10-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

 

FORM 10-K

 

x	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2016, or

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from  to 

Commission file number 0-9068

 

WEYCO GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Wisconsin	39-0702200
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

333 W. Estabrook Boulevard,
P. O. Box 1188,
Milwaukee, WI 53201

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (414) 908-1600

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock — $1.00 par value per share	The NASDAQ Stock Market

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x	Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of the close of business on June 30, 2016, was $174,666,000. This was based on the closing price of $27.78 per share as reported by NASDAQ on June 30, 2016, the last business day of the registrant’s most recently completed second fiscal quarter.

As of March 1, 2017, there were 10,488,276 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for its Annual Meeting of Shareholders scheduled for May 9, 2017, are incorporated by reference in Part III of this report.

 

WEYCO GROUP, INC.
 
Table of Contents to Annual Report on Form 10-K
Year Ended December 31, 2016

	Page
CAUTIONARY STATEMENTS FOR FORWARD-LOOKING INFORMATION		1
PART I.
ITEM 1. BUSINESS		2
ITEM 1A. RISK FACTORS		4
ITEM 1B. UNRESOLVED STAFF COMMENTS		9
ITEM 2. PROPERTIES		9
ITEM 3. LEGAL PROCEEDINGS		9
ITEM 4. MINE SAFETY DISCLOSURES		9
EXECUTIVE OFFICERS OF THE REGISTRANT		10
PART II.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		11
ITEM 6. SELECTED FINANCIAL DATA		12
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		12
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		25
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		26
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		62
ITEM 9A. CONTROLS AND PROCEDURES		62
ITEM 9B. OTHER INFORMATION		62
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		63
ITEM 11. EXECUTIVE COMPENSATION		63
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		63
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		63
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES		63
PART IV.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES		64

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CAUTIONARY STATEMENTS FOR FORWARD-LOOKING INFORMATION

This report contains certain forward-looking statements with respect to Weyco Group, Inc.’s (the “Company”) outlook for the future. These statements represent the Company’s reasonable judgment with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially. Such statements can be identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “should,” “will,” or variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Therefore, the reader is cautioned that these forward-looking statements are subject to a number of risks, uncertainties or other factors that may cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risk factors described under Item 1A, “Risk Factors.”

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PART 1

ITEM 1 BUSINESS

Weyco Group, Inc. is a Wisconsin corporation incorporated in the year 1906 as Weyenberg Shoe Manufacturing Company. Effective April 25, 1990, the name of the corporation was changed to Weyco Group, Inc.

Weyco Group, Inc. and its subsidiaries (the “Company”) engage in one line of business: the design and distribution of quality and innovative footwear. The Company designs and markets footwear principally for men, but also for women and children, under a portfolio of well-recognized brand names including: “Florsheim,” “Nunn Bush,” “Stacy Adams,” “BOGS,” “Rafters” and “Umi.” Trademarks maintained by the Company on its brands are important to the business. The Company’s products consist primarily of mid-priced leather dress shoes and casual footwear composed of man-made materials or leather. In addition, the Company added outdoor boots, shoes and sandals in 2011 with the acquisition of the BOGS and Rafters brands. The Company’s footwear is available in a broad range of sizes and widths, primarily purchased to meet the needs and desires of the general American population.

The Company purchases finished shoes from outside suppliers, primarily located in China and India. Almost all of these foreign-sourced purchases are denominated in U.S. dollars. The Company continues to experience upward cost pressures from its suppliers related to a variety of factors, including higher labor, materials and freight costs. Recently, the strength of the U.S. dollar against the Chinese and Indian currencies has helped to mitigate price increases. The Company has also worked to increase its selling prices to offset the effect of these increases.

The Company’s business is separated into two reportable segments — the North American wholesale segment (“wholesale”) and the North American retail segment (“retail”). The Company also has other wholesale and retail businesses overseas which include its businesses in Australia, South Africa and Asia Pacific (collectively, “Florsheim Australia”) and its wholesale and retail businesses in Europe (“Florsheim Europe”).

In 2016, 2015 and 2014, sales of the Company’s wholesale segment, which include both wholesale sales and worldwide licensing revenues, constituted approximately 77%, 78% and 76% of total sales, respectively. At wholesale, shoes are marketed throughout the United States and Canada in more than 10,000 shoe, clothing and department stores. In 2016, 2015, and 2014 no individual customer represented more than 10% of the Company’s total sales. The Company employs traveling salespeople and independent sales representatives who sell the Company’s products to retail outlets. Shoes are shipped to these retailers primarily from the Company’s distribution center in Glendale, Wisconsin. In the men’s footwear business, there is generally no identifiable seasonality, although new styles are historically developed and shown twice each year, in spring and fall. With the Company’s BOGS brand, which mainly sells winter and outdoor boots, there is seasonality in its business due to the nature of the product; the majority of BOGS sales occur in the third and fourth quarters. Consistent with industry practices, the Company carries significant amounts of inventory to meet customer delivery requirements and periodically provides extended payment terms to customers. The Company also has licensing agreements with third parties who sell its branded shoes outside of the United States, as well as licensing agreements with specialty shoe, apparel and accessory manufacturers in the United States.

Sales of the Company’s retail segment constituted 7% of total sales in each of the years 2016, 2015, and 2014. As of December 31, 2016, the retail segment consisted of 13 Company-operated stores and an internet business in the United States. Sales in retail stores are made directly to the consumer by Company employees.

Sales of the Company’s other businesses represented 16%, 15% and 17% of total sales in 2016, 2015, and 2014, respectively. These sales relate to the Company’s wholesale and retail operations in Australia, South Africa, Asia Pacific and Europe.

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As of December 31, 2016, the Company had a backlog of $38 million in orders compared with $41 million as of December 31, 2015. This does not include unconfirmed blanket orders from customers, which account for the majority of the Company’s orders, particularly from its larger accounts. All orders are expected to be filled within one year.

As of December 31, 2016, the Company employed 661 persons worldwide, of whom 29 were members of collective bargaining units. Future wage and benefit increases under the collective bargaining contracts are not expected to have a significant impact on the future operations or financial position of the Company.

Price, quality, service and brand recognition are all important competitive factors in the shoe industry. The Company has a design department that continually reviews and updates product designs. Compliance with environmental regulations historically has not had, and is not expected to have, a material adverse effect on the Company’s results of operations, financial position or cash flows, although there can be no assurances.

The Company makes available, free of charge, copies of its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports upon written or telephone request. Investors can also access these reports through the Company’s website, www.weycogroup.com, as soon as reasonably practical after the Company files or furnishes those reports to the Securities and Exchange Commission (“SEC”). The information on the Company’s website is not a part of this filing. Also available on the Company’s website are various documents relating to the corporate governance of the Company, including its Code of Ethics.

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ITEM 1A RISK FACTORS

There are various factors that affect the Company’s business, results of operations and financial condition, many of which are beyond the Company’s control. The following is a description of some of the significant factors that might materially and adversely affect the Company’s business, results of operations and financial condition.

Decreases in disposable income and general market volatility in the U.S. and global economy may adversely affect the Company.

Spending patterns in the footwear market, particularly those in the moderate-priced market in which a majority of the Company’s products compete, have historically been impacted by consumers’ disposable income. As a result, the success of the Company is impacted by changes in general economic conditions, especially in the United States. Factors affecting discretionary income for the moderate consumer include, among others, general business conditions, gas and energy costs, employment, consumer confidence, interest rates and taxation. Additionally, the economy and consumer behavior can impact the financial strength and buying patterns of retailers, which can also affect the Company’s results. Volatile, unstable or weak economic conditions, or a worsening of conditions, could adversely affect the Company’s sales volume and overall performance.

Volatility and uncertainty in the U.S. and global credit markets could adversely affect the Company’s business.

U.S. and global financial markets recently have been, and continue to be, unstable and unpredictable, which has generally resulted in tightened credit markets with heightened lending standards and terms. Volatility and instability in the credit markets pose various risks to the Company, including, among others, negatively impacting retailer and consumer confidence, limiting the Company’s customers’ access to credit markets and interfering with the normal commercial relationships between the Company and its customers. Increased credit risks associated with the financial condition of some customers in the retail industry affects their level of purchases from the Company and the collectability of amounts owed to the Company, and in some cases, causes the Company to reduce or cease shipments to certain customers who no longer meet the Company’s credit requirements.

In addition, weak economic conditions and unstable and volatile financial markets could lead to certain of the Company’s customers experiencing cash flow problems, which may force them into higher default rates or to file for bankruptcy protection which may increase the Company’s bad debt expense or further negatively impact the Company’s business.

The Company is subject to risks related to the retail environment that could adversely impact the Company’s business.

The Company is subject to risks associated with doing business in the retail environment, primarily in the United States. The U.S. retail industry has experienced a growing trend toward consolidation of large retailers. The merger of major retailers could result in the Company losing sales volume or increasing its concentration of business with a few large accounts, resulting in reduced bargaining power on the part of the Company, which could increase pricing pressures and lower the Company’s margins.

As the popularity of online shopping for consumer goods increases, the Company’s retail partners may experience decreased foot traffic which could negatively impact their businesses. This may, in turn, negatively impact the Company’s sales to those customers, and adversely affect the Company’s results of operations.

Changes in consumer preferences could negatively impact the Company.

The Company’s success is dependent upon its ability to accurately anticipate and respond to rapidly changing fashion trends and consumer preferences. Failure to predict or respond to trends or preferences could have an adverse impact on the Company’s sales volume and overall performance.

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The Company relies on independent foreign sources of production and the availability of leather, rubber and other raw materials which could have unfavorable effects on the Company’s business.

The Company purchases its products entirely from independent foreign manufacturers, primarily in China and India. Although the Company has good working relationships with its manufacturers, the Company does not have long-term contracts with them. Thus, the Company could experience increases in manufacturing costs, disruptions in the timely supply of products or unanticipated reductions in manufacturing capacity, any of which could negatively impact the Company’s business, results of operations and financial condition. The Company has the ability to move product to different suppliers; however, the transition may not occur smoothly and/or quickly and the Company could miss customer delivery date requirements and, consequently, could lose orders.

The Company’s use of foreign sources of production results in long production and delivery lead times. Therefore, the Company typically forecasts demand at least five months in advance. If the Company’s forecasts are wrong, it could result in the loss of sales if the Company does not have enough product on hand, or in reduced margins if the Company has excess inventory that needs to be sold at discounted prices.

The Company’s ability to import products in a timely and cost-effective manner may be affected by disruptions at U.S. or foreign ports or other transportation facilities, such as labor disputes and work stoppages, political unrest, severe weather, or security requirements in the United States and other countries. These issues could delay importation of products or require the Company to locate alternative ports or warehousing providers to avoid disruption to its customers. These alternatives may not be available on short notice or could result in higher transportation costs, which could have a material adverse impact on the Company’s overall profitability.

The Company’s products depend on the availability of raw materials, especially leather and rubber. Any significant shortages of quantities or increases in the cost of leather or rubber could have a material adverse effect on the Company’s business and results of operations.

Additional risks associated with foreign sourcing that could negatively impact the Company’s business include adverse changes in foreign economic conditions, import regulations, restrictions on the transfer of funds, duties, tariffs, quotas and political or labor interruptions, foreign currency fluctuations, expropriation and nationalization.

The Company conducts business globally, which exposes it to the impact of foreign currency fluctuations as well as political and economic risks.

A portion of the Company’s revenues and expenses are denominated in currencies other than the U.S. dollar. The Company is therefore subject to foreign currency risks and foreign exchange exposure. The Company’s primary exposures are to the Australian dollar and the Canadian dollar. Exchange rates can be volatile and could adversely impact the Company’s financial results.

The Company is exposed to risks of doing business in foreign jurisdictions and risks relating to U.S. policy with respect to companies doing business in foreign jurisdictions. Legislation or other changes in the U.S. tax laws could increase the Company’s U.S. income tax liability and adversely affect the Company’s after-tax profitability. In addition, the results of the recent U.S. election have introduced greater uncertainty with respect to future tax and trade regulations. Changes in tax policy or trade regulations, such as the disallowance of tax deductions on imported merchandise or the imposition of new tariffs on imported products, could have a material adverse effect on the Company’s business and results of operations.

The Company operates in a highly competitive environment, which may result in lower prices and reduce its profits.

The footwear market is extremely competitive. The Company competes with manufacturers, distributors and retailers of men’s, women’s and children’s shoes, certain of which are larger and have substantially greater resources than the Company. The Company competes with these

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companies primarily on the basis of price, quality, service and brand recognition, all of which are important competitive factors in the shoe industry. The Company’s ability to maintain its competitive edge depends upon these factors, as well as its ability to deliver new products at the best value for the consumer, maintain positive brand recognition, and obtain sufficient retail floor space and effective product presentation at retail. If the Company does not remain competitive, the Company’s future results of operations and financial condition could decline.

The Company is dependent on information and communication systems to support its business and internet sales. Significant interruptions could disrupt its business.

The Company accepts and fills the majority of its larger customers’ orders through the use of Electronic Data Interchange (EDI). It relies on its warehouse management system to efficiently process orders. The corporate office relies on computer systems to efficiently process and record transactions. Significant interruptions in the Company’s information and communication systems from power loss, telecommunications failure or computer system failure could significantly disrupt the Company’s business and operations. In addition, the Company sells footwear on its websites, and failures of the Company’s or other retailers’ websites could adversely affect the Company’s sales and results.

The Company, particularly its retail segment and its internet business, is subject to the risk of data loss and security breaches.

The Company sells footwear in its retail stores and on its websites, and therefore the Company and/or its third party credit card processors must process, store, and transmit large amounts of data, including personal information of its customers. Failure to prevent or mitigate data loss or other security breaches, including breaches of Company technology and systems, could expose the Company or its customers to a risk of loss or misuse of such information, adversely affect the Company’s operating results, result in litigation or potential liability for the Company, and otherwise harm the Company’s business and/or reputation. In order to address these risks, the Company uses third party technology and systems for a variety of reasons, including, without limitation, encryption and authentication technology, employee email, content delivery to customers, back-office support, and other functions. Although the Company has developed systems and processes that are designed to protect customer information and prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach at a third party vendor, such measures cannot provide absolute security.

The Company may not be able to successfully integrate new brands and businesses.

The Company has completed a number of acquisitions in the past and intends to continue to look for new acquisition opportunities. Those search efforts could be unsuccessful and costs could be incurred in any failed efforts. Further, if and when an acquisition occurs, the Company cannot guarantee that it will be able to successfully integrate the brand into its current operations, or that any acquired brand would achieve results in line with the Company’s historical performance or its specific expectations for the brand.

Loss of the services of the Company’s top executives could adversely affect the business.

Thomas W. Florsheim, Jr., the Company’s Chairman and Chief Executive Officer, and John W. Florsheim, the Company’s President, Chief Operating Officer and Assistant Secretary, have a strong heritage within the Company and the footwear industry. They possess knowledge, relationships and reputations based on their lifetime exposure to and experience in the Company and the industry. The loss of either one or both of the Company’s top executives could have an adverse impact on the Company’s performance.

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The limited public float and trading volume for the Company’s stock may have an adverse impact on the stock price or make it difficult to liquidate.

The Company’s common stock is held by a relatively small number of shareholders. The Florsheim family owns approximately 34% of the stock and two institutional shareholders hold significant blocks. Other officers, directors, and members of management own stock or have the potential to own stock through previously granted stock options and restricted stock. Consequently, the Company has a relatively small float and low average daily trading volume, which could affect a shareholder’s ability to sell stock or the price at which it can be sold. In addition, future sales of substantial amounts of the Company’s common stock in the public market by large shareholders, or the perception that these sales could occur, may adversely impact the market price of the stock and the stock could be difficult for the shareholder to liquidate.

Deterioration of the municipal bond market in general or of specific municipal bonds held by the Company or its pension plan may result in a material adverse effect on the Company’s financial condition, results of operations, and liquidity.

The Company maintains an investment portfolio consisting primarily of investment-grade municipal bond investments. The Company’s investment policy only permits the purchase of investment-grade securities. The Company’s investment portfolio totaled approximately $26 million as of December 31, 2016, or approximately 10% of total assets. If the value of municipal bonds in general or any of the Company’s municipal bond holdings deteriorate, the performance of the Company’s investment portfolio, financial condition, results of operations, and liquidity may be materially and adversely affected.

The Company’s total assets include goodwill and other indefinite-lived intangible assets. If management determines these have become impaired in the future, net earnings could be materially adversely affected. Additionally, potential tax reform changes related to such assets may adversely affect the Company’s financial results.

Goodwill represents the excess of cost over the fair market value of net assets acquired in a business combination. Indefinite-lived intangible assets are comprised of trademarks on certain of the Company’s principal shoe brands. The Company’s goodwill and trademarks totaled approximately $44 million as of December 31, 2016, or approximately 16% of total assets.

The Company analyzes its goodwill and trademarks for impairment on an annual basis or more frequently when, in the judgment of management, an event has occurred that may indicate that additional analysis is required. Impairment may result from, among other things, deterioration in the Company’s performance, adverse market conditions, adverse changes in applicable laws or regulations, including changes that restrict the activities of or affect the products sold by the Company, and a variety of other factors. The amount of any quantified impairment must be expensed as a charge to results of operations in the period in which the asset becomes impaired.

In the fourth quarter of 2016, the Company evaluated the current state of its Umi business and determined the brand did not fit the long-term strategic objectives of the Company. As a result, the Company recorded a $1.8 million impairment charge ($1.1 million after tax) to write off the majority of the value of the Umi trademark. Other than this write-off, the Company did not record any other goodwill or trademark impairment charges in 2016. The Company also did not record any goodwill or trademark impairment charges in 2015 or 2014. Any future determination of impairment of a significant portion of goodwill or other identifiable intangible assets could have an adverse effect on the Company’s financial condition and results of operations.

Goodwill and trademarks are being deducted for tax purposes in accordance with the U.S. tax policy. Any changes in the U.S. tax policy, limiting or eliminating the deductibility of such assets, could have a material adverse effect on the Company’s financial results.

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Risks related to our defined benefit plan may adversely impact our results of operations and cash flow.

Significant changes in actual investment return on defined benefit plan assets, discount rates, mortality assumptions and other factors could adversely affect the Company’s results of operations and the amounts of contributions the Company must make to its defined benefit plan in future periods. As the Company marks-to-market its defined benefit plan assets and liabilities on an annual basis, large non-cash gains or losses could be recorded in the fourth quarter of each fiscal year. Generally accepted accounting principles in the U.S. require that the Company calculate income or expense for the plan using actuarial valuations. These valuations reflect assumptions about financial markets and interest rates, which may change based on economic conditions. Funding requirements for the Company’s defined benefit plans are dependent upon, among other things, interest rates, underlying asset returns and the impact of legislative or regulatory changes related to defined benefit funding obligations. For a discussion regarding the significant assumptions used to determine net periodic benefit cost, refer to “Critical Accounting Policies” included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

If the Company is unable to maintain effective internal control over its financial reporting, investors could lose confidence in the reliability of its financial statements, which could result in a reduction in the value of its common stock.

Under Section 404 of the Sarbanes-Oxley Act, public companies must include a report of management on the Company’s internal control over financial reporting in their annual reports; that report must contain an assessment by management of the effectiveness of the Company’s internal control over financial reporting. In addition, the independent registered public accounting firm that audits a company’s financial statements must attest to and report on the effectiveness of the company’s internal control over financial reporting.

If the Company is unable to maintain effective internal control over financial reporting, including in connection with changes in accounting rules and standards that apply to it, this could lead to a failure to meet its reporting obligations to the SEC. Such a failure in turn could result in an adverse reaction to the Company in the marketplace or a loss in value of the Company’s common stock, due to a loss of confidence in the reliability of the Company’s financial statements.

Natural disasters and other events outside of the Company’s control, and the ineffective management of such events, may harm the Company’s business.

The Company’s facilities and operations, as well as those of the Company’s suppliers and customers, may be impacted by natural disasters. In the event of such disasters, and if the Company or its suppliers or customers are not adequately insured, the Company’s business could be harmed due to the event itself or due to its inability to effectively manage the effects of the particular event; potential harms include the loss of business continuity, the loss of inventory or business data and damage to infrastructure, warehouses or distribution centers.

Regulations related to conflict minerals may force us to incur additional expenses.

The SEC has adopted disclosure requirements related to certain minerals sourced from the Democratic Republic of Congo and surrounding countries, or “conflict minerals,” that are necessary to the functionality of a product manufactured, or contracted to be manufactured, by a SEC reporting company. The minerals that the rules cover are commonly referred to as “3TG” and include tin, tantalum, tungsten and gold. Implementation of the disclosure requirements could affect the sourcing and availability of some of the materials that the Company uses in the manufacture of its products. There is also uncertainty relating to the requirements of the regulations as a result of ongoing litigation challenging the constitutionality of portions of the regulations. The Company’s supply chain is complex, and if it is not able to determine the origins for all conflict minerals used in its products or that its products are “conflict free,” then it may face reputational challenges with customers or investors. The Company could also incur significant costs related to the compliance process, including potential difficulty or added costs in satisfying disclosure and audit requirements.

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ITEM 1B UNRESOLVED STAFF COMMENTS

None

ITEM 2 PROPERTIES

The following facilities were operated by the Company or its subsidiaries as of December 31, 2016:

Location	Character		Owned/ Leased			Square Footage		% Utilized
Glendale, Wisconsin(2)		Two story office and distribution center		Owned			1,100,000		80	%
Portland, Oregon(2)		Two story office		Leased	(1)		6,300		100	%
Montreal, Canada(2)		Multistory office and distribution center		Owned	(4)		75,800		100	%
Florence, Italy(3)		Two story office and distribution center		Leased	(1)		15,100		100	%
Fairfield Victoria, Australia(3)		Office and distribution center		Leased	(1)		54,000		100	%
Honeydew Park, South Africa(3)		Distribution center		Leased	(1)		8,600		85	%
Hong Kong, China(3)		Office and distribution center		Leased	(1)		14,000		100	%
Dongguan City, China(3)		Office		Leased	(1)		4,400		100	%

(1) Not material leases.

(2) These properties are used principally by the Company's North American wholesale segment.

(3) These properties are used principally by the Company's other businesses which are not reportable segments.

(4) The Company owns a 50% interest in this property. See Note 8 of the Notes to Consolidated Financial Statements.

In addition to the above-described offices and distribution facilities, the Company also operates retail shoe stores under various rental agreements. All of these facilities are suitable and adequate for the Company’s current operations. See Note 13 of the Notes to Consolidated Financial Statements and Item 1, “Business”, above.

ITEM 3 LEGAL PROCEEDINGS

None

ITEM 4 MINE SAFETY DISCLOSURES

Not Applicable

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following were executive officers of Company as of December 31, 2016:

Name	Position	Age
Thomas W. Florsheim, Jr.(1)	Chairman and Chief Executive Officer	58
John W. Florsheim(1)	President, Chief Operating Officer and Assistant Secretary	53
John F. Wittkowske	Senior Vice President, Chief Financial Officer and Secretary	57
Judy Anderson	Vice President, Finance and Treasurer	49
Mike Bernsteen	Vice President, and President of Nunn Bush Brand	60
Dustin Combs	Vice President, and President of BOGS and Rafters Brands	34
Brian Flannery	Vice President, and President of Stacy Adams Brand	55
Kevin Schiff	Vice President, and President of Florsheim Brand	48
George Sotiros	Vice President, Information Technology	50
Allison Woss	Vice President, Supply Chain	44

(1) Thomas W. Florsheim, Jr. and John W. Florsheim are brothers, and Chairman Emeritus Thomas W. Florsheim is their father.

Thomas W. Florsheim, Jr. has served as Chairman and Chief Executive Officer for more than 5 years.

John W. Florsheim has served as President, Chief Operating Officer and Assistant Secretary for more than 5 years.

John F. Wittkowske has served as Senior Vice President, Chief Financial Officer and Secretary for more than 5 years.

Judy Anderson has served as Vice President of Finance and Treasurer for more than 5 years.

Mike Bernsteen has served as a Vice President of the Company and President of the Nunn Bush Brand for 5 years.

Dustin Combs has served as a Vice President of the Company and President of the BOGS and Rafters Brands since January 2015. Prior to this role, Mr. Combs served as Vice President of Sales for the BOGS and Rafters Brands from March 2011 to January 2015.

Brian Flannery has served as a Vice President of the Company and President of the Stacy Adams Brand for more than 5 years.

Kevin Schiff has served as a Vice President of the Company and President of the Florsheim Brand for more than 5 years.

George Sotiros has served as Vice President of Information Technology for more than 5 years.

Allison Woss has served as Vice President of Supply Chain since August 2016. Prior to this role, Ms. Woss served as Vice President of Purchasing from January 2007 to August 2016.

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PART II

ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The shares of the Company’s common stock are traded on the NASDAQ Stock Market (“NASDAQ”) under the symbol “WEYS.”

COMMON STOCK DATA

	2016						2015
	Stock Prices				Cash Dividends Declared		Stock Prices				Cash Dividends Declared
Quarter:	High		Low				High		Low
First	$	28.23	$	22.94	$	0.20	$	30.57	$	26.26	$	0.19
Second	$	28.50	$	25.84	$	0.21	$	31.01	$	27.20	$	0.20
Third	$	29.05	$	24.52	$	0.21	$	30.44	$	25.28	$	0.20
Fourth	$	31.58	$	24.91	$	0.21	$	29.18	$	26.16	$	0.20
					$	0.83					$	0.79

There were 139 holders of record of the Company's common stock as of March 1, 2017.

The stock prices shown above are the high and low actual trades on the NASDAQ for the calendar periods indicated.

Stock Performance

The following line graph compares the cumulative total shareholder return on the Company’s common stock during the five years ended December 31, 2016 with the cumulative return on the NASDAQ-100 Index and the Russell 3000 — RGS Textiles Apparel & Shoe Index. The comparison assumes $100 was invested on December 31, 2011, in the Company’s common stock and in each of the foregoing indices and assumes reinvestment of dividends.

	2011		2012		2013		2014		2015		2016
Weyco Group, Inc.		100		97		122		122		117		141
NASDAQ-100 Global Index		100		118		162		193		212		228
Russell 3000 – RGS Textiles Apparel & Shoe Index		100		112		165		183		179		158

11

In 1998 the Company’s stock repurchase program was established. On several occasions since the program’s inception, the Board of Directors has extended the number of shares authorized for repurchase under the program. In total, 6.5 million shares have been authorized for repurchase. The table below presents information pursuant to Item 703 of Regulation S-K regarding the repurchase of the Company’s common stock by the Company in the three-month period ended December 31, 2016.

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Publicly Announced Program		Maximum Number of Shares that May Yet Be Purchased Under the Program
10/01/2016 – 10/31/2016		16,782	$	26.32		16,782		607,201
11/01/2016 – 11/30/2016		41,567	$	27.54		41,567		565,634
12/01/2016 – 12/31/2016		459	$	28.03		459		565,175
Total		58,808		27.20		58,808

ITEM 6 SELECTED FINANCIAL DATA

The following selected financial data reflects the results of operations, balance sheet data and common share information as of and for the years ended December 31, 2012 through December 31, 2016.

	Years Ended December 31,
	(in thousands, except per share amounts)
	2016		2015		2014		2013		2012
Net Sales	$	296,933	$	320,617	$	320,488	$	300,284	$	293,471
Net earnings attributable to Weyco Group, Inc.	$	16,472	$	18,212	$	19,020	$	17,601	$	18,957
Diluted earnings per share	$	1.56	$	1.68	$	1.75	$	1.62	$	1.73
Weighted average diluted shares outstanding		10,572		10,859		10,888		10,865		10,950
Cash dividends per share	$	0.83	$	0.79	$	0.75	$	0.54	$	0.84
Total assets at year end	$	268,240	$	298,997	$	277,446	$	267,533	$	285,321
Bank borrowings at year end	$	4,268	$	26,649	$	5,405	$	12,000	$	45,000

ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company designs and markets quality and innovative footwear for men, women and children under a portfolio of well-recognized brand names, including: “Florsheim,” “Nunn Bush,” “Stacy Adams,” “BOGS,” “Rafters” and “Umi.” Inventory is purchased from third-party overseas manufacturers. The majority of foreign-sourced purchases are denominated in U.S. dollars. The Company has two reportable segments, North American wholesale operations (“wholesale”) and North American retail operations (“retail”). In the wholesale segment, the Company’s products are sold to leading footwear, department and specialty stores, primarily in the United States and Canada. The Company also has licensing agreements with third parties who sell its branded apparel, accessories and specialty footwear in the United States, as well as its footwear in Mexico and certain markets overseas. Licensing revenues are included in the Company’s wholesale segment. The Company’s retail segment consisted of 13 Company-owned retail stores and an internet business in the United States as of December 31, 2016. Sales in retail outlets are made directly to consumers by Company employees. The Company’s “other” operations include the Company’s wholesale and retail businesses in Australia, South Africa and Asia Pacific (collectively, “Florsheim Australia”) and Europe (“Florsheim Europe”). The majority of the Company’s operations are in the United States, and its results are primarily affected by the economic conditions and the retail environment in the United States.

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This discussion summarizes the significant factors affecting the consolidated operating results, financial position and liquidity of the Company for the three-year period ended December 31, 2016. This discussion should be read in conjunction with Item 8, “Financial Statements and Supplementary Data” below.

EXECUTIVE OVERVIEW

Sales and Earnings Highlights

Consolidated net sales were $296.9 million in 2016, a decrease of 7% as compared to $320.6 million in 2015. Earnings from operations were $21.2 million this year, down 29% as compared to $29.8 million in 2015. Net earnings attributable to Weyco Group, Inc. decreased 10% to $16.5 million in 2016, from $18.2 million last year. Diluted earnings per share were $1.56 in 2016, as compared to $1.68 in 2015.

Earnings for 2016 included an impairment of long-lived assets charge of $1.8 million ($1.1 million after tax) related to the Umi trademark, offset by a $3.1 million adjustment to reverse the deferred tax liability on corporate-owned life insurance policies. Earnings for 2015 included $458,000 ($279,000 after tax) of income representing the final adjustment to the BOGS/Rafters earnout payment. Without these non-recurring adjustments, earnings from operations and net earnings attributable to the Company would have been down 22% and 20%, respectively, for the year.

Diluted earnings per share were $1.56 in 2016, as compared to $1.68 per share in 2015. Without the non-recurring adjustments described above, diluted earnings per share on an adjusted basis would have been $1.36 per share in 2016 and $1.65 in 2015.

Net sales in the Company’s wholesale segment decreased $23.8 million, or 9% for the year, primarily due to lower sales of BOGS and Nunn Bush branded footwear. Net sales in the Company’s retail segment decreased 1%, and net sales of the Company’s other businesses (Florsheim Australia and Florsheim Europe) increased 1% for the year.

Consolidated earnings from operations decreased $8.5 million for the year. Excluding the non-recurring adjustments related to the Umi trademark and the BOGS/Rafters final earnout payment, consolidated earnings from operations would have been down $6.3 million for the year. This decrease was primarily due to lower sales volumes in the Company’s wholesale segment. Earnings from operations in the Company’s retail segment were also down for the year, due to lower sales at the Company’s brick and mortar locations. Earnings from operations of the Company’s other businesses were down for the year, mainly due to lower operating earnings at the Company’s retail store in Macau, resulting from lower sales.

Financial Position Highlights

At December 31, 2016, cash and marketable securities totaled $39.4 million and outstanding debt totaled $4.3 million. At December 31, 2015, cash and marketable securities totaled $43.1 million and outstanding debt totaled $26.6 million. During 2016, the Company generated $46.9 million of cash from operations, and used funds to pay $22.4 million on its revolving line of credit, purchase $11.0 million of its common stock, and pay $8.9 million of dividends. In addition, the Company paid the $5.2 million BOGS/Rafters final earn-out payment, and spent $6.0 million on capital expenditures.

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2016 vs. 2015

Non-Recurring Adjustments

In the fourth quarter of 2016, the Company evaluated the current state of its Umi business and determined the brand did not fit the long-term strategic objectives of the Company. As a result, the Company recorded a $1.8 million impairment charge ($1.1 million after tax) to write off the majority of the value of the Umi trademark. The Company is currently reviewing a number of alternatives for the future of the Umi brand.

Additionally, in the fourth quarter 2016, the Company reviewed its liquidity needs and sources of capital, including evaluating whether it would need the cash available under corporate-owned life insurance policies on two former executives. It was determined that the chances were remote that the Company would need to surrender these policies to satisfy liquidity needs, and, as a result, the Company reversed the $3.1 million deferred tax liability related to these policies.

Finally, in 2015, the Company recorded a $458,000 adjustment ($279,000 after tax) to the final earnout payment related to the 2011 acquisition of the BOGS/Rafters brands. The final earnout payment was paid in March 2016.

For a tabular presentation of the impact of the non-recurring adjustments on the Company’s results, see the “Reconciliation of Non-GAAP Financial Measures” table in the “OTHER” section below.

SEGMENT ANALYSIS

Net sales and earnings from operations for the Company’s segments, as well as its “other” operations, in the years ended December 31, 2016 and 2015, were as follows:

	Years ended December 31,
	2016		2015		% Change
	(Dollars in thousands)
Net Sales
North American Wholesale	$	227,537	$	251,370		-9	%
North American Retail		21,883		22,121		-1	%
Other		47,513		47,126		1	%
Total	$	296,933	$	320,617		-7	%
Earnings from Operations
North American Wholesale	$	16,398	$	24,272		-32	%
North American Retail		2,109		2,519		-16	%
Other		2,729		2,994		-9	%
Total	$	21,236	$	29,785		-29	%

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North American Wholesale Segment

Net Sales

Net sales in the Company’s North American wholesale segment for the years ended December 31, 2016 and 2015, were as follows:

	Years ended December 31,
	2016		2015		% Change
	(Dollars in thousands)
North American Net Sales
Stacy Adams	$	66,620	$	67,655		-2	%
Nunn Bush		58,229		66,681		-13	%
Florsheim		51,563		50,961		1	%
BOGS/Rafters		46,075		59,616		-23	%
Umi		2,265		2,825		-20	%
Total North American Wholesale	$	224,752	$	247,738		-9	%
Licensing		2,785		3,632		-23	%
Total North American Wholesale Segment	$	227,537	$	251,370		-10	%

The Company’s wholesale business faced a challenging retail environment in 2016. Foot traffic at the Company’s customers’ brick and mortar stores has been declining, as the popularity of online shopping continues to grow. Nunn Bush was particularly impacted because a significant amount of the brand’s business is with mid-tier department stores, a segment particularly struggling with this problem. Sales of the BOGS brand also declined, mainly due to the continued impact of the mild 2015/2016 winter season, as retailers carried over BOGS inventory into the 2016/2017 winter season.

Licensing revenues consist of royalties earned on sales of branded apparel, accessories and specialty footwear in the United States and on branded footwear in Mexico and certain overseas markets. The decrease in licensing revenues resulted mainly from licensee transitions that occurred in 2016.

Earnings from Operations

Gross earnings as a percent of net sales were 32.1% in 2016 versus 32.5% in 2015 this year. Earnings from operations in the North American wholesale segment were $16.4 million in 2016, down 32% as compared to $24.3 million in 2015. This year’s wholesale operating earnings included an impairment charge of $1.8 million related to the Umi trademark. Last year’s wholesale operating earnings included $458,000 of income representing the final adjustment to the BOGS/Rafters earnout payment. Without these non-recurring adjustments, wholesale earnings from operations would have been down 24% for the year, due mainly to the decrease in wholesale sales.

The Company’s cost of sales does not include distribution costs (e.g., receiving, inspection or warehousing costs) or shipping and handling expenses. The Company’s distribution costs were $11.7 million and $11.3 million in the years ended December 31, 2016 and 2015, respectively. The Company’s wholesale shipping and handling expenses were $1.6 million and $1.9 million in the years ended December 31, 2016 and 2015, respectively. These costs were included in selling and administrative expenses. The Company’s gross earnings may not be comparable to other companies, as some companies may include distribution costs in cost of sales.

North American wholesale segment selling and administrative expenses include, and are primarily related to, distribution costs, salaries and commissions, advertising costs, employee benefit costs and depreciation. Wholesale selling and administrative expenses decreased $627,000 in 2016, as compared to the prior year. Excluding the non-recurring adjustments described above, wholesale selling and administrative expenses would have been down $2.8 million between years, primarily due to lower employee benefit costs and advertising costs. As a percent of net sales, wholesale selling and administrative expenses were 25% and 23% in 2016 and 2015, respectively. Without the

15

non-recurring adjustments described above, wholesale selling and administrative expenses as a percent of net sales would have been 24% and 23% in 2016 and 2015, respectively.

North American Retail Segment

Net Sales

Net sales in the Company’s North American retail segment were $21.9 million in 2016, down 1% as compared to $22.1 million in 2015. Same store sales, which include U.S. internet sales, were up 1% for the year. There were three fewer domestic retail stores operating in 2016 than there were in 2015, as four stores closed and one store opened. Stores are included in same store sales beginning in the store’s 13^th month of operations after its grand opening. The increase in same store sales was due to an increase in the Company’s U.S. internet business.

Earnings from Operations

Earnings from operations in the North American retail segment were $2.1 million in 2016, down 16% as compared to $2.5 million in 2015. Retail gross earnings as a percent of net sales were 65.0% in 2016 and 65.7% in 2015. Selling and administrative expenses for the retail segment include, and are primarily related to, rent and occupancy costs, employee costs, advertising expense and freight. Selling and administrative expenses as a percent of net sales were 55% in 2016 compared to 54% in 2015. The decrease in retail earnings from operations was primarily due to lower net sales at the Company’s brick and mortar locations.

The Company reviews its long-lived assets for impairment in accordance with Accounting Standards Codification (“ASC”) 360, Property Plant and Equipment (“ASC 360”). See Note 2 in the Notes to Consolidated Financial Statements for further information. A $113,000 impairment charge was recognized in 2016. No impairment charges were recognized in 2015.

Other

The Company’s other businesses include its wholesale and retail operations in Australia, South Africa, Asia Pacific and Europe. In 2016, net sales of the Company’s other businesses were $47.5 million, up 1% as compared with $47.1 million in 2015. This increase was primarily due to higher net sales in Florsheim Europe’s wholesale business. Earnings from operations at Florsheim Australia and Florsheim Europe were $2.7 million in 2016, down 9% as compared to $3.0 million last year. This decrease was primarily due to lower operating earnings at the Company’s retail store in Macau, resulting from lower sales.

2015 vs. 2014

SEGMENT ANALYSIS

Net sales and earnings from operations for the Company’s segments, as well as its “other” operations, in the years ended December 31, 2015 and 2014, were as follows:

	Years ended December 31,
	2015		2014		% Change
	(Dollars in thousands)
Net Sales
North American Wholesale	$	251,370	$	243,429		3	%
North American Retail		22,121		23,324		-5	%
Other		47,126		53,735		-12	%
Total	$	320,617	$	320,488		0	%
Earnings from Operations
North American Wholesale	$	24,272	$	22,527		8	%
North American Retail		2,519		3,300		-24	%
Other		2,994		4,830		-38	%
Total	$	29,785	$	30,657		-3	%

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North American Wholesale Segment

Net Sales

Net sales in the Company’s North American wholesale segment for the years ended December 31, 2015 and 2014, were as follows:

	Years ended December 31,
	2015		2014		% Change
	(Dollars in thousands)
North American Net Sales
Stacy Adams	$	67,655	$	61,157		11	%
Nunn Bush		66,681		66,498		0	%
Florsheim		50,961		51,440		-1	%
BOGS/Rafters		59,616		57,830		3	%
Umi		2,825		3,322		-15	%
Total North American Wholesale	$	247,738	$	240,247		3	%
Licensing		3,632		3,182		14	%
Total North American Wholesale Segment	$	251,370	$	243,429		3	%

The increase in Stacy Adams 2015 net sales was driven by strong new product sales. Net sales of the BOGS/Rafters brands were up in 2015 compared to 2014 due to strong sales of BOGS women’s and children’s footwear in the U.S.

Licensing revenues consist of royalties earned on sales of branded apparel, accessories and specialty footwear in the United States and on branded footwear in Mexico and certain overseas markets.

Earnings from Operations

Gross margins for the wholesale segment increased to 32.5% in 2015, from 32.3% in 2014. Gross margins in the U.S. increased to 32.4% in 2015, from 31.4% in 2014, however, this increase was offset by lower gross margins in Canada. Gross margins in Canada continue to be negatively affected by the weaker Canadian dollar because inventory is purchased in U.S. dollars.

Earnings from operations in the North American wholesale segment were $24.3 million in 2015, up 8% as compared to $22.5 million in 2014. This increase was due to higher sales and gross margins.

The Company’s cost of sales does not include distribution costs (e.g., receiving, inspection or warehousing costs) or shipping and handling expenses. The Company’s distribution costs were $11.3 million and $11.0 million in the years ended December 31, 2015 and 2014, respectively. The Company’s wholesale shipping and handling expenses were $1.9 million and $2.4 million in the years ended December 31, 2015 and 2014, respectively. These costs were included in selling and administrative expenses. The Company’s gross earnings may not be comparable to other companies, as some companies may include distribution costs in cost of sales.

North American wholesale segment selling and administrative expenses include, and are primarily related to, distribution costs, salaries and commissions, advertising costs, employee benefit costs and depreciation. Wholesale selling and administrative expenses were up $1.3 million in 2015, which included an additional $2 million in marketing and advertising expenses. As a percent of net sales, wholesale selling and administrative expenses were 23% in each of 2015 and 2014.

North American Retail Segment

Net Sales

Net sales in the Company’s North American retail segment were $22.1 million in 2015, down 5% as compared to $23.3 million in 2014. The decrease was due to three fewer domestic retail stores operating in 2015 as compared to 2014. Same store sales, which include U.S. internet sales, were

17

up 1% for the year. Stores are included in same store sales beginning in the store’s 13^th month of operations after its grand opening. The increase in same store sales was due to an increase in the Company’s U.S. internet business.

Earnings from Operations

Earnings from operations in the North American retail segment were $2.5 million in 2015, down 24% as compared to $3.3 million in 2014. Retail gross earnings as a percent of net sales were 65.7% in 2015 and 65.9% in 2014. Selling and administrative expenses for the retail segment include, and are primarily related to, rent and occupancy costs, employee costs and depreciation. Selling and administrative expenses as a percent of net sales were 54% in 2015 compared to 52% in 2014. The decrease in retail earnings from operations was primarily due to lower net sales at the Company’s brick and mortar locations.

The Company reviews its long-lived assets for impairment in accordance with Accounting Standards Codification (“ASC”) 360, Property Plant and Equipment (“ASC 360”). See Note 2 in the Notes to Consolidated Financial Statements for further information. No impairment charge was recognized in 2015 or 2014.

Other

The Company’s other businesses include its wholesale and retail operations in Australia, South Africa, Asia Pacific and Europe. In 2015, net sales of the Company’s other businesses were $47.1 million, down 12% as compared with $53.7 million in 2014. This decrease was primarily due to lower net sales at Florsheim Australia, caused by the translation of the weaker Australian currency into U.S. dollars. In local currency, Florsheim Australia’s net sales were up 7% for the year. Earnings from operations at Florsheim Australia and Florsheim Europe were $3.0 million in 2015, down 38% as compared to $4.8 million in 2014. This decrease was primarily due to lower operating earnings at recently opened stores in Asia and Australia as well as lower operating earnings at the Company’s retail store in Macau, as a result of higher operating expenses.

OTHER INCOME AND EXPENSE AND TAXES

The majority of the Company’s interest income is from its investments in marketable securities. Interest income was $763,000 in 2016, $936,000 in 2015, and $1.2 million in 2014. The decrease over the three-year period was primarily due to lower average investment balances.

Interest expense was $436,000 in 2016, $181,000 in 2015 and $178,000 in 2014. The increase in interest expense in 2016 was primarily due to interest recognized on a 2016 tax settlement.

Other income (expense), net, was $514,000 of income in 2016 compared to expense of ($1.4 million) and ($595,000) in 2015 and 2014, respectively. This year’s other income included foreign currency transaction gains of $513,000, resulting mainly from unrealized gains on foreign exchange contracts entered into by Florsheim Australia. Last year’s other expense included ($961,000) of foreign currency transaction losses, resulting mainly from unrealized losses on foreign exchange contracts entered into by Florsheim Australia, as well as losses from the revaluation of intercompany loans between the Company’s wholesale segment and Florsheim Australia. Additionally, other expense for 2015 included $473,000 of expense related to the operating losses and write-off of an investment by Florsheim Australia in a foreign joint venture. Other expense in 2014 included ($268,000) of foreign currency transaction losses, resulting mainly from the revaluation of intercompany loans between the Company’s wholesale segment and Florsheim Australia.

The effective tax rate for 2016 was 23.0% compared with 37.7% in 2015 and 36.2% in 2014. The decrease in 2016 was mainly due to the reversal of the deferred tax liability on corporate-owned life insurance policies (14.2%), as discussed above. The increase in 2015 was primarily due to a higher state tax liability as well as higher effective tax rates at the Company’s foreign locations.

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LIQUIDITY & CAPITAL RESOURCES

The Company’s primary sources of liquidity are its cash and short-term marketable securities, which aggregated $18.3 million at December 31, 2016, and $22.4 million at December 31, 2015, and its revolving line of credit. In 2016, the Company generated $46.9 million of cash from operations, compared with using $5.7 million of cash in operations in 2015, and generating $17.8 million of cash from operations in 2014. Fluctuations in net cash from operating activities over the three-year period have mainly resulted from changes in net earnings and operating assets and liabilities, and most significantly the year-end inventory and accounts receivable balances. The increase in 2016 was related to the reduction in inventory levels in accordance with customer orders, and also to reflect a more conservative position based on the overall retail environment.

The Company’s capital expenditures were $6.0 million, $2.5 million and $2.9 million in 2016, 2015 and 2014, respectively. The Company expects capital expenditures to be between $2 million and $3 million in 2017. The increase in 2016 was due to improvements that were made to the Company’s distribution center in Glendale, Wisconsin to increase its capacity, as well as remodeling projects to improve two of the Company’s Florida retail stores, and the build out for the new store opened in Florida this year.

The Company paid cash dividends of $8.9 million, $8.5 million and $8.2 million in 2016, 2015 and 2014, respectively.

The Company continues to repurchase its common stock under its share repurchase program when the Company believes market conditions are favorable. In 2016, the Company repurchased 410,983 shares for a total cost of $11.0 million. In 2015, the Company repurchased 354,741 shares for a total cost of $9.9 million. In 2014, the Company repurchased 297,576 shares for a total cost of $8.0 million. At December 31, 2016, the remaining total shares available to purchase under the program was approximately 565,000 shares.

At December 31, 2016, the Company had a $60 million unsecured revolving line of credit with a bank expiring November 3, 2017. The line of credit bears interest at LIBOR plus 0.75%. At December 31, 2016, outstanding borrowings were approximately $4.3 million at an interest rate of 1.52%. The highest balance during the year was $28.4 million. At December 31, 2015, outstanding borrowings were $26.6 million at an interest rate of 1.18%. The highest balance during 2015 was $42.0 million.

In connection with the Bogs acquisition, the Company had two earn-out payments due to the former shareholders of Bogs. The Company made the first earn-out payment of $1,270,000 in the first quarter of 2013. The second and final earn-out payment of $5,217,000 was made in March 2016. For additional information, see Note 10 in the Notes to Consolidated Financial Statements.

As of December 31, 2016, $3.1 million of cash and cash equivalents was held by the Company’s foreign subsidiaries. If these funds are needed for operations in the U.S., the Company would be required to accrue and pay U.S. taxes to repatriate these funds. Management believes that under the current tax law, the related tax impact of any such repatriation would not be material to the Company’s financial statements. For additional information, see Note 12 in the Notes to Consolidated Financial Statements.

In the fourth quarter of 2016, the Company reviewed its liquidity needs and sources of capital, including evaluating whether it would need the cash available under corporate-owned life insurance policies on two former executives. It was determined that the chances were remote that the Company would need to surrender the policies to satisfy liquidity needs, and, as a result, the Company reversed the $3.1 million deferred tax liability related to the policies.

The Company will continue to evaluate the best uses for its available liquidity, including, among other uses, capital expenditures, continued stock repurchases and additional acquisitions.

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The Company believes that available cash and marketable securities, cash provided by operations, and available borrowing facilities will provide adequate support for the cash needs of the business through March 2018, although there can be no assurances.

Off-Balance Sheet Arrangements

The Company does not utilize any special purpose entities or other off-balance sheet arrangements.

Commitments

The Company’s significant contractual obligations are its supplemental pension plan, short-term borrowings, and its operating leases. These obligations are discussed further in the Notes to Consolidated Financial Statements. The Company also has significant obligations to purchase inventory. Future obligations under operating leases are disclosed in Note 13 of the Notes to Consolidated Financial Statements. The table below provides summary information about these obligations as of December 31, 2016.

	Payments Due by Period (dollars in thousands)
	Total		Less Than a Year		2 – 3 Years		4 – 5 Years		More Than 5 Years
Pension obligations	$	34,031	$	409	$	893	$	1,040	$	31,689
Short-term borrowings		4,268	$	4,268	$	—	$	—	$	—
Operating leases		41,138		9,178		15,793		10,384		5,783
Purchase obligations*		51,460		51,460		—		—		—
Total	$	130,897	$	65,315	$	16,686	$	11,424	$	37,472

* Purchase obligations relate entirely to commitments to purchase inventory.

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OTHER

Non-GAAP Information

The comparability of certain of the Company’s financial measures was impacted by non-recurring adjustments related to the Umi trademark impairment, an adjustment to reverse the deferred tax liability on corporate-owned life insurance policies, and the gain from the final adjustment to the earnout payment related to the 2011 acquisition of Bogs. To provide additional information to investors to facilitate the comparison of past and present performance, the Company presented non-GAAP financial measures that exclude the financial impact of these non-recurring adjustments. These non-GAAP financial measures were used internally by management in evaluating the results of operations, but they are not intended to replace the presentation of financial results in accordance with GAAP. A reconciliation of the non-GAAP financial measures to their nearest comparable GAAP financial measures, as presented in the Consolidated Statements of Earnings, is provided in the table below.

Reconciliation of Non-GAAP Financial Measures

The following is a reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures for the twelve-month periods ended December 31, 2016 and 2015.

	Twelve Months Ended December 31, 2016									Twelve Months Ended December 31, 2015
	GAAP Measures (As Reported)			Adjustments			Non-GAAP Measures (As Adjusted)			GAAP Measures (As Reported)			Adjustments			Non-GAAP Measures (As Adjusted)
Net sales	$	296,933					$	296,933		$	320,617					$	320,617
Cost of sales		184,890						184,890			199,008						199,008
Gross earnings		112,043						112,043			121,609						121,609
Selling and administrative expenses		90,807			(1,770	)(1)		89,037			91,824			458	(3)		92,282
Earnings from operations		21,236						23,006			29,785						29,327
Interest income		763						763			936						936
Interest expense		(436	)					(436	)		(181	)					(181	)
Other income (expense), net		514						514			(1,425	)					(1,425	)
Earnings before provision for income taxes		22,077						23,847			29,115						28,657
Provision for income taxes		5,084			3,832	(2)		8,916			10,962			(179	)(3)		10,783
Net earnings		16,993						14,931			18,153						17,874
Net earnings (loss) attributable to noncontrolling interest		521						521			(59	)					(59	)
Net earnings attributable to Weyco Group, Inc.	$	16,472					$	14,410		$	18,212					$	17,933
Earnings per share
Basic	$	1.57			(0.20	)	$	1.37		$	1.69			(0.03	)	$	1.66
Diluted	$	1.56			(0.20	)	$	1.36		$	1.68			(0.03	)	$	1.65

(1) Umi trademark impairment

(2) Includes a $3.1 million adjustment to reverse deferred taxes on corporate-owned life insurance policies, and the tax effect of the Umi trademark impairment

(3) Gain from the final adjustment to the earnout payment relating to the 2011 acquisition of Bogs, and the related tax effect.

21

Critical Accounting Policies

The Company’s accounting policies are more fully described in Note 2 of the Notes to Consolidated Financial Statements. As disclosed in Note 2, the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the consolidated financial statements. The following policies are considered by management to be the most critical in understanding the significant accounting estimates inherent in the preparation of the Company’s consolidated financial statements and the uncertainties that could impact the Company’s results of operations, financial position and cash flows.

Sales Returns, Sales Allowances and Doubtful Accounts

The Company records reserves and allowances (“reserves”) for sales returns, sales allowances and discounts, cooperative advertising, and accounts receivable balances that it believes will ultimately not be collected. The reserves are based on such factors as specific customer situations, historical experience, a review of the current aging status of customer receivables and current and expected economic conditions. The reserve for doubtful accounts includes a specific reserve for accounts identified as potentially uncollectible, plus an additional reserve for the balance of accounts, determined based on historical trends. The Company evaluates the reserves and the estimation process and makes adjustments when appropriate. Historically, actual write-offs against the reserves have been within the Company’s expectations. Changes in these reserves may be required if actual returns, discounts and bad debt activity varies from the original estimates. These changes could impact the Company’s results of operations, financial position and cash flows.

Pension Plan Accounting

The Company’s pension expense and corresponding obligation are determined on an actuarial basis and require certain actuarial assumptions. Management believes the two most critical of these assumptions are the discount rate and the expected rate of return on plan assets. The Company evaluates its actuarial assumptions annually on the measurement date (December 31) and makes modifications based on such factors as market interest rates and historical asset performance. Changes in these assumptions can result in different expense and liability amounts, and future actual experience can differ from these assumptions.

Discount Rate — Pension expense and projected benefit obligation both increase as the discount rate is reduced. See Note 11 of the Notes to Consolidated Financial Statements for discount rates used in determining the net pension expense for the years ended December 31, 2016, 2015 and 2014 and the funded status of the plans at December 31, 2016 and 2015. Effective January 1, 2016, the Company adopted the spot-rate approach to determine the interest cost component of pension expense. Under the spot-rate approach, the interest cost is calculated by applying interest to the discounted cash flow expected at each payment date. The interest is determined using the same spot rate along the yield curve that was used to determine the present value of the associated payment. Prior to 2016, the Company the Company utilized the cash flow matching method, which discounted each year’s projected cash flows at the associated spot interest rate back to the measurement date. A 0.5% decrease in the discount rate would increase annual pension expense and the projected benefit obligation by approximately $32,000 and $3.9 million, respectively.

The Company considered the adoption of the spot rate approach a change in accounting estimate and recognized the effects of the change on a prospective basis. The effects of adopting the spot rate approach reduced net pension expense by approximately $522,000 ($318,000 after tax, or $0.03 per diluted share) in 2016, primarily due to a reduction in interest cost.

22

Expected Rate of Return — Pension expense increases as the expected rate of return on pension plan assets decreases. In estimating the expected return on plan assets, the Company considers the historical returns on plan assets and future expectations of asset returns. The Company utilized an expected rate of return on plan assets of 7.50% in 2016, 2015 and 2014. This rate was based on the Company’s long-term investment policy of equity securities: 20% – 80%; fixed income securities: 20% – 80%; and other, principally cash: 0% – 20%. A 0.5% decrease in the expected return on plan assets would increase annual pension expense by approximately $156,000.

The Company’s unfunded benefit obligation was $28.2 million and $30.6 million at December 31, 2016 and 2015, respectively. The decrease between years was primarily due to the pension plan freeze, effective December 31, 2016. The effect of the freeze was a reduction of the projected benefit obligation to the amount of the plans’ accumulated benefit obligations.

Goodwill and Trademarks

Goodwill and trademarks are tested for impairment on an annual basis and more frequently when significant events or changes in circumstances indicate that their carrying values may not be recoverable. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of the asset.

The Company’s $11.1 million of goodwill resulted from the 2011 acquisition of The Combs Company (“Bogs”). The Company uses a two-step process to test this goodwill for impairment. First, the applicable reporting unit’s fair value is compared to its carrying value. If the reporting unit’s carrying amount exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired, and the second step of the impairment test would be performed. The second step of the goodwill impairment test is to measure the amount of the impairment loss, if any. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge would be recorded for the difference if the carrying value exceeds the implied fair value of the goodwill.

The Company conducted its annual impairment test of goodwill as of December 31, 2016. For goodwill impairment testing, the Company determined the applicable reporting unit is its wholesale segment. Fair value of the wholesale segment was estimated based on a discounted cash flow analysis. The rate used in determining discounted cash flows was a rate corresponding to the Company’s weighted average cost of capital, adjusted for risk where appropriate. In determining the estimated future cash flows, current and future levels of income were considered as well as business trends and market conditions. The testing determined that the estimated fair value of the wholesale segment exceeded its carrying value therefore there was no impairment of goodwill in 2016.

The Company conducted its annual impairment tests of trademarks as of December 31, 2016. The Company uses a discounted cash flow methodology to determine the fair value of its trademarks, and a loss would be recognized if the carrying values of the trademarks exceeded their fair values. During the fourth quarter of 2016, the Company evaluated the current state of the Umi business and determined the brand did not fit the long-term strategic objectives of the Company. As a result, the Company recorded a $1,770,000 impairment charge to write off the majority of the value of the Umi trademark. Other than this write-down, there were no other impairments of the Company’s trademarks in 2016. Additionally, there were no impairments of the Company’s trademarks in 2015 or 2014.

The Company can make no assurances that the goodwill or trademarks will not be impaired in the future. When preparing a discounted cash flow analysis, the Company makes a number of key estimates and assumptions. The Company estimates the future cash flows based on historical and forecasted revenues and operating costs. This, in turn, involves further estimates such as estimates of future growth rates and inflation rates. The discount rate is based on the estimated weighted

23

average cost of capital for the business and may change from year to year. Weighted average cost of capital includes certain assumptions such as market capital structures, market beta, risk-free rate of return and estimated costs of borrowing. Changes in these key estimates and assumptions, or in other assumptions used in this process, could materially affect the Company’s impairment analysis for a given year.

Contingent Consideration

Contingent consideration was comprised of two earn-out payments that the Company was obligated to pay the former shareholders of Bogs in connection with the Company’s acquisition of Bogs in 2011. The contingent consideration was formula-driven and was based on Bogs achieving certain levels of gross margin dollars between January 1, 2011, and December 31, 2015. The first earn-out payment was paid on March 28, 2013 in the amount of $1,270,000. The second earn-out payment was paid on March 23, 2016 in the amount of $5,217,000. The second and final earn-out payment was recorded within accrued liabilities as of December 31, 2015.

Prior to December 31, 2015, the Company determined the fair value of the contingent consideration using a probability-weighted model which included estimates related to Bogs future sales levels and gross margins. On a quarterly basis, the Company revalued the obligation and recorded increases or decreases in its fair value as an adjustment to operating earnings. Changes to the contingent consideration obligation resulted from accretion of the discount due to the passage of time and changes in the actual or projected future performance of Bogs. The assumptions used to determine the fair value of the liability included a significant amount of judgment, and any changes in the assumptions may have had a material impact on the amount of contingent consideration expense or income recorded in a given period.

Recent Accounting Pronouncements

See Note 2 of the Notes to Consolidated Financial Statements.

24

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in foreign exchange and interest rates. To reduce the risk from changes in foreign exchange rates, the Company selectively uses foreign exchange contracts. The Company does not hold or issue financial instruments for trading purposes. The Company generally does not have significant market risk on its marketable securities as those investments consist of investment-grade securities and are held to maturity. The Company reviewed its portfolio of investments as of December 31, 2016, and determined that no other-than-temporary market value impairment exists.

The Company is also exposed to market risk related to the assets in its defined benefit pension plan. The Company reduces that risk by having a diversified portfolio of equity and fixed income investments and periodically reviews this allocation with its investment consultants.

Foreign Currency

The Company’s earnings are affected by fluctuations in the value of the U.S. dollar against foreign currencies, primarily as a result of the sale of product to Canadian customers, Florsheim Australia’s purchases of its inventory in U.S. dollars and the Company’s intercompany loans with Florsheim Australia. At December 31, 2016, the Company had foreign exchange contracts outstanding to sell $6.0 million Canadian dollars at a price of approximately $4.5 million U.S. dollars. Additionally, Florsheim Australia had foreign exchange contracts outstanding to buy $2.6 million U.S. dollars at a price of approximately $3.5 million Australian dollars. All contracts expire in less than one year. Based on the Company’s outstanding foreign contracts and intercompany loans, a 10% depreciation in the U.S. dollar at December 31, 2016 would result in a loss of approximately $298,000.

Interest Rates

The Company is exposed to interest rate fluctuations on borrowings under its revolving line of credit. At December 31, 2016, the Company had approximately $4.3 million of outstanding borrowings under the revolving line of credit. The interest expense related to borrowings under the line during 2016 was approximately $217,000. A 10% increase in the Company’s interest rate on borrowings outstanding as of December 31, 2016 would not have a material effect on the Company’s financial position, results of operations or cash flows.

25

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

	Page
Management’s Report on Internal Control Over Financial Reporting		27
Report of Independent Registered Public Accounting Firm (Successor)		28
Report of Independent Registered Public Accounting Firm (Predecessor)		30
Consolidated Statements of Earnings		31
Consolidated Statements of Comprehensive Income		32
Consolidated Balance Sheets		33
Consolidated Statements of Equity		34
Consolidated Statements of Cash Flows		35
Notes to Consolidated Financial Statements		36

26

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013). Based on the assessment, the Company’s management has concluded that, as of December 31, 2016, the Company’s internal control over financial reporting was effective based on those criteria.

The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company’s independent registered public accounting firm has audited the Company’s consolidated financial statements and the effectiveness of internal controls over financial reporting as of December 31, 2016 as stated in its report below.

27

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders, Audit Committee and Board of Directors
Weyco Group, Inc.
Milwaukee, WI

We have audited the accompanying consolidated balance sheets of Weyco Group, Inc. as of December 31, 2016, and 2015, and the related consolidated statements of earnings, comprehensive income, equity and cash flows for the years then ended. We also have audited Weyco Group, Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 framework). The company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements include examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

28

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Weyco Group, Inc. as of December 31, 2016, and 2015 and the results of their operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, Weyco Group, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 framework).

As discussed in Note 12 to the financial statements, effective January 1, 2016, Weyco Group, Inc. adopted Accounting Standards Update (ASU) 2015-17, Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes.

/s/ Baker Tilly Virchow Krause, LLP
 
Milwaukee, Wisconsin
March 9, 2017

29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Weyco Group, Inc.

We have audited the accompanying consolidated statements of earnings, comprehensive income, equity, and cash flows of Weyco Group, Inc. and subsidiaries (the “Company”) for the year ended December 31, 2014. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of operations and cash flows of Weyco Group, Inc. and subsidiaries for the year ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP
 
Milwaukee, Wisconsin
March 11, 2015

30

CONSOLIDATED STATEMENTS OF EARNINGS

For the years ended December 31, 2016, 2015 and 2014

	2016			2015			2014
	(In thousands, except per share amounts)
Net sales	$	296,933		$	320,617		$	320,488
Cost of sales		184,890			199,008			197,420
Gross earnings		112,043			121,609			123,068
Selling and administrative expenses		90,807			91,824			92,411
Earnings from operations		21,236			29,785			30,657
Interest income		763			936			1,174
Interest expense		(436	)		(181	)		(178	)
Other income (expense), net		514			(1,425	)		(595	)
Earnings before provision for income taxes		22,077			29,115			31,058
Provision for income taxes		5,084			10,962			11,234
Net earnings		16,993			18,153			19,824
Net earnings (loss) attributable to noncontrolling interest		521			(59	)		804
Net earnings attributable to Weyco Group, Inc.	$	16,472		$	18,212		$	19,020
Basic earnings per share	$	1.57		$	1.69		$	1.76
Diluted earnings per share	$	1.56		$	1.68		$	1.75

 
 
The accompanying notes to consolidated financial statements are an integral part of these financial statements.

31

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2016, 2015 and 2014

	2016		2015			2014
	(Dollars in thousands)
Net earnings	$	16,993	$	18,153		$	19,824
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		198		(3,411	)		(2,374	)
Pension liability adjustments		1,696		2,360			(6,648	)
Other comprehensive income (loss)		1,894		(1,051	)		(9,022	)
Comprehensive income		18,887		17,102			10,802
Comprehensive income (loss) attributable to noncontrolling interest		517		(673	)		390
Comprehensive income attributable to Weyco Group, Inc.	$	18,370	$	17,775		$	10,412

 
 
The accompanying notes to consolidated financial statements are an integral part of these financial statements.

32

CONSOLIDATED BALANCE SHEETS

As of December 31, 2016 and 2015

	2016			2015
	(In thousands, except par value and share data)
ASSETS:
Cash and cash equivalents	$	13,710		$	17,926
Marketable securities, at amortized cost		4,601			4,522
Accounts receivable, less allowances of $2,516 and $2,257, respectively		50,726			54,009
Income tax receivable		789			—
Inventories		69,898			97,184
Prepaid expenses and other current assets		6,203			5,835
Total current assets		145,927			179,476
Marketable securities, at amortized cost		21,061			20,685
Deferred income tax benefits		660			—
Property, plant and equipment, net		33,717			31,833
Goodwill		11,112			11,112
Trademarks		32,978			34,748
Other assets		22,785			21,143
Total assets	$	268,240		$	298,997
LIABILITIES AND EQUITY:
Short-term borrowings	$	4,268		$	26,649
Accounts payable		11,942			13,339
Dividend payable		2,192			2,147
Accrued liabilities:
Wages, salaries and commissions		2,372			3,134
Taxes other than income taxes		1,193			1,111
Other		7,007			13,239
Accrued income tax payable		—			31
Deferred income tax liabilities		—			1,537
Total current liabilities		28,974			61,187
Deferred income tax liabilities		703			70
Long-term pension liability		27,801			30,188
Other long-term liabilities		2,482			2,823
Commitments and contingencies (Note 13)
Equity:
Common stock, $1.00 par value, authorized 24,000,000 shares in 2016 and 2015, issued and outstanding 10,504,975 shares in 2016 and 10,767,389 shares in 2015		10,505			10,767
Capital in excess of par value		50,184			45,759
Reinvested earnings		157,468			160,325
Accumulated other comprehensive loss		(16,569	)		(18,467	)
Total Weyco Group, Inc. equity		201,588			198,384
Noncontrolling interest		6,692			6,345
Total equity		208,280			204,729
Total liabilities and equity	$	268,240		$	298,997

 
 
The accompanying notes to consolidated financial statements are an integral part of these financial statements.

33

CONSOLIDATED STATEMENTS OF EQUITY

For the years ended December 31, 2016, 2015 and 2014
(In thousands, except per share amounts)

	Common Stock			Capital in Excess of Par Value			Reinvested Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interest
Balance, December 31, 2013	$	10,876		$	31,729		$	156,983		$	(9,422)		$	6,826
Net earnings		—			—			19,020			—			804
Foreign currency translation adjustments		—			—			—			(1,960	)		(414	)
Pension liability adjustment (net of tax of $4,250)		—			—			—			(6,648	)		—
Cash dividends declared ($0.75 per share)		—			—			(8,137	)		—			—
Cash dividends paid to noncontrolling interest of subsidiary		—			—			—			—			(198	)
Stock options exercised		218			4,663			—			—			—
Issuance of restricted stock		24			(24	)		—			—			—
Stock-based compensation expense		—			1,465			—			—			—
Income tax benefit from stock options exercised and vesting of restricted stock		—			133			—			—			—
Shares purchased and retired		(297	)		—			(7,687	)		—			—
Balance, December 31, 2014	$	10,821		$	37,966		$	160,179		$	(18,030)		$	7,018
Net earnings		—			—			18,212			—			(59	)
Foreign currency translation adjustments		—			—			—			(2,797	)		(614	)
Pension liability adjustment (net of tax of $1,509)		—			—			—			2,360			—
Cash dividends declared ($0.79 per share)		—			—			(8,563	)		—			—
Stock options exercised		279			5,865			—			—			—
Issuance of restricted stock		22			(22	)		—			—			—
Stock-based compensation expense		—			1,559			—			—			—
Income tax benefit from stock options exercised and vesting of restricted stock		—			391			—			—			—
Shares purchased and retired		(355	)		—			(9,503	)		—			—
Balance, December 31, 2015	$	10,767		$	45,759		$	160,325		$	(18,467)		$	6,345
Net earnings		—			—			16,472			—			521
Foreign currency translation adjustments		—			—			—			202			(4	)
Pension liability adjustment (net of tax of $1,085)		—			—			—			1,696			—
Cash dividends declared ($0.83 per share)		—			—			(8,772	)		—			—
Cash dividends paid to noncontrolling interest of subsidiary		—			—			—			—			(170	)
Stock options exercised		123			2,871			—			—			—
Issuance of restricted stock		27			(27	)		—			—			—
Restricted stock forfeited		(2	)		2
Stock-based compensation expense		—			1,559			—			—			—
Income tax benefit from stock options exercised and vesting of restricted stock		—			20			—			—			—
Shares purchased and retired		(410	)		—			(10,557	)		—			—
Balance, December 31, 2016	$	10,505		$	50,184		$	157,468		$	(16,569)		$	6,692

 
 
The accompanying notes to consolidated financial statements are an integral part of these financial statements.

34

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2016, 2015 and 2014

	2016			2015			2014
	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	16,993		$	18,153		$	19,824
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities –
Depreciation		3,670			3,612			3,659
Amortization		387			426			361
Bad debt expense		76			235			240
Deferred income taxes		(2,645	)		346			1,115
Net (gains) losses on remeasurement of contingent consideration		—			(458	)		611
Net foreign currency transaction (gains) losses		(513	)		961			268
Stock-based compensation		1,559			1,559			1,465
Pension contributions		(2,400	)		(2,633	)		(1,300	)
Pension expense		3,184			3,699			2,212
Impairment of property, plant and equipment		113			—			—
Impairment of trademark		1,770			—			—
Increase in cash surrender value of life insurance		(573	)		(573	)		(552	)
Changes in operating assets and liabilities –
Accounts receivable		3,179			1,009			(6,787	)
Inventories		27,313			(28,282	)		(5,807	)
Prepaid expenses and other assets		(1,595	)		2,237			(901	)
Accounts payable		(1,389	)		(2,326	)		1,626
Accrued liabilities and other		(1,447	)		(3,587	)		604
Accrued income taxes		(811	)		(105	)		1,205
Net cash provided by (used for) operating activities		46,871			(5,727	)		17,843
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities		(6,287	)		(3,033	)		(8,427	)
Proceeds from maturities of marketable securities		5,745			8,191			8,177
Life insurance premiums paid		(155	)		(155	)		(155	)
Purchase of property, plant and equipment		(5,992	)		(2,481	)		(2,890	)
Net cash (used for) provided by investing activities		(6,689	)		2,522			(3,295	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid		(8,720	)		(8,452	)		(8,029	)
Cash dividends paid to noncontrolling interest of subsidiary		(170	)		—			(198	)
Shares purchased and retired		(10,967	)		(9,858	)		(7,984	)
Proceeds from stock options exercised		2,994			6,144			4,881
Payment of contingent consideration		(5,217	)		—			—
Proceeds from bank borrowings		121,959			160,534			101,200
Repayments of bank borrowings		(144,340	)		(139,290	)		(107,795	)
Income tax benefits from stock-based compensation		20			391			133
Net cash (used for) provided by financing activities		(44,441	)		9,469			(17,792	)
Effect of exchange rate changes on cash and cash equivalents		43			(837	)		(226	)
Net (decrease) increase in cash and cash equivalents	$	(4,216)		$	5,427		$	(3,470	)
CASH AND CASH EQUIVALENTS at beginning of year		17,926			12,499			15,969
CASH AND CASH EQUIVALENTS at end of year	$	13,710		$	17,926		$	12,499
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds	$	8,505		$	10,341		$	8,875
Interest paid	$	436		$	181		$	127

 
 
The accompanying notes to consolidated financial statements are an integral part of these financial statements.

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

1. NATURE OF OPERATIONS

Weyco Group, Inc. designs and markets quality and innovative footwear for men, women and children under a portfolio of well-recognized brand names including: “Florsheim,” “Nunn Bush,” “Stacy Adams,” “BOGS,” “Rafters,” and “Umi.” Inventory is purchased from third-party overseas manufacturers. The majority of foreign-sourced purchases are denominated in U.S. dollars. The Company has two reportable segments, North American wholesale operations (“wholesale”) and North American retail operations (“retail”). In the wholesale segment, the Company’s products are sold to leading footwear, department and specialty stores primarily in the United States and Canada. The Company also has licensing agreements with third parties who sell its branded apparel, accessories and specialty footwear in the United States, as well as its footwear in Mexico and certain markets overseas. Licensing revenues are included in the Company’s wholesale segment. The Company’s retail segment consisted of 13 Company-owned retail stores and an internet business in the United States as of December 31, 2016. Sales in retail outlets are made directly to consumers by Company employees. The Company’s “other” operations include the Company’s wholesale and retail operations in Australia, South Africa, Asia Pacific (collectively, “Florsheim Australia”) and Europe (“Florsheim Europe”). The majority of the Company’s operations are in the United States, and its results are primarily affected by the economic conditions and retail environment in the United States.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation — The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and include all of the Company’s majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ materially from those estimates.

Cash and Cash Equivalents — The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. At December 31, 2016 and 2015, the Company’s cash and cash equivalents included investments in money market accounts and cash deposits at various banks. The Company periodically has cash balances in excess of insured amounts. The Company has not experienced any losses on deposits in excess of insured amounts.

Investments — All of the Company’s municipal bond investments are classified as held-to-maturity securities and reported at amortized cost pursuant to Accounting Standards Codification (“ASC”) 320, Investments — Debt and Equity Securities (“ASC 320”) as the Company has the intent and ability to hold all investments to maturity. See Note 4.

Accounts Receivable — Trade accounts receivable arise from the sale of products on unsecured trade credit terms. On a quarterly basis, the Company reviews all significant accounts with past due balances, as well as the collectability of other outstanding trade accounts receivable for possible write-off. It is the Company’s policy to write-off accounts receivable against the allowance account when receivables are deemed to be uncollectible. The allowance for doubtful accounts reflects the Company’s best estimate of probable losses in the accounts receivable balances. The Company determines the allowance based on known troubled accounts, historical experience and other evidence currently available.

36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  – (continued)

Inventories — Inventories are valued at cost, which is not in excess of market value. The majority of inventories are determined on a last-in, first-out (“LIFO”) basis. Inventory costs include the cost of shoes purchased from third-party manufacturers, as well as related freight and duty costs. The Company generally takes title to product at the time of shipping. See Note 5.

Property, Plant and Equipment and Depreciation — Property, plant and equipment are stated at cost. Plant and equipment are depreciated using primarily the straight-line method over their estimated useful lives as follows: buildings and improvements, 10 to 39 years; machinery and equipment, 3 to 5 years; furniture and fixtures, 5 to 7 years. For income tax reporting purposes, depreciation is calculated using applicable methods.

Impairment of Long-Lived Assets — Property, plant and equipment are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment if events or changes in circumstances indicate that the carrying amounts may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to its related estimated undiscounted future cash flows. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. To derive the fair value, the Company utilizes the income approach and the fair value determined is categorized as Level 3 in the fair value hierarchy. The fair value of each asset group is determined using the estimated future cash flows discounted at an estimated weighted-average cost of capital. For purposes of the impairment review, the Company groups assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In the case of its retail stores, the Company groups assets at the individual store level. In connection with the Company’s impairment review, the Company’s retail segment recognized an impairment charge of $113,000 in 2016 which was recorded within selling and administrative expenses in the Consolidated Statements of Earnings. No impairment charges were recorded in 2015 or 2014.

Goodwill and Intangible Assets — Goodwill represents the excess of the purchase price over the estimated fair value of the underlying assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not subject to amortization. Other intangible assets consist of trademarks, customer relationships, and a non-compete agreement. Intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets which are not amortized are reviewed for impairment annually and whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. See Note 7.

Life Insurance — Life insurance policies are recorded at the amount that could be realized under the insurance contracts as of the balance sheet date. These assets are included within other assets in the Consolidated Balance Sheets. See Note 8.

Contingent Consideration — Contingent consideration was comprised of two earn-out payments that the Company was obligated to pay the former shareholders of The Combs Company (“Bogs”) in connection with the Company’s acquisition of Bogs in 2011. The Company revalued the contingent consideration liability on a quarterly basis and recorded increases or decreases in its fair value as an adjustment to operating earnings. Changes to the liability resulted from accretion of the discount due to the passage of time as well as changes in the actual or projected performance of Bogs. The assumptions used to determine the fair value of the contingent consideration liability included a significant amount of judgment. See Note 10.

Income Taxes — Deferred income taxes are provided on temporary differences arising from differences in the basis of assets and liabilities for income tax and financial reporting purposes. Deferred tax assets and liabilities are measured using enacted income tax rates in effect. Tax rate changes affecting deferred tax assets and liabilities are recognized in income at the enactment date.

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  – (continued)

The Company’s policy related to interest and penalties associated with unrecognized tax benefits are recorded within interest expense and income tax expense, respectively. See Note 12.

Noncontrolling Interest — The Company’s noncontrolling interest is accounted for under ASC 810, Consolidation (“ASC 810”) and represents the minority shareholder’s ownership interest related to the Company’s wholesale and retail businesses in Australia, South Africa and Asia Pacific. In accordance with ASC 810, the Company reports its noncontrolling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net (loss) earnings attributable to the noncontrolling interest and net earnings attributable to the Company’s common shareholders on the face of the Consolidated Statements of Earnings.

In accordance with the subscription agreement entered into in connection with the acquisition of Florsheim Australia in January 2009, the Company’s equity interest in Florsheim Australia decreases from 60% to 51% of equity issued under the subscription agreement as intercompany loans are paid in accordance with their terms. To date, the Company’s equity interest in Florsheim Australia has decreased from 60% to 55% and the noncontrolling shareholder’s interest has increased from 40% to 45%. This change is reflected in the Consolidated Statements of Equity.

Revenue Recognition — Revenue from the sale of product is recognized when title and risk of loss transfers to the customer and the customer is obligated to pay the Company. Sales to independent dealers are recorded at the time of shipment to those dealers. Sales through Company-owned retail outlets are recorded at the time of delivery to retail customers. All product sales are recorded net of estimated allowances for returns and discounts. The Company’s estimates of allowances for returns and discounts are based on such factors as specific customer situations, historical experience, and current and expected economic conditions. The Company evaluates the reserves and the estimation process and makes adjustments when appropriate. Revenue from third-party licensing agreements is recognized in the period earned. Licensing revenues were $2.8 million for 2016, $3.6 million for 2015 and $3.2 million for 2014.

Shipping and Handling Fees — The Company classifies shipping and handling fees billed to customers as revenues. Shipping and handling expenses incurred by the Company are included in selling and administrative expenses in the Consolidated Statements of Earnings. Wholesale segment shipping and handling expenses totaled $1.6 million in 2016, $1.9 million in 2015, and $2.4 million in 2014. Retail segment shipping and handling expenses, which result primarily from the Company’s shipments to its U.S. internet consumers, totaled $1.4 million in 2016, $1.2 million in 2015, and $1.1 million in 2014.

Cost of Sales — The Company’s cost of sales includes the cost of products and inbound freight and duty costs.

Selling and Administrative Expenses — Selling and administrative expenses primarily include salaries and commissions, advertising costs, employee benefit costs, distribution costs (e.g., receiving, inspection and warehousing costs), rent and depreciation. Distribution costs included in selling and administrative expenses were $11.7 million in 2016, $11.3 million in 2015, and $11.0 million in 2014.

Advertising Costs — Advertising costs are expensed as incurred. Total advertising costs were $11.8 million, $12.8 million, and $10.5 million in 2016, 2015 and 2014, respectively. All advertising expenses are included in selling and administrative expenses with the exception of co-op advertising expenses which are recorded as a reduction of net sales. Co-op advertising expenses, which are included in the above totals, reduced net sales by $4.0 million, $4.2 million, and $3.5 million in 2016, 2015 and 2014, respectively.

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  – (continued)

Foreign Currency Translations — The Company accounts for currency translations in accordance with ASC 830, Foreign Currency Matters. The Company’s non-U.S. subsidiaries’ local currencies are the functional currencies under which the balance sheet accounts are translated into U.S. dollars at the rates of exchange in effect at fiscal year-end and income and expense accounts are translated at the weighted average rates of exchange in effect during the year. Translation adjustments resulting from this process are recognized as a separate component of accumulated other comprehensive loss, which is a component of equity.

Foreign Currency Transactions — Gains and losses from foreign currency transactions are included in other income (expense), net, in the Consolidated Statements of Earnings. Net foreign currency transaction gains (losses) totaled $513,000 of gains in 2016, as compared to losses of ($961,000) and ($268,000) in 2015 and 2014, respectively.

The foreign currency transaction gains recognized in 2016 resulted mainly from unrealized gains on foreign exchange contracts entered into by Florsheim Australia. The foreign currency transaction losses recognized in 2015 resulted mainly from unrealized losses on foreign exchange contracts entered into by Florsheim Australia, as well as losses from the revaluation of intercompany loans between the Company’s wholesale segment and Florsheim Australia. The foreign currency transaction losses recognized in 2014 resulted mainly from the revaluation of intercompany loans between the Company’s wholesale segment and Florsheim Australia

Financial Instruments — At December 31, 2016, the Company had foreign exchange contracts outstanding to sell $6.0 million Canadian dollars at a price of approximately $4.5 million U.S. dollars. Additionally, the Company’s majority-owned subsidiary, Florsheim Australia, had foreign exchange contracts outstanding to buy $2.6 million U.S. dollars at a price of approximately $3.5 million Australian dollars. These contracts all expire in 2017.

Realized gains and losses on foreign exchange contracts are related to the purchase and sale of inventory and therefore are included in the Company’s net sales or cost of sales. In 2016, there were no significant realized gains or losses on foreign exchange contracts. In 2015, the Company recognized realized gains of $1.4 million related to foreign exchange contracts, and in 2014, there were no significant realized gains or losses related to foreign exchange contracts.

Earnings Per Share — Basic earnings per share excludes any dilutive effects of restricted stock and options to purchase common stock. Diluted earnings per share includes any dilutive effects of restricted stock and options to purchase common stock. See Note 15.

Comprehensive Income — Comprehensive income includes net earnings and changes in accumulated other comprehensive loss. Comprehensive income is reported in the Consolidated Statements of Comprehensive Income.

The components of accumulated other comprehensive loss as recorded on the accompanying Consolidated Balance Sheets were as follows:

	2016			2015
	(Dollars in thousands)
Foreign currency translation adjustments	$	(5,489)		$	(5,691	)
Pension liability, net of tax		(11,080	)		(12,776	)
Total accumulated other comprehensive loss	$	(16,569)		$	(18,467	)

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  – (continued)

The noncontrolling interest as recorded in the Consolidated Balance Sheets at December 31, 2016 and 2015, included foreign currency translation adjustments of approximately ($1,065,000) and ($1,061,000), respectively.

The following presents a tabular disclosure about changes in accumulated other comprehensive loss (dollars in thousands):

	Foreign Currency Translation Adjustments			Defined Benefit Pension Items			Total
Balance, December 31, 2014	$	(2,894	)	$	(15,136	)	$	(18,030	)
Other comprehensive (loss) income before reclassifications		(2,797	)		1,285			(1,512	)
Amounts reclassified from accumulated other comprehensive loss		—			1,075			1,075
Net current period other comprehensive (loss) income		(2,797	)		2,360			(437	)
Balance, December 31, 2015	$	(5,691	)	$	(12,776	)	$	(18,467	)
Other comprehensive income before reclassifications		202			765			967
Amounts reclassified from accumulated other comprehensive loss		—			931			931
Net current period other comprehensive income		202			1,696			1,898
Balance, December 31, 2016	$	(5,489	)	$	(11,080	)	$	(16,569	)

The following presents a tabular disclosure about reclassification adjustments out of accumulated other comprehensive loss during the years ended December 31, 2016 and 2015 (dollars in thousands):

	Amounts reclassified from accumulated other comprehensive loss for the year ended December 31,						Affected line item in the statement where net income is presented
	2016			2015
Amortization of defined benefit pension items
Prior service cost	$	(262)		$	(112	)		(1)
Actuarial losses		1,789			1,874			(1)
Total before tax		1,527			1,762
Tax benefit		(596	)		(687	)
Net of tax	$	931		$	1,075

(1) These amounts were included in the computation of net periodic pension cost. See Note 11 for additional details.

Stock-Based Compensation — At December 31, 2016, the Company had two stock-based employee compensation plans, which are described more fully in Note 17. The Company accounts for these plans under the recognition and measurement principles of ASC 718, Compensation —  Stock Compensation, (“ASC 718”). The Company’s policy is to estimate the fair market value of each option award granted on the date of grant using the Black-Scholes option pricing model. The Company estimates the fair value of each restricted stock award based on the fair market value of

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  – (continued)

the Company’s stock price on the grant date. The resulting compensation cost for both the options and restricted stock is amortized on a straight-line basis over the vesting period of the respective awards.

Concentration of Credit Risk — The Company had one individual customer accounts receivable balance outstanding that represented 11% of the Company’s gross accounts receivable balance at December 31, 2016. There was no single customer that represented more than 10% of the Company’s gross accounts receivable balance at December 31, 2015. Additionally, there were no individual customers with sales above 10% of the Company’s total sales in 2016, 2015 and 2014.

Recent Accounting Pronouncements — 

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04 “Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This new standard simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. The amendments in this update are effective for annual impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed on or after January 1, 2017. The Company does not anticipate that the adoption of this new standard will have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This new standard simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain reclassifications on the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” This new standard requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months. The amendments in this update are effective for fiscal years beginning after December 15, 2018 and interim periods therein. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” The new standard clarifies that, for inventories measured at the lower of cost and net realizable value, net realizable value should be determined based on the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The amendments in this update are effective for fiscal years beginning after December 15, 2016. The Company does not anticipate that the adoption of this new accounting standard will have a material impact on its consolidated financial statements.

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry specific guidance. The new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” The amendment in this update defers the effective date of ASU No. 2014-09 for all entities by

41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  – (continued)

one year. Additional ASUs have been issued as part of the overall new revenue guidance. This new revenue standard permits the use of either the retrospective or cumulative effect transition method.

The Company has begun its initial assessment of the new revenue standard, with a focus on identifying the contracts with customers and assessing whether and what performance obligations exist. Based on our preliminary assessment to date, the Company does not expect that the adoption of this new standard will have a material impact on its consolidated financial statements. The Company currently plans to adopt the new standard in the first quarter of 2018. The Company is continuing its assessment, which may identify other impacts.

3. FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes the following three-level hierarchy for fair value measurements based upon the sources of data and assumptions used to develop the fair value measurements:

Level 1 — unadjusted quoted market prices in active markets for identical assets or liabilities that are publicly accessible.

Level 2 — quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.

Level 3 — unobservable inputs that reflect the Company’s assumptions, consistent with reasonably available assumptions made by other market participants.

The carrying amounts of all short-term financial instruments, except marketable securities and foreign exchange contracts, approximate fair value due to the short-term nature of those instruments. Marketable securities are carried at amortized cost. The fair value disclosures of marketable securities are Level 2 valuations as defined by ASC 820, consisting of quoted prices for identical or similar assets in markets that are not active. See Note 4. Foreign exchange contracts are carried at fair value. The fair value measurements of foreign exchange contracts are based on observable market transactions of spot and forward rates, and thus represent level 2 valuations as defined by ASC 820. The Company’s contingent consideration was measured at fair value. See Note 10.

4. INVESTMENTS

Below is a summary of the amortized cost and estimated market values of the Company’s marketable securities as of December 31, 2016, and 2015. The estimated market values provided are Level 2 valuations as defined by ASC 820.

	2016				2015
	Amortized Cost		Market Value		Amortized Cost		Market Value
	(Dollars in thousands)
Municipal bonds:
Current	$	4,601	$	4,610	$	4,522	$	4,546
Due from one through five years		12,133		12,486		12,395		13,057
Due from six through ten years		7,705		7,804		6,929		7,217
Due from eleven through twenty years		1,223		1,222		1,361		1,391
Total	$	25,662	$	26,122	$	25,207	$	26,211

42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

4. INVESTMENTS  – (continued)

The unrealized gains and losses on marketable securities at December 31, 2016 and 2015 were as follows:

	2016				2015
	Unrealized Gains		Unrealized Losses		Unrealized Gains		Unrealized Losses
	(Dollars in thousands)
Municipal bonds	$	546	$	(86)	$	1,014	$	(10	)

At each reporting date, the Company reviews its investments to determine whether a decline in fair value below the amortized cost basis is other-than-temporary. To determine whether a decline in value is other-than-temporary, the Company considers all available evidence, including the issuer’s financial condition, the severity and duration of the decline in fair value, and the Company’s intent and ability to hold the investment for a reasonable period of time sufficient for any forecasted recovery. If a decline in value is deemed other-than-temporary, the Company records a reduction in the carrying value to the estimated fair value. The Company determined that no other-than-temporary impairment exists for the years ended December 31, 2016, 2015, and 2014.

5. INVENTORIES

At December 31, 2016 and 2015, inventories consisted of:

	2016			2015
	(Dollars in thousands)
Finished shoes	$	88,277		$	116,177
LIFO reserve		(18,379	)		(18,993	)
Total inventories	$	69,898		$	97,184

Finished shoes included inventory in-transit of $16.4 million and $38.1 million at December 31, 2016 and 2015, respectively. At December 31, 2016, approximately 89% of the Company’s inventories were valued by the LIFO method of accounting while approximately 11% were valued by the first-in, first-out (“FIFO”) method of accounting. At December 31, 2015, approximately 91% of the Company’s inventories were valued by the LIFO method of accounting while approximately 9% were valued by the first-in, first-out (“FIFO”) method of accounting.

During 2016, there were liquidations of LIFO inventory quantities which resulted in immaterial decreases in cost of sales in 2016. During 2015, there were no liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years as compared to the cost of fiscal 2015 purchases. During 2014, there were liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years as compared to the cost of fiscal 2014 purchases. The effect of the liquidation decreased cost of sales by $151,000 in 2014.

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

6. PROPERTY, PLANT AND EQUIPMENT, NET

At December 31, 2016 and 2015, property, plant and equipment consisted of:

	2016			2015
	(Dollars in thousands)
Land and land improvements	$	3,714		$	3,706
Buildings and improvements		26,912			26,912
Machinery and equipment		30,906			27,142
Retail fixtures and leasehold improvements		12,455			11,232
Construction in progress		39			24
Property, plant and equipment		74,026			69,016
Less: Accumulated depreciation		(40,309	)		(37,183	)
Property, plant and equipment, net	$	33,717		$	31,833

7. INTANGIBLE ASSETS

The Company’s indefinite-lived intangible assets as recorded in the Consolidated Balance Sheets consisted of the following:

	December 31, 2016							December 31, 2015
	Gross Carrying Amount		Accumulated Impairment			Net		Gross Carrying Amount		Accumulated Impairment		Net
	(Dollars in thousands)							(Dollars in thousands)
Indefinite-lived intangible assets
Goodwill	$	11,112	$	—		$	11,112	$	11,112	$	—	$	11,112
Trademarks		34,748		(1,770	)		32,978		34,748		—		34,748
Total indefinite-lived intangible assets	$	45,860	$	(1,770	)	$	44,090	$	45,860	$	—	$	45,860

The Company performs impairment tests for goodwill and trademarks on an annual basis and more frequently if an event or changes in circumstances indicate that their carrying values may not be recoverable. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of the asset.

The Company’s goodwill resulted from the 2011 acquisition of the BOGS/Rafters brands. The Company uses a two-step process to test this goodwill for impairment. The first step is to compare the applicable reporting unit’s fair value to its carrying value. The Company determined that the applicable reporting unit is its wholesale segment. If the fair value of the wholesale segment is greater than its carrying value, there is no impairment. If the carrying value is greater than the fair value, then the second step must be completed to measure the amount of the impairment, if any. The second step calculates the implied fair value of the goodwill, which is compared to its carrying value. If the implied fair value is less than the carrying value, an impairment loss is recognized equal to the difference. In 2016, the testing determined that the estimated fair value of the wholesale segment exceeded its carrying value, therefore there was no impairment of goodwill. The Company has never recorded an impairment charge on this goodwill.

The Company tests its trademarks for impairment annually by comparing the fair value of each trademark to its related carrying value. Fair value is estimated using a discounted cash flow methodology. During the fourth quarter of 2016, the Company evaluated the current state of the Umi business and determined the brand did not fit the long-term strategic objectives of the Company. As a result, the Company recorded a $1,770,000 impairment charge to write off the majority of the value of

44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

7. INTANGIBLE ASSETS  – (continued)

the Umi trademark. The Company is currently looking into different strategic alternatives for the Umi brand. Other than this write-off, the Company did not record any other trademark impairment charges in 2016.

The Company’s amortizable intangible assets as recorded in the Consolidated Balance Sheets consisted of the following:

	Weighted Average Life (Years)		December 31, 2016							December 31, 2015
			Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
			(Dollars in thousands)							(Dollars in thousands)
Amortizable intangible assets
Non-compete agreement		5	$	200	$	(200	)	$	—	$	200	$	(193	)	$	7
Customer relationships		15		3,500		(1,361	)		2,139		3,500		(1,128	)		2,372
Total amortizable intangible assets			$	3,700	$	(1,561	)	$	2,139	$	3,700	$	(1,321	)	$	2,379

The amortizable intangible assets are included within other assets in the Consolidated Balance Sheets. See Note 8.

The Company recorded amortization expense for intangible assets of $240,000 in 2016 and $273,000 in each of 2015 and 2014. Excluding the impact of any future acquisitions, the Company anticipates future amortization expense to be as follows:

(Dollars in thousands)	Intangible Assets
2017	$	233
2018		233
2019		233
2020		233
2021		233
Thereafter		974
Total	$	2,139

8. OTHER ASSETS

Other assets included the following amounts at December 31, 2016 and 2015:

	2016		2015
	(Dollars in thousands)
Cash surrender value of life insurance	$	15,604	$	14,876
Amortizable intangible assets (See Note 7)		2,139		2,379
Investment in real estate		2,297		2,284
Other		2,745		1,604
Total other assets	$	22,785	$	21,143

The Company has five life insurance policies on current and former executives. Upon death of the insured executives, the approximate death benefit the Company would receive is $16.6 million in aggregate as of December 31, 2016.

45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

8. OTHER ASSETS  – (continued)

On May 1, 2013, the Company purchased a 50% interest in a building in Montreal, Canada for approximately $3.2 million. The building, which is classified as an investment in real estate in the above table, serves as the Company’s Canadian office and distribution center. The purchase was accounted for as an equity-method investment under ASC 323, Investments — Equity Method and Joint Ventures.

9. SHORT-TERM BORROWINGS

At December 31, 2016, the Company had a $60 million unsecured revolving line of credit with a bank expiring November 3, 2017. The line of credit bears interest at LIBOR plus 0.75%. At December 31, 2016, outstanding borrowings were approximately $4.3 million at an interest rate of 1.52%. The highest balance during the year was $28.4 million. At December 31, 2015, outstanding borrowings were $26.6 million at an interest rate of 1.18%.

10. CONTINGENT CONSIDERATION

Contingent consideration was comprised of two earn-out payments that the Company was obligated to pay the former shareholders of The Combs Company (“Bogs”) in connection with the Company’s acquisition of Bogs in 2011. The estimate of contingent consideration was formula-driven and was based on Bogs achieving certain levels of gross margin dollars between January 1, 2011, and December 31, 2015. The first earn-out payment was paid on March 28, 2013 in the amount of $1,270,000. The second and final earn-out payment was paid on March 23, 2016 in the amount of $5,217,000. In accordance with ASC 805, Business Combinations, the Company remeasured its estimate of the fair value of the liability at each reporting date. The change in fair value was recognized in earnings.

The following table summarizes the activity during 2016 and 2015 related to the second earn-out payment as recorded in the Consolidated Statements of Earnings (dollars in thousands):

	2016			2015
Beginning balance	$	5,217		$	5,675
Net gain on remeasurement of contingent consideration		—			(458	)
Payment of contingent consideration		(5,217	)		—
Ending balance	$	—		$	5,217

The second and final earn-out payment was recorded within accrued liabilities at December 31, 2015. The gain on remeasurement of contingent consideration was recorded within selling and administrative expenses in the consolidated statements of earnings for the year ended December 31, 2015.

The total contingent consideration was reflected in the Company’s wholesale segment. The fair value measurement of the contingent consideration was based on significant inputs not observed in the market and thus represented a level 3 valuation as defined by ASC 820.

11. EMPLOYEE RETIREMENT PLANS

The Company has a defined benefit pension plan covering substantially all employees, as well as an unfunded supplemental pension plan for key executives. Retirement benefits are provided based on employees’ years of credited service and average earnings or stated amounts for years of service. Normal retirement age is 65 with provisions for earlier retirement. The plan also has provisions for disability and death benefits. The plan closed to new participants as of August 1, 2011. Additionally, benefit accruals under the plan were frozen effective December 31, 2016.

The Company’s funding policy for the defined benefit pension plan is to make contributions to the plan such that all employees’ benefits will be fully provided by the time they retire. Plan assets

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

11. EMPLOYEE RETIREMENT PLANS  – (continued)

are stated at market value and consist primarily of equity securities and fixed income securities, mainly U.S. government and corporate obligations.

The Company follows ASC 715, Compensation — Retirement Benefits (“ASC 715”) which requires employers to recognize the funded status of defined benefit pension and other postretirement benefit plans as an asset or liability in their statements of financial position and to recognize changes in the funded status in the year in which the changes occur as a component of comprehensive income. In addition, ASC 715 requires employers to measure the funded status of their plans as of the date of their year-end statements of financial position. ASC 715 also requires additional disclosures regarding amounts included in accumulated other comprehensive loss.

The Company’s pension plan’s weighted average asset allocation at December 31, 2016 and 2015, by asset category, was as follows:

	Plan Assets at December 31,
	2016			2015
Asset Category:
Equity Securities		54	%		52	%
Fixed Income Securities		38	%		40	%
Other		8	%		8	%
Total		100	%		100	%

The Company has a Retirement Plan Committee, consisting of the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, to manage the operations and administration of all benefit plans and related trusts. The committee has an investment policy for the pension plan assets that establishes target asset allocation ranges for the above listed asset classes as follows: equity securities: 20% – 80%; fixed income securities: 20% – 80%; and other, principally cash: 0% – 20%. On a semi-annual basis, the committee reviews progress towards achieving the pension plan’s performance objectives.

To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This resulted in the selection of the 7.50% long-term rate of return on assets assumption for 2016.

Assumptions used in determining the funded status at December 31, 2016 and 2015 were:

	2016			2015
Discount rate		4.35	%		4.62	%
Rate of compensation increase		4.00	%		4.00	%

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

11. EMPLOYEE RETIREMENT PLANS  – (continued)

The following is a reconciliation of the change in benefit obligation and plan assets of both the defined benefit pension plan and the unfunded supplemental pension plan for the years ended December 31, 2016 and 2015:

	Defined Benefit Pension Plan						Supplemental Pension Plan
	2016			2015			2016			2015
	(Dollars in thousands)
Change in projected benefit obligation
Projected benefit obligation, beginning of year	$	48,677		$	50,932		$	14,261		$	14,841
Service cost		1,328			1,345			310			291
Interest cost		1,833			2,051			616			614
Plan curtailment		(5,098	)		—			(919	)		—
Actuarial loss (gain)		2,282			(3,806	)		1,527			(1,135	)
Benefits paid		(3,943	)		(1,845	)		(386	)		(350	)
Projected benefit obligation, end of year	$	45,079		$	48,677		$	15,409		$	14,261
Change in plan assets
Fair value of plan assets, beginning of year		32,345			32,027			—			—
Actual return on plan assets		1,791			(320	)		—			—
Administrative expenses		(315	)		(150	)		—			—
Contributions		2,400			2,633			386			350
Benefits paid		(3,943	)		(1,845	)		(386	)		(350	)
Fair value of plan assets, end of year	$	32,278		$	32,345		$	—		$	—
Funded status of plan	$	(12,801)		$	(16,332	)	$	(15,409)		$	(14,261	)
Amounts recognized in the consolidated balance sheets consist of:
Accrued liabilities – other	$	—		$	—		$	(409)		$	(405	)
Long-term pension liability		(12,801	)		(16,332	)		(15,000	)		(13,856	)
Net amount recognized	$	(12,801)		$	(16,332	)	$	(15,409)		$	(14,261	)
Amounts recognized in accumulated other comprehensive loss consist of:
Accumulated loss, net of income tax benefit of $5,373, $6,631, $1,802 and $1,808, respectively	$	8,403		$	10,371		$	2,820		$	2,828
Prior service cost, net of income tax liability of $0, $0, ($91) and ($270), respectively		—			—			(143	)		(423	)
Net amount recognized	$	8,403		$	10,371		$	2,677		$	2,405

On September 15, 2016, the pension plan was amended to offer an immediate pension payout either as a one-time lump sum or annuity payment to certain former employees who had not yet commenced benefits under the plan. Benefits were calculated as of December 1, 2016, with lump sum payments being paid in December 2016 and annuity payments beginning January 1, 2017. As of December 31, 2016, $1.9 million in lump sum payments were paid as a result of this amendment. These lump sum payments are included in the “Benefits paid” line item in the above table.

On November 7, 2016, the Board of Directors of the Company authorized the freezing of the pension plan, whereby benefit accruals would be frozen effective December 31, 2016. The effect of the

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

11. EMPLOYEE RETIREMENT PLANS  – (continued)

freeze was a reduction of the projected benefit obligation (“PBO”) to the amount of the plans’ accumulated benefit obligations. The decrease in the PBO reduced the unrecognized net actuarial loss of the plan, which is reported on an after-tax basis in accumulated other comprehensive loss within the Consolidated Balance Sheets. No curtailment gain was recognized in earnings. These plan changes will reduce the service and interest cost of the plan for periods subsequent to the curtailment.

As noted above, the accumulated benefit obligations for the defined benefit pension plan and the supplemental pension plan were equal to the respective plans’ projected benefit obligations as of December 31, 2016, due to the pension plan curtailment. As of December 31, 2015, the accumulated benefit obligations for the defined benefit pension plan and the supplemental pension plan were $43.7 million and $14.2 million, respectively.

Assumptions used in determining net periodic pension cost for the years ended December 31, 2016, 2015 and 2014 were:

	Defined Benefit Pension Plan									Supplemental Pension Plan
	2016			2015			2014			2016			2015			2014
Discount rate for determining projected benefit obligation		4.60	%		4.17	%		5.03	%		4.67	%		4.17	%		5.03	%
Discount rate in effect for determining service cost		4.81	%		4.17	%		5.03	%		4.84	%		4.17	%		5.03	%
Discount rate in effect for determining interest cost		3.93	%		4.17	%		5.03	%		4.18	%		4.17	%		5.03	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%		4.00	%		4.00	%		4.00	%
Long-term rate of return on plan assets		7.50	%		7.50	%		7.50	%		—			—			—

Effective January 1, 2016, the Company adopted the spot-rate approach to determine the interest cost component of pension expense. Under the spot-rate approach, the interest cost is calculated by applying interest to the discounted cash flow expected at each payment date. The interest is determined using the same spot rate along the yield curve that was used to determine the present value of the associated payment. Prior to 2016, the Company used a single weighted-average rate in the determination of pension expense.

The Company considered the adoption of the spot rate approach a change in accounting estimate and recognized the effects of the change on a prospective basis. The effects of adopting the spot rate approach reduced net pension expense by approximately $522,000 in 2016, primarily due to a reduction in interest cost.

The components of net pension expense for the years ended December 31, 2016, 2015 and 2014, were:

	2016			2015			2014
	(Dollars in thousands)
Benefits earned during the period	$	1,638		$	1,636		$	1,263
Interest cost on projected benefit obligation(1)		2,449			2,665			2,586
Expected return on plan assets		(2,430	)		(2,364	)		(2,343	)
Net amortization and deferral		1,527			1,762			706
Net pension expense	$	3,184		$	3,699		$	2,212

(1) The decrease in interest cost in 2016 was primarily due to the adoption of the spot-rate approach, as described above.

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

11. EMPLOYEE RETIREMENT PLANS  – (continued)

Due to the pension plan amendments described above, the Company expects net pension expense to decrease by approximately $2.1 million in 2017.

The Company expects to recognize expense of $544,000 due to the amortization of unrecognized loss and income of $63,000 due to the amortization of prior service credit as components of net periodic expense in 2017, which are included in accumulated other comprehensive loss at December 31, 2016.

It is the Company’s intention to satisfy the minimum funding requirements and maintain at least an 80% funding percentage in its defined benefit retirement plan in future years. At this time, the Company expects that any cash contributions necessary to satisfy these requirements would not be material in 2017.

Projected benefit payments for the plans as of December 31, 2016, were estimated as follows:

	Defined Benefit Pension Plan		Supplemental Pension Plan
	(Dollars in thousands)
2017	$	2,308	$	409
2018	$	2,390	$	423
2019	$	2,530	$	470
2020	$	2,554	$	504
2021	$	2,572	$	536
2022 – 2026	$	13,183	$	4,035

The following table summarizes the fair value of the Company’s pension plan assets as of December 31, 2016, by asset category within the fair value hierarchy (for further level information, see Note 3):

	December 31, 2016
	Quoted Prices in Active Markets Level 1		Significant Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
	(Dollars in thousands)
Common stocks	$	12,656	$	970	$	—	$	13,626
Preferred stocks		227		17		—		244
Exchange traded funds		3,742		—		—		3,742
Corporate obligations		—		5,113		—		5,113
State and municipal obligations		—		1,538		—		1,538
Pooled fixed income funds		4,345		—		—		4,345
U.S. government securities		—		1,061		—		1,061
Cash and cash equivalents		2,519		—		—		2,519
Subtotal	$	23,489	$	8,699	$	—	$	32,188
Other assets(1)								90
Total							$	32,278

(1) This category represents trust receivables that are not leveled.

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

11. EMPLOYEE RETIREMENT PLANS  – (continued)

The following table summarizes the fair value of the Company’s pension plan assets as of December 31, 2015, by asset category within the fair value hierarchy (for further level information, see Note 3):

	December 31, 2015
	Quoted Prices in Active Markets		Significant Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Common stocks	$	12,352	$	1,027	$	—	$	13,379
Preferred stocks		409		22		—		431
Exchange traded funds		3,375		—		—		3,375
Corporate obligations		—		4,503		—		4,503
State and municipal obligations		—		1,337		—		1,337
Pooled fixed income funds		5,423		—		—		5,423
U.S. government securities		—		1,103		—		1,103
Cash and cash equivalents		2,703		—		—		2,703
Subtotal	$	24,262	$	7,992	$	—	$	32,254
Other assets(1)								91
Total							$	32,345

(1) This category represents trust receivables that are not leveled.

The Company also has a defined contribution plan covering substantially all employees. The Company contributed $417,000, $350,000 and $302,000 to the plan in 2016, 2015 and 2014, respectively. Effective January 1, 2017, the Company amended its defined contribution plan to increase the Company match formula for all plan participants. With this amendment, the Company estimates that total match contributions will increase by approximately $450,000 in 2017.

12. INCOME TAXES

The provision for income taxes included the following components for the years ended December 31, 2016, 2015 and 2014:

	2016			2015		2014
	(Dollars in thousands)
Current:
Federal	$	5,965		$	8,801	$	7,339
State		1,027			1,314		1,131
Foreign		737			501		1,649
Total		7,729			10,616		10,119
Deferred		(2,645	)		346		1,115
Total provision	$	5,084		$	10,962	$	11,234

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

12. INCOME TAXES  – (continued)

The differences between the U.S. federal statutory income tax rate and the Company’s effective tax rate were as follows for the years ended December 31, 2016, 2015 and 2014:

	2016			2015			2014
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		3.5			3.4			2.8
Non-taxable municipal bond interest		(1.0	)		(1.0	)		(1.2	)
Foreign income tax rate differences		(0.6	)		0.4			(0.8	)
Life insurance deferred tax reversal		(14.2	)		—			—
Other		0.3			(0.1	)		0.4
Effective tax rate		23.0	%		37.7	%		36.2	%

The decrease in the provision for income taxes and the effective tax rate for 2016 was primarily due to a one-time adjustment related to corporate-owned life insurance policies. In the fourth quarter of 2016, the Company reviewed its liquidity needs and sources of capital, including evaluating whether it would need the cash available under corporate-owned life insurance policies on two former executives. It was determined that the chances were remote that the Company would need to surrender the policies to satisfy liquidity needs, and, as a result, the Company reversed the $3.1 million deferred tax liability related to the policies.

The foreign component of pretax net earnings was $2.7 million, $1.3 million and $5.0 million for 2016, 2015 and 2014, respectively. As of December 31, 2016, the total amount of unremitted foreign earnings was $7.3 million. A deferred tax liability has not been recorded on these unremitted earnings because the Company intends to permanently reinvest such earnings outside of the U.S. Future dividends, if any, would be paid only out of current year earnings. If the remaining unremitted foreign earnings at December 31, 2016 were to be repatriated in the future, the related deferred tax liability would not have a material impact on the Company’s financial statements.

The components of deferred taxes as of December 31, 2016, and 2015 were as follows:

	2016			2015
	(Dollars in thousands)
Deferred income tax assets:
Accounts receivable reserves	$	341		$	422
Pension liability		11,002			11,931
Accrued liabilities		2,648			2,383
Carryfoward losses		129			—
Foreign currency losses on intercompany loans		53			148
		14,173			14,884
Deferred income tax liabilities:
Inventory and related reserves		(3,744	)		(3,552	)
Cash value of life insurance		(441	)		(3,517	)
Property, plant and equipment		(1,483	)		(1,420	)
Intangible assets		(8,284	)		(7,753	)
Prepaid expenses and other assets		(264	)		(249	)
		(14,216	)		(16,491	)
Net deferred income tax liabilities	$	(43)		$	(1,607	)

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

12. INCOME TAXES  – (continued)

The net deferred tax liabilities are classified in the Consolidated Balance Sheets as follows:

	2016			2015
	(Dollars in thousands)
Current deferred income tax liabilities	$	—		$	(1,537	)
Non-current deferred income tax benefits		660			—
Non-current deferred income tax liabilities		(703	)		(70	)
Net deferred income tax liabilities	$	(43)		$	(1,607	)

In 2015, the FASB issued guidance which simplified the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. The Company adopted this guidance for the year ended December 31, 2016 on a prospective basis. Prior period balances were not adjusted.

Uncertain Tax Positions

The Company accounts for its uncertain tax positions in accordance with ASC 740, Income Taxes (“ASC 740”). ASC 740 provides that the tax effects from an uncertain tax position can be recognized in the Company’s consolidated financial statements only if the position is more likely than not of being sustained on audit, based on the technical merits of the position.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

	2016			2015		2014
	(Dollars in thousands)
Unrecognized tax benefits balance at January 1,	$	284		$	—	$	124
Increases related to current year tax positions		239			284		—
Decreases related to prior period positions		—			—		(69	)
Decreases due to settlements of tax positions		(248	)		—		(55	)
Unrecognized tax benefits balance at December 31,	$	275		$	284	$	—

The unrecognized tax benefits at December 31, 2016 and 2015, include $70,000 and $108,000, respectively, of interest related to such positions. The unrecognized tax benefits, if ultimately recognized, would reduce the Company’s annual effective tax rate. The liabilities for potential interest are included in the Consolidated Balance Sheets at December 31, 2016 and 2015.

The Company files a U.S. federal income tax return, various U.S. state income tax returns and several foreign returns. In general, the 2014 through 2016 tax years remain subject to examination by those taxing authorities.

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

13. COMMITMENTS

The Company operates retail shoe stores under both short-term and long-term leases. Leases provide for a minimum rental plus percentage rentals based upon sales in excess of a specified amount. The Company also leases office space in the U.S. and its distribution facilities in Canada and overseas. Total minimum rents were $9.8 million in 2016, $9.1 million in 2015 and $9.7 million in 2014. Percentage rentals were $441,000 in 2016, $461,000 in 2015, and $512,000 in 2014.

Future fixed and minimum rental commitments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2016, are shown below. Renewal options exist for many long-term leases.

(Dollars in thousands)	Operating Leases
2017	$	9,178
2018		8,291
2019		7,502
2020		6,036
2021		4,348
Thereafter		5,783
Total	$	41,138

At December 31, 2016, the Company also had purchase commitments of approximately $51.5 million to purchase inventory, all of which were due in less than one year.

14. STOCK REPURCHASE PROGRAM

In April 1998, the Company’s Board of Directors first authorized a stock repurchase program to purchase shares of its common stock in open market transactions at prevailing prices. In 2016, the Company purchased 410,983 shares at a total cost of $11.0 million through its stock repurchase program. In 2015, the Company purchased 354,741 shares at a total cost of $9.9 million through its stock repurchase program. In 2014, the Company purchased 297,576 shares at a total cost of $8.0 million through its stock repurchase program. At December 31, 2016, there were 565,175 authorized shares remaining under the program.

15. EARNINGS PER SHARE

The following table sets forth the computations of basic and diluted earnings per share for the years ended December 31, 2016, 2015 and 2014:

	2016		2015		2014
	(In thousands, except per share amounts)
Numerator:
Net earnings attributable to Weyco Group, Inc.	$	16,472	$	18,212	$	19,020
Denominator:
Basic weighted average shares outstanding		10,519		10,773		10,791
Effect of dilutive securities:
Employee stock-based awards		53		86		97
Diluted weighted average shares outstanding		10,572		10,859		10,888
Basic earnings per share	$	1.57	$	1.69	$	1.76
Diluted earnings per share	$	1.56	$	1.68	$	1.75

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

15. EARNINGS PER SHARE  – (continued)

Diluted weighted average shares outstanding for 2016 exclude antidilutive stock options totaling 873,276 shares at a weighted average price of $26.86. Diluted weighted average shares outstanding for 2015 exclude antidilutive stock options totaling 720,757 shares at a weighted average price of $27.59. Diluted weighted average shares outstanding for 2014 exclude antidilutive stock options totaling 656,000 shares at a weighted average price of $27.76.

Unvested restricted stock awards provide holders with dividend rights prior to vesting, however, such rights are forfeitable if the awards do not vest. As a result, unvested restricted stock awards are not participating securities and are excluded from the computation of earnings per share.

16. SEGMENT INFORMATION

The Company has two reportable segments: North American wholesale operations (“wholesale”) and North American retail operations (“retail”). The chief operating decision maker, the Company’s Chief Executive Officer, evaluates the performance of the Company’s segments based on earnings from operations. Therefore, interest income or expense, other income or expense, and income taxes are not allocated to the segments. The “other” category in the table below includes the Company’s wholesale and retail operations in Australia, South Africa, Asia Pacific and Europe, which do not meet the criteria for separate reportable segment classification.

In the wholesale segment, shoes are marketed through more than 10,000 footwear, department and specialty stores, primarily in the United States and Canada. Licensing revenues are also included in the Company’s wholesale segment. The Company has licensing agreements with third parties who sell its branded apparel, accessories and specialty footwear in the United States, as well as its footwear in Mexico and certain markets overseas. In 2016, 2015 and 2014, there was no single customer with sales above 10% of the Company’s total sales.

In the retail segment, the Company operated 13 Company-owned stores in principal cities and an internet business in the United States as of December 31, 2016. Sales in retail outlets are made directly to the consumer by Company employees. In addition to the sale of the Company’s brands of footwear in these retail outlets, other branded footwear and accessories are also sold.

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

16. SEGMENT INFORMATION  – (continued)

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies. Summarized segment data for the years ended December 31, 2016, 2015 and 2014 was as follows:

	Wholesale		Retail		Other		Total
	(Dollars in thousands)
2016
Product sales	$	224,752	$	21,883	$	47,513	$	294,148
Licensing revenues		2,785		—		—		2,785
Net sales		227,537		21,883		47,513		296,933
Depreciation		2,361		461		848		3,670
Earnings from operations		16,398		2,109		2,729		21,236
Total assets		234,005		5,341		28,894		268,240
Capital expenditures		3,650		1,188		1,154		5,992
2015
Product sales	$	247,738	$	22,121	$	47,126	$	316,985
Licensing revenues		3,632		—		—		3,632
Net sales		251,370		22,121		47,126		320,617
Depreciation		2,210		535		867		3,612
Earnings from operations		24,272		2,519		2,994		29,785
Total assets		267,265		4,372		27,360		298,997
Capital expenditures		1,329		399		753		2,481
2014
Product sales	$	240,247	$	23,324	$	53,735	$	317,306
Licensing revenues		3,182		—		—		3,182
Net sales		243,429		23,324		53,735		320,488
Depreciation		2,251		553		855		3,659
Earnings from operations		22,527		3,300		4,830		30,657
Total assets		244,278		4,689		28,479		277,446
Capital expenditures		1,305		60		1,525		2,890

All North American corporate office assets are included in the wholesale segment. Transactions between segments primarily consist of sales between the wholesale and retail segments. Intersegment sales are valued at the cost of inventory plus an estimated cost to ship the products. Intersegment sales have been eliminated and are excluded from net sales in the above table.

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

16. SEGMENT INFORMATION  – (continued)

Geographic Segments

Financial information relating to the Company’s business by geographic area was as follows for the years ended December 31, 2016, 2015 and 2014:

	2016		2015		2014
	(Dollars in thousands)
Net Sales:
United States	$	231,462	$	252,459	$	244,260
Canada		17,958		21,031		22,493
Europe		8,014		7,291		9,048
Australia		28,390		27,224		30,466
Asia		7,702		9,050		9,842
South Africa		3,407		3,562		4,379
Total	$	296,933	$	320,617	$	320,488
Long-Lived Assets:
United States	$	74,548	$	74,658	$	75,952
Other		7,695		7,699		9,048
	$	82,243	$	82,357	$	85,000

Net sales attributed to geographic locations are based on the location of the assets producing the sales. Long-lived assets by geographic location consist of property, plant and equipment (net), goodwill, trademarks, investment in real estate and amortizable intangible assets.

17. STOCK-BASED COMPENSATION PLANS

At December 31, 2016, the Company had two stock-based compensation plans: the 2011 Incentive Plan and the 2014 Incentive Plan (collectively, “the Plans”). Under the Plans, options to purchase common stock were granted to officers and key employees at exercise prices not less than the fair market value of the Company’s common stock on the date of the grant. The Company issues new common stock to satisfy stock option exercises and the issuance of restricted stock awards. Awards are no longer granted under the 2011 plan.

Stock options and restricted stock awards were granted on August 25, 2016, August 25, 2015, and on August 26, 2014. Under the Plans, stock options and restricted stock awards are valued at fair market value based on the Company’s closing stock price on the date of grant. The stock options and restricted stock awards granted in 2016, 2015 and 2014 vest ratably over four years. As of December 31, 2016, there were 17,100 shares remaining available for stock-based awards under the 2014 Incentive Plan.

In accordance with ASC 718, stock-based compensation expense was recognized in the 2016, 2015 and 2014 consolidated financial statements for stock options and restricted stock awards granted since 2010. An estimate of forfeitures, based on historical data, was included in the calculation of stock-based compensation, and the estimate was adjusted quarterly to the extent that actual forfeitures differ, or are expected to materially differ, from such estimates. The effect of applying the expense recognition provisions of ASC 718 decreased Earnings Before Provision For Income Taxes by $1,559,000 in each of the years 2016 and 2015, and $1,465,000 in 2014.

As of December 31, 2016, there was $1.9 million of total unrecognized compensation cost related to non-vested stock options granted in the years 2013 through 2016 which is expected to be recognized over the weighted-average remaining vesting period of 2.7 years. As of December 31, 2016, there was $1.4 million of total unrecognized compensation cost related to non-vested restricted

57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

17. STOCK-BASED COMPENSATION PLANS  – (continued)

stock awards granted in the years 2013 through 2016 which is expected to be recognized over the weighted-average remaining vesting period of 2.7 years.

The following weighted-average assumptions were used to determine compensation expense related to stock options in 2016, 2015 and 2014:

	2016			2015			2014
Risk-free interest rate		1.09	%		1.36	%		1.45	%
Expected dividend yield		3.29	%		3.12	%		2.81	%
Expected term		4.3 years			4.3 years			4.3 years
Expected volatility		21.3	%		21.6	%		17.8	%

The risk-free interest rate is based on U.S. Treasury bonds with a remaining term equal to the expected term of the award. The expected dividend yield is based on the Company’s expected annual dividend as a percentage of the market value of the Company’s common stock in the year of grant. The expected term of the stock options is determined using historical experience. The expected volatility is based upon historical stock prices over the most recent period equal to the expected term of the award.

The following tables summarize stock option activity under the Company’s plans:

Stock Options

	Years ended December 31,
	2016					2015					2014
Stock Options	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at beginning of year		1,351,826		$	26.09		1,355,416		$	25.36		1,260,866		$	24.41
Granted		277,800			25.51		299,700			25.64		331,600			27.04
Exercised		(123,294	)		24.28		(279,090	)		22.02		(218,150	)		22.37
Forfeited or expired		(20,075	)		26.52		(24,200	)		26.58		(18,900	)		25.71
Outstanding at end of year		1,486,257		$	26.13		1,351,826		$	26.09		1,355,416		$	25.36
Exercisable at end of year		762,132		$	26.07		594,906		$	25.55		603,834		$	23.66
Weighted average fair market value of options granted	$	3.05				$	3.30				$	2.93

	Weighted Average Remaining Contractual Life (in Years)		Aggregate Intrinsic Value
Outstanding – December 31, 2016		3.6	$	7,686,000
Exercisable – December 31, 2016		2.6	$	3,989,000

The aggregate intrinsic value of outstanding and exercisable stock options is defined as the difference between the market value of the Company’s stock on December 30, 2016 of $31.30 and the exercise price multiplied by the number of in-the-money outstanding and exercisable stock options.

58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

17. STOCK-BASED COMPENSATION PLANS  – (continued)

Non-vested Stock Options

Non-vested Stock Options	Number of Options			Weighted Average Exercise Price		Weighted Average Fair Value
Non-vested – December 31, 2013		679,785		$	26.14	$	3.46
Granted		331,600			27.04		2.93
Vested		(243,303	)		25.54		3.80
Forfeited		(16,500	)		25.98		3.44
Non-vested – December 31, 2014		751,582		$	26.74	$	3.12
Granted		299,700			25.64		3.30
Vested		(275,187	)		26.14		3.36
Forfeited		(19,175	)		26.59		3.14
Non-vested – December 31, 2015		756,920		$	26.53	$	3.10
Granted		277,800			25.51		3.05
Vested		(293,720	)		26.39		3.13
Forfeited		(16,875	)		26.37		3.10
Non-vested – December 31, 2016		724,125		$	26.20	$	3.07

The following table summarizes information about outstanding and exercisable stock options at December 31, 2016:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number of Options Outstanding		Weighted Average Remaining Contractual Life (in Years)		Weighted Average Exercise Price		Number of Options Exercisable		Weighted Average Exercise Price
$23.53 to $25.86		865,207		3.8	$	24.95		373,832	$	24.14
$27.04 to $28.50		621,050		3.3	$	27.77		388,300	$	27.92
		1,486,257		3.6	$	26.13		762,132	$	26.07

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

	2016		2015		2014
	(Dollars in thousands)
Total intrinsic value of stock options exercised	$	455	$	1,705	$	1,108
Cash received from stock option exercises	$	2,994	$	6,144	$	4,881
Income tax benefit from the exercise of stock options	$	178	$	665	$	432
Total fair value of stock options vested	$	919	$	925	$	923

59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

17. STOCK-BASED COMPENSATION PLANS  – (continued)

Restricted Stock

The following table summarizes restricted stock award activity during the years ended December 31, 2014, 2015 and 2016:

Non-vested Restricted Stock	Shares of Restricted Stock			Weighted Average Grant Date Fair Value
Non-vested – December 31, 2013		47,500		$	25.86
Issued		24,400			27.04
Vested		(17,850	)		25.31
Forfeited		—			—
Non-vested – December 31, 2014		54,050			26.58
Issued		21,900			25.64
Vested		(20,700	)		25.94
Forfeited		—			—
Non-vested – December 31, 2015		55,250		$	26.45
Issued		26,900			25.51
Vested		(22,025	)		26.26
Forfeited		(1,625	)		26.30
Non-vested – December 31, 2016		58,500		$	26.09

At December 31, 2016, the Company expected 58,500 shares of restricted stock to vest over a weighted-average remaining contractual term of 2.8 years. These shares had an aggregate intrinsic value of $1.8 million at December 31, 2016. The aggregate intrinsic value was calculated using the market value of the Company’s stock on December 30, 2016 of $31.30 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 $230,000 in 2016, $221,000 in 2015, and $183,000 in 2014.

18. QUARTERLY FINANCIAL DATA (Unaudited)

(In thousands, except per share amounts)

2016	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Net sales	$	78,900	$	56,867	$	79,069	$	82,097	$	296,933
Gross earnings	$	27,127	$	22,291	$	29,322	$	33,303	$	112,043
Net earnings attributable to Weyco Group, Inc.	$	2,687	$	1,000	$	4,600	$	8,185	$	16,472
Net earnings per share:
Basic	$	0.25	$	0.09	$	0.44	$	0.79	$	1.57
Diluted	$	0.25	$	0.09	$	0.44	$	0.78	$	1.56

60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2016, 2015 and 2014

18. QUARTERLY FINANCIAL DATA (Unaudited)  – (continued)

2015	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Net sales	$	78,052	$	63,934	$	91,227	$	87,404	$	320,617
Gross earnings	$	28,737	$	24,423	$	32,610	$	35,839	$	121,609
Net earnings attributable to Weyco Group, Inc.	$	3,633	$	2,040	$	5,526	$	7,013	$	18,212
Net earnings per share:
Basic	$	0.34	$	0.19	$	0.51	$	0.65	$	1.69
Diluted	$	0.33	$	0.19	$	0.51	$	0.65	$	1.68

19. VALUATION AND QUALIFYING ACCOUNTS

	Deducted from Assets
	Doubtful Accounts			Returns and Allowances			Total
	(Dollars in thousands)
BALANCE, DECEMBER 31, 2013	$	1,233		$	1,060		$	2,293
Add – Additions charged to earnings		240			3,299			3,539
Deduct – Charges for purposes for which reserves were established		(246	)		(3,202	)		(3,448	)
BALANCE, DECEMBER 31, 2014	$	1,227		$	1,157		$	2,384
Add – Additions charged to earnings		235			3,200			3,435
Deduct – Charges for purposes for which reserves were established		(286	)		(3,276	)		(3,562	)
BALANCE, DECEMBER 31, 2015	$	1,176		$	1,081		$	2,257
Add – Additions charged to earnings		76			3,290			3,366
Deduct – Charges for purposes for which reserves were established		(90	)		(2,829	)		(2,919	)
Deduct – Adjustment to reserve		(188	)		—			(188	)
BALANCE, DECEMBER 31, 2016	$	974		$	1,542		$	2,516

20. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through March 9, 2017, the date these financial statements were issued. No significant subsequent events have occurred through this date requiring adjustment to the financial statements or disclosures.

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ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission is recorded, processed, summarized and reported on a timely basis. The Company’s Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report (the “Evaluation Date”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures. Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective in bringing to their attention on a timely basis information relating to the Company required to be included in the Company’s periodic filings under the Exchange Act.

Management’s Report on Internal Control over Financial Reporting

The report of management required under this Item 9A is contained in Item 8 of Part II of this Annual Report on Form 10-K under the heading “Management’s Report on Internal Control over Financial Reporting.”

Reports of Independent Registered Public Accounting Firm

The attestation reports from the current and former independent registered public accounting firms required under this Item 9A are contained in Item 8 of Part II of this Annual Report on Form 10-K under the headings “Report of Independent Registered Public Accounting Firm (Successor)” and “Report of Independent Registered Public Accounting Firm (Predecessor).”

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the quarter or year ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B OTHER INFORMATION

None

62

PART III

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required by this Item is set forth within Part I, “Executive Officers of the Registrant” of this Annual Report on Form 10-K and within the Company’s definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 9, 2017 (the “2017 Proxy Statement”) in sections entitled “Proposal One: Election of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Audit Committee,” and “Code of Business Ethics,” and is incorporated herein by reference.

ITEM 11 EXECUTIVE COMPENSATION

Information required by this Item is set forth in the Company’s 2017 Proxy Statement in sections entitled “Compensation Discussion and Analysis and Executive Compensation,” “Director Compensation,” and “Corporate Governance and Compensation Committee Interlocks and Insider Participation,” and is incorporated herein by reference.

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by this Item is set forth in the Company’s 2017 Proxy Statement in the section entitled “Security Ownership of Management and Others,” and is incorporated herein by reference.

The following table provides information about the Company’s equity compensation plans as of December 31, 2016:

Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity compensation plans approved by shareholders		1,486,257	$	26.13		17,100
Equity compensation plans not approved by shareholders		—		—		—
Total		1,486,257	$	26.13		17,100

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this Item is set forth in the Company’s 2017 Proxy Statement in sections entitled “Transactions with Related Persons” and “Director Independence,” and is incorporated herein by reference.

ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required by this Item is set forth in the Company’s 2017 Proxy Statement in the section entitled “Audit and Non-Audit Fees,” and is incorporated herein by reference.

63

PART IV

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this Annual Report on Form 10-K:

(1) Financial Statements — See the consolidated financial statements included in Part II, Item 8 “Financial Statements and Supplementary Data” in this 2016 Annual Report on Form 10-K.

(2) Financial Statement Schedules — Financial statement schedules have been omitted because information required in these schedules is included in the Notes to Consolidated Financial Statements.

(b) List of Exhibits.

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Exhibit	Description	Incorporation Herein By Reference To	Filed Herewith
2.1	Stock Purchase Agreement, relating to The Combs Company dated March 2, 2011 by and among Weyco Group, Inc. and The Combs Company, d/b/a Bogs Footwear, William G. Combs and Sue Combs (excluding certain schedules and exhibits referred to in the agreement, which the registrant hereby agrees to furnish supplementally to the SEC upon request of the SEC)	Exhibit 2.1 to Form 8-K filed March 7, 2011
3.1	Articles of Incorporation as Restated August 29, 1961, and Last Amended February 16, 2005	Exhibit 3.1 to Form 10-K for Year Ended December 31, 2004
3.2	Bylaws as Revised January 21, 1991 and Last Amended July 26, 2007	Exhibit 3 to Form 8-K Dated July 26, 2007
10.1	Subscription Agreement relating to Florsheim Australia Pty Ltd, dated January 23, 2009 by and among Florsheim Australia Pty Ltd, Seraneuse Pty Ltd as trustee for the Byblose Trust, Weyco Group, Inc. and David Mayne Venner	Exhibit 10.1 to Form 10-K for Year Ended December 31, 2008
10.2	Shareholders Agreement relating to Florsheim Australia Pty Ltd, dated January 23, 2009 by and among Florsheim Australia Pty Ltd, Seraneuse Pty Ltd as trustee for the Byblose Trust, Weyco Group, Inc, and David Mayne Venner	Exhibit 10.2 to Form 10-K for Year Ended December 31, 2008
10.3	Loan Agreement dated January 23, 2009 between Weyco Investments, Inc. and Florsheim Australia Pty Ltd	Exhibit 10.3 to Form 10-K for Year Ended December 31, 2008
10.4	Fixed and Floating Charge Agreement Between Weyco Investments, Inc. and Florsheim Australia Pty Ltd	Exhibit 10.4 to Form 10-K for Year Ended December 31, 2008
10.4a	Loan Modification Agreement dated December 6, 2012 between Weyco Investments, Inc. and Florsheim Australia Pty Ltd	Exhibit 10.4a to Form 10-K for Year Ended December 31, 2013
10.5*	Consulting Agreement — Thomas W. Florsheim, dated December 28, 2000	Exhibit 10.1 to Form 10-K for Year Ended December 31, 2001
10.6*	Employment Agreement (Renewal) — Thomas W. Florsheim, Jr., dated January 1, 2017		X
10.7*	Employment Agreement (Renewal) — John W. Florsheim, dated January 1, 2017		X

65

Exhibit	Description	Incorporation Herein By Reference To	Filed Herewith
10.8*	Excess Benefits Plan — Amended Effective as of January 1, 2008, and further Amended Effective December 31, 2016		X
10.9*	Second Amendment to Weyco Group, Inc. Pension Plan, dated November 7, 2016	Exhibit 10.2 to Form 10-Q for the Quarter Ended September 30, 2016
10.10*	Deferred Compensation Plan — Amended Effective as of January 1, 2008, and further Amended Effective December 31, 2016		X
10.11	Amendment to PNC Bank Loan Agreement and Committed Line of Credit Note, dated November 4, 2016	Exhibit 10.1 to Form 10-Q for Quarter Ended September 30, 2016
10.12	PNC Bank Loan Agreement, dated November 5, 2013	Exhibit 10.1 to Form 10-Q for Quarter Ended September 30, 2013
10.13	PNC Bank Committed Line of Credit Note, dated November 5, 2013	Exhibit 10.2 to Form 10-Q for Quarter Ended September 30, 2013
10.14*	Change of Control Agreement John Wittkowske, dated January 26, 1998 and restated December 22, 2008	Exhibit 10.14 to Form 10-K for Year Ended December 31, 2008
10.19*	Weyco Group, Inc. 2011 Incentive Plan	Appendix A to the Registrant’s Proxy Statement Schedule 14A for the Annual Meeting of Shareholders held on May 3, 2011
10.20*	Weyco Group, Inc. 2014 Incentive Plan	Appendix A to the Registrant’s Proxy Statement Schedule 14A for the Annual Meeting of Shareholders held on May 6, 2014
10.20a*	Form of incentive stock option agreement for the Weyco Group, Inc. 2014 Incentive Plan	Exhibit 10.19a to Form 10-Q for Quarter Ended September 30, 2014
10.20b*	Form of non-qualified stock option agreement for the Weyco Group, Inc. 2014 Incentive Plan	Exhibit 10.19b to Form 10-Q for Quarter Ended September 30, 2014
10.20c*	Form of restricted stock agreement for the Weyco Group, Inc. 2014 Incentive Plan	Exhibit 10.19c to Form 10-Q for Quarter Ended September 30, 2014
21	Subsidiaries of the Registrant		X
23.1	Consent of Independent Registered Public Accounting Firm dated March 9, 2017		X
23.2	Consent of Independent Registered Public Accounting Firm dated March 9, 2017		X

66

Exhibit	Description	Incorporation Herein By Reference To	Filed Herewith
31.1	Certification of Chief Executive Officer		X
31.2	Certification of Chief Financial Officer		X
32	Section 906 Certification of Chief Executive Officer and Chief Financial Officer		X
101	The following financial information from Weyco Group, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2016 and 2015; (ii) Consolidated Statements of Earnings for the years ended December 31, 2016, 2015 and 2014; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014; (iv) Consolidated Statements of Equity for the years ended December 31, 2016, 2015 and 2014; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014; (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.		X

* Management contract or compensatory plan or arrangement

67

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WEYCO GROUP, INC.
By /s/ John F. Wittkowske John F. Wittkowske, Senior Vice President, Chief Financial Officer and Secretary	March 9, 2017

 

Power of Attorney

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Thomas W. Florsheim, Jr., John W. Florsheim, and John F. Wittkowske, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below, as of March 9, 2017, by the following persons on behalf of the registrant and in the capacities indicated.

/s/ Thomas W. Florsheim Thomas W. Florsheim, Chairman Emeritus
/s/ Thomas W. Florsheim, Jr. Thomas W. Florsheim, Jr., Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
/s/ John W. Florsheim John W. Florsheim, President, Chief Operating Officer, Assistant Secretary and Director
/s/ John F. Wittkowske John F. Wittkowske, Senior Vice President, Chief Financial Officer and Secretary (Principal Financial Officer)
/s/ Judy Anderson Judy Anderson, Vice President, Finance and Treasurer (Principal Accounting Officer)
/s/ Tina Chang Tina Chang, Director

68

/s/ Robert Feitler Robert Feitler, Director
/s/ Cory L. Nettles Cory L. Nettles, Director
/s/ Frederick P. Stratton, Jr. Frederick P. Stratton, Jr., Director

69

EX-10.6

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.

- 2 -

(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.

- 3 -

(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.

- 4 -

(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.

- 5 -

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

- 6 -

(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.

- 7 -

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.

- 8 -

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.

- 9 -

(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).

- 10 -

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)

- 11 -

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

- 12 -

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.

- 13 -

EX-10.7

exhibit 10.7

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”), dated as of January 1, 2017, 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, 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 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 $611,500 (Six Hundred Eleven 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.

- 2 -

(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.

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 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.

- 3 -

(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, 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 an accident and health plan covering employees of the Company or (ii) unable to engage in any substantial gainful activity.

- 4 -

(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 -

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

- 6 -

(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.

- 7 -

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.

- 8 -

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.

(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.

- 9 -

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).

- 10 -

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)

- 11 -

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

- 12 -

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

/s/ John W. Florsheim

John W. Florsheim

- 13 -

EX-10.8

Exhibit 10.8

WEYCO GROUP, INC. EXCESS BENEFITS PLAN

Amended Effective as of January 1, 2008

and further Amended Effective as of December 31, 2016

Table of Contents

		Page
PREAMBLE		1
ARTICLE I	General	2
1.1	Actuarial Equivalent	2
1.2	Code	2
1.3	Committee	2
1.4	Deferred Compensation Plan	2
1.5	Employer	2
1.6	ERISA	2
1.7	Pension Plan	2
1.8	Plan	2
1.9	Separation from Service	3
1.10	High Three Year Average Base and Bonus	4
ARTICLE II	Eligibility	5
2.1	Persons Eligible As Participants Under The Plan	5
ARTICLE III	Retirement Benefits	5
3.1	Amount of Retirement Benefits	5
3.2	Manner of Payment	6
3.3	Pre-retirement Survivor Annuity	6
3.4	Impact of Pension Plan Freeze	8
3.5	Interpretation and Coordination with Deferred Compensation Plan	8
3.6	Elections	8
3.7	Six Month Delay	9
3.8	Delayed Distribution	9
3.9	Inclusion in Income Under Section 409A	10
3.10	Domestic Relations Order	10
3.11	“Limitation on Benefits	10
ARTICLE IV	Amendment and Termination	11
4.1	In General	11
4.2	Distribution Upon Termination	11

i

Table of Contents

(continued)

		Page
ARTICLE V	Miscellaneous	12
5.1	No Guarantee of Employment, etc	12
5.2	Assignment Not Permitted	12
5.3	Absence of Trust	12
5.4	Controlling Law	12
5.5	Severability	12
5.6	Limitations on Provisions	12
5.7	Other Agreements	12
5.8	Gender and Number	12
5.9	Withholding	12
5.10	Facility of Payment	13
5.11	Identity of Payee	13
5.12	Evidence Conclusive	13
5.13	Committee Authority	13
5.14	Impact on Other Plans	13
5.15	Claims Procedure	14
5.16	Status of Plan Under ERISA	15
5.17	Name and Address Changes	15
ARTICLE VI	Change Of Control	16
6.1	Definition Change of Control	16
6.2	Payments in Event of Change of Control	16
6.3	Further Consequences	17

ii

PREAMBLE

Weyco Group, Inc. has maintained the Weyco Group, Inc. Excess Benefits Plan (the “Plan”) so that participants may receive the additional pension benefits which they are prevented from receiving under the Weyco Group, Inc. Pension and Deferred Compensation Plans as a result of the limitations of Internal Revenue Code Sections 401(a)(17) and 415. It amended the Plan for purposes of compliance with the requirements of Internal Revenue Code Section 409A effective as of January 1, 2008 and now further amends the Plan effective as of December 31, 2016 to freeze certain accruals.

All amounts accrued under the Plan prior to January 1, 2005 and all amounts accrued under the Plan on or after January 1, 2005 shall be governed by the terms and provisions of this document. This document describes how this Plan shall be administered for periods after 2007. For periods after 2004 and prior to 2008, it has been administered in good faith compliance with the provisions of Section 409A. This document is intended to comply with the provisions of Section 409A and shall be interpreted accordingly. If any provision or term of this document would be prohibited by or inconsistent with the requirements of Section 409A, then such provision or term shall be deemed to be reformed to comply with Section 409A.

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ARTICLE I 

General

1.1         “Actuarial Equivalent” means a form of benefit having the same value as another form of benefit determined using interest rate and mortality factors set forth in the Pension Plan for like calculations.

1.2         “Code” means the Internal Revenue Code of 1986, as amended.

1.3         “Committee” means an administrative Committee of at least 3 members which is appointed by the Company’s Board of Directors. Such Committee shall be the Plan Administrator of this Plan for purposes of ERISA. The Committee may act at a meeting or by its unanimous written consent. A majority of the members of the Committee shall constitute a quorum for the transaction of business and shall have full power to act hereunder. All decisions shall be made by vote of the majority present at any meeting at which a quorum is present, except for actions in writing without a meeting which must be unanimous. The Committee may appoint a Secretary who may, but need not be, a member of the Committee. The Committee may adopt such bylaws and regulations as it deems desirable for the conduct of its affairs. Any absent Committee member, and any dissenting Committee member who (at the time of the making of any decision by the majority) registers his dissent in writing delivered at that time to the other Committee members, shall be immune to the fullest extent permitted by law from any and all liability occasioned by or resulting from the decision of the majority. The Committee shall be entitled to rely upon the Employer’s records as to information pertinent to calculations or determinations made pursuant to the Plan. A member of the Committee may not vote or decide upon any matter relating solely to himself or vote in any case in which his individual right to claim to any benefit under the Plan is particularly involved. If, in any case in which a Committee member is so disqualified to act, the remaining members cannot agree, then the Employer will appoint a temporary substitute member to exercise all of the powers of the disqualified member concerning the matter in which that member is disqualified to act.

1.4         “Deferred Compensation Plan” means the Weyco Group, Inc. Deferred Compensation Plan.

1.5         “Employer” means Weyco Group, Inc.

1.6         “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.7         “Pension Plan” means the Weyco Group, Inc. Pension Plan as amended from time to time but only portions thereof relating to salaried employees. The retirement benefits under this Plan shall be based upon the Pension Plan as in effect from time to time and shall reflect the amended definition of “Compensation” in the Pension Plan which is effective October 1, 2012.

1.8         “Plan” means the Weyco Group, Inc. Excess Benefits Plan set forth herein.

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1.9         “Separation from Service” means:

(a)          In General. The Participant shall have a Separation from Service with the Employer if the Participant dies, retires, or otherwise has a termination of employment with the Employer. However, for purposes of this Section 1.9, the employment relationship is treated as continuing intact while the individual is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with the Employer under an applicable statute or by contract. For purposes of this paragraph (a) of this Section 1.9, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Employer. If the period of leave exceeds six months and the individual does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence shall be substituted for such six-month period.

(b)          Termination of Employment. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Employer and Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or, the full period of services to the Employer if the Participant has been providing services to the Employer less than 36 months). Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Participant continues to be treated as an employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly situated service providers have been treated consistently, and whether the Participant is permitted, and realistically available, to perform services for other service recipients in the same line of business. The Participant is presumed to have Separated from Service where the level of bona fide services performed decreases to a level equal to 20 percent or less of the average level of services performed by the employee during the immediately preceding 36-month period. The Participant will be presumed not to have Separated from Service where the level of bona fide services performed continues at a level that is 50 percent or more of the average level of service performed by the Participant during the immediately preceding 36-month period. No presumption applies to a decrease in the level of bona fide services performed to a level that is more than 20 percent and less than 50 percent of the average level of bona fide services performed during the immediately preceding 36-month period. The presumption is rebuttable by demonstrating that the Employer and the Participant reasonably anticipated that as of a certain date the level of bona fide services would be reduced permanently to a level less than or equal to 20 percent of the average level of bona fide services provided during the immediately preceding 36-month period or the full period of services to the Employer if the Participant has been providing services to the Employer less than 36 months (or that the level of bona fide services would not be so reduced). For example, the Participant may demonstrate that the Employer and the Participant reasonably anticipated that the Participant would cease providing services, but that, after the original cessation of services, business circumstances such as termination of the Participant’s replacement caused the Participant to return to employment. Although the Participant’s return to employment may cause the Participant to be presumed to have continued in employment because the Participant is providing services at a rate equal to the rate at which the Participant was providing services before the termination of employment, the facts and circumstances in this case would demonstrate that at the time the Participant originally ceased to provide services, the Employer reasonably anticipated that the Participant would not provide services in the future. For purposes of this paragraph (b), for periods during which the Participant is on a paid bona fide leave of absence (as defined in paragraph (a) of this Section 1.9) and has not otherwise terminated employment pursuant to paragraph (a) of this Section 1.9, the Participant is treated as providing bona fide services at a level equal to the level of services that the Participant would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which the Participant is on an unpaid bona fide leave of absence (as defined in paragraph (a) of this Section 1.9) and has not otherwise terminated employment pursuant to paragraph (a) of this Section 1.9, are disregarded for purposes of this paragraph (b) of this Section 1.9 (including for purposes of determining the applicable 36-month (or shorter) period).

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(c)          Asset Purchase Transactions. Where as part of a sale or other disposition of assets by the Employer as seller to an unrelated service recipient (buyer), a Participant of the Employer would otherwise experience a Separation from Service with the Employer, the Employer and the buyer may retain the discretion to specify, and may specify, whether a Participant providing services to the Employer immediately before the asset purchase transaction and providing services to the buyer after and in connection with the asset purchase transaction has experienced a Separation from Service, provided that the asset purchase transaction results from bona fide, arm’s length negotiations, all service providers providing services to the Employer immediately before the asset purchase transaction and providing services to the buyer after and in connection with the asset purchase transaction are treated consistently (regardless of position at the Employer) for purposes of applying the provisions of any nonqualified deferred compensation plan, and such treatment is specified in writing no later than the closing date of the asset purchase transaction. For purposes of this paragraph (c), references to a sale or other disposition of assets, or an asset purchase transaction, refer only to a transfer of substantial assets, such as a plant or division or substantially all the assets of a trade or business.

(d)          Dual Status. If a Participant provides services both as an employee of the Employer and as an independent contractor of the Employer, the Participant must separate from service both as an employee and as an independent contractor to be treated as having Separated from Service. If a Participant ceases providing services as an independent contractor and begins providing services as an employee, or ceases providing services as an employee and begins providing services as an independent contractor, the Participant will not be considered to have a Separation from Service until the Participant has ceased providing services in both capacities. Notwithstanding the foregoing, if a Participant provides services both as an employee of the Employer and a member of the board of directors of the Employer, the services provided as a director are not taken into account in determining whether the Participant has a Separation from Service as an employee for purposes of this Plan unless this Plan is aggregated with any plan in which the Participant participates as a director under IRS Regulation Section 1.409A-1(c)(2)(ii).

1.10       “High Three Year Average Base and Bonus” means the average of the three Plan Years in which the Participant received the highest total base salary and bonus in the last 10 (20 for executive officers) Plan Years of the Participant’s employment with the Company, which Plan Years need not be consecutive. For purposes of this calculation, a bonus shall be considered in the year paid.

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ARTICLE II 

Eligibility

2.1         Persons Eligible As Participants Under The Plan. Each person who is a participant in the Pension Plan and whose benefit under the Pension Plan is reduced below what it would have been in the absence of limitations set forth in the Pension Plan required by Internal Revenue Code Sections 401(a)(17) and 415 shall be a Participant in this Plan.

ARTICLE III 

Retirement Benefits

3.1         Amount of Retirement Benefits.

(a)          Normal or Late Retirement. In the case of a Participant who Separates from Service with the Employer on or after his 65th birthday, his pension benefit hereunder shall commence on the first day of the month next following the date of his Separation from Service. The amount of such monthly pension payable as a single life monthly pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan and Deferred Compensation Plan as a single life pension based on Separation from Service on the same date if the provisions of Internal Revenue Code Sections 401(a)(17) and 415 did not exist, minus (ii) the amount of pension, expressed as a single life monthly pension, actually payable to him under the Pension Plan and Deferred Compensation Plan on the same date.

(b)          Early Retirement.

(1)          In the case of a Participant who terminates employment with the Employer on or after his 55th birthday and after completing 15 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, his pension benefit hereunder shall commence on the first day of the month next following his 65th birthday or (ii) if so elected by the Participant consistent with Section 3.5, the first day of any month next following the date of his Separation from Service.

(2)          The amount of such monthly pension payable as a single life pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan and Deferred Compensation Plan as a single life monthly pension based on his Separation from Service on the same date and commencement of his benefits under the Pension Plan and Deferred Compensation Plan on the same date if the provisions of Internal Revenue Code Sections 401(a)(17) and 415 did not exist, minus (ii) the amount of pension, if any, expressed as a single life monthly pension, actually payable to him under the Pension Plan and Deferred Compensation Plan based on his Separation from Service on the same date and assuming benefits commenced on the same date.

(c)          Termination of Employment.

(d)          (1)         In the case of a Participant who Separates from Service with the Employer on or after completing at least 5 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, but prior to completing 15 such years of Credited Service his pension benefit hereunder shall commence on the first day of the month next following the date he attains age 65. The amount of such monthly pension payable as a single life monthly pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan and Deferred Compensation Plan at age 65 as a single life monthly pension based on his Separation from Service on the same date if the provisions of Internal Revenue Code Sections 401(a)(17) and 415 did not exist, minus (ii) the amount of pension, if any, expressed as a single life monthly pension, actually payable to him under the Pension Plan and Deferred Compensation Plan based on his Separation from Service on the same date and assuming benefits commenced on the same date.

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(2)(A)    In the case of a Participant who Separates from Service with the Employer prior to his 55th birthday but after completing 15 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, his pension benefit hereunder shall commence on the first day of the month next following the 65th birthday or (ii) is so elected by the Participant consistent with Section 3.5, the first day of any month next following the date of his Separation From Service.

(B)         The amount of such monthly pension payable as a single life pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan and Deferred Compensation Plan as a single life monthly pension based on his termination on the same date and commencement of benefits on the same date if the provisions of Internal Revenue Code Sections 401(a)(17) and 415 did not exist, minus (ii) the amount of pension, if any, expressed as a single life monthly pension actually payable to him under the Pension Plan based on his termination on the same date and assuming benefits under the Pension Plan and Deferred Compensation Plan commenced on the same date.

(3)          In the case of an individual who terminates employment with the Employer prior to completing 5 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, no benefits shall be payable hereunder.

3.2         Manner of Payment.

(a)          If the Participant is unmarried at the time his benefits commence, his pension benefit shall be payable to him in the form of a single life monthly pension.

(b)          If the Participant is married at the time his benefits commence, instead of receiving a single life monthly pension he shall receive a Joint and Survivor Pension. The Joint and Survivor Pension shall be a reduced monthly pension payable to the Participant for his life with a continuing pension payable after his death to his surviving spouse for her life in an amount equal to 100% of the reduced benefit payable during the life of the Participant. Such Joint and Survivor Pension shall be the Actuarial Equivalent of the single life monthly pension which would be payable to the Participant if he were unmarried.

(c)          If so elected by the Participant prior to the date of commencement of payment applicable under Section 3.1, the Plan shall pay the benefit of a Participant for which the Participant is eligible under paragraph (a) or (b) above in the form of a single life annuity or in one of the optional annuity forms of benefit available under the Pension Plan which is the Actuarial Equivalent of the pension payable to the Participant under Section 3.1 hereunder.

3.3         Pre-retirement Survivor Annuity.

(a)          If any married Participant who has completed 5 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, (or married former Participant who had completed 5 years of such Credited Service) dies before starting to receive payments hereunder, then his surviving spouse, if any, shall be entitled to a monthly benefit for life.

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(b)          The amount of such monthly benefit for life shall be:

(i)          In the case of a Participant who dies while employed by the Employer after attainment of age 55 and completion of 15 years of such Credited Service, an amount equal to what such spouse would have received as a survivor annuity if the Participant had Separated from Service on the day before his death and commenced to receive benefits under whichever of Section 3.1(a) or (b) would have been applicable under the Joint and Survivor Pension form as described in Section 3.2;

(ii)         in the case of a Participant or former Participant who had completed 15 years of such Credited Service but who dies on or before his 55th birthday, an amount equal to what such spouse would have received as a survivor annuity if the Participant had Separated from Service on his date of death, survived to his 55th birthday, commenced to receive benefits under Section 3.1(b) (based on his Credited Service and the benefit formula as in effect under the Pension Plan and Deferred Compensation Plan on the date of his death or, if earlier, date of Separation from Service) on the first of the month following his 55th birthday in the Joint and Survivor Pension form, as described in Section 3.2, and died on the next day;

(iii)        in the case of a Participant or former Participant who dies before having completed 15 years of such Credited Service, an amount equal to what such spouse would have received as a survivor annuity if the Participant or former Participant had Separated from Service on his date of death, survived to the first of the month following his 65th birthday, commenced to received benefits under Section 3.1 (a) (based on his Credited Service and the benefit formula under the Pension Plan and Deferred Compensation Plan as in effect on the date of his death or, if earlier, date of Separation from Service) on the first of the month following his 65th birthday in the Joint and Survivor Pension form, as described in Section 3.2, and died on the next day.

(c)          Provided that the surviving spouse survives to such commencement date, payment of such benefit will commence on the later of (i) the first day of the month following the Participant’s or former Participant’s date of death or (ii) in the case of a Participant or former Participant who had completed 15 years of Credited Service, the first day of the month following the date on which the Participant or former Participant would have attained age 55 or (iii) in the case of a Participant or former Participant who had not completed 15 years of Credited Service, the first day of the month following what would have been the 65th birthday of the Participant or former Participant.

(d)          If a Participant who is otherwise described in Section 4.3(a), except that the Participant is not survived by a surviving spouse, dies before starting to receive payments hereunder, then the Participant’s designated Beneficiary, if any, shall be entitled to a lump sum cash payment. The amount of the lump sum cash payment shall be equal to the Actuarial Equivalent value of the lifetime payments which would otherwise have been made to a surviving spouse of the Participant under the foregoing paragraphs (a), (b) and (c) of this Section 4.3 if such spouse had been the same age as the Participant and had survived to the commencement date described in the foregoing paragraphs (a), (b) and (c) of this Section 4.3. The term “Beneficiary” for purposes of this paragraph (d) shall be such person or persons as have been designated by the Participant as his primary or contingent Beneficiary. If the Participant shall fail to designate a Beneficiary as provided in this paragraph (d), or if no designated beneficiary shall survive the Participant, the payment due under this paragraph (d) shall be made instead to the Participant’s estate. A beneficiary designation will be effective only if the signed beneficiary designation form is filed with the Secretary of the Employer while the Participant is alive, which form shall be deemed to cancel all beneficiary designations signed and filed previously. If multiple beneficiaries are designated, they shall share in the lump sum payment due under this paragraph (d) in the proportions specified by the Participant or, if the Participant does not so specify, they shall share equally. If a designated Beneficiary is a child of the Participant and if that child should not survive the Participant, the surviving children, if any, of that child shall share equally in the payment which would have been made to that child.

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3.4         Impact of Pension Plan Freeze. Notwithstanding any provision herein to the contrary, a Participant who holds a Senior Vice-President or higher position with the Company on December 31, 2016 or is promoted to such a position after December 31, 2016 shall have his benefit under this Plan calculated as if Credited Service under the Pension Plan had not been frozen effective as of December 31, 2016. For purposes of clarity, a Participant described in this Section 3.4 shall have his benefit under this Plan calculated with service after December 31, 2016 included.

3.5         Interpretation and Coordination with Deferred Compensation Plan.

It is the intention of the Employer that the benefits provided to the Participant and any beneficiary under this Plan and the Pension Plan and Deferred Compensation Plan together shall be no greater than would have been provided to the Participant and any beneficiary under the terms of the Pension Plan and Deferred Compensation Plan if the Participant had at all times been covered under the Pension Plan in accordance with their rules had the limitations of Internal Revenue Code Sections 415 and 401(a)(17) not existed.

3.6         Elections.

(a)          A Participant may make the elections described in Sections 3.1(b)(1)(ii) and 3.1(c)(2)(A)(ii) and may elect to receive a single lump sum payment which is the Actuarial Equivalent of the lifetime payments which would otherwise be made to him under Sections 3.1 and 3.2 in lieu of such lifetime payments (and such lump sum election shall apply as well to the pre-retirement survivor annuity payable under Section 3.3).

(b)          A Participant must make any election pursuant to paragraph (a) prior to the first day of the first calendar year in which he becomes a Participant in this Plan. If the Participant fails to make such election, the Participant shall be deemed to have elected the earliest distribution date available under Sections 3.1(b)(1)(ii) and 3.1(c)(2)(A)(ii) and the lump sum distribution option described in paragraph (a) above. One time, after the individual’s initial election or deemed election, the individual may make a new election to be applicable to benefits which accrue hereunder after the last day of the calendar year in which the Participant makes such election.

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(c)          A Participant may change an existing payment election applicable to amounts already accrued by completing and filing a new payment election form with the Committee. The payment election form on file with the Committee as of the date of the Participant’s Separation from Service shall be controlling. Notwithstanding the preceding sentence, a payment election form changing the time of commencement of, or form of, the Participant’s payment shall not be effective if the Participant has a Separation from Service within twelve months after the date on which the changed election is filed with the Committee. Any change in the time of commencement of payment or any change in payment method between an annuity or lump sum payment shall have the effect of delaying the commencement of payments to a date which is at least five (5) years following the initially scheduled payment commencement date previously in effect. For purposes of compliance with Section 409A of the Code, annuity payments are treated as a single payment rather than a right to a series of separate payments; therefore, a Participant who has elected (or is deemed to have elected) either the annuity form or the lump sum form may substitute the other form for the form originally elected as long as the foregoing one-year and five year rules are satisfied. The five year delay rule does not apply if payment is being made as a result of Separation from Service due to the Participant’s death. In the event that a Participant’s new payment election would not be effective under the rules of this paragraph (c), the payment election previously in effect shall be controlling.

(d)          Any individual who is a participant in the Plan on or before December 31, 2008, is not deemed to have made an election under paragraph (b) above, but may make an election described in paragraph (a) above without being subject to the rules of paragraph (b) above or paragraph (c) above as long as such election is made on or before December 31, 2008. The election described in this paragraph (d) shall not be effective if the Participant’s Separation from Service occurs before January 1, 2009. An election made under this paragraph (d) may be changed after December 31, 2008 only if the rules of paragraph (c) above are satisfied.

(e)          The distribution provisions of the Weyco Group, Inc. Deferred Compensation Plan and Weyco Group, Inc. Excess Benefits Plan are identical and any distribution election made or deemed made under one plan shall be applicable under the other plan as well. The governing election shall be that which is applicable under the first of the two plans in which the individual becomes a participant. If the individual becomes a participant at the same time under both plans, then the distribution election made or deemed made under the Weyco Group, Inc. Deferred Compensation Plan shall govern.

3.7         Six Month Delay. Notwithstanding any provision of this Article III to the contrary, except where Separation from Service is caused by death, no payment shall be begin to a Participant prior to the first day of the seventh month following the month in which the Participant’s Separation from Service occurs. Any payments which would otherwise have been made prior to such date shall be credited with interest at the same rate as in effect for lump sum Actuarial Equivalent calculations and paid in a single lump sum on the first day of the seventh month following the month in which the Participant’s Separation from Service occurs.

3.8         Delayed Distribution.

A payment otherwise required to be made pursuant to the provisions of this Article III or Article VI shall be delayed if the Employer reasonably anticipates that the Employer’s deduction with respect to such payment would not be permitted due to application of Code Section 162(m); provided, however that such payment shall be made on the earliest date on which the Employer reasonably anticipates or should reasonably anticipate that the deduction of the payment of the amount will not be barred by application of Code Section 162(m).

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3.9         Inclusion in Income Under Section 409A. Notwithstanding any other provision of this Article III, in the event this Plan fails to satisfy the requirements of Code Section 409A and regulations thereunder with respect to any Participant, there shall be distributed to such Participant as promptly as possible after the Committee becomes aware of such fact of noncompliance such portion of the Participant’s benefit hereunder as is included in income as a result of the failure to comply, but no more and the Participant’s benefit hereunder shall be reduced by the Actuarial Equivalent value of the amount distributed. If the Participant’s Separation from Service has already occurred, no amount shall be payable under this Section until the first day of the seventh month beginning after the date of Separation from Service.

3.10       Domestic Relations Order. Notwithstanding any other provision of this Article III, payments shall be made from the interest of a Participant in this Plan to such individual or individuals (other than the Participant) and at such times as are necessary to comply with a domestic relations order (as defined in Code Section 414(p)(1)(B) and the Participant’s benefit hereunder shall be reduced by the Actuarial Equivalent value of the amount distributed.

3.11       “Limitation on Benefits. The aggregate benefits under the Pension Plan, the Deferred Compensation Plan and this Plan shall not exceed 60% of the Participant’s High Three Year Average Base and Bonus (the “Maximum Benefit”). If a Participant receives a benefit under this Plan prior to age 65, the Maximum Benefit shall be reduced to reflect the benefit commencement date by using the relevant factors from the Pension Plan. Any reduction necessary to comply with the Maximum Benefit shall first be made in this Plan and then in the Deferred Compensation Plan.

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ARTICLE IV 

Amendment and Termination

4.1         In General. Weyco Group, Inc. may amend or terminate this Plan at any time by action of its Board of Directors. However, unless necessary to conform to any present or future federal or state law or regulation, amendment or termination may not result in a reduction of benefits of a Participant (or his surviving spouse) who is already receiving benefits, nor may amendment or termination result in a Participant who is still in active service (or his surviving spouse) receiving a benefit hereunder smaller than that to which he would have been entitled had the Participant Separated from Service on the day prior to the effective date of such amendment or termination unless the Participant consents to such amendment..

4.2         Distribution Upon Termination. If this Plan is terminated, there shall be no accrual of additional benefits by any Participant; such accrued benefits as exist at the date of Plan termination shall be paid at the time and in the form otherwise called for by the provisions of this Plan in the same manner as though the Plan had not been terminated. Notwithstanding the preceding sentence, if the Plan is terminated and if the termination is of the type described in regulations issued by the Internal Revenue Service pursuant to Code Section 409A, then the Employer shall distribute the Actuarial Equivalent present value of their accrued benefits herein of Participants and Beneficiaries in a lump sum within the time period specified in such regulations and, following such distribution, there shall be no further obligation to any Participant or beneficiary under this Plan.

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ARTICLE V 

Miscellaneous

5.1         No Guarantee of Employment, etc. Neither the creation of the Plan nor anything contained herein shall be construed as giving any Participant hereunder or other employees of the Employer any right to remain in the employ of the Employer.

5.2         Assignment Not Permitted. Payment of benefits hereunder to Participants (or beneficiaries) shall be made only to them and upon their personal receipts or endorsements and such benefits shall not be assignable by them.

5.3         Absence of Trust. Benefits under the Plan shall be paid from the Employer’s general assets and any claim of a Participant or beneficiary for benefits under the Plan shall be as an unsecured general creditor and no participant or beneficiary shall have any beneficial ownership interest or secured interest in any of the Employer’s assets as a result of the creation of the Plan.

5.4         Controlling Law. To the extent not preempted by the laws of the United States of America, the laws of the State of Wisconsin shall be the controlling state law in all matters relating to the Plan and shall apply.

5.5         Severability. If any provisions of the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Plan, but this Plan shall be construed and enforced as if said illegal and invalid provisions had never been included herein.

5.6         Limitations on Provisions. The provisions of the Plan and any benefits payable hereunder shall be limited as described herein. Any benefit payable under the Pension Plan shall be paid solely in accordance with the terms and provisions of the Pension Plan, and nothing in the Plan shall operate or be construed in any way to modify, amend, or affect the terms and provisions of the Pension Plan.

5.7         Other Agreements. Nothing contained herein shall alter the terms of any other agreement between the Employer and any Participant hereunder.

5.8         Gender and Number. Masculine gender shall include the feminine, and the singular shall include the plural, unless the context clearly indicates otherwise.

5.9         Withholding. Notwithstanding any other provision of the Plan to the contrary, the Employer shall withhold from any amounts payable hereunder (or from other amounts payable by the Employer to the Participant) any taxes or other amounts required by any governmental authority to be withheld. If FICA taxes must be withheld in connection with amounts credited hereunder before payments are otherwise due hereunder and if there are no other wages from which to withhold them, the Employer shall pay such FICA taxes generated by such payment (and taxes under Code Section 3401 triggered thereby and additional taxes under Section 3401 attributable to pyramiding) but no more and the Participant’s benefit hereunder shall be reduced by an amount equal to the Actuarial Equivalent of such amount.

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5.10       Facility of Payment. If, in the Employer’s judgment, any person entitled to make an election or to receive payment of a benefit is physically, mentally, or legally prevented from so doing, the Employer may make such election or may authorize payment of such benefit to any person who, or institution which, in the Employer’s judgment, is responsible for caring for the person entitled to the benefit. If an amount becomes distributable to a minor or a person under legal disability, the Employer may direct that such distribution may be made to such person without the intervention of any legal guardian or conservator, to a relative of such person for the benefit of such person or to the legal guardian or conservator of such person. Any such distributions shall constitute a full discharge with respect to the Employer, and the Employer shall not be required to see to the application of any distribution so made.

5.11       Identity of Payee. If at any time any doubt exists as to the identity of any person entitled to payment of any benefit hereunder or as to the amount or time of any such payment, such sum shall be held by the Employer until such doubt is cured or the Employer may pay such sum into a court of competent jurisdiction in accordance with any lawful procedure in such case made and provided.

5.12       Evidence Conclusive. The Employer and any person or persons involved in the administration of the Plan shall be entitled to rely upon any certification, statement, or representation made or evidence furnished by any person with respect to his age or other facts required to be determined under any of the provisions of the Plan, and shall not be liable on account of the payment of any monies or the doing of any act or failure to act in reliance thereon. Any such certification, statement, representation, or evidence, upon being duly made or furnished, shall be conclusively binding upon the person furnishing it but not upon the Employer or any other person involved in the administration of the Plan. Nothing herein contained shall be construed to prevent any of such parties from contesting any such certification, statement, representation, or evidence or to relieve any person from the duty of submitting satisfactory proof of his age or such other fact.

5.13       Committee Authority. The Committee shall have all authority that may be appropriate for administering the Plan, including the authority to adopt rules and regulations for implementing and carrying out the Plan, interpreting the provisions of the Plan and determining the eligibility of the employees to participate in the Plan and a Participant’s (or beneficiary’s) entitlement to benefits hereunder. The Committee shall have full and complete discretionary authority to determine eligibility for benefits under the Plan, to construe the terms of the Plan and to decide any matter presented through the claims procedure. Any final determination by the Committee shall be binding on all parties and afforded the maximum deference allowed by law. If challenged in court, such determination shall not be subject to de novo review and shall not be overturned unless proven to be arbitrary and capricious based upon the evidence considered by the Committee at the time of such determination. If any Committee member is also a Participant in the Plan, such Committee member shall not participate in any decision regarding such member’s interest or entitlement under the Plan and shall not be present at any Committee discussion of such member’s interest or entitlement under the Plan.

5.14       Impact on Other Plans. No amounts credited to any Participant under this Plan and no amounts paid from this Plan will be taken into account as “wages”, “salary”, “base pay” or any other type of compensation when determining the amount of any payment or allocation, or for any other purpose, under any other plan of the Employer, except as otherwise may be specifically provided by such plan.

13

5.15       Claims Procedure.

(a)          If a Participant or the Participant’s Beneficiary (hereinafter referred to as a “Claimant”) is denied all or a portion of an expected benefit under the Plan for any reason, he or she may file a claim with the Committee. The Committee shall notify the Claimant within 60 days of allowance or denial of the claim, unless the Claimant receives written notice prior to the end of the sixty (60) day period stating that special circumstances require an extension of the time for decision and specifying the expected date of decision (no later than 60 days after the end of the original 60 day period). The notice of the such decision shall be in writing, sent by mail to the Claimant’s last known address, and if a denial of the claim, must contain the following information:

(b)          the specific reasons for the denial;

(c)          specific reference to pertinent provisions of the Plan on which the denial is based; and

(d)          if applicable, a description of any additional information or material necessary to perfect the claim, an explanation of why such information or material is necessary, and an explanation of the claims review procedure.

(e)          a description of the Plan’s claims review procedure, including a statement of the Claimant’s right to bring a civil action under Section 502 of ERISA if the Claimant’s claim is denied upon review.

A Claimant is entitled to request a review of any denial of his claim. The request for review must be submitted in writing to the Compensation Committee within 60 days after receipt of the notice of the denial. The timely filing of such a request is necessary to preserve any legal recourse which may be available to the Claimant and, absent the submission of request for review within the 60-day period, the claim will be deemed to be conclusively denied. Upon submission of a written request for review, the Claimant or his representative shall be entitled to review all pertinent documents, and to submit issues and comments in writing for consideration by the Committee.

The Committee shall fully and fairly review the matter and shall consider all information submitted in the review request, without regard to whether or not such information was submitted or considered in the initial claim determination. The Committee shall promptly respond to the Claimant, in writing, of its decision within 60 days after receipt of the review request. However, due to special circumstances, if no response has been provided within the first 60 days, and notice of the need for additional time has been furnished within such period, the review and response may be made within the following 60 days. The Committee’s decision shall include specific reasons for the decision, including references to the particular Plan provisions upon which the decision is based, notification that the Claimant can receive or review copies of all documents, records and information relevant to the claim, and information as to the Claimant’s right to file suit under Section 502(a) of ERISA.

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5.16       Status of Plan Under ERISA. The Plan is intended to be an unfunded plan maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, as described in Section 201(2), Section 301(a)(3), Section 401(a)(1) and Section 4021(b)(6) of the Employees Retirement Income Security Act of 1974, as amended.

5.17       Name and Address Changes. Each Participant shall keep his name and address on file with the Employer and shall promptly notify the Employer of any changes in his name or address. All notices required or contemplated by this Plan shall be deemed to have been given to a Participant if mailed with adequate postage prepaid thereon addressed to him at his last address on file with the Employer. If any check in payment of a benefit hereunder (which was mailed to the last address of the payee as shown on the Employer’s records) is returned unclaimed, further payments shall be discontinued unless evidence is furnished that the recipient is still alive.

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ARTICLE VI 

Change Of Control

6.1         Definition Change of Control. For purposes of this Plan, a “Change of Control” shall occur:

(1)          on the date any person or more than one person acting as a group (within the meaning of Regulation Section 1.409A-3(i)(5)(v)(B)), other than the group consisting of members of the family of Thomas W. Florsheim and their descendants or trusts for their benefit (the “Florsheim Group”), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of the stock of the Employer possessing 30% or more of the total voting power of the outstanding stock of the Employer;

(2)          on the date of the sale or transfer of all or substantially all of the operating assets of the Employer (for purposes of this subparagraph (2), such a sale or transfer shall not be deemed to have occurred unless it is also a sale described within the meaning of Regulation Section 1.409A-3(i)(5)(vii); provided, however, that a sale or transfer of all or substantially all of the operating assets of the Employer shall not be deemed to have occurred merely because the requirements of that regulation are satisfied); or

(3)          on the date a majority of the Employer’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Employer’s Board of Directors before the date of the appointment or election.

6.2         Payments in Event of Change of Control. Notwithstanding any provision of this Plan to the contrary:

(a)          Within 30 days after the occurrence of a Change of Control, a lump sum payment shall be made to each Participant hereunder who is in the employ of the Employer on the date the Change of Control occurs. Such lump sum payment shall be the Actuarial Equivalent of the pension which would be payable to the Participant pursuant to Section 3.1 if the Participant had terminated employment on the date the Change of Control occurred and had commenced to receive the pension accrued by him to the date of the Change of Control on the first day of the month following his 65th birthday or, if the Participant is already 65, the first day of the month following the date of the Change of Control. For purposes of calculating the amount which would be payable to the Participant under the preceding sentence, the 5 year of service requirement in Section 3.1(c)(1) shall be ignored and the provisions of Section 3.1(c)(3) shall be ignored.

(b)          Within 30 days after the occurrence of a Change of Control, a lump sum payment shall be made to each Participant hereunder who is no longer in the employ of the Employer on the date the Change of Control occurs and who has neither been paid a lump sum distribution of his benefits hereunder nor otherwise commenced to receive payment of his benefits hereunder. Such lump sum payment shall be the Actuarial Equivalent of the pension which would be payable to the Participant pursuant to Section 3.1 based on the benefits accrued by the Participant hereunder to the time of the Participant’s termination of employment on the assumption that the Participant would commence to receive the pension accrued by him on the first day of the month following his 65th birthday.

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(c)          Within 30 days after the occurrence of a Change of Control, a lump sum payment shall be made to each Participant hereunder who is no longer in the employ of the Employer and who is in pay status hereunder receiving monthly benefit payments. Such lump sum payments shall be the Actuarial Equivalent of the pension payments remaining to be paid to the Participant hereunder.

(d)          Payment under this Section 6.2 shall be in lieu of any and all amounts otherwise payable to or with respect to the Participant under this Plan.

(e)          In the event the Participant should die after a Change of Control and before the lump sum payment called for by this Section 6.2 is paid, such payment shall be made to the Participant’s surviving spouse, if any.

(f)          In the event a Participant has died prior to the occurrence of a Change of Control, and such Participant’s spouse is entitled to a benefit under Section 3.3, such spouse shall in lieu thereof, and within 30 days after the occurrence of the Change of Control, be paid a lump sum cash amount which is the Actuarial Equivalent of the payment the spouse would have been entitled to under Section 3.3(b)(i), (ii) or (iii) as the case may be.

6.3         Further Consequences. No Participant shall accrue any additional benefits hereunder from and after the date of the Change of Control. Once the payments called for by Section 6.2 have been made, no further payments shall be due any person hereunder.

Dated this ______ day of _________________, 2016.

John Wittkowse, Senior Vice President and Chief Financial Officer

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EX-10.10

Exhibit 10.10

WEYCO GROUP, INC. DEFERRED COMPENSATION PLAN

Amended Effective as of January 1, 2008

and further Amended Effective as of December 31, 2016

Table of Contents

		Page
PREAMBLE		1
ARTICLE I	Definitions	2
1.1	“Actuarial Equivalent”	2
1.2	“Code”	2
1.3	“Committee”	2
1.4	“Employer”	2
1.5	“ERISA”	2
1.6	“Highly Compensated Employee”	2
1.7	“High Five Year Average Compensation”	2
1.8	“Pension Plan”	3
1.9	“Plan”	3
1.10	“Special Formula”	3
1.11	“Separation from Service”	3
1.12	“High Three Year Average Base and Bonus”	5
ARTICLE II	Eligibility	6
2.1	Persons Eligible As Participants Under The Plan	6
ARTICLE III	Retirement Benefits	6
3.1	Amount of Retirement Benefits For Persons Who Are Not Executive Officers	6
3.2	Manner of Payment	7
3.3	Pre-retirement Survivor Annuity	7
3.4	Interpretation	9
3.5	Elections	9
3.6	Six Month Delay	10
3.7	Delayed Distribution	10
3.8	Inclusion in Income Under Section 409A	11
3.9	Domestic Relations Order	11
3.10	Limitation on Benefits	11
ARTICLE IV	Retirement Benefits	12
4.1	Amount of Retirement Benefits For Executive Officers	12

i 

Table of Contents

(continued)

		Page
4.2	Manner of Payment	13
4.3	Pre-retirement Survivor Annuity	14
4.4	Interpretation	15
4.5	Elections	15
4.6	Six Month Delay	16
4.7	Delayed Distribution	17
4.8	Inclusion in Income Under Section 409A	17
4.9	Domestic Relations Order	17
4.10	Change in Executive Officer Status	17
4.11	Limitation on Benefits	17
ARTICLE V	Amendment and Termination	18
5.1	In General	18
5.2	Distribution Upon Termination	18
ARTICLE VI	Miscellaneous	19
6.1	No Guarantee of Employment, etc	19
6.2	Assignment Not Permitted	19
6.3	Absence of Trust	19
6.4	Controlling Law	19
6.5	Severability	19
6.6	Limitations on Provisions	19
6.7	Other Agreements	19
6.8	Gender and Number	19
6.9	Withholding	19
6.10	Facility of Payment	20
6.11	Identity of Payee	20
6.12	Evidence Conclusive	20
6.13	Committee Authority	20
6.14	Impact on Other Plans	20
6.15	Claims Procedure	21
6.16	Status of Plan Under ERISA	22

ii 

Table of Contents

(continued)

		Page
6.17	Name and Address Changes	22
ARTICLE VII	Change of Control	23
7.1	Definition Change of Control	23
7.2	Payments in Event of Change of Control	23
7.3	Further Consequences	24

iii 

PREAMBLE

Weyco Group, Inc. has maintained the Weyco Group, Inc. Deferred Compensation Plan for the purpose of providing supplemental retirement benefits to eligible employees. It amended the Plan for purposes of compliance with the requirements of Internal Revenue Code Section 409A effective as of January 1, 2008 and now further amends the Plan effective as of December 31, 2016 to freeze certain accruals.

All amounts accrued under the Plan prior to January 1, 2005 and all amounts accrued under the Plan on or after January 1, 2005 shall be governed by the terms and provisions of this document. This document describes how this Plan shall be administered for periods after 2007. For periods after 2004 and prior to 2008, it has been administered in good faith compliance with the provisions of Section 409A. This document is intended to comply with the provisions of Section 409A and shall be interpreted accordingly. If any provision or term of this document would be prohibited by or inconsistent with the requirements of Section 409A, then such provision or term shall be deemed to be reformed to comply with Section 409A.

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ARTICLE I
Definitions

1.1           “Actuarial Equivalent” means a form of benefit having the same value as another form of benefit determined using interest rate and mortality factors set forth in the Pension Plan for like calculations.

1.2           “Code“ means the Internal Revenue Code of 1986, as amended.

1.3           “Committee”. The term “Committee” means an administrative Committee of at least 3 members which is appointed by the Company’s Board of Directors. Such Committee shall be the Plan Administrator of this Plan for purposes of ERISA. The Committee may also act at a meeting or by its unanimous written consent. A majority of the members of the Committee shall constitute a quorum for the transaction of business and shall have full power to act hereunder. All decisions shall be made by vote of the majority present at any meeting at which a quorum is present, except for actions in writing without a meeting which must be unanimous. The Committee may appoint a Secretary who may, but need not be, a member of the Committee. The Committee may adopt such bylaws and regulations as it deems desirable for the conduct of its affairs. Any absent Committee member, and any dissenting Committee member who (at the time of the making of any decision by the majority) registers his dissent in writing delivered at that time to the other Committee members, shall be immune to the fullest extent permitted by law from any and all liability occasioned by or resulting from the decision of the majority. The Committee shall be entitled to rely upon the Employer’s records as to information pertinent to calculations or determinations made pursuant to the Plan. A member of the Committee may not vote or decide upon any matter relating solely to himself or vote in any case in which his individual right to claim to any benefit under the Plan is particularly involved. If, in any case in which a Committee member is so disqualified to act, the remaining members cannot agree, then the Employer will appoint a temporary substitute member to exercise all of the powers of the disqualified member concerning the matter in which that member is disqualified to act.

1.4           “Employer”. The term “Employer” means Weyco Group, Inc.

1.5           “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.6           “Highly Compensated Employee”. The term “Highly Compensated Employee” means an employee described as a Highly Compensated Employee in the Pension Plan who was a participant in the Pension Plan on December 31, 1988.

1.7           “High Five Year Average Compensation”. The term “High Five Year Average Compensation” means the amount which would be the Employee’s Average Annual Compensation under Section 1.06 of Part A of the Pension Plan if the relevant period described in Section 1.06 of Part A of the Pension Plan were the 20 year period ending with the current Plan Year and if the five years of compensation taken into account for purposes of averaging were not required to be consecutive years. Notwithstanding the foregoing, effective December 31, 2016, the term “High Five Year Average Compensation” means the amount which would be the Employee’s Average Annual Compensation under Section 1.06 of Part A of the Pension Plan if the relevant period described in Section 1.06 of Part A of the Pension Plan were the 20 year period ending with December 31, 2016 and if the five years of compensation taken into account for purposes of averaging were not required to be consecutive years

2

1.8           “Pension Plan”. The term “Pension Plan” means the Weyco Group, Inc. Pension Plan, as amended from time to time, but only the portions thereof relating to salaried employees. The retirement benefits under this Plan shall be based upon the Pension Plan as in effect from time to time and shall reflect the amended definition of “Compensation” in the Pension Plan which is effective October 1, 2012.

1.9           “Plan”. The term “Plan” means the Weyco Group, Inc. Deferred Compensation Plan as set forth in this document.

1.10         “Special Formula”. The term “Special Formula” means the pension which would be calculated under Section 3.01(d) of Part A of the Pension Plan if the formula in the Weyenberg Shoe Manufacturing Company Salaried Employees Pension Plan as in effect on December 31, 1988 referred to in such Section 3.01(d) utilized the following definition of “Final Earnings” in lieu of the definition of “Final Earnings” in Section 1.16 of the Weyenberg Shoe Manufacturing Company Salaried Employees Pension Plan as in effect on December 31, 1988:

“Final Earnings” means the Employee’s highest average Earnings for any five (5) consecutive calendar years during the twenty (20) calendar years immediately preceding the earlier of his Normal Retirement Date, his Early Retirement Date, his Disability and Normal Retirement Date or his Deferred Vested Retirement Date. Notwithstanding the foregoing, effective as of December 31, 2016, “Final Earnings” means the Employee’s highest average Earnings for any five (5) consecutive calendar years during the twenty (20) calendar years immediately preceding the earlier of his Normal Retirement Date, his Early Retirement Date, his Disability and Normal Retirement Date, his Deferred Vested Retirement Date or January 1, 2017.”

1.11         “Separation from Service” means:

(a)          In General. The Participant shall have a Separation from Service with the Employer if the Participant dies, retires, or otherwise has a termination of employment with the Employer. However, for purposes of this Section 1.11, the employment relationship is treated as continuing intact while the individual is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with the Employer under an applicable statute or by contract. For purposes of this paragraph (a) of this Section 1.11, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Employer. If the period of leave exceeds six months and the individual does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence shall be substituted for such six-month period.

3

(b)          Termination of Employment. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Employer and Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or, the full period of services to the Employer if the Participant has been providing services to the Employer less than 36 months). Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Participant continues to be treated as an employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly situated service providers have been treated consistently, and whether the Participant is permitted, and realistically available, to perform services for other service recipients in the same line of business. The Participant is presumed to have Separated from Service where the level of bona fide services performed decreases to a level equal to 20 percent or less of the average level of services performed by the employee during the immediately preceding 36-month period. The Participant will be presumed not to have Separated from Service where the level of bona fide services performed continues at a level that is 50 percent or more of the average level of service performed by the Participant during the immediately preceding 36-month period. No presumption applies to a decrease in the level of bona fide services performed to a level that is more than 20 percent and less than 50 percent of the average level of bona fide services performed during the immediately preceding 36-month period. The presumption is rebuttable by demonstrating that the Employer and the Participant reasonably anticipated that as of a certain date the level of bona fide services would be reduced permanently to a level less than or equal to 20 percent of the average level of bona fide services provided during the immediately preceding 36-month period or the full period of services to the Employer if the Participant has been providing services to the Employer less than 36 months (or that the level of bona fide services would not be so reduced). For example, the Participant may demonstrate that the Employer and the Participant reasonably anticipated that the Participant would cease providing services, but that, after the original cessation of services, business circumstances such as termination of the Participant’s replacement caused the Participant to return to employment. Although the Participant’s return to employment may cause the Participant to be presumed to have continued in employment because the Participant is providing services at a rate equal to the rate at which the Participant was providing services before the termination of employment, the facts and circumstances in this case would demonstrate that at the time the Participant originally ceased to provide services, the Employer reasonably anticipated that the Participant would not provide services in the future. For purposes of this paragraph (b), for periods during which the Participant is on a paid bona fide leave of absence (as defined in paragraph (a) of this Section 1.11) and has not otherwise terminated employment pursuant to paragraph (a) of this Section 1.11, the Participant is treated as providing bona fide services at a level equal to the level of services that the Participant would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which the Participant is on an unpaid bona fide leave of absence (as defined in paragraph (a) of this Section 1.11) and has not otherwise terminated employment pursuant to paragraph (a) of this Section 1.11, are disregarded for purposes of this paragraph (b) of this Section 1.11 (including for purposes of determining the applicable 36-month (or shorter) period).

4

(c)          Asset Purchase Transactions. Where as part of a sale or other disposition of assets by the Employer as seller to an unrelated service recipient (buyer), a Participant of the Employer would otherwise experience a Separation from Service with the Employer, the Employer and the buyer may retain the discretion to specify, and may specify, whether a Participant providing services to the Employer immediately before the asset purchase transaction and providing services to the buyer after and in connection with the asset purchase transaction has experienced a Separation from Service, provided that the asset purchase transaction results from bona fide, arm’s length negotiations, all service providers providing services to the Employer immediately before the asset purchase transaction and providing services to the buyer after and in connection with the asset purchase transaction are treated consistently (regardless of position at the Employer) for purposes of applying the provisions of any nonqualified deferred compensation plan, and such treatment is specified in writing no later than the closing date of the asset purchase transaction. For purposes of this paragraph (c), references to a sale or other disposition of assets, or an asset purchase transaction, refer only to a transfer of substantial assets, such as a plant or division or substantially all the assets of a trade or business.

(d)          Dual Status. If a Participant provides services both as an employee of the Employer and as an independent contractor of the Employer, the Participant must separate from service both as an employee and as an independent contractor to be treated as having Separated from Service. If a Participant ceases providing services as an independent contractor and begins providing services as an employee, or ceases providing services as an employee and begins providing services as an independent contractor, the Participant will not be considered to have a Separation from Service until the Participant has ceased providing services in both capacities. Notwithstanding the foregoing, if a Participant provides services both as an employee of the Employer and a member of the board of directors of the Employer, the services provided as a director are not taken into account in determining whether the Participant has a Separation from Service as an employee for purposes of this Plan unless this Plan is aggregated with any plan in which the Participant participates as a director under IRS Regulation Section 1.409A-1(c)(2)(ii).

1.12         “High Three Year Average Base and Bonus”. The term “High Three Year Average Base and Bonus” means the average of the three Plan Years in which the Participant received the highest total base salary and bonus in the last 10 (20 for executive officers) Plan Years of the Particpant’s employment with the Company, which Plan Years need not be consecutive. For purposes of this calculation, a bonus shall be considered in the year paid.

5

ARTICLE II
Eligibility

2.1           Persons Eligible As Participants Under The Plan. Each Highly Compensated Employee who had been a participant in the Weyenberg Shoe Manufacturing Company Salaried Employees Pension Plan on December 31, 1988 and who therefore is not eligible for the minimum benefit under the provisions of Section 3.01(d) of Part A of the Pension Plan shall be a Participant in this Plan. Also, each executive officer of the Company shall be a Participant in this Plan. “Executive officer” means a person who is a Senior Vice President or above.

ARTICLE III
Retirement Benefits

3.1          Amount of Retirement Benefits For Persons Who Are Not Executive Officers

This Article III applies to Participants who are not executive officers.

(a)          Normal or Late Retirement. In the case of a Participant who Separates from Service with the Employer on or after his 65th birthday, his pension benefit hereunder shall commence on the first day of the month next following the date of his Separation from Service. The amount of such monthly pension payable as a single life monthly pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan as a single life pension based on Separation from Service on the same date if the exclusion of Highly Compensated Employees from the minimum benefit described in Section 3.01(d) of Part A of the Pension Plan did not exist and as if the minimum benefit described in such Section 3.01(d) were based on the Special Formula, minus (ii) the amount of pension, expressed as a single life monthly pension, actually payable to him under the Pension Plan on the same date.

(b)          Early Retirement.

(1)         In the case of a Participant who Separates from Service with the Employer on or after his 55th birthday and after completing 15 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, his pension benefit hereunder shall commence on either (i) the first day of the month following his 65th birthday or (ii) if so elected by the Participant consistent with Section 3.5, the first day of any month next following the date of his Separation from Service and prior to his 65th birthday.

(2)         The amount of such monthly pension payable as a single life pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan as a single life monthly pension based on his Separation from Service on the same date and commencement of his benefits under the Pension Plan on the same date if the exclusion of Highly Compensated Employees from the minimum benefit described in Section 3.01(d) of Part A of the Pension Plan did not exist and as if the minimum benefit described in such Section 3.01(d) were based on the Special Formula, minus (ii) the amount of pension, if any, expressed as a single life monthly pension, actually payable to him under the Pension Plan based on his Separation from Service on the same date and assuming benefits commenced on the same date.

(c)          Termination of Employment. (1) In the case of a Participant who Separates from Service with the Employer on or after completing at least 5 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, but prior to completing 15 such years of Credited Service his pension benefit hereunder shall commence on the first day of the month next following the date he attains age 65. The amount of such monthly pension payable as a single life monthly pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan at age 65 as a single life monthly pension based on his Separation from Service on the same date if the exclusion of Highly Compensated Employees from the minimum benefit described in Section 3.01(d) of Part A of the Pension Plan did not exist and as if the minimum benefit described in such Section 3.01(d) were based on the Special Formula, minus (ii) the amount of pension, if any, expressed as a single life monthly pension, actually payable to him under the Pension Plan based on his Separation from Service on the same date and assuming benefits commenced on the same date.

6

(2)(A)         In the case of a Participant who Separates from Service with the Employer prior to his 55th birthday but after completing 15 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, his pension benefit hereunder shall commence (i) on the first day of the month next following the date he attains age 65 or (ii) if so elected by the Participant consistent with Section 3.5, the first day of any month next following his 55th birthday and prior to his 65th birthday.

(B)         The amount of such monthly pension payable as a single life pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan as a single life monthly pension based on his Separation from Service on the same date and commencement of benefits on the same date if the exclusion of Highly Compensated Employees from the minimum benefit described in Section 3.01(d) of Part A of the Pension Plan did not exist and as if the minimum benefit described in such Section 3.01(d) were based on the Special Formula, minus (ii) the amount of pension, if any, expressed as a single life monthly pension actually payable to him under the Pension Plan based on his Separation from Service on the same date and assuming benefits under the Pension Plan commenced on the same date.

(3)         In the case of an individual who Separates from Service with the Employer prior to completing 5 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, no benefits shall be payable hereunder.

3.2           Manner of Payment.

(a)          If the Participant is unmarried at the time his benefits commence, his pension benefit shall be payable to him in the form of a single life monthly pension.

(b)          If the Participant is married at the time his benefits commence, instead of receiving a single life monthly pension he shall receive a Joint and Survivor Pension. The Joint and Survivor Pension shall be a reduced monthly pension payable to the Participant for his life with a continuing pension payable after his death to his surviving spouse for her life in an amount equal to 100% of the reduced benefit payable during the life of the Participant. Such Joint and Survivor Pension shall be the Actuarial Equivalent of the single life monthly pension which would be payable to the Participant if he were unmarried.

(c)          If so elected by the Participant prior to the date of commencement of payment applicable under Section 3.1, the Plan shall pay the benefit of a Participant for which the Participant is eligible under paragraph (a) or (b) above in the form of a single life annuity or in one of the optional annuity forms of benefit available under the Pension Plan which is the Actuarial Equivalent of the pension payable to the Participant under Section 3.1 hereunder.

3.3           Pre-retirement Survivor Annuity.

(a)          If any married Participant who has completed 5 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, (or married former Participant who had completed 5 years of such Credited Service) dies before starting to receive payments hereunder, then his surviving spouse, if any, shall be entitled to a monthly benefit for life.

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(b)          The amount of such monthly benefit for life shall be:

(i)          in the case of a Participant who dies while employed by the Employer after attainment of age 55 and completion of 15 years of such Credited Service, an amount equal to what such spouse would have received as a survivor annuity if the Participant had Separated from Service on the day before his death and commenced to receive benefits under whichever of Section 3.1(a) or (b) would have been applicable under the Joint and Survivor Pension form as described in Section 3.2;

(ii)         in the case of a Participant or former Participant who had completed 15 years of such Credited Service but who dies on or before his 55th birthday, an amount equal to what such spouse would have received as a survivor annuity if the Participant had Separated from Service on his date of death, survived to his 55th birthday and commenced to receive benefits under Section 3.1(b) (based on his Credited Service and the benefit formula as in effect under the Pension Plan on the date of his death or, if earlier, date of Separation from Service) on the first of the month following his 55th birthday in the Joint and Survivor Pension form, as described in Section 3.2, and died on the next day;

(iii)        in the case of a Participant or former Participant who dies before having completed 15 years of such Credited Service, an amount equal to what such spouse would have received as a survivor annuity if the Participant or former Participant had Separated from Service on his date of death, survived to the first of the month following his 65th birthday, commenced to received benefits under Section 3.1 (a) (based on his Credited Service and the benefit formula under the Pension Plan as in effect on the date of his death or, if earlier, date of Separation from Service) on the first of the month following his 65th birthday in the Joint and Survivor Pension form, as described in Section 3.2, and died on the next day.

(c)          Provided that the surviving spouse survives to such commencement date, payment of such benefit will commence on the later of (i) the first day of the month following the Participant’s or former Participant’s date of death or (ii) in the case of a Participant or former Participant who had completed 15 years of Credited Service, the first day of the month following the date on which the Participant or former Participant would have attained age 55 or (iii) in the case of a Participant or former Participant who had not completed 15 years of Credited Service, the first day of the month following what would have been the 65th birthday of the Participant or former Participant.

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(d)          If a Participant who is otherwise described in Section 3.3(a), except that the Participant is not survived by a surviving spouse, dies before starting to receive payments hereunder, then the Participant’s designated Beneficiary, if any, shall be entitled to a lump sum cash payment. The amount of the lump sum cash payment shall be equal to the Actuarial Equivalent value of the lifetime payments which would otherwise have been made to a surviving spouse of the Participant under the foregoing paragraphs (a), (b) and (c) of this Section 3.3 if such spouse had been the same age as the Participant and had survived to the commencement date described in the foregoing paragraphs (a), (b) and (c) of this Section 3.3. The term “Beneficiary” for purposes of this paragraph (d) shall be such person or persons as have been designated by the Participant as his primary or contingent Beneficiary. If the Participant shall fail to designate a Beneficiary as provided in this paragraph (d), or if no designated beneficiary shall survive the Participant, the payment due under this paragraph (d) shall be made instead to the Participant’s estate. A beneficiary designation will be effective only if the signed beneficiary designation form is filed with the Secretary of the Employer while the Participant is alive, which form shall be deemed to cancel all beneficiary designations signed and filed previously. If multiple beneficiaries are designated, they shall share in the lump sum payment due under this paragraph (d) in the proportions specified by the Participant or if the Participant does not so specify, they shall share equally. If a designated Beneficiary is a child of the Participant and if that child should not survive the Participant, the surviving children, if any, of that child shall share equally in the payment which would have been made to that child.

3.4           Interpretation. It is the intention of the Employer that the benefits provided to the Participant and any beneficiary under this Plan and the Pension Plan together shall be no greater than would have been provided to the Participant and any beneficiary under the terms of the Pension Plan if the Participant had at all times been covered under the Pension Plan in accordance with its rules had the exclusion of the Participant from the minimum benefit described in Section 3.01(d) of Part A of the Pension Plan not existed.

3.5           Elections.

(a)          A Participant may make the elections described in Sections 3.1(b)(1)(ii) and 3.1(c)(2)(A)(ii) and may elect to receive a single lump sum payment which is the Actuarial Equivalent of the lifetime payments which would otherwise be made to him under Sections 3.1 and 3.2 in lieu of such lifetime payments (and such lump sum election shall apply as well to the pre-retirement survivor annuity payable under Section 3.3).

(b)          A Participant must make any election pursuant to paragraph (a) prior to the first day of the first calendar year in which he becomes a Participant in this Plan. If the Participant fails to make such election, the Participant shall be deemed to have elected the earliest distribution date available under Sections 3.1(b)(1)(ii) and 3.1(c)(2)(A)(ii) and the lump sum distribution option described in paragraph (a) above. One time, after the individual’s initial election or deemed election, the individual may make a new election to be applicable to benefits which accrue hereunder after the last day of the calendar year in which the Participant makes such election.

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(c)          A Participant may change an existing payment election applicable to amounts already accrued by completing and filing a new payment election form with the Committee. The payment election form on file with the Committee as of the date of the Participant’s Separation from Service shall be controlling. Notwithstanding the preceding sentence, a payment election form changing the time of commencement of, or form of, the Participant’s payment shall not be effective if the Participant has a Separation from Service within twelve months after the date on which the changed election is filed with the Committee. Any change in the time of commencement of payment or any change in payment method between an annuity or lump sum payment shall have the effect of delaying the commencement of payments to a date which is at least five (5) years following the initially scheduled payment commencement date previously in effect. For purposes of compliance with Section 409A of the Code, annuity payments are treated as a single payment rather than a right to a series of separate payments; therefore, a Participant who has elected (or is deemed to have elected) either the annuity form or the lump sum form may substitute the other form for the form originally elected as long as the foregoing one-year and five year rules are satisfied. The five year delay rule does not apply if payment is being made as a result of Separation from Service due to the Participant’s death. In the event that a Participant’s new payment election would not be effective under the rules of this paragraph (c), the payment election previously in effect shall be controlling.

(d)          Any individual who is a participant in the Plan on or before December 31, 2008, is not deemed to have made an election under paragraph (b) above but may make an election described in paragraph (a) above without being subject to the rules of paragraph (b) above or paragraph (c) above as long as such election is made on or before December 31, 2008. The election described in this paragraph (d) shall not be effective if the Participant’s Separation from Service occurs before January 1, 2009. An election made under this paragraph (d) may be changed after December 31, 2008 only if the rules of paragraph (c) above are satisfied.

(e)          The distribution provisions of the Weyco Group, Inc. Deferred Compensation Plan and Weyco Group, Inc. Excess Benefits Plan are identical and any distribution election made or deemed made under one plan shall be applicable under the other plan as well. The governing election shall be that which is applicable under the first of the two plans in which the individual becomes a participant. If the individual becomes a participant at the same time under both plans, then the distribution election made or deemed made under the Weyco Group, Inc. Deferred Compensation Plan shall govern.

3.6           Six Month Delay. Notwithstanding any provision of this Article III to the contrary, except where Separation from Service is caused by death, no payment shall be begin to a Participant prior to the first day of the seventh month following the month in which the Participant’s Separation from Service occurs. Any payments which would otherwise have been made prior to such date shall be credited with interest at the same rate as in effect for lump sum Actuarial Equivalent calculations and paid in a single lump sum on the first day of the seventh month following the month in which the Participant’s Separation from Service occurs.

3.7           Delayed Distribution.

A payment otherwise required to be made pursuant to the provisions of this Article III or Article VII shall be delayed if the Employer reasonably anticipates that the Employer’s deduction with respect to such payment would not be permitted due to application of Code Section 162(m); provided, however that such payment shall be made on the earliest date on which the Employer reasonably anticipates or should reasonably anticipate that the deduction of the payment of the amount will not be barred by application of Code Section 162(m).

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3.8           Inclusion in Income Under Section 409A. Notwithstanding any other provision of this Article III, in the event this Plan fails to satisfy the requirements of Code Section 409A and regulations thereunder with respect to any Participant, there shall be distributed to such Participant as promptly as possible after the Committee becomes aware of such fact of noncompliance such portion of the Participant’s benefit hereunder as is included in income as a result of the failure to comply, but no more and the Participant’s benefit hereunder shall be reduced by the Actuarial Equivalent value of the amount distributed. If the Participant’s Separation from Service has already occurred, no amount shall be payable under this Section until the first day of the seventh month beginning after the date of Separation from Service.

3.9           Domestic Relations Order. Notwithstanding any other provision of this Article III, payments shall be made from the interest of a Participant in this Plan to such individual or individuals (other than the Participant) and at such times as are necessary to comply with a domestic relations order (as defined in Code Section 414(p)(1)(B) and the Participant’s benefit hereunder shall be reduced by the Actuarial Equivalent value of the amount distributed.

3.10         Limitation on Benefits. The aggregate benefits under the Pension Plan and this Plan shall not exceed 60% of the Participant’s High Three Year Average Base and Bonus (the “Maximum Benefit”). If a Participant receives a benefit under this Plan prior to age 65, the Maximum Benefit shall be reduced to reflect the benefit commencement date by using the relevant factors from the Pension Plan. Any reduction necessary to comply with the Maximum Benefit shall be made in this Plan.

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ARTICLE IV
Retirement Benefits

4.1          Amount of Retirement Benefits For Executive Officers.

This Article IV applies to persons who are executive officers.

(a)          Normal or Late Retirement. In the case of a Participant who Separates from Service with the Employer on or after his 65th birthday, his pension benefit hereunder shall commence on the first day of the month next following the date of his Separation from Service. The amount of such monthly pension payable as a single life monthly pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan as a single life pension based on Separation from Service on the same date if the offset described in Section 3.01(a)(1)(ii) of Part A of the Pension Plan did not exist and if Average Annual Compensation as defined in Section 1.06 of Part A of the Pension Plan had the same meaning as High Five Year Average Compensation as defined herein, minus (ii) the amount of pension, expressed as a single life monthly pension, actually payable to him under the Pension Plan on the same date.

(b)          Early Retirement.

(1)         In the case of a Participant who Separates from Service with the Employer on or after his 55th birthday and after completing 15 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, his pension benefit hereunder shall commence on either (i) the first day of the month following his 65th birthday or (ii) if so elected by the Participant consistent with Section 4.5, the first day of any month next following the date of his Separation from Service and prior to his 65th birthday.

(2)         The amount of such monthly pension payable as a single life pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan as a single life monthly pension based on his Separation from Service on the same date and commencement of his benefits under the Pension Plan on the same date if the offsets described in Sections 1.01(b)(i)(1)b., 1.01(c)(i)(1)b. and 3.01(a)(i)(2) of Part A of the Pension Plan did not exist and if Average Annual Compensation as defined in Section 1.06 of Part A of the Pension Plan had the same meaning as High Five Year Average Compensation as defined herein, minus (ii) the amount of pension, if any, expressed as a single life monthly pension, actually payable to him under the Pension Plan based on his Separation from Service on the same date and assuming benefits commenced on the same date.

(c)          Termination of Employment.

(1)         In the case of a Participant who Separates from Service with the Employer on or after completing at least 5 years of Credited Service, as defined in Section 1.14 of the Pension Plan, but prior to completing 15 such years of Credited Service his pension benefit hereunder shall commence on the first day of the month next following the date he attains age 65. The amount of such monthly pension payable as a single life monthly pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan at age 65 as a single life monthly pension based on his Separation from Service on the same date if the offset described in Section 3.01(a)(i)(2) of Part A of the Pension Plan did not exist and if Average Annual Compensation as defined in Section 1.06 of Part A of the Pension Plan had the same meaning as High Five Year Average Compensation as defined herein, minus (ii) the amount of pension, if any, expressed as a single life monthly pension, actually payable to him under the Pension Plan based on his Separation from Service on the same date and assuming benefits commenced on the same date.

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(2)(A)         In the case of a Participant who Separates from Service with the Employer prior to his 55th birthday but after completing 15 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, his pension benefit hereunder shall commence (i) on the first day of the month next following the date he attains age 65 or (ii) if so elected by the Participant consistent with Section 4.5, the first day of any month next following his 55th birthday and prior to his 65th birthday.

(B)         The amount of such monthly pension payable as a single life pension shall be (i) the amount of monthly pension which would be payable to him under the Pension Plan as a single life monthly pension based on his Separation from Service on the same date and commencement of benefits on the same date if the offsets described in Sections 1.01(b)(i)1b., 1.01(c)(i)1b. and 3.01(a)(i)(2) of Part A of the Pension Plan did not exist and if Average Annual Compensation as defined in Section 1.06 of Part A of the Pension Plan had the same meaning as High Five Year Average Compensation as defined herein, minus (ii) the amount of pension, if any, expressed as a single life monthly pension actually payable to him under the Pension Plan based on his Separation from Service on the same date and assuming benefits under the Pension Plan commenced on the same date.

(3)         In the case of an individual who Separates from Service with the Employer prior to completing 5 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, no benefits shall be payable hereunder.

(d)          Impact of Pension Plan Freeze. Notwithstanding any provision herein to the contrary, a Participant who holds a Senior Vice-President or higher position with the Company on December 31, 2016 or is promoted to such a position after December 31, 2016 shall have his benefit under this Plan calculated as if Credited Service under the Pension Plan had not been frozen effective as of December 31, 2016. or purposes of clarity, a Participant described in this Section 3.4 shall have his benefit under this Plan calculated with service after December 31, 2016 included.

4.2           Manner of Payment.

(a)          If the Participant is unmarried at the time his benefits commence, his pension benefit shall be payable to him in the form of a single life monthly pension.

(b)          If the Participant is married at the time his benefits commence, instead of receiving a single life monthly pension he shall receive a Joint and Survivor Pension. The Joint and Survivor Pension shall be a reduced monthly pension payable to the Participant for his life with a continuing pension payable after his death to his surviving spouse for her life in an amount equal to 100% of the reduced benefit payable during the life of the Participant. Such Joint and Survivor Pension shall be the actuarial equivalent of the single life monthly pension which would be payable to the Participant if he were unmarried.

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(c)          If so elected by the Participant prior to the date of commencement of payment applicable under Section 4.1, the Plan shall pay the benefit of a Participant for which the Participant is eligible under paragraph (a) or (b) above in the form of a single life annuity or in one of the optional annuity forms of benefit available under the Pension Plan which is the Actuarial Equivalent of the pension payable to the Participant under Section 4.1 hereunder.

4.3           Pre-retirement Survivor Annuity.

(a)          If any married Participant who has completed 5 years of Credited Service, as defined in Section 1.14 of Part A of the Pension Plan, (or married former Participant who had completed 5 years of such Credited Service) dies before starting to receive payments hereunder, then his surviving spouse, if any, shall be entitled to a monthly benefit for life.

(b)          The amount of such monthly benefit for life shall be:

(i)          in the case of a Participant who dies while employed by the Employer after attainment of age 55 and completion of 15 years of such Credited Service, an amount equal to what such spouse would have received as a survivor annuity if the Participant had Separated from Service on the day before his death and commenced to receive benefits under whichever of Section 4.1(a) or (b) would have been applicable under the Joint and Survivor Pension form as described in Section 4.2;

(ii)         in the case of a Participant or former Participant who had completed 15 years of such Credited Service but who dies on or before his 55th birthday, an amount equal to what such spouse would have received as a survivor annuity if the Participant had Separated from Service on his date of death, survived to his 55th birthday, commenced to receive benefits under Section 4.1(b) (based on his Credited Service and the benefit formula as in effect under the Pension Plan on the date of his death or, if earlier, date of Separation from Service) on the first of the month following his 55th birthday in the Joint and Survivor Pension form, as described in Section 4.2, and died on the next day;

(iii)        in the case of a Participant or former Participant who dies before having completed 15 years of such Credited Service, an amount equal to what such spouse would have received as a survivor annuity if the Participant or former Participant had Separated from Service on his date of death, survived to the first of the month following his 65th birthday, commenced to received benefits under Section 4.1 (a) (based on his Credited Service and the benefit formula under the Pension Plan as in effect on the date of his death or, if earlier, date of Separation from Service) on the first of the month following his 65th birthday in the Joint and Survivor Pension form, as described in Section 4.2, and died on the next day.

(c)          Provided that the surviving spouse survives to such commencement date, payment of such benefit will commence on the later of (i) the first day of the month following the Participant’s or former Participant’s date of death or (ii) in the case of a Participant or former Participant who had completed 15 years of Credited Service, the first day of the month following the date on which the Participant or former Participant would have attained age 55 or (iii) in the case of a Participant or former Participant who had not completed 15 years of Credited Service, the first day of the month following what would have been the 65th birthday of the Participant or former Participant.

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(d)          If a Participant who is otherwise described in Section 4.3(a), except that the Participant is not survived by a surviving spouse, dies before starting to receive payments hereunder, then the Participant’s designated Beneficiary, if any, shall be entitled to a lump sum cash payment. The amount of the lump sum cash payment shall be equal to the Actuarial Equivalent value of the lifetime payments which would otherwise have been made to a surviving spouse of the Participant under the foregoing paragraphs (a), (b) and (c) of this Section 4.3 if such spouse had been the same age as the Participant and had survived to the commencement date described in the foregoing paragraphs (a), (b) and (c) of this Section 4.3. The term “Beneficiary” for purposes of this paragraph (d) shall be such person or persons as have been designated by the Participant as his primary or contingent Beneficiary. If the Participant shall fail to designate a Beneficiary as provided in this paragraph (d), or if no designated beneficiary shall survive the Participant, the payment due under this paragraph (d) shall be made instead to the Participant’s estate. A beneficiary designation will be effective only if the signed beneficiary designation form is filed with the Secretary of the Employer while the Participant is alive, which form shall be deemed to cancel all beneficiary designations signed and filed previously. If multiple beneficiaries are designated, they shall share in the lump sum payment due under this paragraph (d) in the proportions specified by the Participant or if the Participant does not so specify, they shall share equally. If a designated Beneficiary is a child of the Participant and if that child should not survive the Participant, the surviving children, if any, of that child shall share equally in the payment which would have been made to that child.

4.4           Interpretation. It is the intention of the Employer that the benefits provided to the Participant and any beneficiary under this Plan and the Pension Plan together shall be no greater than would have been provided to the Participant and any beneficiary under the terms of the Pension Plan if the Participant had at all times been covered under the Pension Plan in accordance with its rules, had the offsets described in Sections 1.01(b)(i)1b., 1.01(c)(i)1b. and 3.01(a)(i)(2) of Part A of the Pension Plan not existed and had the definition herein of High Five Year Average Compensation been substituted for Average Annual Compensation in Section 1.06 of Part A of the Pension Plan.

4.5           Elections.

(a)          A Participant may make the elections described in Sections 4.1(b)(1)(ii) and 4.1(c)(2)(A)(ii) and may elect to receive a single lump sum payment which is the Actuarial Equivalent of the lifetime payments which would otherwise be made to him under Sections 4.1 and 4.2 in lieu of such lifetime payments (and such lump sum election shall apply as well to the pre-retirement survivor annuity payable under Section 4.3).

(b)          A Participant must make any election pursuant to paragraph (a) above prior to the first day of the first calendar year in which he becomes a Participant in this Plan. If the Participant fails to make such election, the Participant shall be deemed to have elected the earliest distribution date available under Sections 4.1(b)(1)(ii) and 4.1(c)(2)(A)(ii) and the lump sum distribution option described in paragraph (a) above. One time, after the individual’s initial election or deemed election, the individual may make a new election to be applicable to benefits which accrue hereunder after the last day of the calendar year in which the Participant makes such election.

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(c)          A Participant may change an existing payment election applicable to amounts already accrued by completing and filing a new payment election form with the Committee. The payment election form on file with the Committee as of the date of the Participant’s Separation from Service shall be controlling. Notwithstanding the preceding sentence, a payment election form changing the time of commencement of, or form of, the Participant’s payment shall not be effective if the Participant has a Separation from Service within twelve months after the date on which the changed election is filed with the Committee. Any change in the time of commencement of payment or any change in payment method between an annuity or lump sum payment shall have the effect of delaying the commencement of payments to a date which is at least five (5) years following the initially scheduled payment commencement date previously in effect. For purposes of compliance with Section 409A of the Code, annuity payments are treated as a single payment rather than a right to a series of separate payments; therefore, a Participant who has elected (or is deemed to have elected) either the annuity form or the lump sum form may substitute the other form for the form originally elected as long as the foregoing one-year and five year rules are satisfied. The five year delay rule does not apply if payment is being made as a result of Separation from Service due to the Participant’s death. In the event that a Participant’s new payment election would not be effective under the rules of this paragraph (c), the payment election previously in effect shall be controlling.

(d)          Any individual who is a participant in the Plan on or before December 31, 2008, is not deemed to have made an election under paragraph (b) above, but may make an election described in paragraph (a) above without being subject to the rules of paragraph (b) above or paragraph (c) above as long as such election is made on or before December 31, 2008. The election described in this paragraph (d) shall not be effective if the Participant’s Separation from Service occurs before January 1, 2009. An election made under this paragraph (d) may be changed after December 31, 2008 only if the rules of paragraph (c) above are satisfied.

(e)          The distribution provisions of the WEYCO Group, Inc. Deferred Compensation Plan and WEYCO Group, Inc. Excess Benefits Plan are identical and any distribution election made or deemed made under one plan shall be applicable under the other plan as well. The governing election shall be that which is applicable under the first of the two plans in which the individual becomes a participant. If the individual becomes a participant at the same time under both plans, then the distribution election made or deemed made under the WEYCO Group, Inc. Deferred Compensation Plan shall govern.

4.6           Six Month Delay. Notwithstanding any provision of this Article III to the contrary, except where Separation from Service is caused by death, no payment shall be begin to a Participant prior to the first day of the seventh month following the month in which the Participant’s Separation from Service occurs. Any payments which would otherwise have been made prior to such date shall be credited with interest at the same rate as in effect for lump sum Actuarial Equivalent calculations and paid in a single lump sum on the first day of the seventh month following the month in which the Participant’s Separation from Service occurs.

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4.7           Delayed Distribution.

A payment otherwise required to be made pursuant to the provisions of this Article IV or Article VII shall be delayed if the Employer reasonably anticipates that the Employer’s deduction with respect to such payment would not be permitted due to application of Code Section 162(m); provided, however that such payment shall be made on the earliest date on which the Employer reasonably anticipates or should reasonably anticipate that the deduction of the payment of the amount will not be barred by application of Code Section 162(m).

4.8           Inclusion in Income Under Section 409A. Notwithstanding any other provision of this Article III, in the event this Plan fails to satisfy the requirements of Code Section 409A and regulations thereunder with respect to any Participant, there shall be distributed to such Participant as promptly as possible after the Committee becomes aware of such fact of noncompliance such portion of the Participant’s benefit hereunder as is included in income as a result of the failure to comply, but no more and the Participant’s benefit hereunder shall be reduced by the Actuarial Equivalent value of the amount distributed. If the Participant’s Separation from Service has already occurred, no amount shall be payable under this Section until the first day of the seventh month beginning after the date of Separation from Service.

4.9           Domestic Relations Order. Notwithstanding any other provision of this Article III, payments shall be made from the interest of a Participant in this Plan to such individual or individuals (other than the Participant) and at such times as are necessary to comply with a domestic relations order (as defined in Code Section 414(p)(1)(B) and the Participant’s benefit hereunder shall be reduced by the Actuarial Equivalent value of the amount distributed.

4.10         Change in Executive Officer Status. If an individual who has been an executive officer ceases to be an executive officer but continues in the employment of the Employer, he shall accrue no additional benefits hereunder after the date of his change of status. Any benefits payable to him under this Plan shall be based on his accrued benefit hereunder on the date of such change in status. Notwithstanding the foregoing, if such an individual had been a participant in the Weyenberg Shoe Manufacturing Company Salaried Employees Pension Plan on December 31, 1988, then his entire benefit hereunder shall instead be calculated under Article III hereof based on his total service as an employee (including executive officer service) if by doing so the individual would receive a larger benefit hereunder.

4.11         Limitation on Benefits. The aggregate benefits under the Pension Plan and this Plan shall not exceed 60% of the Participant’s High Three Year Average Base and Bonus (the “Maximum Benefit”). If a Participant receives a benefit under this Plan prior to age 65, the Maximum Benefit shall be reduced to reflect the benefit commencement date by using the relevant factors from the Pension Plan. Any reduction necessary to comply with the Maximum Benefit shall be made in this Plan.

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ARTICLE V
Amendment and Termination

5.1           In General. Weyco Group, Inc. may amend or terminate this Plan at any time by action of its Board of Directors. However, unless necessary to conform to any present or future federal or state law or regulation, amendment or termination may not result in a reduction of benefits of a Participant (or his surviving spouse) who is already receiving benefits, nor may amendment or termination result in a Participant who is still in active service (or his surviving spouse) receiving a benefit hereunder smaller than that to which he would have been entitled had the Participant Separated from Service on the day prior to the effective date of such amendment or termination unless the Participant consents to such amendment.

5.2           Distribution Upon Termination. If this Plan is terminated, there shall be no accrual of additional benefits by any Participant; such accrued benefits as exist at the date of Plan termination shall be paid at the time and in the form otherwise called for by the provisions of this Plan in the same manner as though the Plan had not been terminated. Notwithstanding the preceding sentence, if the Plan is terminated and if the termination is of the type described in regulations issued by the Internal Revenue Service pursuant to Code Section 409A, then the Employer shall distribute the Actuarial Equivalent present value of their accrued benefits herein of Participants and Beneficiaries in a lump sum within the time period specified in such regulations and, following such distribution, there shall be no further obligation to any Participant or beneficiary under this Plan.

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ARTICLE VI
Miscellaneous

6.1           No Guarantee of Employment, etc. Neither the creation of the Plan nor anything contained herein shall be construed as giving any Participant hereunder or other employees of the Employer any right to remain in the employ of the Employer.

6.2           Assignment Not Permitted. Payment of benefits hereunder to Participants (or beneficiaries) shall be made only to them and upon their personal receipts or endorsements and such benefits shall not be assignable by them.

6.3           Absence of Trust. Benefits under the Plan shall be paid from the Employer’s general assets and any claim of a Participant or beneficiary for benefits under the Plan shall be as an unsecured general creditor and no participant or beneficiary shall have any beneficial ownership interest or secured interest in any of the Employer’s assets as a result of the creation of the Plan.

6.4           Controlling Law. To the extent not preempted by the laws of the United States of America, the laws of the State of Wisconsin shall be the controlling state law in all matters relating to the Plan and shall apply.

6.5           Severability. If any provisions of the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Plan, but this Plan shall be construed and enforced as if said illegal and invalid provisions had never been included herein.

6.6           Limitations on Provisions. The provisions of the Plan and any benefits payable hereunder shall be limited as described herein. Any benefit payable under the Pension Plan shall be paid solely in accordance with the terms and provisions of the Pension Plan, and nothing in the Plan shall operate or be construed in any way to modify, amend, or affect the terms and provisions of the Pension Plan.

6.7           Other Agreements. Nothing contained herein shall alter the terms of any other agreement between the Employer and any Participant hereunder.

6.8           Gender and Number. Masculine gender shall include the feminine, and the singular shall include the plural, unless the context clearly indicates otherwise.

6.9           Withholding. Notwithstanding any other provision of the Plan to the contrary, the Employer shall withhold from any amounts payable hereunder (or from other amounts payable by the Employer to the Participant) any taxes or other amounts required by any governmental authority to be withheld. If FICA taxes must be withheld in connection with amounts credited hereunder before payments are otherwise due hereunder and if there are no other wages from which to withhold them, the Employer shall pay such FICA taxes generated by such payment (and taxes under Code Section 3401 triggered thereby and additional taxes under Section 3401 attributable to pyramiding) but no more and the Participant’s benefit hereunder shall be reduced by an amount equal to the Actuarial Equivalent of such amount.

19

6.10         Facility of Payment. If, in Weyco Group, Inc.’s judgment, any person entitled to make an election or to receive payment of a benefit is physically, mentally, or legally prevented from so doing, Weyco Group, Inc. may make such election or may authorize payment of such benefit to any person who, or institution which, in Weyco Group, Inc.’s judgment, is responsible for caring for the person entitled to the benefit. If an amount becomes distributable to a minor or a person under legal disability, Weyco Group, Inc. may direct that such distribution may be made to such person without the intervention of any legal guardian or conservator, to a relative of such person for the benefit of such person or to the legal guardian or conservator of such person. Any such distributions shall constitute a full discharge with respect to Weyco Group, Inc., and Weyco Group, Inc. shall not be required to see to the application of any distribution so made.

6.11         Identity of Payee. If at any time any doubt exists as to the identity of any person entitled to payment of any benefit hereunder or as to the amount or time of any such payment, such sum shall be held by Weyco Group, Inc. until the further order of Weyco Group, Inc. or until final order of a court of competent jurisdiction may direct Weyco Group, Inc. to pay such sum into a court of competent jurisdiction in accordance with any lawful procedure in such case made and provided.

6.12         Evidence Conclusive. Weyco Group, Inc. and any person or persons involved in the administration of the Plan shall be entitled to rely upon any certification, statement, or representation made or evidence furnished by any person with respect to his age or other facts required to be determined under any of the provisions of the Plan, and shall not be liable on account of the payment of any monies or the doing of any act or failure to act in reliance thereon. Any such certification, statement, representation, or evidence, upon being duly made or furnished, shall be conclusively binding upon the person furnishing it but not upon Weyco Group, Inc. or any other person involved in the administration of the Plan. Nothing herein contained shall be construed to prevent any of such parties from contesting any such certification, statement, representation, or evidence or to relieve any person from the duty of submitting satisfactory proof of his age or such other fact.

6.13         Committee Authority. The Committee shall have all authority that may be appropriate for administering the Plan, including the authority to adopt rules and regulations for implementing and carrying out the Plan, interpreting the provisions of the Plan and determining the eligibility of the employees to participate in the Plan and a Participant’s (or beneficiary’s) entitlement to benefits hereunder. The Committee shall have full and complete discretionary authority to determine eligibility for benefits under the Plan, to construe the terms of the Plan and to decide any matter presented through the claims procedure. Any final determination by the Committee shall be binding on all parties and afforded the maximum deference allowed by law. If challenged in court, such determination shall not be subject to de novo review and shall not be overturned unless proven to be arbitrary and capricious based upon the evidence considered by the Committee at the time of such determination. If any Committee member is also a Participant in the Plan, such Committee member shall not participate in any decision regarding such member’s interest or entitlement under the Plan and shall not be present at any Committee discussion of such member’s interest or entitlement under the Plan.

6.14         Impact on Other Plans. No amounts credited to any Participant under this Plan and no amounts paid from this Plan will be taken into account as “wages”, “salary”, “base pay” or any other type of compensation when determining the amount of any payment or allocation, or for any other purpose, under any other plan of the Employer, except as otherwise may be specifically provided by such plan.

20

6.15         Claims Procedure.

(a)          If a Participant or the Participant’s Beneficiary (hereinafter referred to as a “Claimant”) is denied all or a portion of an expected benefit under the Plan for any reason, he or she may file a claim with the Committee. The Committee shall notify the Claimant within 60 days of allowance or denial of the claim, unless the Claimant receives written notice prior to the end of the sixty (60) day period stating that special circumstances require an extension of the time for decision and specifying the expected date of decision (no later than 60 days after the end of the original 60 day period). The notice of the such decision shall be in writing, sent by mail to the Claimant’s last known address, and if a denial of the claim, must contain the following information:

(b)          the specific reasons for the denial;

(c)          specific reference to pertinent provisions of the Plan on which the denial is based; and

(d)          if applicable, a description of any additional information or material necessary to perfect the claim, an explanation of why such information or material is necessary, and an explanation of the claims review procedure.

(e)          a description of the Plan’s claims review procedure, including a statement of the Claimant’s right to bring a civil action under Section 502 of ERISA if the Claimant’s claim is denied upon review.

A Claimant is entitled to request a review of any denial of his claim. The request for review must be submitted in writing to the Compensation Committee within 60 days after receipt of the notice of the denial. The timely filing of such a request is necessary to preserve any legal recourse which may be available to the Claimant and, absent the submission of request for review within the 60-day period, the claim will be deemed to be conclusively denied. Upon submission of a written request for review, the Claimant or his representative shall be entitled to review all pertinent documents, and to submit issues and comments in writing for consideration by the Committee.

The Committee shall fully and fairly review the matter and shall consider all information submitted in the review request, without regard to whether or not such information was submitted or considered in the initial claim determination. The Committee shall promptly respond to the Claimant, in writing, of its decision within 60 days after receipt of the review request. However, due to special circumstances, if no response has been provided within the first 60 days, and notice of the need for additional time has been furnished within such period, the review and response may be made within the following 60 days. The Committee’s decision shall include specific reasons for the decision, including references to the particular Plan provisions upon which the decision is based, notification that the Claimant can receive or review copies of all documents, records and information relevant to the claim, and information as to the Claimant’s right to file suit under Section 502(a) of ERISA.

21

6.16         Status of Plan Under ERISA. The Plan is intended to be an unfunded plan maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, as described in Section 201(2), Section 301(a)(3), Section 401(a)(1) and Section 4021(b)(6) of the Employee Retirement Income Security Act of 1974, as amended.

6.17         Name and Address Changes. Each Participant shall keep his name and address on file with the Employer and shall promptly notify the Employer of any changes in his name or address. All notices required or contemplated by this Plan shall be deemed to have been given to a Participant if mailed with adequate postage prepaid thereon addressed to him at his last address on file with the Employer. If any check in payment of a benefit hereunder (which was mailed to the last address of the payee as shown on the Employer’s records) is returned unclaimed, further payments shall be discontinued unless evidence is furnished that the recipient is still alive.

22

ARTICLE VII
Change of Control

7.1           Definition Change of Control. For purposes of this Plan, a “Change of Control” shall occur:

(1)         on the date any person or more than one person acting as a group (within the meaning of Regulation Section 1.409A-3(i)(5)(v)(B)), other than the group consisting of members of the family of Thomas W. Florsheim and their descendants or trusts for their benefit (the “Florsheim Group”), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of the stock of the Employer possessing 30% or more of the total voting power of the outstanding stock of the Employer;

(2)         on the date of the sale or transfer of all or substantially all of the operating assets of the Employer (for purposes of this subparagraph (2), such a sale or transfer shall not be deemed to have occurred unless it is also a sale described within the meaning of Regulation Section 1.409A-3(i)(5)(vii); provided, however, that a sale or transfer of all or substantially all of the operating assets of the Employer shall not be deemed to have occurred merely because the requirements of that regulation are satisfied); or

(3)         on the date a majority of the Employer’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Employer’s Board of Directors before the date of the appointment or election.

7.2           Payments in Event of Change of Control. Notwithstanding any provision of this Plan to the contrary:

(a)          Within 30 days after the occurrence of a Change of Control, a lump sum payment shall be made to each Participant hereunder who is in the employ of the Employer on the date the Change of Control occurs. Such lump sum payment shall be the Actuarial Equivalent of the pension which would be payable to the Participant pursuant to Section 3.1 or 4.1 if the Participant had terminated employment on the date the Change of Control occurred and had commenced to receive the pension accrued by him to the date of the Change of Control on the first day of the month following his 65th birthday or, if the Participant is already 65, the first day of the month following the date of the Change of Control. For purposes of calculating the amount which would be payable to the Participant under the preceding sentence, the 5 year of service requirement in Section 3.1(c)(1) and 4.1(c)(1) shall be ignored and the provisions of Section 3.1(c)(3) and 4.1(c)(3) shall be ignored.

(b)          Within 30 days after the occurrence of a Change of Control, a lump sum payment shall be made to each Participant hereunder who is no longer in the employ of the Employer on the date the Change of Control occurs and who has neither been paid a lump sum distribution of his benefits hereunder nor otherwise commenced to receive payment of his benefits hereunder. Such lump sum payment shall be the Actuarial Equivalent of the pension which would be payable to the Participant pursuant to Section 3.1 or 4.1 based on the benefits accrued by the Participant hereunder to the time of the Participant’s termination of employment on the assumption that the Participant would commence to receive the pension accrued by him on the first day of the month following his 65th birthday.

23

(c)          Within 30 days after the occurrence of a Change of Control, a lump sum payment shall be made to each Participant hereunder who is no longer in the employ of the Employer and who is in pay status hereunder receiving monthly benefit payments. Such lump sum payments shall be the Actuarial Equivalent of the pension payments remaining to be paid to the Participant hereunder.

(d)          Payment under this Section 7.2 shall be in lieu of any and all amounts otherwise payable to or with respect to the Participant under this Plan.

(e)          In the event the Participant should die after a Change of Control and before the lump sum payment called for by this Section 7.2 is paid, such payment shall be made to the Participant’s surviving spouse, if any.

(f)          In the event a Participant has died prior to the occurrence of a Change of Control, and such Participant’s spouse is entitled to a benefit under Section 3.3, or 4.3 such spouse shall in lieu thereof, and within 30 days after the occurrence of the Change of Control, be paid a lump sum cash amount which is the Actuarial Equivalent of the payment the spouse would have been entitled to under Section 3.3(b)(i), (ii) or (iii) or Section 4.3(b)(i), (ii) or (iii) as the case may be.

7.3           Further Consequences. No Participant shall accrue any additional benefits hereunder from and after the date of the Change of Control. Once the payments called for by Section 7.2 have been made, no further payments shall be due any person hereunder.

Dated this ______ day of _________________, 2016.

John Wittkowse, Senior Vice President and Chief Financial Officer

24

EX-21

EXHIBIT 21

WEYCO GROUP, INC.

SUBSIDIARIES OF THE REGISTRANT

Name of Company	Incorporated In	Subsidiary Of
Weyco Investments, Inc.	Nevada	Weyco Group, Inc.
Weyco Merger, Inc.	Wisconsin	Weyco Group, Inc.
Weyco Sales, LLC	Wisconsin	Weyco Group, Inc.
Weyco Retail Corp.	Wisconsin	Weyco Group, Inc.
Florsheim Shoes Europe S.r.l.	Italy	Weyco Group, Inc.
*Florsheim Australia Pty Ltd	Australia	Weyco Group, Inc.
*Florsheim South Africa Pty Ltd	South Africa	Florsheim Australia Pty Ltd
*Florsheim Asia Pacific Ltd	Hong Kong	Florsheim Australia Pty Ltd

* Less than 100% owned subsidiary of Weyco Group, Inc.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements Nos. 333-56035, 333-129881, 333-176975, and 333-198294 on Form S-8 of our report dated March 9, 2017, relating to the consolidated financial statements of Weyco Group, Inc. and subsidiaries (the “Company”) and the effectiveness of internal control over financial reporting, which appears in this annual report on Form 10-K for the year ended December 31, 2016.

/s/ BAKER TILLY VIRCHOW KRAUSE, LLP

Milwaukee, Wisconsin
March 9, 2017

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-56035, 333-129881, 333-176975, and 333-198294 on Form S-8 of our report dated March 11, 2015, relating to the 2014 consolidated financial statements of Weyco Group, Inc. and subsidiaries (the “Company”), appearing in this Annual Report on Form 10-K of Weyco Group, Inc. for the year ended December 31, 2016.

/s/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin
March 9, 2017

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Thomas W. Florsheim, Jr., certify that:

1. I have reviewed this annual report on Form 10-K of Weyco Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 9, 2017	/s/ Thomas W. Florsheim, Jr. Thomas W. Florsheim, Jr. Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, John F. Wittkowske, certify that:

1. I have reviewed this annual report on Form 10-K of Weyco Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 9, 2017	/s/ John F. Wittkowske John F. Wittkowske Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF PERIODIC FINANCIAL REPORTS

We, Thomas W. Florsheim, Jr., Chief Executive Officer, and John F. Wittkowske, Chief Financial Officer of Weyco Group, Inc., each certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Annual Report on Form 10-K for the year ended December 31, 2016 (the “Periodic Report”) to which this statement is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and

(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Weyco Group, Inc.

Dated: March 9, 2017	/s/ Thomas W. Florsheim, Jr. Thomas W. Florsheim, Jr. Chief Executive Officer
	/s/ John F. Wittkowske John F. Wittkowske Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in type form within the electronic version of this written statement required by Section 906, has been provided to Weyco Group, Inc. and will be retained by Weyco Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Mar. 01, 2017	Jun. 30, 2016
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Entity Registrant Name	WEYCO GROUP INC
Entity Central Index Key	0000106532
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 174,666,000
Trading Symbol	WEYS
Entity Common Stock, Shares Outstanding		10,488,276

XML

CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Net sales	$ 296,933	$ 320,617	$ 320,488
Cost of sales	184,890	199,008	197,420
Gross earnings	112,043	121,609	123,068
Selling and administrative expenses	90,807	91,824	92,411
Earnings from operations	21,236	29,785	30,657
Interest income	763	936	1,174
Interest expense	(436)	(181)	(178)
Other income (expense), net	514	(1,425)	(595)
Earnings before provision for income taxes	22,077	29,115	31,058
Provision for income taxes	5,084	10,962	11,234
Net earnings	16,993	18,153	19,824
Net earnings (loss) attributable to noncontrolling interest	521	(59)	804
Net earnings attributable to Weyco Group, Inc.	$ 16,472	$ 18,212	$ 19,020
Basic earnings per share (in dollars per share)	$ 1.57	$ 1.69	$ 1.76
Diluted earnings per share (in dollars per share)	$ 1.56	$ 1.68	$ 1.75

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Net earnings	$ 16,993	$ 18,153	$ 19,824
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	198	(3,411)	(2,374)
Pension liability adjustments	1,696	2,360	(6,648)
Other comprehensive income (loss)	1,894	(1,051)	(9,022)
Comprehensive income	18,887	17,102	10,802
Comprehensive income (loss) attributable to noncontrolling interest	517	(673)	390
Comprehensive income attributable to Weyco Group, Inc.	$ 18,370	$ 17,775	$ 10,412

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
ASSETS:
Cash and cash equivalents	$ 13,710	$ 17,926
Marketable securities, at amortized cost	4,601	4,522
Accounts receivable, less allowances of $2,516 and $2,257, respectively	50,726	54,009
Income tax receivable	789	0
Inventories	69,898	97,184
Prepaid expenses and other current assets	6,203	5,835
Total current assets	145,927	179,476
Marketable securities, at amortized cost	21,061	20,685
Deferred income tax benefits	660	0
Property, plant and equipment, net	33,717	31,833
Goodwill	11,112	11,112
Trademarks	32,978	34,748
Other assets	22,785	21,143
Total assets	268,240	298,997
LIABILITIES AND EQUITY:
Short-term borrowings	4,268	26,649
Accounts payable	11,942	13,339
Dividend payable	2,192	2,147
Accrued liabilities:
Wages, salaries and commissions	2,372	3,134
Taxes other than income taxes	1,193	1,111
Other	7,007	13,239
Accrued income tax payable	0	31
Deferred income tax liabilities	0	1,537
Total current liabilities	28,974	61,187
Deferred income tax liabilities	703	70
Long-term pension liability	27,801	30,188
Other long-term liabilities	2,482	2,823
Commitments and contingencies (Note 13)
Equity:
Common stock, $1.00 par value, authorized 24,000,000 shares in 2016 and 2015, issued and outstanding 10,504,975 shares in 2016 and 10,767,389 shares in 2015	10,505	10,767
Capital in excess of par value	50,184	45,759
Reinvested earnings	157,468	160,325
Accumulated other comprehensive loss	(16,569)	(18,467)
Total Weyco Group, Inc. equity	201,588	198,384
Noncontrolling interest	6,692	6,345
Total equity	208,280	204,729
Total liabilities and equity	$ 268,240	$ 298,997

XML

CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts receivable, reserves (in dollars)	$ 2,516	$ 2,257
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common Stock, Shares Authorized	24,000,000	24,000,000
Common Stock, Shares, Issued	10,504,975	10,767,389
Common Stock, Shares, Outstanding	10,504,975	10,767,389

XML

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Capital in Excess of Par Value [Member]	Reinvested Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Noncontrolling Interest [Member]
Balance at Dec. 31, 2013		$ 10,876	$ 31,729	$ 156,983	$ (9,422)	$ 6,826
Net earnings	$ 19,824	0	0	19,020	0	804
Foreign currency translation adjustments	(2,374)	0	0	0	(1,960)	(414)
Pension liability adjustment, net of tax	6,648	0	0	0	(6,648)	0
Cash dividends declared		0	0	(8,137)	0	0
Cash dividends paid to noncontrolling interest of subsidiary		0	0	0	0	(198)
Stock options exercised		218	4,663	0	0	0
Issuance of restricted stock		24	(24)	0	0	0
Stock-based compensation expense		0	1,465	0	0	0
Income tax benefit from stock options exercised and vesting of restricted stock		0	133	0	0	0
Shares purchased and retired		(297)	0	(7,687)	0	0
Balance at Dec. 31, 2014		10,821	37,966	160,179	(18,030)	7,018
Net earnings	18,153	0	0	18,212	0	(59)
Foreign currency translation adjustments	(3,411)	0	0	0	(2,797)	(614)
Pension liability adjustment, net of tax	(2,360)	0	0	0	2,360	0
Cash dividends declared		0	0	(8,563)	0	0
Stock options exercised		279	5,865	0	0	0
Issuance of restricted stock		22	(22)	0	0	0
Stock-based compensation expense		0	1,559	0	0	0
Income tax benefit from stock options exercised and vesting of restricted stock		0	391	0	0	0
Shares purchased and retired		(355)	0	(9,503)	0	0
Balance at Dec. 31, 2015	204,729	10,767	45,759	160,325	(18,467)	6,345
Net earnings	16,993	0	0	16,472	0	521
Foreign currency translation adjustments	198	0	0	0	202	(4)
Pension liability adjustment, net of tax	(1,696)	0	0	0	1,696	0
Cash dividends declared		0	0	(8,772)	0	0
Cash dividends paid to noncontrolling interest of subsidiary		0	0	0	0	(170)
Stock options exercised		123	2,871	0	0	0
Issuance of restricted stock		27	(27)	0	0	0
Restricted stock forfeited		(2)	2
Stock-based compensation expense		0	1,559	0	0	0
Income tax benefit from stock options exercised and vesting of restricted stock		0	20	0	0	0
Shares purchased and retired		(410)	0	(10,557)	0	0
Balance at Dec. 31, 2016	$ 208,280	$ 10,505	$ 50,184	$ 157,468	$ (16,569)	$ 6,692

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CONSOLIDATED STATEMENTS OF EQUITY [Parenthetical] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Pension liability adjustment, net of tax (in dollars)	$ 1,085	$ 1,509	$ 4,250
Cash dividends declared (in dollars per share)	$ 0.83	$ 0.79	$ 0.75

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 16,993	$ 18,153	$ 19,824
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities -
Depreciation	3,670	3,612	3,659
Amortization	387	426	361
Bad debt expense	76	235	240
Deferred income taxes	(2,645)	346	1,115
Net (gains) losses on remeasurement of contingent consideration	0	(458)	611
Net foreign currency transaction (gains) losses	(513)	961	268
Stock-based compensation	1,559	1,559	1,465
Pension contributions	(2,400)	(2,633)	(1,300)
Pension expense	3,184	3,699	2,212
Impairment of property, plant and equipment	113	0	0
Impairment of trademark	1,770	0	0
Increase in cash surrender value of life insurance	(573)	(573)	(552)
Changes in operating assets and liabilities -
Accounts receivable	3,179	1,009	(6,787)
Inventories	27,313	(28,282)	(5,807)
Prepaid expenses and other assets	(1,595)	2,237	(901)
Accounts payable	(1,389)	(2,326)	1,626
Accrued liabilities and other	(1,447)	(3,587)	604
Accrued income taxes	(811)	(105)	1,205
Net cash provided by (used for) operating activities	46,871	(5,727)	17,843
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities	(6,287)	(3,033)	(8,427)
Proceeds from maturities of marketable securities	5,745	8,191	8,177
Life insurance premiums paid	(155)	(155)	(155)
Purchase of property, plant and equipment	(5,992)	(2,481)	(2,890)
Net cash (used for) provided by investing activities	(6,689)	2,522	(3,295)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid	(8,720)	(8,452)	(8,029)
Cash dividends paid to noncontrolling interest of subsidiary	(170)	0	(198)
Shares purchased and retired	(10,967)	(9,858)	(7,984)
Proceeds from stock options exercised	2,994	6,144	4,881
Payment of contingent consideration	(5,217)	0	0
Proceeds from bank borrowings	121,959	160,534	101,200
Repayments of bank borrowings	(144,340)	(139,290)	(107,795)
Income tax benefits from stock-based compensation	20	391	133
Net cash (used for) provided by financing activities	(44,441)	9,469	(17,792)
Effect of exchange rate changes on cash and cash equivalents	43	(837)	(226)
Net (decrease) increase in cash and cash equivalents	(4,216)	5,427	(3,470)
CASH AND CASH EQUIVALENTS at beginning of year	17,926	12,499	15,969
CASH AND CASH EQUIVALENTS at end of year	13,710	17,926	12,499
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds	8,505	10,341	8,875
Interest paid	$ 436	$ 181	$ 127

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NATURE OF OPERATIONS

12 Months Ended

Dec. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations [Text Block]

1. NATURE OF OPERATIONS

Weyco Group, Inc. designs and markets quality and innovative footwear for men, women and children under a portfolio of well-recognized brand names including: “Florsheim,” “Nunn Bush,” “Stacy Adams,” “BOGS,” “Rafters,” and “Umi.” Inventory is purchased from third-party overseas manufacturers. The majority of foreign-sourced purchases are denominated in U.S. dollars. The Company has two reportable segments, North American wholesale operations (“wholesale”) and North American retail operations (“retail”). In the wholesale segment, the Company’s products are sold to leading footwear, department and specialty stores primarily in the United States and Canada. The Company also has licensing agreements with third parties who sell its branded apparel, accessories and specialty footwear in the United States, as well as its footwear in Mexico and certain markets overseas. Licensing revenues are included in the Company’s wholesale segment. The Company’s retail segment consisted of 13 Company-owned retail stores and an internet business in the United States as of December 31, 2016. Sales in retail outlets are made directly to consumers by Company employees. The Company’s “other” operations include the Company’s wholesale and retail operations in Australia, South Africa, Asia Pacific (collectively, “Florsheim Australia”) and Europe (“Florsheim Europe”). The majority of the Company’s operations are in the United States, and its results are primarily affected by the economic conditions and retail environment in the United States.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation — The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and include all of the Company’s majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ materially from those estimates.

Cash and Cash Equivalents — The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. At December 31, 2016 and 2015, the Company’s cash and cash equivalents included investments in money market accounts and cash deposits at various banks. The Company periodically has cash balances in excess of insured amounts. The Company has not experienced any losses on deposits in excess of insured amounts.

Investments —  All of the Company’s municipal bond investments are classified as held-to-maturity securities and reported at amortized cost pursuant to Accounting Standards Codification (“ASC”) 320, Investments — Debt and Equity Securities (“ASC 320”) as the Company has the intent and ability to hold all investments to maturity. See Note 4.

Accounts Receivable —  Trade accounts receivable arise from the sale of products on unsecured trade credit terms. On a quarterly basis, the Company reviews all significant accounts with past due balances, as well as the collectability of other outstanding trade accounts receivable for possible write-off. It is the Company’s policy to write-off accounts receivable against the allowance account when receivables are deemed to be uncollectible. The allowance for doubtful accounts reflects the Company’s best estimate of probable losses in the accounts receivable balances. The Company determines the allowance based on known troubled accounts, historical experience and other evidence currently available.

Inventories — Inventories are valued at cost, which is not in excess of market value. The majority of inventories are determined on a last-in, first-out (“LIFO”) basis. Inventory costs include the cost of shoes purchased from third-party manufacturers, as well as related freight and duty costs. The Company generally takes title to product at the time of shipping. See Note 5.

Property, Plant and Equipment and Depreciation — Property, plant and equipment are stated at cost. Plant and equipment are depreciated using primarily the straight-line method over their estimated useful lives as follows: buildings and improvements, 10 to 39 years; machinery and equipment, 3 to 5 years; furniture and fixtures, 5 to 7 years. For income tax reporting purposes, depreciation is calculated using applicable methods.

Impairment of Long-Lived Assets — Property, plant and equipment are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment if events or changes in circumstances indicate that the carrying amounts may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to its related estimated undiscounted future cash flows. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. To derive the fair value, the Company utilizes the income approach and the fair value determined is categorized as Level 3 in the fair value hierarchy. The fair value of each asset group is determined using the estimated future cash flows discounted at an estimated weighted-average cost of capital. For purposes of the impairment review, the Company groups assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In the case of its retail stores, the Company groups assets at the individual store level. In connection with the Company’s impairment review, the Company’s retail segment recognized an impairment charge of $113,000 in 2016 which was recorded within selling and administrative expenses in the Consolidated Statements of Earnings. No impairment charges were recorded in 2015 or 2014.

Goodwill and Intangible Assets —  Goodwill represents the excess of the purchase price over the estimated fair value of the underlying assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not subject to amortization. Other intangible assets consist of trademarks, customer relationships, and a non-compete agreement. Intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets which are not amortized are reviewed for impairment annually and whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. See Note 7.

Life Insurance —  Life insurance policies are recorded at the amount that could be realized under the insurance contracts as of the balance sheet date. These assets are included within other assets in the Consolidated Balance Sheets. See Note 8.

Contingent Consideration —  Contingent consideration was comprised of two earn-out payments that the Company was obligated to pay the former shareholders of The Combs Company (“Bogs”) in connection with the Company’s acquisition of Bogs in 2011. The Company revalued the contingent consideration liability on a quarterly basis and recorded increases or decreases in its fair value as an adjustment to operating earnings. Changes to the liability resulted from accretion of the discount due to the passage of time as well as changes in the actual or projected performance of Bogs. The assumptions used to determine the fair value of the contingent consideration liability included a significant amount of judgment. See Note 10.

Income Taxes —  Deferred income taxes are provided on temporary differences arising from differences in the basis of assets and liabilities for income tax and financial reporting purposes. Deferred tax assets and liabilities are measured using enacted income tax rates in effect. Tax rate changes affecting deferred tax assets and liabilities are recognized in income at the enactment date.

The Company’s policy related to interest and penalties associated with unrecognized tax benefits are recorded within interest expense and income tax expense, respectively. See Note 12.

Noncontrolling Interest —  The Company’s noncontrolling interest is accounted for under ASC 810, Consolidation (“ASC 810”) and represents the minority shareholder’s ownership interest related to the Company’s wholesale and retail businesses in Australia, South Africa and Asia Pacific. In accordance with ASC 810, the Company reports its noncontrolling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net (loss) earnings attributable to the noncontrolling interest and net earnings attributable to the Company’s common shareholders on the face of the Consolidated Statements of Earnings.

In accordance with the subscription agreement entered into in connection with the acquisition of Florsheim Australia in January 2009, the Company’s equity interest in Florsheim Australia decreases from 60% to 51% of equity issued under the subscription agreement as intercompany loans are paid in accordance with their terms. To date, the Company’s equity interest in Florsheim Australia has decreased from 60% to 55% and the noncontrolling shareholder’s interest has increased from 40% to 45%. This change is reflected in the Consolidated Statements of Equity.

Revenue Recognition — Revenue from the sale of product is recognized when title and risk of loss transfers to the customer and the customer is obligated to pay the Company. Sales to independent dealers are recorded at the time of shipment to those dealers. Sales through Company-owned retail outlets are recorded at the time of delivery to retail customers. All product sales are recorded net of estimated allowances for returns and discounts. The Company’s estimates of allowances for returns and discounts are based on such factors as specific customer situations, historical experience, and current and expected economic conditions. The Company evaluates the reserves and the estimation process and makes adjustments when appropriate. Revenue from third-party licensing agreements is recognized in the period earned. Licensing revenues were $2.8 million for 2016, $3.6 million for 2015 and $3.2 million for 2014.

Shipping and Handling Fees — The Company classifies shipping and handling fees billed to customers as revenues. Shipping and handling expenses incurred by the Company are included in selling and administrative expenses in the Consolidated Statements of Earnings. Wholesale segment shipping and handling expenses totaled $1.6 million in 2016, $1.9 million in 2015, and $2.4 million in 2014. Retail segment shipping and handling expenses, which result primarily from the Company’s shipments to its U.S. internet consumers, totaled $1.4 million in 2016, $1.2 million in 2015, and $1.1 million in 2014.

Cost of Sales — The Company’s cost of sales includes the cost of products and inbound freight and duty costs.

Selling and Administrative Expenses —  Selling and administrative expenses primarily include salaries and commissions, advertising costs, employee benefit costs, distribution costs (e.g., receiving, inspection and warehousing costs), rent and depreciation. Distribution costs included in selling and administrative expenses were $11.7 million in 2016, $11.3 million in 2015, and $11.0 million in 2014.

Advertising Costs —  Advertising costs are expensed as incurred. Total advertising costs were $11.8 million, $12.8 million, and $10.5 million in 2016, 2015 and 2014, respectively. All advertising expenses are included in selling and administrative expenses with the exception of co-op advertising expenses which are recorded as a reduction of net sales. Co-op advertising expenses, which are included in the above totals, reduced net sales by $4.0 million, $4.2 million, and $3.5 million in 2016, 2015 and 2014, respectively.

Foreign Currency Translations — The Company accounts for currency translations in accordance with ASC 830, Foreign Currency Matters. The Company’s non-U.S. subsidiaries’ local currencies are the functional currencies under which the balance sheet accounts are translated into U.S. dollars at the rates of exchange in effect at fiscal year-end and income and expense accounts are translated at the weighted average rates of exchange in effect during the year. Translation adjustments resulting from this process are recognized as a separate component of accumulated other comprehensive loss, which is a component of equity.

Foreign Currency Transactions —  Gains and losses from foreign currency transactions are included in other income (expense), net, in the Consolidated Statements of Earnings. Net foreign currency transaction gains (losses) totaled $513,000 of gains in 2016, as compared to losses of ($961,000) and ($268,000) in 2015 and 2014, respectively.

The foreign currency transaction gains recognized in 2016 resulted mainly from unrealized gains on foreign exchange contracts entered into by Florsheim Australia. The foreign currency transaction losses recognized in 2015 resulted mainly from unrealized losses on foreign exchange contracts entered into by Florsheim Australia, as well as losses from the revaluation of intercompany loans between the Company’s wholesale segment and Florsheim Australia. The foreign currency transaction losses recognized in 2014 resulted mainly from the revaluation of intercompany loans between the Company’s wholesale segment and Florsheim Australia

Financial Instruments —  At December 31, 2016, the Company had foreign exchange contracts outstanding to sell $6.0 million Canadian dollars at a price of approximately $4.5 million U.S. dollars. Additionally, the Company’s majority-owned subsidiary, Florsheim Australia, had foreign exchange contracts outstanding to buy $2.6 million U.S. dollars at a price of approximately $3.5 million Australian dollars. These contracts all expire in 2017.

Realized gains and losses on foreign exchange contracts are related to the purchase and sale of inventory and therefore are included in the Company’s net sales or cost of sales. In 2016, there were no significant realized gains or losses on foreign exchange contracts. In 2015, the Company recognized realized gains of $1.4 million related to foreign exchange contracts, and in 2014, there were no significant realized gains or losses related to foreign exchange contracts.

Earnings Per Share — Basic earnings per share excludes any dilutive effects of restricted stock and options to purchase common stock. Diluted earnings per share includes any dilutive effects of restricted stock and options to purchase common stock. See Note 15.

Comprehensive Income —  Comprehensive income includes net earnings and changes in accumulated other comprehensive loss. Comprehensive income is reported in the Consolidated Statements of Comprehensive Income.

The components of accumulated other comprehensive loss as recorded on the accompanying Consolidated Balance Sheets were as follows:

	2016			2015
	(Dollars in thousands)
Foreign currency translation adjustments	$	(5,489)		$	(5,691	)
Pension liability, net of tax		(11,080	)		(12,776	)
Total accumulated other comprehensive loss	$	(16,569)		$	(18,467	)

The noncontrolling interest as recorded in the Consolidated Balance Sheets at December 31, 2016 and 2015, included foreign currency translation adjustments of approximately ($1,065,000) and ($1,061,000), respectively.

The following presents a tabular disclosure about changes in accumulated other comprehensive loss (dollars in thousands):

	Foreign Currency Translation Adjustments			Defined Benefit Pension Items			Total
Balance, December 31, 2014	$	(2,894	)	$	(15,136	)	$	(18,030	)
Other comprehensive (loss) income before reclassifications		(2,797	)		1,285			(1,512	)
Amounts reclassified from accumulated other comprehensive loss		—			1,075			1,075
Net current period other comprehensive (loss) income		(2,797	)		2,360			(437	)
Balance, December 31, 2015	$	(5,691	)	$	(12,776	)	$	(18,467	)
Other comprehensive income before reclassifications		202			765			967
Amounts reclassified from accumulated other comprehensive loss		—			931			931
Net current period other comprehensive income		202			1,696			1,898
Balance, December 31, 2016	$	(5,489	)	$	(11,080	)	$	(16,569	)

 

The following presents a tabular disclosure about reclassification adjustments out of accumulated other comprehensive loss during the years ended December 31, 2016 and 2015 (dollars in thousands):

	Amounts reclassified from accumulated other comprehensive loss for the year ended December 31,						Affected line item in the statement where net income is presented
	2016			2015
Amortization of defined benefit pension items
Prior service cost	$	(262)		$	(112	)		(1)
Actuarial losses		1,789			1,874			(1)
Total before tax		1,527			1,762
Tax benefit		(596	)		(687	)
Net of tax	$	931		$	1,075

(1) These amounts were included in the computation of net periodic pension cost. See Note 11 for additional details.

Stock-Based Compensation —  At December 31, 2016, the Company had two stock-based employee compensation plans, which are described more fully in Note 17. The Company accounts for these plans under the recognition and measurement principles of ASC 718, Compensation —  Stock Compensation, (“ASC 718”). The Company’s policy is to estimate the fair market value of each option award granted on the date of grant using the Black-Scholes option pricing model. The Company estimates the fair value of each restricted stock award based on the fair market value of the Company’s stock price on the grant date. The resulting compensation cost for both the options and restricted stock is amortized on a straight-line basis over the vesting period of the respective awards.

 Concentration of Credit Risk —  The Company had one individual customer accounts receivable balance outstanding that represented 11% of the Company’s gross accounts receivable balance at December 31, 2016. There was no single customer that represented more than 10% of the Company’s gross accounts receivable balance at December 31, 2015. Additionally, there were no individual customers with sales above 10% of the Company’s total sales in 2016, 2015 and 2014.

Recent Accounting Pronouncements — 

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04 “Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This new standard simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. The amendments in this update are effective for annual impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed on or after January 1, 2017. The Company does not anticipate that the adoption of this new standard will have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This new standard simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain reclassifications on the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” This new standard requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months. The amendments in this update are effective for fiscal years beginning after December 15, 2018 and interim periods therein. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” The new standard clarifies that, for inventories measured at the lower of cost and net realizable value, net realizable value should be determined based on the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The amendments in this update are effective for fiscal years beginning after December 15, 2016. The Company does not anticipate that the adoption of this new accounting standard will have a material impact on its consolidated financial statements.

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry specific guidance. The new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” The amendment in this update defers the effective date of ASU No. 2014-09 for all entities by one year. Additional ASUs have been issued as part of the overall new revenue guidance. This new revenue standard permits the use of either the retrospective or cumulative effect transition method.

The Company has begun its initial assessment of the new revenue standard, with a focus on identifying the contracts with customers and assessing whether and what performance obligations exist. Based on our preliminary assessment to date, the Company does not expect that the adoption of this new standard will have a material impact on its consolidated financial statements. The Company currently plans to adopt the new standard in the first quarter of 2018. The Company is continuing its assessment, which may identify other impacts.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

3. FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes the following three-level hierarchy for fair value measurements based upon the sources of data and assumptions used to develop the fair value measurements:

Level 1 — unadjusted quoted market prices in active markets for identical assets or liabilities that are publicly accessible.

Level 2 — quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.

Level 3 — unobservable inputs that reflect the Company’s assumptions, consistent with reasonably available assumptions made by other market participants.

The carrying amounts of all short-term financial instruments, except marketable securities and foreign exchange contracts, approximate fair value due to the short-term nature of those instruments. Marketable securities are carried at amortized cost. The fair value disclosures of marketable securities are Level 2 valuations as defined by ASC 820, consisting of quoted prices for identical or similar assets in markets that are not active. See Note 4. Foreign exchange contracts are carried at fair value. The fair value measurements of foreign exchange contracts are based on observable market transactions of spot and forward rates, and thus represent level 2 valuations as defined by ASC 820. The Company’s contingent consideration was measured at fair value. See Note 10.

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INVESTMENTS

12 Months Ended

Dec. 31, 2016

Investments [Abstract]

Cost and Equity Method Investments Disclosure [Text Block]

4. INVESTMENTS

Below is a summary of the amortized cost and estimated market values of the Company’s marketable securities as of December 31, 2016, and 2015. The estimated market values provided are Level 2 valuations as defined by ASC 820.

	2016				2015
	Amortized Cost		Market Value		Amortized Cost		Market Value
	(Dollars in thousands)
Municipal bonds:
Current	$	4,601	$	4,610	$	4,522	$	4,546
Due from one through five years		12,133		12,486		12,395		13,057
Due from six through ten years		7,705		7,804		6,929		7,217
Due from eleven through twenty years		1,223		1,222		1,361		1,391
Total	$	25,662	$	26,122	$	25,207	$	26,211

The unrealized gains and losses on marketable securities at December 31, 2016 and 2015 were as follows:

	2016					2015
	Unrealized Gains		Unrealized Losses			Unrealized Gains		Unrealized Losses
	(Dollars in thousands)
Municipal bonds	$	546	$	(86	)	$	1,014	$	(10	)

At each reporting date, the Company reviews its investments to determine whether a decline in fair value below the amortized cost basis is other-than-temporary. To determine whether a decline in value is other-than-temporary, the Company considers all available evidence, including the issuer’s financial condition, the severity and duration of the decline in fair value, and the Company’s intent and ability to hold the investment for a reasonable period of time sufficient for any forecasted recovery. If a decline in value is deemed other-than-temporary, the Company records a reduction in the carrying value to the estimated fair value. The Company determined that no other-than-temporary impairment exists for the years ended December 31, 2016, 2015, and 2014.

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INVENTORIES

12 Months Ended

Dec. 31, 2016

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

5. INVENTORIES

At December 31, 2016 and 2015, inventories consisted of:

	2016			2015
	(Dollars in thousands)
Finished shoes	$	88,277		$	116,177
LIFO reserve		(18,379	)		(18,993	)
Total inventories	$	69,898		$	97,184

Finished shoes included inventory in-transit of $16.4 million and $38.1 million at December 31, 2016 and 2015, respectively. At December 31, 2016, approximately 89% of the Company’s inventories were valued by the LIFO method of accounting while approximately 11% were valued by the first-in, first-out (“FIFO”) method of accounting. At December 31, 2015, approximately 91% of the Company’s inventories were valued by the LIFO method of accounting while approximately 9% were valued by the first-in, first-out (“FIFO”) method of accounting.

During 2016, there were liquidations of LIFO inventory quantities which resulted in immaterial decreases in cost of sales in 2016. During 2015, there were no liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years as compared to the cost of fiscal 2015 purchases. During 2014, there were liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years as compared to the cost of fiscal 2014 purchases. The effect of the liquidation decreased cost of sales by $151,000 in 2014.

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PROPERTY, PLANT AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

6. PROPERTY, PLANT AND EQUIPMENT, NET

At December 31, 2016 and 2015, property, plant and equipment consisted of:

	2016			2015
	(Dollars in thousands)
Land and land improvements	$	3,714		$	3,706
Buildings and improvements		26,912			26,912
Machinery and equipment		30,906			27,142
Retail fixtures and leasehold improvements		12,455			11,232
Construction in progress		39			24
Property, plant and equipment		74,026			69,016
Less: Accumulated depreciation		(40,309	)		(37,183	)
Property, plant and equipment, net	$	33,717		$	31,833

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INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

7. INTANGIBLE ASSETS

The Company’s indefinite-lived intangible assets as recorded in the Consolidated Balance Sheets consisted of the following:

	December 31, 2016							December 31, 2015
	Gross Carrying Amount		Accumulated Impairment			Net		Gross Carrying Amount		Accumulated Impairment		Net
	(Dollars in thousands)							(Dollars in thousands)
Indefinite-lived intangible assets
Goodwill	$	11,112	$	—		$	11,112	$	11,112	$	—	$	11,112
Trademarks		34,748		(1,770	)		32,978		34,748		—		34,748
Total indefinite-lived intangible assets	$	45,860	$	(1,770	)	$	44,090	$	45,860	$	—	$	45,860

The Company performs impairment tests for goodwill and trademarks on an annual basis and more frequently if an event or changes in circumstances indicate that their carrying values may not be recoverable. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of the asset.

The Company’s goodwill resulted from the 2011 acquisition of the BOGS/Rafters brands. The Company uses a two-step process to test this goodwill for impairment. The first step is to compare the applicable reporting unit’s fair value to its carrying value. The Company determined that the applicable reporting unit is its wholesale segment. If the fair value of the wholesale segment is greater than its carrying value, there is no impairment. If the carrying value is greater than the fair value, then the second step must be completed to measure the amount of the impairment, if any. The second step calculates the implied fair value of the goodwill, which is compared to its carrying value. If the implied fair value is less than the carrying value, an impairment loss is recognized equal to the difference. In 2016, the testing determined that the estimated fair value of the wholesale segment exceeded its carrying value, therefore there was no impairment of goodwill. The Company has never recorded an impairment charge on this goodwill.

The Company tests its trademarks for impairment annually by comparing the fair value of each trademark to its related carrying value. Fair value is estimated using a discounted cash flow methodology. During the fourth quarter of 2016, the Company evaluated the current state of the Umi business and determined the brand did not fit the long-term strategic objectives of the Company. As a result, the Company recorded a $1,770,000 impairment charge to write off the majority of the value of the Umi trademark. The Company is currently looking into different strategic alternatives for the Umi brand. Other than this write-off, the Company did not record any other trademark impairment charges in 2016.

The Company’s amortizable intangible assets as recorded in the Consolidated Balance Sheets consisted of the following:

	Weighted Average Life (Years)		December 31, 2016							December 31, 2015
			Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
			(Dollars in thousands)							(Dollars in thousands)
Amortizable intangible assets
Non-compete agreement		5	$	200	$	(200	)	$	—	$	200	$	(193	)	$	7
Customer relationships		15		3,500		(1,361	)		2,139		3,500		(1,128	)		2,372
Total amortizable intangible assets			$	3,700	$	(1,561	)	$	2,139	$	3,700	$	(1,321	)	$	2,379

The amortizable intangible assets are included within other assets in the Consolidated Balance Sheets. See Note 8.

The Company recorded amortization expense for intangible assets of $240,000 in 2016 and $273,000 in each of 2015 and 2014. Excluding the impact of any future acquisitions, the Company anticipates future amortization expense to be as follows:

(Dollars in thousands)	Intangible Assets
2017	$	233
2018		233
2019		233
2020		233
2021		233
Thereafter		974
Total	$	2,139

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OTHER ASSETS

12 Months Ended

Dec. 31, 2016

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Noncurrent Assets Disclosure [Text Block]

8. OTHER ASSETS

Other assets included the following amounts at December 31, 2016 and 2015:

	2016		2015
	(Dollars in thousands)
Cash surrender value of life insurance	$	15,604	$	14,876
Amortizable intangible assets (See Note 7)		2,139		2,379
Investment in real estate		2,297		2,284
Other		2,745		1,604
Total other assets	$	22,785	$	21,143

The Company has five life insurance policies on current and former executives. Upon death of the insured executives, the approximate death benefit the Company would receive is $16.6 million in aggregate as of December 31, 2016.

On May 1, 2013, the Company purchased a 50% interest in a building in Montreal, Canada for approximately $3.2 million. The building, which is classified as an investment in real estate in the above table, serves as the Company’s Canadian office and distribution center. The purchase was accounted for as an equity-method investment under ASC 323, Investments — Equity Method and Joint Ventures.

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SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2016

Short-term Debt [Abstract]

Short-term Debt [Text Block]

9. SHORT-TERM BORROWINGS

At December 31, 2016, the Company had a $60 million unsecured revolving line of credit with a bank expiring November 3, 2017. The line of credit bears interest at LIBOR plus 0.75%. At December 31, 2016, outstanding borrowings were approximately $4.3 million at an interest rate of 1.52%. The highest balance during the year was $28.4 million. At December 31, 2015, outstanding borrowings were $26.6 million at an interest rate of 1.18%.

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CONTINGENT CONSIDERATION

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

10. CONTINGENT CONSIDERATION

Contingent consideration was comprised of two earn-out payments that the Company was obligated to pay the former shareholders of The Combs Company (“Bogs”) in connection with the Company’s acquisition of Bogs in 2011. The estimate of contingent consideration was formula-driven and was based on Bogs achieving certain levels of gross margin dollars between January 1, 2011, and December 31, 2015. The first earn-out payment was paid on March 28, 2013 in the amount of $1,270,000. The second and final earn-out payment was paid on March 23, 2016 in the amount of $5,217,000. In accordance with ASC 805, Business Combinations, the Company remeasured its estimate of the fair value of the liability at each reporting date. The change in fair value was recognized in earnings.

The following table summarizes the activity during 2016 and 2015 related to the second earn-out payment as recorded in the Consolidated Statements of Earnings (dollars in thousands):

	2016			2015
Beginning balance	$	5,217		$	5,675
Net gain on remeasurement of contingent consideration		—			(458	)
Payment of contingent consideration		(5,217	)		—
Ending balance	$	—		$	5,217

The second and final earn-out payment was recorded within accrued liabilities at December 31, 2015. The gain on remeasurement of contingent consideration was recorded within selling and administrative expenses in the consolidated statements of earnings for the year ended December 31, 2015.

The total contingent consideration was reflected in the Company’s wholesale segment. The fair value measurement of the contingent consideration was based on significant inputs not observed in the market and thus represented a level 3 valuation as defined by ASC 820.

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EMPLOYEE RETIREMENT PLANS

12 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

11. EMPLOYEE RETIREMENT PLANS

The Company has a defined benefit pension plan covering substantially all employees, as well as an unfunded supplemental pension plan for key executives. Retirement benefits are provided based on employees’ years of credited service and average earnings or stated amounts for years of service. Normal retirement age is 65 with provisions for earlier retirement. The plan also has provisions for disability and death benefits. The plan closed to new participants as of August 1, 2011. Additionally, benefit accruals under the plan were frozen effective December 31, 2016.

The Company’s funding policy for the defined benefit pension plan is to make contributions to the plan such that all employees’ benefits will be fully provided by the time they retire. Plan assets are stated at market value and consist primarily of equity securities and fixed income securities, mainly U.S. government and corporate obligations.

The Company follows ASC 715, Compensation — Retirement Benefits (“ASC 715”) which requires employers to recognize the funded status of defined benefit pension and other postretirement benefit plans as an asset or liability in their statements of financial position and to recognize changes in the funded status in the year in which the changes occur as a component of comprehensive income. In addition, ASC 715 requires employers to measure the funded status of their plans as of the date of their year-end statements of financial position. ASC 715 also requires additional disclosures regarding amounts included in accumulated other comprehensive loss.

The Company’s pension plan’s weighted average asset allocation at December 31, 2016 and 2015, by asset category, was as follows:

	Plan Assets at December 31,
	2016			2015
Asset Category:
Equity Securities		54	%		52	%
Fixed Income Securities		38	%		40	%
Other		8	%		8	%
Total		100	%		100	%

The Company has a Retirement Plan Committee, consisting of the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, to manage the operations and administration of all benefit plans and related trusts. The committee has an investment policy for the pension plan assets that establishes target asset allocation ranges for the above listed asset classes as follows: equity securities: 20% – 80%; fixed income securities: 20% – 80%; and other, principally cash: 0% – 20%. On a semi-annual basis, the committee reviews progress towards achieving the pension plan’s performance objectives.

To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This resulted in the selection of the 7.50% long-term rate of return on assets assumption for 2016.

Assumptions used in determining the funded status at December 31, 2016 and 2015 were:

	2016			2015
Discount rate		4.35	%		4.62	%
Rate of compensation increase		4.00	%		4.00	%

The following is a reconciliation of the change in benefit obligation and plan assets of both the defined benefit pension plan and the unfunded supplemental pension plan for the years ended December 31, 2016 and 2015:

	Defined Benefit Pension Plan						Supplemental Pension Plan
	2016			2015			2016			2015
	(Dollars in thousands)
Change in projected benefit obligation
Projected benefit obligation, beginning of year	$	48,677		$	50,932		$	14,261		$	14,841
Service cost		1,328			1,345			310			291
Interest cost		1,833			2,051			616			614
Plan curtailment		(5,098	)		—			(919	)		—
Actuarial loss (gain)		2,282			(3,806	)		1,527			(1,135	)
Benefits paid		(3,943	)		(1,845	)		(386	)		(350	)
Projected benefit obligation, end of year	$	45,079		$	48,677		$	15,409		$	14,261
Change in plan assets
Fair value of plan assets, beginning of year		32,345			32,027			—			—
Actual return on plan assets		1,791			(320	)		—			—
Administrative expenses		(315	)		(150	)		—			—
Contributions		2,400			2,633			386			350
Benefits paid		(3,943	)		(1,845	)		(386	)		(350	)
Fair value of plan assets, end of year	$	32,278		$	32,345		$	—		$	—
Funded status of plan	$	(12,801	)	$	(16,332	)	$	(15,409	)	$	(14,261	)
Amounts recognized in the consolidated balance sheets consist of:
Accrued liabilities – other	$	—		$	—		$	(409	)	$	(405	)
Long-term pension liability		(12,801	)		(16,332	)		(15,000	)		(13,856	)
Net amount recognized	$	(12,801	)	$	(16,332	)	$	(15,409	)	$	(14,261	)
Amounts recognized in accumulated other comprehensive loss consist of:
Accumulated loss, net of income tax benefit of $5,373, $6,631, $1,802 and $1,808, respectively	$	8,403		$	10,371		$	2,820		$	2,828
Prior service cost, net of income tax liability of $0, $0, ($91) and ($270), respectively		—			—			(143	)		(423	)
Net amount recognized	$	8,403		$	10,371		$	2,677		$	2,405

On September 15, 2016, the pension plan was amended to offer an immediate pension payout either as a one-time lump sum or annuity payment to certain former employees who had not yet commenced benefits under the plan. Benefits were calculated as of December 1, 2016, with lump sum payments being paid in December 2016 and annuity payments beginning January 1, 2017. As of December 31, 2016, $1.9 million in lump sum payments were paid as a result of this amendment. These lump sum payments are included in the “Benefits paid” line item in the above table.

On November 7, 2016, the Board of Directors of the Company authorized the freezing of the pension plan, whereby benefit accruals would be frozen effective December 31, 2016. The effect of the freeze was a reduction of the projected benefit obligation (“PBO”) to the amount of the plans’ accumulated benefit obligations. The decrease in the PBO reduced the unrecognized net actuarial loss of the plan, which is reported on an after-tax basis in accumulated other comprehensive loss within the Consolidated Balance Sheets. No curtailment gain was recognized in earnings. These plan changes will reduce the service and interest cost of the plan for periods subsequent to the curtailment.

As noted above, the accumulated benefit obligations for the defined benefit pension plan and the supplemental pension plan were equal to the respective plans’ projected benefit obligations as of December 31, 2016, due to the pension plan curtailment. As of December 31, 2015, the accumulated benefit obligations for the defined benefit pension plan and the supplemental pension plan were $43.7 million and $14.2 million, respectively.

Assumptions used in determining net periodic pension cost for the years ended December 31, 2016, 2015 and 2014 were:

	Defined Benefit Pension Plan									Supplemental Pension Plan
	2016			2015			2014			2016			2015			2014
Discount rate for determining projected benefit obligation		4.60	%		4.17	%		5.03	%		4.67	%		4.17	%		5.03	%
Discount rate in effect for determining service cost		4.81	%		4.17	%		5.03	%		4.84	%		4.17	%		5.03	%
Discount rate in effect for determining interest cost		3.93	%		4.17	%		5.03	%		4.18	%		4.17	%		5.03	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%		4.00	%		4.00	%		4.00	%
Long-term rate of return on plan assets		7.50	%		7.50	%		7.50	%		—			—			—

Effective January 1, 2016, the Company adopted the spot-rate approach to determine the interest cost component of pension expense. Under the spot-rate approach, the interest cost is calculated by applying interest to the discounted cash flow expected at each payment date. The interest is determined using the same spot rate along the yield curve that was used to determine the present value of the associated payment. Prior to 2016, the Company used a single weighted-average rate in the determination of pension expense.

The Company considered the adoption of the spot rate approach a change in accounting estimate and recognized the effects of the change on a prospective basis. The effects of adopting the spot rate approach reduced net pension expense by approximately $522,000 in 2016, primarily due to a reduction in interest cost.

The components of net pension expense for the years ended December 31, 2016, 2015 and 2014, were:

	2016			2015			2014
	(Dollars in thousands)
Benefits earned during the period	$	1,638		$	1,636		$	1,263
Interest cost on projected benefit obligation(1)		2,449			2,665			2,586
Expected return on plan assets		(2,430	)		(2,364	)		(2,343	)
Net amortization and deferral		1,527			1,762			706
Net pension expense	$	3,184		$	3,699		$	2,212

(1) The decrease in interest cost in 2016 was primarily due to the adoption of the spot-rate approach, as described above.

Due to the pension plan amendments described above, the Company expects net pension expense to decrease by approximately $2.1 million in 2017.

The Company expects to recognize expense of $544,000 due to the amortization of unrecognized loss and income of $63,000 due to the amortization of prior service credit as components of net periodic expense in 2017, which are included in accumulated other comprehensive loss at December 31, 2016.

It is the Company’s intention to satisfy the minimum funding requirements and maintain at least an 80% funding percentage in its defined benefit retirement plan in future years. At this time, the Company expects that any cash contributions necessary to satisfy these requirements would not be material in 2017. 

Projected benefit payments for the plans as of December 31, 2016, were estimated as follows:

	Defined Benefit Pension Plan		Supplemental Pension Plan
	(Dollars in thousands)
2017	$	2,308	$	409
2018	$	2,390	$	423
2019	$	2,530	$	470
2020	$	2,554	$	504
2021	$	2,572	$	536
2022 – 2026	$	13,183	$	4,035

The following table summarizes the fair value of the Company’s pension plan assets as of December 31, 2016, by asset category within the fair value hierarchy (for further level information, see Note 3):

	December 31, 2016
	Quoted Prices in Active Markets Level 1		Significant Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
	(Dollars in thousands)
Common stocks	$	12,656	$	970	$	—	$	13,626
Preferred stocks		227		17		—		244
Exchange traded funds		3,742		—		—		3,742
Corporate obligations		—		5,113		—		5,113
State and municipal obligations		—		1,538		—		1,538
Pooled fixed income funds		4,345		—		—		4,345
U.S. government securities		—		1,061		—		1,061
Cash and cash equivalents		2,519		—		—		2,519
Subtotal	$	23,489	$	8,699	$	—	$	32,188
Other assets(1)								90
Total							$	32,278

(1) This category represents trust receivables that are not leveled.

The following table summarizes the fair value of the Company’s pension plan assets as of December 31, 2015, by asset category within the fair value hierarchy (for further level information, see Note 3):  

	December 31, 2015
	Quoted Prices in Active Markets		Significant Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Common stocks	$	12,352	$	1,027	$	—	$	13,379
Preferred stocks		409		22		—		431
Exchange traded funds		3,375		—		—		3,375
Corporate obligations		—		4,503		—		4,503
State and municipal obligations		—		1,337		—		1,337
Pooled fixed income funds		5,423		—		—		5,423
U.S. government securities		—		1,103		—		1,103
Cash and cash equivalents		2,703		—		—		2,703
Subtotal	$	24,262	$	7,992	$	—	$	32,254
Other assets(1)								91
Total							$	32,345

(1) This category represents trust receivables that are not leveled.

The Company also has a defined contribution plan covering substantially all employees. The Company contributed $417,000, $350,000 and $302,000 to the plan in 2016, 2015 and 2014, respectively. Effective January 1, 2017, the Company amended its defined contribution plan to increase the Company match formula for all plan participants. With this amendment, the Company estimates that total match contributions will increase by approximately $450,000 in 2017.

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INCOME TAXES

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

12. INCOME TAXES

The provision for income taxes included the following components for the years ended December 31, 2016, 2015 and 2014:

	2016			2015		2014
	(Dollars in thousands)
Current:
Federal	$	5,965		$	8,801	$	7,339
State		1,027			1,314		1,131
Foreign		737			501		1,649
Total		7,729			10,616		10,119
Deferred		(2,645	)		346		1,115
Total provision	$	5,084		$	10,962	$	11,234

 

The differences between the U.S. federal statutory income tax rate and the Company’s effective tax rate were as follows for the years ended December 31, 2016, 2015 and 2014:

 

	2016			2015			2014
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		3.5			3.4			2.8
Non-taxable municipal bond interest		(1.0	)		(1.0	)		(1.2	)
Foreign income tax rate differences		(0.6	)		0.4			(0.8	)
Life insurance deferred tax reversal		(14.2	)		—			—
Other		0.3			(0.1	)		0.4
Effective tax rate		23.0	%		37.7	%		36.2	%

The decrease in the provision for income taxes and the effective tax rate for 2016 was primarily due to a one-time adjustment related to corporate-owned life insurance policies. In the fourth quarter of 2016, the Company reviewed its liquidity needs and sources of capital, including evaluating whether it would need the cash available under corporate-owned life insurance policies on two former executives. It was determined that the chances were remote that the Company would need to surrender the policies to satisfy liquidity needs, and, as a result, the Company reversed the $3.1 million deferred tax liability related to the policies. 

The foreign component of pretax net earnings was $2.7 million, $1.3 million and $5.0 million for 2016, 2015 and 2014, respectively. As of December 31, 2016, the total amount of unremitted foreign earnings was $7.3 million. A deferred tax liability has not been recorded on these unremitted earnings because the Company intends to permanently reinvest such earnings outside of the U.S. Future dividends, if any, would be paid only out of current year earnings. If the remaining unremitted foreign earnings at December 31, 2016 were to be repatriated in the future, the related deferred tax liability would not have a material impact on the Company’s financial statements.

The components of deferred taxes as of December 31, 2016, and 2015 were as follows:

	2016			2015
	(Dollars in thousands)
Deferred income tax assets:
Accounts receivable reserves	$	341		$	422
Pension liability		11,002			11,931
Accrued liabilities		2,648			2,383
Carryfoward losses		129			—
Foreign currency losses on intercompany loans		53			148
		14,173			14,884
Deferred income tax liabilities:
Inventory and related reserves		(3,744	)		(3,552	)
Cash value of life insurance		(441	)		(3,517	)
Property, plant and equipment		(1,483	)		(1,420	)
Intangible assets		(8,284	)		(7,753	)
Prepaid expenses and other assets		(264	)		(249	)
		(14,216	)		(16,491	)
Net deferred income tax liabilities	$	(43)		$	(1,607	)

 

The net deferred tax liabilities are classified in the Consolidated Balance Sheets as follows:

 

	2016			2015
	(Dollars in thousands)
Current deferred income tax liabilities	$	—		$	(1,537	)
Non-current deferred income tax benefits		660			—
Non-current deferred income tax liabilities		(703	)		(70	)
Net deferred income tax liabilities	$	(43)		$	(1,607	)

In 2015, the FASB issued guidance which simplified the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. The Company adopted this guidance for the year ended December 31, 2016 on a prospective basis. Prior period balances were not adjusted.

Uncertain Tax Positions

The Company accounts for its uncertain tax positions in accordance with ASC 740, Income Taxes (“ASC 740”). ASC 740 provides that the tax effects from an uncertain tax position can be recognized in the Company’s consolidated financial statements only if the position is more likely than not of being sustained on audit, based on the technical merits of the position.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

 

	2016			2015		2014
	(Dollars in thousands)
Unrecognized tax benefits balance at January 1,	$	284		$	—	$	124
Increases related to current year tax positions		239			284		—
Decreases related to prior period positions		—			—		(69	)
Decreases due to settlements of tax positions		(248	)		—		(55	)
Unrecognized tax benefits balance at December 31,	$	275		$	284	$	—

The unrecognized tax benefits at December 31, 2016 and 2015, include $70,000 and $108,000, respectively, of interest related to such positions. The unrecognized tax benefits, if ultimately recognized, would reduce the Company’s annual effective tax rate. The liabilities for potential interest are included in the Consolidated Balance Sheets at December 31, 2016 and 2015.

The Company files a U.S. federal income tax return, various U.S. state income tax returns and several foreign returns. In general, the 2014 through 2016 tax years remain subject to examination by those taxing authorities.

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COMMITMENTS

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

13. COMMITMENTS

The Company operates retail shoe stores under both short-term and long-term leases. Leases provide for a minimum rental plus percentage rentals based upon sales in excess of a specified amount. The Company also leases office space in the U.S. and its distribution facilities in Canada and overseas. Total minimum rents were $9.8 million in 2016, $9.1 million in 2015 and $9.7 million in 2014. Percentage rentals were $441,000 in 2016, $461,000 in 2015, and $512,000 in 2014.

Future fixed and minimum rental commitments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2016, are shown below. Renewal options exist for many long-term leases.

(Dollars in thousands)	Operating Leases
2017	$	9,178
2018		8,291
2019		7,502
2020		6,036
2021		4,348
Thereafter		5,783
Total	$	41,138

At December 31, 2016, the Company also had purchase commitments of approximately $51.5 million to purchase inventory, all of which were due in less than one year.

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STOCK REPURCHASE PROGRAM

12 Months Ended

Dec. 31, 2016

Share Repurchase Program Disclosure [Abstract]

Share Repurchase Program Disclosure [Text Block]

14. STOCK REPURCHASE PROGRAM

In April 1998, the Company’s Board of Directors first authorized a stock repurchase program to purchase shares of its common stock in open market transactions at prevailing prices. In 2016, the Company purchased 410,983 shares at a total cost of $11.0 million through its stock repurchase program. In 2015, the Company purchased 354,741 shares at a total cost of $9.9 million through its stock repurchase program. In 2014, the Company purchased 297,576 shares at a total cost of $8.0 million through its stock repurchase program. At December 31, 2016, there were 565,175 authorized shares remaining under the program.

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EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

15. EARNINGS PER SHARE

The following table sets forth the computations of basic and diluted earnings per share for the years ended December 31, 2016, 2015 and 2014:

	2016		2015		2014
	(In thousands, except per share amounts)
Numerator:
Net earnings attributable to Weyco Group, Inc.	$	16,472	$	18,212	$	19,020
Denominator:
Basic weighted average shares outstanding		10,519		10,773		10,791
Effect of dilutive securities:
Employee stock-based awards		53		86		97
Diluted weighted average shares outstanding		10,572		10,859		10,888
Basic earnings per share	$	1.57	$	1.69	$	1.76
Diluted earnings per share	$	1.56	$	1.68	$	1.75

Diluted weighted average shares outstanding for 2016 exclude antidilutive stock options totaling 873,276 shares at a weighted average price of $26.86. Diluted weighted average shares outstanding for 2015 exclude antidilutive stock options totaling 720,757 shares at a weighted average price of $27.59. Diluted weighted average shares outstanding for 2014 exclude antidilutive stock options totaling 656,000 shares at a weighted average price of $27.76.

Unvested restricted stock awards provide holders with dividend rights prior to vesting, however, such rights are forfeitable if the awards do not vest. As a result, unvested restricted stock awards are not participating securities and are excluded from the computation of earnings per share.

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SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

16. SEGMENT INFORMATION

The Company has two reportable segments: North American wholesale operations (“wholesale”) and North American retail operations (“retail”). The chief operating decision maker, the Company’s Chief Executive Officer, evaluates the performance of the Company’s segments based on earnings from operations. Therefore, interest income or expense, other income or expense, and income taxes are not allocated to the segments. The “other” category in the table below includes the Company’s wholesale and retail operations in Australia, South Africa, Asia Pacific and Europe, which do not meet the criteria for separate reportable segment classification.

In the wholesale segment, shoes are marketed through more than 10,000 footwear, department and specialty stores, primarily in the United States and Canada. Licensing revenues are also included in the Company’s wholesale segment. The Company has licensing agreements with third parties who sell its branded apparel, accessories and specialty footwear in the United States, as well as its footwear in Mexico and certain markets overseas. In 2016, 2015 and 2014, there was no single customer with sales above 10% of the Company’s total sales.

In the retail segment, the Company operated 13 Company-owned stores in principal cities and an internet business in the United States as of December 31, 2016. Sales in retail outlets are made directly to the consumer by Company employees. In addition to the sale of the Company’s brands of footwear in these retail outlets, other branded footwear and accessories are also sold.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies. Summarized segment data for the years ended December 31, 2016, 2015 and 2014 was as follows:

	Wholesale		Retail		Other		Total
	(Dollars in thousands)
2016
Product sales	$	224,752	$	21,883	$	47,513	$	294,148
Licensing revenues		2,785		—		—		2,785
Net sales		227,537		21,883		47,513		296,933
Depreciation		2,361		461		848		3,670
Earnings from operations		16,398		2,109		2,729		21,236
Total assets		234,005		5,341		28,894		268,240
Capital expenditures		3,650		1,188		1,154		5,992
2015
Product sales	$	247,738	$	22,121	$	47,126	$	316,985
Licensing revenues		3,632		—		—		3,632
Net sales		251,370		22,121		47,126		320,617
Depreciation		2,210		535		867		3,612
Earnings from operations		24,272		2,519		2,994		29,785
Total assets		267,265		4,372		27,360		298,997
Capital expenditures		1,329		399		753		2,481
2014
Product sales	$	240,247	$	23,324	$	53,735	$	317,306
Licensing revenues		3,182		—		—		3,182
Net sales		243,429		23,324		53,735		320,488
Depreciation		2,251		553		855		3,659
Earnings from operations		22,527		3,300		4,830		30,657
Total assets		244,278		4,689		28,479		277,446
Capital expenditures		1,305		60		1,525		2,890

All North American corporate office assets are included in the wholesale segment. Transactions between segments primarily consist of sales between the wholesale and retail segments. Intersegment sales are valued at the cost of inventory plus an estimated cost to ship the products. Intersegment sales have been eliminated and are excluded from net sales in the above table.

Geographic Segments

Financial information relating to the Company’s business by geographic area was as follows for the years ended December 31, 2016, 2015 and 2014:

	2016		2015		2014
	(Dollars in thousands)
Net Sales:
United States	$	231,462	$	252,459	$	244,260
Canada		17,958		21,031		22,493
Europe		8,014		7,291		9,048
Australia		28,390		27,224		30,466
Asia		7,702		9,050		9,842
South Africa		3,407		3,562		4,379
Total	$	296,933	$	320,617	$	320,488
Long-Lived Assets:
United States	$	74,548	$	74,658	$	75,952
Other		7,695		7,699		9,048
	$	82,243	$	82,357	$	85,000

Net sales attributed to geographic locations are based on the location of the assets producing the sales. Long-lived assets by geographic location consist of property, plant and equipment (net), goodwill, trademarks, investment in real estate and amortizable intangible assets.

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STOCK-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

17. STOCK-BASED COMPENSATION PLANS

At December 31, 2016, the Company had two stock-based compensation plans: the 2011 Incentive Plan and the 2014 Incentive Plan (collectively, “the Plans”). Under the Plans, options to purchase common stock were granted to officers and key employees at exercise prices not less than the fair market value of the Company’s common stock on the date of the grant. The Company issues new common stock to satisfy stock option exercises and the issuance of restricted stock awards. Awards are no longer granted under the 2011 plan.

Stock options and restricted stock awards were granted on August 25, 2016, August 25, 2015, and on August 26, 2014. Under the Plans, stock options and restricted stock awards are valued at fair market value based on the Company’s closing stock price on the date of grant. The stock options and restricted stock awards granted in 2016, 2015 and 2014 vest ratably over four years. As of December 31, 2016, there were 17,100 shares remaining available for stock-based awards under the 2014 Incentive Plan.

In accordance with ASC 718, stock-based compensation expense was recognized in the 2016, 2015 and 2014 consolidated financial statements for stock options and restricted stock awards granted since 2010. An estimate of forfeitures, based on historical data, was included in the calculation of stock-based compensation, and the estimate was adjusted quarterly to the extent that actual forfeitures differ, or are expected to materially differ, from such estimates. The effect of applying the expense recognition provisions of ASC 718 decreased Earnings Before Provision For Income Taxes by $1,559,000 in each of the years 2016 and 2015, and $1,465,000 in 2014.

As of December 31, 2016, there was $1.9 million of total unrecognized compensation cost related to non-vested stock options granted in the years 2013 through 2016 which is expected to be recognized over the weighted-average remaining vesting period of 2.7 years. As of December 31, 2016, there was $1.4 million of total unrecognized compensation cost related to non-vested restricted stock awards granted in the years 2013 through 2016 which is expected to be recognized over the weighted-average remaining vesting period of 2.7 years.

The following weighted-average assumptions were used to determine compensation expense related to stock options in 2016, 2015 and 2014:

	2016			2015			2014
Risk-free interest rate		1.09	%		1.36	%		1.45	%
Expected dividend yield		3.29	%		3.12	%		2.81	%
Expected term		4.3 years			4.3 years			4.3 years
Expected volatility		21.3	%		21.6	%		17.8	%

The risk-free interest rate is based on U.S. Treasury bonds with a remaining term equal to the expected term of the award. The expected dividend yield is based on the Company’s expected annual dividend as a percentage of the market value of the Company’s common stock in the year of grant. The expected term of the stock options is determined using historical experience. The expected volatility is based upon historical stock prices over the most recent period equal to the expected term of the award.

The following tables summarize stock option activity under the Company’s plans:

Stock Options 

	Years ended December 31,
	2016					2015					2014
Stock Options	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at beginning of year		1,351,826		$	26.09		1,355,416		$	25.36		1,260,866		$	24.41
Granted		277,800			25.51		299,700			25.64		331,600			27.04
Exercised		(123,294	)		24.28		(279,090	)		22.02		(218,150	)		22.37
Forfeited or expired		(20,075	)		26.52		(24,200	)		26.58		(18,900	)		25.71
Outstanding at end of year		1,486,257		$	26.13		1,351,826		$	26.09		1,355,416		$	25.36
Exercisable at end of year		762,132		$	26.07		594,906		$	25.55		603,834		$	23.66
Weighted average fair market value of options granted	$	3.05				$	3.30				$	2.93

	Weighted Average Remaining Contractual Life (in Years)		Aggregate Intrinsic Value
Outstanding – December 31, 2016		3.6	$	7,686,000
Exercisable – December 31, 2016		2.6	$	3,989,000

The aggregate intrinsic value of outstanding and exercisable stock options is defined as the difference between the market value of the Company’s stock on December 30, 2016 of $31.30 and the exercise price multiplied by the number of in-the-money outstanding and exercisable stock options.

Non-vested Stock Options

Non-vested Stock Options	Number of Options			Weighted Average Exercise Price		Weighted Average Fair Value
Non-vested – December 31, 2013		679,785		$	26.14	$	3.46
Granted		331,600			27.04		2.93
Vested		(243,303	)		25.54		3.80
Forfeited		(16,500	)		25.98		3.44
Non-vested – December 31, 2014		751,582		$	26.74	$	3.12
Granted		299,700			25.64		3.30
Vested		(275,187	)		26.14		3.36
Forfeited		(19,175	)		26.59		3.14
Non-vested – December 31, 2015		756,920		$	26.53	$	3.10
Granted		277,800			25.51		3.05
Vested		(293,720	)		26.39		3.13
Forfeited		(16,875	)		26.37		3.10
Non-vested – December 31, 2016		724,125		$	26.20	$	3.07

The following table summarizes information about outstanding and exercisable stock options at December 31, 2016:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number of Options Outstanding		Weighted Average Remaining Contractual Life (in Years)		Weighted Average Exercise Price		Number of Options Exercisable		Weighted Average Exercise Price
$23.53 to $25.86		865,207		3.8	$	24.95		373,832	$	24.14
$27.04 to $28.50		621,050		3.3	$	27.77		388,300	$	27.92
		1,486,257		3.6	$	26.13		762,132	$	26.07

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

	2016		2015		2014
	(Dollars in thousands)
Total intrinsic value of stock options exercised	$	455	$	1,705	$	1,108
Cash received from stock option exercises	$	2,994	$	6,144	$	4,881
Income tax benefit from the exercise of stock options	$	178	$	665	$	432
Total fair value of stock options vested	$	919	$	925	$	923

Restricted Stock

The following table summarizes restricted stock award activity during the years ended December 31, 2014, 2015 and 2016:

Non-vested Restricted Stock	Shares of Restricted Stock			Weighted Average Grant Date Fair Value
Non-vested – December 31, 2013		47,500		$	25.86
Issued		24,400			27.04
Vested		(17,850	)		25.31
Forfeited		—			—
Non-vested – December 31, 2014		54,050			26.58
Issued		21,900			25.64
Vested		(20,700	)		25.94
Forfeited		—			—
Non-vested – December 31, 2015		55,250		$	26.45
Issued		26,900			25.51
Vested		(22,025	)		26.26
Forfeited		(1,625	)		26.30
Non-vested – December 31, 2016		58,500		$	26.09

At December 31, 2016, the Company expected 58,500 shares of restricted stock to vest over a weighted-average remaining contractual term of 2.8 years. These shares had an aggregate intrinsic value of $1.8 million at December 31, 2016. The aggregate intrinsic value was calculated using the market value of the Company’s stock on December 30, 2016 of $31.30 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 $230,000 in 2016, $221,000 in 2015, and $183,000 in 2014.

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QUARTERLY FINANCIAL DATA

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Text Block]

18. QUARTERLY FINANCIAL DATA (Unaudited)

(In thousands, except per share amounts)

2016	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Net sales	$	78,900	$	56,867	$	79,069	$	82,097	$	296,933
Gross earnings	$	27,127	$	22,291	$	29,322	$	33,303	$	112,043
Net earnings attributable to Weyco Group, Inc.	$	2,687	$	1,000	$	4,600	$	8,185	$	16,472
Net earnings per share:
Basic	$	0.25	$	0.09	$	0.44	$	0.79	$	1.57
Diluted	$	0.25	$	0.09	$	0.44	$	0.78	$	1.56

2015	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Net sales	$	78,052	$	63,934	$	91,227	$	87,404	$	320,617
Gross earnings	$	28,737	$	24,423	$	32,610	$	35,839	$	121,609
Net earnings attributable to Weyco Group, Inc.	$	3,633	$	2,040	$	5,526	$	7,013	$	18,212
Net earnings per share:
Basic	$	0.34	$	0.19	$	0.51	$	0.65	$	1.69
Diluted	$	0.33	$	0.19	$	0.51	$	0.65	$	1.68

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VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2016

Valuation and Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

19. VALUATION AND QUALIFYING ACCOUNTS

	Deducted from Assets
	Doubtful Accounts			Returns and Allowances			Total
	(Dollars in thousands)
BALANCE, DECEMBER 31, 2013	$	1,233		$	1,060		$	2,293
Add – Additions charged to earnings		240			3,299			3,539
Deduct – Charges for purposes for which reserves were established		(246	)		(3,202	)		(3,448	)
BALANCE, DECEMBER 31, 2014	$	1,227		$	1,157		$	2,384
Add – Additions charged to earnings		235			3,200			3,435
Deduct – Charges for purposes for which reserves were established		(286	)		(3,276	)		(3,562	)
BALANCE, DECEMBER 31, 2015	$	1,176		$	1,081		$	2,257
Add – Additions charged to earnings		76			3,290			3,366
Deduct – Charges for purposes for which reserves were established		(90	)		(2,829	)		(2,919	)
Deduct – Adjustment to reserve		(188	)		—			(188	)
BALANCE, DECEMBER 31, 2016	$	974		$	1,542		$	2,516

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2016

Subsequent Events [Abstract]

Subsequent Events [Text Block]

20. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through March 9, 2017, the date these financial statements were issued. No significant subsequent events have occurred through this date requiring adjustment to the financial statements or disclosures.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation — The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and include all of the Company’s majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ materially from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents — The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. At December 31, 2016 and 2015, the Company’s cash and cash equivalents included investments in money market accounts and cash deposits at various banks. The Company periodically has cash balances in excess of insured amounts. The Company has not experienced any losses on deposits in excess of insured amounts.

Investment, Policy [Policy Text Block]

Investments —  All of the Company’s municipal bond investments are classified as held-to-maturity securities and reported at amortized cost pursuant to Accounting Standards Codification (“ASC”) 320, Investments — Debt and Equity Securities (“ASC 320”) as the Company has the intent and ability to hold all investments to maturity. See Note 4.

Trade and Other Accounts Receivable, Policy [Policy Text Block]

Accounts Receivable —  Trade accounts receivable arise from the sale of products on unsecured trade credit terms. On a quarterly basis, the Company reviews all significant accounts with past due balances, as well as the collectability of other outstanding trade accounts receivable for possible write-off. It is the Company’s policy to write-off accounts receivable against the allowance account when receivables are deemed to be uncollectible. The allowance for doubtful accounts reflects the Company’s best estimate of probable losses in the accounts receivable balances. The Company determines the allowance based on known troubled accounts, historical experience and other evidence currently available.

Inventory, Policy [Policy Text Block]

Inventories — Inventories are valued at cost, which is not in excess of market value. The majority of inventories are determined on a last-in, first-out (“LIFO”) basis. Inventory costs include the cost of shoes purchased from third-party manufacturers, as well as related freight and duty costs. The Company generally takes title to product at the time of shipping. See Note 5.

Property, Plant and Equipment, Policy [Policy Text Block]

Property, Plant and Equipment and Depreciation — Property, plant and equipment are stated at cost. Plant and equipment are depreciated using primarily the straight-line method over their estimated useful lives as follows: buildings and improvements, 10 to 39 years; machinery and equipment, 3 to 5 years; furniture and fixtures, 5 to 7 years. For income tax reporting purposes, depreciation is calculated using applicable methods.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets — Property, plant and equipment are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment if events or changes in circumstances indicate that the carrying amounts may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to its related estimated undiscounted future cash flows. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. To derive the fair value, the Company utilizes the income approach and the fair value determined is categorized as Level 3 in the fair value hierarchy. The fair value of each asset group is determined using the estimated future cash flows discounted at an estimated weighted-average cost of capital. For purposes of the impairment review, the Company groups assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In the case of its retail stores, the Company groups assets at the individual store level. In connection with the Company’s impairment review, the Company’s retail segment recognized an impairment charge of $113,000 in 2016 which was recorded within selling and administrative expenses in the Consolidated Statements of Earnings. No impairment charges were recorded in 2015 or 2014.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Intangible Assets —  Goodwill represents the excess of the purchase price over the estimated fair value of the underlying assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not subject to amortization. Other intangible assets consist of trademarks, customer relationships, and a non-compete agreement. Intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets which are not amortized are reviewed for impairment annually and whenever events or changes in circumstances indicate the carrying amounts may not be recoverable. See Note 7.

Life Settlement Contracts, Policy [Policy Text Block]

Life Insurance —  Life insurance policies are recorded at the amount that could be realized under the insurance contracts as of the balance sheet date. These assets are included within other assets in the Consolidated Balance Sheets. See Note 8.

Contingent Consideration Policy [Policy Text Block]

Contingent Consideration —  Contingent consideration was comprised of two earn-out payments that the Company was obligated to pay the former shareholders of The Combs Company (“Bogs”) in connection with the Company’s acquisition of Bogs in 2011. The Company revalued the contingent consideration liability on a quarterly basis and recorded increases or decreases in its fair value as an adjustment to operating earnings. Changes to the liability resulted from accretion of the discount due to the passage of time as well as changes in the actual or projected performance of Bogs. The assumptions used to determine the fair value of the contingent consideration liability included a significant amount of judgment. See Note 10.

Income Tax, Policy [Policy Text Block]

Income Taxes —  Deferred income taxes are provided on temporary differences arising from differences in the basis of assets and liabilities for income tax and financial reporting purposes. Deferred tax assets and liabilities are measured using enacted income tax rates in effect. Tax rate changes affecting deferred tax assets and liabilities are recognized in income at the enactment date.

The Company’s policy related to interest and penalties associated with unrecognized tax benefits are recorded within interest expense and income tax expense, respectively. See Note 12.

Noncontrolling Interest Policy [Policy Text Block]

Noncontrolling Interest —  The Company’s noncontrolling interest is accounted for under ASC 810, Consolidation (“ASC 810”) and represents the minority shareholder’s ownership interest related to the Company’s wholesale and retail businesses in Australia, South Africa and Asia Pacific. In accordance with ASC 810, the Company reports its noncontrolling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net (loss) earnings attributable to the noncontrolling interest and net earnings attributable to the Company’s common shareholders on the face of the Consolidated Statements of Earnings.

In accordance with the subscription agreement entered into in connection with the acquisition of Florsheim Australia in January 2009, the Company’s equity interest in Florsheim Australia decreases from 60% to 51% of equity issued under the subscription agreement as intercompany loans are paid in accordance with their terms. To date, the Company’s equity interest in Florsheim Australia has decreased from 60% to 55% and the noncontrolling shareholder’s interest has increased from 40% to 45%. This change is reflected in the Consolidated Statements of Equity.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition — Revenue from the sale of product is recognized when title and risk of loss transfers to the customer and the customer is obligated to pay the Company. Sales to independent dealers are recorded at the time of shipment to those dealers. Sales through Company-owned retail outlets are recorded at the time of delivery to retail customers. All product sales are recorded net of estimated allowances for returns and discounts. The Company’s estimates of allowances for returns and discounts are based on such factors as specific customer situations, historical experience, and current and expected economic conditions. The Company evaluates the reserves and the estimation process and makes adjustments when appropriate. Revenue from third-party licensing agreements is recognized in the period earned. Licensing revenues were $2.8 million for 2016, $3.6 million for 2015 and $3.2 million for 2014.

Shipping and Handling Cost, Policy [Policy Text Block]

Shipping and Handling Fees — The Company classifies shipping and handling fees billed to customers as revenues. Shipping and handling expenses incurred by the Company are included in selling and administrative expenses in the Consolidated Statements of Earnings. Wholesale segment shipping and handling expenses totaled $1.6 million in 2016, $1.9 million in 2015, and $2.4 million in 2014. Retail segment shipping and handling expenses, which result primarily from the Company’s shipments to its U.S. internet consumers, totaled $1.4 million in 2016, $1.2 million in 2015, and $1.1 million in 2014.

Cost of Sales, Policy [Policy Text Block]

Cost of Sales — The Company’s cost of sales includes the cost of products and inbound freight and duty costs.

Selling, General and Administrative Expenses, Policy [Policy Text Block]

Selling and Administrative Expenses —  Selling and administrative expenses primarily include salaries and commissions, advertising costs, employee benefit costs, distribution costs (e.g., receiving, inspection and warehousing costs), rent and depreciation. Distribution costs included in selling and administrative expenses were $11.7 million in 2016, $11.3 million in 2015, and $11.0 million in 2014.

Advertising Costs, Policy [Policy Text Block]

Advertising Costs —  Advertising costs are expensed as incurred. Total advertising costs were $11.8 million, $12.8 million, and $10.5 million in 2016, 2015 and 2014, respectively. All advertising expenses are included in selling and administrative expenses with the exception of co-op advertising expenses which are recorded as a reduction of net sales. Co-op advertising expenses, which are included in the above totals, reduced net sales by $4.0 million, $4.2 million, and $3.5 million in 2016, 2015 and 2014, respectively

Foreign Currency Translations Policy [Policy Text Block]

Foreign Currency Translations — The Company accounts for currency translations in accordance with ASC 830, Foreign Currency Matters. The Company’s non-U.S. subsidiaries’ local currencies are the functional currencies under which the balance sheet accounts are translated into U.S. dollars at the rates of exchange in effect at fiscal year-end and income and expense accounts are translated at the weighted average rates of exchange in effect during the year. Translation adjustments resulting from this process are recognized as a separate component of accumulated other comprehensive loss, which is a component of equity.

Foreign Currency Transactions Policy [Policy Text Block]

Foreign Currency Transactions —  Gains and losses from foreign currency transactions are included in other income (expense), net, in the Consolidated Statements of Earnings. Net foreign currency transaction gains (losses) totaled $513,000 of gains in 2016, as compared to losses of ($961,000) and ($268,000) in 2015 and 2014, respectively.

The foreign currency transaction gains recognized in 2016 resulted mainly from unrealized gains on foreign exchange contracts entered into by Florsheim Australia. The foreign currency transaction losses recognized in 2015 resulted mainly from unrealized losses on foreign exchange contracts entered into by Florsheim Australia, as well as losses from the revaluation of intercompany loans between the Company’s wholesale segment and Florsheim Australia. The foreign currency transaction losses recognized in 2014 resulted mainly from the revaluation of intercompany loans between the Company’s wholesale segment and Florsheim Australia

Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial Instruments —  At December 31, 2016, the Company had foreign exchange contracts outstanding to sell $6.0 million Canadian dollars at a price of approximately $4.5 million U.S. dollars. Additionally, the Company’s majority-owned subsidiary, Florsheim Australia, had foreign exchange contracts outstanding to buy $2.6 million U.S. dollars at a price of approximately $3.5 million Australian dollars. These contracts all expire in 2017.

Realized gains and losses on foreign exchange contracts are related to the purchase and sale of inventory and therefore are included in the Company’s net sales or cost of sales. In 2016, there were no significant realized gains or losses on foreign exchange contracts. In 2015, the Company recognized realized gains of $1.4 million related to foreign exchange contracts, and in 2014, there were no significant realized gains or losses related to foreign exchange contracts.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share — Basic earnings per share excludes any dilutive effects of restricted stock and options to purchase common stock. Diluted earnings per share includes any dilutive effects of restricted stock and options to purchase common stock. See Note 15.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income —  Comprehensive income includes net earnings and changes in accumulated other comprehensive loss. Comprehensive income is reported in the Consolidated Statements of Comprehensive Income.

The components of accumulated other comprehensive loss as recorded on the accompanying Consolidated Balance Sheets were as follows:

	2016			2015
	(Dollars in thousands)
Foreign currency translation adjustments	$	(5,489)		$	(5,691	)
Pension liability, net of tax		(11,080	)		(12,776	)
Total accumulated other comprehensive loss	$	(16,569)		$	(18,467	)

The noncontrolling interest as recorded in the Consolidated Balance Sheets at December 31, 2016 and 2015, included foreign currency translation adjustments of approximately ($1,065,000) and ($1,061,000), respectively.

The following presents a tabular disclosure about changes in accumulated other comprehensive loss (dollars in thousands):

	Foreign Currency Translation Adjustments			Defined Benefit Pension Items			Total
Balance, December 31, 2014	$	(2,894	)	$	(15,136	)	$	(18,030	)
Other comprehensive (loss) income before reclassifications		(2,797	)		1,285			(1,512	)
Amounts reclassified from accumulated other comprehensive loss		—			1,075			1,075
Net current period other comprehensive (loss) income		(2,797	)		2,360			(437	)
Balance, December 31, 2015	$	(5,691	)	$	(12,776	)	$	(18,467	)
Other comprehensive income before reclassifications		202			765			967
Amounts reclassified from accumulated other comprehensive loss		—			931			931
Net current period other comprehensive income		202			1,696			1,898
Balance, December 31, 2016	$	(5,489	)	$	(11,080	)	$	(16,569	)

 

The following presents a tabular disclosure about reclassification adjustments out of accumulated other comprehensive loss during the years ended December 31, 2016 and 2015 (dollars in thousands):

	Amounts reclassified from accumulated other comprehensive loss for the year ended December 31,						Affected line item in the statement where net income is presented
	2016			2015
Amortization of defined benefit pension items
Prior service cost	$	(262)		$	(112	)		(1)
Actuarial losses		1,789			1,874			(1)
Total before tax		1,527			1,762
Tax benefit		(596	)		(687	)
Net of tax	$	931		$	1,075

(1) These amounts were included in the computation of net periodic pension cost. See Note 11 for additional details.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation —  At December 31, 2016, the Company had two stock-based employee compensation plans, which are described more fully in Note 17. The Company accounts for these plans under the recognition and measurement principles of ASC 718, Compensation —  Stock Compensation. The Company’s policy is to estimate the fair market value of each option award granted on the date of grant using the Black-Scholes option pricing model. The Company estimates the fair value of each restricted stock award based on the fair market value of the Company’s stock price on the grant date. The resulting compensation cost for both the options and restricted stock is amortized on a straight-line basis over the vesting period of the respective awards.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk —  The Company had one individual customer accounts receivable balance outstanding that represented 11% of the Company’s gross accounts receivable balance at December 31, 2016. There was no single customer that represented more than 10% of the Company’s gross accounts receivable balance at December 31, 2015. Additionally, there were no individual customers with sales above 10% of the Company’s total sales in 2016, 2015 and 2014.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements — 

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04 “Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This new standard simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. The amendments in this update are effective for annual impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed on or after January 1, 2017. The Company does not anticipate that the adoption of this new standard will have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This new standard simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain reclassifications on the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” This new standard requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months. The amendments in this update are effective for fiscal years beginning after December 15, 2018 and interim periods therein. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” The new standard clarifies that, for inventories measured at the lower of cost and net realizable value, net realizable value should be determined based on the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The amendments in this update are effective for fiscal years beginning after December 15, 2016. The Company does not anticipate that the adoption of this new accounting standard will have a material impact on its consolidated financial statements.

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry specific guidance. The new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” The amendment in this update defers the effective date of ASU No. 2014-09 for all entities by one year. Additional ASUs have been issued as part of the overall new revenue guidance. This new revenue standard permits the use of either the retrospective or cumulative effect transition method.

The Company has begun its initial assessment of the new revenue standard, with a focus on identifying the contracts with customers and assessing whether and what performance obligations exist. Based on our preliminary assessment to date, the Company does not expect that the adoption of this new standard will have a material impact on its consolidated financial statements. The Company currently plans to adopt the new standard in the first quarter of 2018. The Company is continuing its assessment, which may identify other impacts.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The components of accumulated other comprehensive loss as recorded on the accompanying Consolidated Balance Sheets were as follows:

	2016			2015
	(Dollars in thousands)
Foreign currency translation adjustments	$	(5,489)		$	(5,691	)
Pension liability, net of tax		(11,080	)		(12,776	)
Total accumulated other comprehensive loss	$	(16,569)		$	(18,467	)

Changes In Accumulated Other Comprehensive Loss [Table Text Block]

The following presents a tabular disclosure about changes in accumulated other comprehensive loss during the year ended December 31, 2016 (dollars in thousands):

	Foreign Currency Translation Adjustments			Defined Benefit Pension Items			Total
Balance, December 31, 2014	$	(2,894	)	$	(15,136	)	$	(18,030	)
Other comprehensive (loss) income before reclassifications		(2,797	)		1,285			(1,512	)
Amounts reclassified from accumulated other comprehensive loss		—			1,075			1,075
Net current period other comprehensive (loss) income		(2,797	)		2,360			(437	)
Balance, December 31, 2015	$	(5,691	)	$	(12,776	)	$	(18,467	)
Other comprehensive income before reclassifications		202			765			967
Amounts reclassified from accumulated other comprehensive loss		—			931			931
Net current period other comprehensive income		202			1,696			1,898
Balance, December 31, 2016	$	(5,489	)	$	(11,080	)	$	(16,569	)

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

The following presents a tabular disclosure about reclassification adjustments out of accumulated other comprehensive loss during the years ended December 31, 2016 and 2015 (dollars in thousands):

	Amounts reclassified from accumulated other comprehensive loss for the year ended December 31,						Affected line item in the statement where net income is presented
	2016			2015
Amortization of defined benefit pension items
Prior service cost	$	(262)		$	(112	)		(1)
Actuarial losses		1,789			1,874			(1)
Total before tax		1,527			1,762
Tax benefit		(596	)		(687	)
Net of tax	$	931		$	1,075

(1) These amounts were included in the computation of net periodic pension cost. See Note 11 for additional details.

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INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2016

Investments [Abstract]

Held-to-maturity Securities [Table Text Block]

Below is a summary of the amortized cost and estimated market values of the Company’s marketable securities as of December 31, 2016, and 2015. The estimated market values provided are Level 2 valuations as defined by ASC 820.

	2016				2015
	Amortized Cost		Market Value		Amortized Cost		Market Value
	(Dollars in thousands)
Municipal bonds:
Current	$	4,601	$	4,610	$	4,522	$	4,546
Due from one through five years		12,133		12,486		12,395		13,057
Due from six through ten years		7,705		7,804		6,929		7,217
Due from eleven through twenty years		1,223		1,222		1,361		1,391
Total	$	25,662	$	26,122	$	25,207	$	26,211

Unrealized Gain (Loss) on Investments [Table Text Block]

The unrealized gains and losses on marketable securities at December 31, 2016 and 2015 were as follows:

	2016					2015
	Unrealized Gains		Unrealized Losses			Unrealized Gains		Unrealized Losses
	(Dollars in thousands)
Municipal bonds	$	546	$	(86	)	$	1,014	$	(10	)

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INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2016

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

At December 31, 2016 and 2015, inventories consisted of:

	2016			2015
	(Dollars in thousands)
Finished shoes	$	88,277		$	116,177
LIFO reserve		(18,379	)		(18,993	)
Total inventories	$	69,898		$	97,184

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PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

At December 31, 2016 and 2015, property, plant and equipment consisted of:

	2016			2015
	(Dollars in thousands)
Land and land improvements	$	3,714		$	3,706
Buildings and improvements		26,912			26,912
Machinery and equipment		30,906			27,142
Retail fixtures and leasehold improvements		12,455			11,232
Construction in progress		39			24
Property, plant and equipment		74,026			69,016
Less: Accumulated depreciation		(40,309	)		(37,183	)
Property, plant and equipment, net	$	33,717		$	31,833

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INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

The Company’s indefinite-lived intangible assets as recorded in the Consolidated Balance Sheets consisted of the following:

	December 31, 2016							December 31, 2015
	Gross Carrying Amount		Accumulated Impairment			Net		Gross Carrying Amount		Accumulated Impairment		Net
	(Dollars in thousands)							(Dollars in thousands)
Indefinite-lived intangible assets
Goodwill	$	11,112	$	—		$	11,112	$	11,112	$	—	$	11,112
Trademarks		34,748		(1,770	)		32,978		34,748		—		34,748
Total indefinite-lived intangible assets	$	45,860	$	(1,770	)	$	44,090	$	45,860	$	—	$	45,860

The Company’s amortizable intangible assets as recorded in the Consolidated Balance Sheets consisted of the following:

	Weighted Average Life (Years)		December 31, 2016							December 31, 2015
			Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
			(Dollars in thousands)							(Dollars in thousands)
Amortizable intangible assets
Non-compete agreement		5	$	200	$	(200	)	$	—	$	200	$	(193	)	$	7
Customer relationships		15		3,500		(1,361	)		2,139		3,500		(1,128	)		2,372
Total amortizable intangible assets			$	3,700	$	(1,561	)	$	2,139	$	3,700	$	(1,321	)	$	2,379

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Excluding the impact of any future acquisitions, the Company anticipates future amortization expense to be as follows:

(Dollars in thousands)	Intangible Assets
2017	$	233
2018		233
2019		233
2020		233
2021		233
Thereafter		974
Total	$	2,139

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OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2016

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets, Noncurrent [Table Text Block]

Other assets included the following amounts at December 31, 2016 and 2015:

	2016		2015
	(Dollars in thousands)
Cash surrender value of life insurance	$	15,604	$	14,876
Amortizable intangible assets (See Note 7)		2,139		2,379
Investment in real estate		2,297		2,284
Other		2,745		1,604
Total other assets	$	22,785	$	21,143

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CONTINGENT CONSIDERATION (Tables)

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

The following table summarizes the activity during 2016 and 2015 related to the second earn-out payment as recorded in the Consolidated Statements of Earnings (dollars in thousands):

	2016			2015
Beginning balance	$	5,217		$	5,675
Net gain on remeasurement of contingent consideration		—			(458	)
Payment of contingent consideration		(5,217	)		—
Ending balance	$	—		$	5,217

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EMPLOYEE RETIREMENT PLANS (Tables)

12 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of Weighted Average Plan Assets Allocation [Table Text Block]

The Company’s pension plan’s weighted average asset allocation at December 31, 2016 and 2015, by asset category, was as follows:

	Plan Assets at December 31,
	2016			2015
Asset Category:
Equity Securities		54	%		52	%
Fixed Income Securities		38	%		40	%
Other		8	%		8	%
Total		100	%		100	%

Schedule of Assumptions Used to Determine, Net Funded Status of Plan [Table Text Block]

Assumptions used in determining the funded status at December 31, 2016 and 2015 were:

	2016			2015
Discount rate		4.35	%		4.62	%
Rate of compensation increase		4.00	%		4.00	%

Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan [Table Text Block]

The following is a reconciliation of the change in benefit obligation and plan assets of both the defined benefit pension plan and the unfunded supplemental pension plan for the years ended December 31, 2016 and 2015:

	Defined Benefit Pension Plan						Supplemental Pension Plan
	2016			2015			2016			2015
	(Dollars in thousands)
Change in projected benefit obligation
Projected benefit obligation, beginning of year	$	48,677		$	50,932		$	14,261		$	14,841
Service cost		1,328			1,345			310			291
Interest cost		1,833			2,051			616			614
Plan curtailment		(5,098	)		—			(919	)		—
Actuarial loss (gain)		2,282			(3,806	)		1,527			(1,135	)
Benefits paid		(3,943	)		(1,845	)		(386	)		(350	)
Projected benefit obligation, end of year	$	45,079		$	48,677		$	15,409		$	14,261
Change in plan assets
Fair value of plan assets, beginning of year		32,345			32,027			—			—
Actual return on plan assets		1,791			(320	)		—			—
Administrative expenses		(315	)		(150	)		—			—
Contributions		2,400			2,633			386			350
Benefits paid		(3,943	)		(1,845	)		(386	)		(350	)
Fair value of plan assets, end of year	$	32,278		$	32,345		$	—		$	—
Funded status of plan	$	(12,801	)	$	(16,332	)	$	(15,409	)	$	(14,261	)
Amounts recognized in the consolidated balance sheets consist of:
Accrued liabilities – other	$	—		$	—		$	(409	)	$	(405	)
Long-term pension liability		(12,801	)		(16,332	)		(15,000	)		(13,856	)
Net amount recognized	$	(12,801	)	$	(16,332	)	$	(15,409	)	$	(14,261	)
Amounts recognized in accumulated other comprehensive loss consist of:
Accumulated loss, net of income tax benefit of $5,373, $6,631, $1,802 and $1,808, respectively	$	8,403		$	10,371		$	2,820		$	2,828
Prior service cost, net of income tax liability of $0, $0, ($91) and ($270), respectively		—			—			(143	)		(423	)
Net amount recognized	$	8,403		$	10,371		$	2,677		$	2,405

Schedule of Assumptions Used [Table Text Block]

Assumptions used in determining net periodic pension cost for the years ended December 31, 2016, 2015 and 2014 were:

	Defined Benefit Pension Plan									Supplemental Pension Plan
	2016			2015			2014			2016			2015			2014
Discount rate for determining projected benefit obligation		4.60	%		4.17	%		5.03	%		4.67	%		4.17	%		5.03	%
Discount rate in effect for determining service cost		4.81	%		4.17	%		5.03	%		4.84	%		4.17	%		5.03	%
Discount rate in effect for determining interest cost		3.93	%		4.17	%		5.03	%		4.18	%		4.17	%		5.03	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%		4.00	%		4.00	%		4.00	%
Long-term rate of return on plan assets		7.50	%		7.50	%		7.50	%		—			—			—

Schedule of Net Benefit Costs [Table Text Block]

The components of net pension expense for the years ended December 31, 2016, 2015 and 2014, were:

	2016			2015			2014
	(Dollars in thousands)
Benefits earned during the period	$	1,638		$	1,636		$	1,263
Interest cost on projected benefit obligation(1)		2,449			2,665			2,586
Expected return on plan assets		(2,430	)		(2,364	)		(2,343	)
Net amortization and deferral		1,527			1,762			706
Net pension expense	$	3,184		$	3,699		$	2,212

(1) The decrease in interest cost in 2016 was primarily due to the adoption of the spot-rate approach, as described above.

Schedule of Expected Benefit Payments [Table Text Block]

Projected benefit payments for the plans as of December 31, 2016, were estimated as follows:

	Defined Benefit Pension Plan		Supplemental Pension Plan
	(Dollars in thousands)
2017	$	2,308	$	409
2018	$	2,390	$	423
2019	$	2,530	$	470
2020	$	2,554	$	504
2021	$	2,572	$	536
2022 – 2026	$	13,183	$	4,035

Schedule of Allocation of Plan Assets [Table Text Block]

The following table summarizes the fair value of the Company’s pension plan assets as of December 31, 2016, by asset category within the fair value hierarchy (for further level information, see Note 3):

	December 31, 2016
	Quoted Prices in Active Markets Level 1		Significant Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
	(Dollars in thousands)
Common stocks	$	12,656	$	970	$	—	$	13,626
Preferred stocks		227		17		—		244
Exchange traded funds		3,742		—		—		3,742
Corporate obligations		—		5,113		—		5,113
State and municipal obligations		—		1,538		—		1,538
Pooled fixed income funds		4,345		—		—		4,345
U.S. government securities		—		1,061		—		1,061
Cash and cash equivalents		2,519		—		—		2,519
Subtotal	$	23,489	$	8,699	$	—	$	32,188
Other assets(1)								90
Total							$	32,278

(1) This category represents trust receivables that are not leveled.

The following table summarizes the fair value of the Company’s pension plan assets as of December 31, 2015, by asset category within the fair value hierarchy (for further level information, see Note 3):  

	December 31, 2015
	Quoted Prices in Active Markets		Significant Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Common stocks	$	12,352	$	1,027	$	—	$	13,379
Preferred stocks		409		22		—		431
Exchange traded funds		3,375		—		—		3,375
Corporate obligations		—		4,503		—		4,503
State and municipal obligations		—		1,337		—		1,337
Pooled fixed income funds		5,423		—		—		5,423
U.S. government securities		—		1,103		—		1,103
Cash and cash equivalents		2,703		—		—		2,703
Subtotal	$	24,262	$	7,992	$	—	$	32,254
Other assets(1)								91
Total							$	32,345

(1) This category represents trust receivables that are not leveled.

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The provision for income taxes included the following components at December 31, 2016, 2015 and 2014:

	2016			2015		2014
	(Dollars in thousands)
Current:
Federal	$	5,965		$	8,801	$	7,339
State		1,027			1,314		1,131
Foreign		737			501		1,649
Total		7,729			10,616		10,119
Deferred		(2,645	)		346		1,115
Total provision	$	5,084		$	10,962	$	11,234

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The differences between the U.S. federal statutory income tax rate and the Company’s effective tax rate were as follows for the years ended December 31, 2016, 2015 and 2014:

	2016			2015			2014
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		3.5			3.4			2.8
Non-taxable municipal bond interest		(1.0	)		(1.0	)		(1.2	)
Foreign income tax rate differences		(0.6	)		0.4			(0.8	)
Life insurance deferred tax reversal		(14.2	)		—			—
Other		0.3			(0.1	)		0.4
Effective tax rate		23.0	%		37.7	%		36.2	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The components of deferred taxes as of December 31, 2016, and 2015 were as follows:

	2016			2015
	(Dollars in thousands)
Deferred income tax assets:
Accounts receivable reserves	$	341		$	422
Pension liability		11,002			11,931
Accrued liabilities		2,648			2,383
Carryfoward losses		129			—
Foreign currency losses on intercompany loans		53			148
		14,173			14,884
Deferred income tax liabilities:
Inventory and related reserves		(3,744	)		(3,552	)
Cash value of life insurance		(441	)		(3,517	)
Property, plant and equipment		(1,483	)		(1,420	)
Intangible assets		(8,284	)		(7,753	)
Prepaid expenses and other assets		(264	)		(249	)
		(14,216	)		(16,491	)
Net deferred income tax liabilities	$	(43)		$	(1,607	)

 

Schedule of Deferred Tax Benefit (Liabilities) [Table Text Block]

The net deferred tax liabilities are classified in the Consolidated Balance Sheets as follows:

	2016			2015
	(Dollars in thousands)
Current deferred income tax liabilities	$	—		$	(1,537	)
Non-current deferred income tax benefits		660			—
Non-current deferred income tax liabilities		(703	)		(70	)
Net deferred income tax liabilities	$	(43	)	$	(1,607	)

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

 

	2016			2015		2014
	(Dollars in thousands)
Unrecognized tax benefits balance at January 1,	$	284		$	—	$	124
Increases related to current year tax positions		239			284		—
Decreases related to prior period positions		—			—		(69	)
Decreases due to settlements of tax positions		(248	)		—		(55	)
Unrecognized tax benefits balance at December 31,	$	275		$	284	$	—

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COMMITMENTS (Tables)

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Future fixed and minimum rental commitments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2016, are shown below. Renewal options exist for many long-term leases.

(Dollars in thousands)	Operating Leases
2017	$	9,178
2018		8,291
2019		7,502
2020		6,036
2021		4,348
Thereafter		5,783
Total	$	41,138

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EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table sets forth the computations of basic and diluted earnings per share for the years ended December 31, 2016, 2015 and 2014:

	2016		2015		2014
	(In thousands, except per share amounts)
Numerator:
Net earnings attributable to Weyco Group, Inc.	$	16,472	$	18,212	$	19,020
Denominator:
Basic weighted average shares outstanding		10,519		10,773		10,791
Effect of dilutive securities:
Employee stock-based awards		53		86		97
Diluted weighted average shares outstanding		10,572		10,859		10,888
Basic earnings per share	$	1.57	$	1.69	$	1.76
Diluted earnings per share	$	1.56	$	1.68	$	1.75

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SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies. Summarized segment data for the years ended December 31, 2016, 2015 and 2014 was as follows:

	Wholesale		Retail		Other		Total
	(Dollars in thousands)
2016
Product sales	$	224,752	$	21,883	$	47,513	$	294,148
Licensing revenues		2,785		—		—		2,785
Net sales		227,537		21,883		47,513		296,933
Depreciation		2,361		461		848		3,670
Earnings from operations		16,398		2,109		2,729		21,236
Total assets		234,005		5,341		28,894		268,240
Capital expenditures		3,650		1,188		1,154		5,992
2015
Product sales	$	247,738	$	22,121	$	47,126	$	316,985
Licensing revenues		3,632		—		—		3,632
Net sales		251,370		22,121		47,126		320,617
Depreciation		2,210		535		867		3,612
Earnings from operations		24,272		2,519		2,994		29,785
Total assets		267,265		4,372		27,360		298,997
Capital expenditures		1,329		399		753		2,481
2014
Product sales	$	240,247	$	23,324	$	53,735	$	317,306
Licensing revenues		3,182		—		—		3,182
Net sales		243,429		23,324		53,735		320,488
Depreciation		2,251		553		855		3,659
Earnings from operations		22,527		3,300		4,830		30,657
Total assets		244,278		4,689		28,479		277,446
Capital expenditures		1,305		60		1,525		2,890

Schedule Of Entity Wide Disclosure On Geographic Areas Net Sales And Long Lived Assets In Individual Foreign Countries By Country [Table Text Block]

Financial information relating to the Company’s business by geographic area was as follows for the years ended December 31, 2016, 2015 and 2014:

	2016		2015		2014
	(Dollars in thousands)
Net Sales:
United States	$	231,462	$	252,459	$	244,260
Canada		17,958		21,031		22,493
Europe		8,014		7,291		9,048
Australia		28,390		27,224		30,466
Asia		7,702		9,050		9,842
South Africa		3,407		3,562		4,379
Total	$	296,933	$	320,617	$	320,488
Long-Lived Assets:
United States	$	74,548	$	74,658	$	75,952
Other		7,695		7,699		9,048
	$	82,243	$	82,357	$	85,000

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STOCK-BASED COMPENSATION PLANS (Tables)

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The following weighted-average assumptions were used to determine compensation expense related to stock options in 2016, 2015 and 2014:

	2016			2015			2014
Risk-free interest rate		1.09	%		1.36	%		1.45	%
Expected dividend yield		3.29	%		3.12	%		2.81	%
Expected term		4.3 years			4.3 years			4.3 years
Expected volatility		21.3	%		21.6	%		17.8	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following tables summarize stock option activity under the Company’s plans:

Stock Options 

	Years ended December 31,
	2016					2015					2014
Stock Options	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding at beginning of year		1,351,826		$	26.09		1,355,416		$	25.36		1,260,866		$	24.41
Granted		277,800			25.51		299,700			25.64		331,600			27.04
Exercised		(123,294	)		24.28		(279,090	)		22.02		(218,150	)		22.37
Forfeited or expired		(20,075	)		26.52		(24,200	)		26.58		(18,900	)		25.71
Outstanding at end of year		1,486,257		$	26.13		1,351,826		$	26.09		1,355,416		$	25.36
Exercisable at end of year		762,132		$	26.07		594,906		$	25.55		603,834		$	23.66
Weighted average fair market value of options granted	$	3.05				$	3.30				$	2.93

	Weighted Average Remaining Contractual Life (in Years)		Aggregate Intrinsic Value
Outstanding – December 31, 2016		3.6	$	7,686,000
Exercisable – December 31, 2016		2.6	$	3,989,000

Schedule of Nonvested Share Activity [Table Text Block]

The aggregate intrinsic value of outstanding and exercisable stock options is defined as the difference between the market value of the Company’s stock on December 30, 2016 of $31.30 and the exercise price multiplied by the number of in-the-money outstanding and exercisable stock options.

Non-vested Stock Options

Non-vested Stock Options	Number of Options			Weighted Average Exercise Price		Weighted Average Fair Value
Non-vested – December 31, 2013		679,785		$	26.14	$	3.46
Granted		331,600			27.04		2.93
Vested		(243,303	)		25.54		3.80
Forfeited		(16,500	)		25.98		3.44
Non-vested – December 31, 2014		751,582		$	26.74	$	3.12
Granted		299,700			25.64		3.30
Vested		(275,187	)		26.14		3.36
Forfeited		(19,175	)		26.59		3.14
Non-vested – December 31, 2015		756,920		$	26.53	$	3.10
Granted		277,800			25.51		3.05
Vested		(293,720	)		26.39		3.13
Forfeited		(16,875	)		26.37		3.10
Non-vested – December 31, 2016		724,125		$	26.20	$	3.07

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

The following table summarizes information about outstanding and exercisable stock options at December 31, 2016:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number of Options Outstanding		Weighted Average Remaining Contractual Life (in Years)		Weighted Average Exercise Price		Number of Options Exercisable		Weighted Average Exercise Price
$23.53 to $25.86		865,207		3.8	$	24.95		373,832	$	24.14
$27.04 to $28.50		621,050		3.3	$	27.77		388,300	$	27.92
		1,486,257		3.6	$	26.13		762,132	$	26.07

Schedule of Cash Proceeds Received from Share-based Payment Awards [Table Text Block]

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

	2016		2015		2014
	(Dollars in thousands)
Total intrinsic value of stock options exercised	$	455	$	1,705	$	1,108
Cash received from stock option exercises	$	2,994	$	6,144	$	4,881
Income tax benefit from the exercise of stock options	$	178	$	665	$	432
Total fair value of stock options vested	$	919	$	925	$	923

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

The following table summarizes restricted stock award activity during the years ended December 31, 2014, 2015 and 2016:

Non-vested Restricted Stock	Shares of Restricted Stock			Weighted Average Grant Date Fair Value
Non-vested – December 31, 2013		47,500		$	25.86
Issued		24,400			27.04
Vested		(17,850	)		25.31
Forfeited		—			—
Non-vested – December 31, 2014		54,050			26.58
Issued		21,900			25.64
Vested		(20,700	)		25.94
Forfeited		—			—
Non-vested – December 31, 2015		55,250		$	26.45
Issued		26,900			25.51
Vested		(22,025	)		26.26
Forfeited		(1,625	)		26.30
Non-vested – December 31, 2016		58,500		$	26.09

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QUARTERLY FINANCIAL DATA (Tables)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information [Table Text Block]

(In thousands, except per share amounts)

2016	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Net sales	$	78,900	$	56,867	$	79,069	$	82,097	$	296,933
Gross earnings	$	27,127	$	22,291	$	29,322	$	33,303	$	112,043
Net earnings attributable to Weyco Group, Inc.	$	2,687	$	1,000	$	4,600	$	8,185	$	16,472
Net earnings per share:
Basic	$	0.25	$	0.09	$	0.44	$	0.79	$	1.57
Diluted	$	0.25	$	0.09	$	0.44	$	0.78	$	1.56

 

2015	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Net sales	$	78,052	$	63,934	$	91,227	$	87,404	$	320,617
Gross earnings	$	28,737	$	24,423	$	32,610	$	35,839	$	121,609
Net earnings attributable to Weyco Group, Inc.	$	3,633	$	2,040	$	5,526	$	7,013	$	18,212
Net earnings per share:
Basic	$	0.34	$	0.19	$	0.51	$	0.65	$	1.69
Diluted	$	0.33	$	0.19	$	0.51	$	0.65	$	1.68

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VALUATION AND QUALIFYING ACCOUNTS (Tables)

12 Months Ended

Dec. 31, 2016

Valuation and Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts Disclosure [Table Text Block]

	Deducted from Assets
	Doubtful Accounts			Returns and Allowances			Total
	(Dollars in thousands)
BALANCE, DECEMBER 31, 2013	$	1,233		$	1,060		$	2,293
Add – Additions charged to earnings		240			3,299			3,539
Deduct – Charges for purposes for which reserves were established		(246	)		(3,202	)		(3,448	)
BALANCE, DECEMBER 31, 2014	$	1,227		$	1,157		$	2,384
Add – Additions charged to earnings		235			3,200			3,435
Deduct – Charges for purposes for which reserves were established		(286	)		(3,276	)		(3,562	)
BALANCE, DECEMBER 31, 2015	$	1,176		$	1,081		$	2,257
Add – Additions charged to earnings		76			3,290			3,366
Deduct – Charges for purposes for which reserves were established		(90	)		(2,829	)		(2,919	)
Deduct – Adjustment to reserve		(188	)		—			(188	)
BALANCE, DECEMBER 31, 2016	$	974		$	1,542		$	2,516

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accounting Policies [Line Items]
Foreign currency translation adjustments	$ (5,489)	$ (5,691)	$ (2,894)
Pension liability, net of tax	(11,080)	(12,776)	(15,136)
Total accumulated other comprehensive loss	$ (16,569)	$ (18,467)	$ (18,030)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Foreign Currency Translation Adjustments, Beginning balance	$ (5,691)	$ (2,894)
Other comprehensive (loss) income before reclassifications, Foreign Currency Translation Adjustments	202	(2,797)
Amounts reclassified from accumulated other comprehensive loss, Foreign Currency Translation Adjustments	0	0
Net current period other comprehensive (loss) income, Foreign Currency Translation Adjustments	202	(2,797)
Foreign Currency Translation Adjustments, Ending balance	(5,489)	(5,691)
Defined Benefit Pension Items, Beginning balance	(12,776)	(15,136)
Other comprehensive (loss) income before reclassifications, Defined Benefit Pension Items	765	1,285
Amounts reclassified from accumulated other comprehensive loss, Defined Benefit Pension Items	931	1,075
Net current period other comprehensive (loss) income, Defined Benefit Pension Items	1,696	2,360
Defined Benefit Pension Items, Ending balance	(11,080)	(12,776)
Beginning balance	(18,467)	(18,030)
Other comprehensive (loss) income before reclassifications	967	(1,512)
Amounts reclassified from accumulated other comprehensive loss	931	1,075
Net current period other comprehensive (loss) income	1,898	(437)
Ending balance	$ (16,569)	$ (18,467)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Amortization of defined benefit pension items Prior service cost	$ (262)	$ (112)	[1]
Amortization of defined benefit pension items Actuarial losses	1,789	1,874	[1]
Amortization of defined benefit pension items Total before tax	1,527	1,762
Amortization of defined benefit pension items Tax benefit	(596)	(687)
Amortization of defined benefit pension items Net of tax	$ 931	$ 1,075

[1] These amounts were included in the computation of net periodic pension cost. See Note 11 for additional details.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) CAD in Millions, AUD in Millions	12 Months Ended
	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2016 CAD	Dec. 31, 2016 AUD
Accounting Policies [Line Items]
Royalty Revenue, Total	$ 2,800,000	$ 3,600,000	$ 3,200,000
Selling Expense	11,700,000	11,300,000	11,000,000
Advertising Expense	11,800,000	12,800,000	10,500,000
Cooperative Advertising Expense	4,000,000	4,200,000	3,500,000
Net foreign currency transaction losses	(513,000)	961,000	268,000
Foreign Currency Translation Adjustment Minority Interest	$ 1,065,000	1,061,000
Noncontrolling Interest, Description	the Companys equity interest in Florsheim Australia decreases from 60% to 51% of equity issued under the subscription agreement as intercompany loans are paid in accordance with their terms. To date, the Companys equity interest in Florsheim Australia has decreased from 60% to 55% and the noncontrolling shareholders interest has increased from 40% to 45%.
Forward Exchange Contracts, Canadian [Member]
Accounting Policies [Line Items]
Investment Owned, Foreign Currency Contract, Current Value	$ 4,500,000			CAD 6.0
Forward Exchange Contracts, Australian [Member]
Accounting Policies [Line Items]
Investment Owned, Foreign Currency Contract, Current Value	$ 2,600,000				AUD 3.5
Accounts Receivable [Member]
Accounting Policies [Line Items]
Concentration Risk, Customer	The Company had one individual customer accounts receivable balance outstanding that represented 11% of the Companys gross accounts receivable balance at December 31, 2016. There was no single customer that represented more than 10% of the Companys gross accounts receivable balance at December 31, 2015.
Sales Revenue, Goods, Net [Member]
Accounting Policies [Line Items]
Concentration Risk, Customer	Additionally, there were noindividual customers with sales above 10% of the Companys total sales in 2016, 2015 and 2014.
Wholesale Segment [Member]
Accounting Policies [Line Items]
Shipping, Handling and Transportation Costs, Total	$ 1,600,000	1,900,000	2,400,000
Retail Segment [Member]
Accounting Policies [Line Items]
Asset Impairment Charges, Total	113,000	0	0
Shipping, Handling and Transportation Costs, Total	$ 1,400,000	$ 1,200,000	$ 1,100,000
Building and Building Improvements [Member] | Minimum [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Building and Building Improvements [Member] | Maximum [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	39 years
Machinery and Equipment [Member] | Minimum [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Machinery and Equipment [Member] | Maximum [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Furniture and Fixtures [Member] | Minimum [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Furniture and Fixtures [Member] | Maximum [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	7 years

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INVESTMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost, Current	$ 4,601	$ 4,522
Municipal Bonds [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost, Current	4,601	4,522
Amortized Cost, Due from one through five years	12,133	12,395
Amortized Cost, Due from six through ten years	7,705	6,929
Amortized Cost, Due from eleven through twenty years	1,223	1,361
Amortized Cost, Total	25,662	25,207
Market Value, Current	4,610	4,546
Market Value, Due from one through five years	12,486	13,057
Market Value, Due from six through ten years	7,804	7,217
Market Value, Due from eleven through twenty years	1,222	1,391
Market Value, Total	$ 26,122	$ 26,211

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INVESTMENTS (Details 1) - Municipal Bonds [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Net Investment Income [Line Items]
Unrealized Gains	$ 546	$ 1,014
Unrealized Losses	$ (86)	$ (10)

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INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Finished shoes	$ 88,277	$ 116,177
LIFO reserve	(18,379)	(18,993)
Total inventories	$ 69,898	$ 97,184

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INVENTORIES (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Other Inventory, in Transit, Gross		$ 16,400,000	$ 38,100,000
Percentage of LIFO Inventory		89.00%	91.00%
Percentage of FIFO Inventory		11.00%	9.00%
Decrease In Cost Of Goods Sold	$ 151,000

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PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Land and land improvements	$ 3,714	$ 3,706
Buildings and improvements	26,912	26,912
Machinery and equipment	30,906	27,142
Retail fixtures and leasehold improvements	12,455	11,232
Construction in progress	39	24
Property, plant and equipment	74,026	69,016
Less: Accumulated depreciation	(40,309)	(37,183)
Property, plant and equipment, net	$ 33,717	$ 31,833

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INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Indefinite-lived intangible assets:
Gross Carrying Amount	$ 45,860	$ 45,860
Accumulated Amortization	(1,770)	0
Net	44,090	45,860
Amortizable intangible assets:
Gross Carrying Amount	3,700	3,700
Accumulated Amortization	(1,561)	(1,321)
Net	2,139	2,379
Goodwill [Member]
Indefinite-lived intangible assets:
Gross Carrying Amount	11,112	11,112
Accumulated Amortization	0	0
Net	11,112	11,112
Trademarks [Member]
Indefinite-lived intangible assets:
Gross Carrying Amount	34,748	34,748
Accumulated Amortization	(1,770)	0
Net	$ 32,978	34,748
Noncompete Agreements [Member]
Amortizable intangible assets:
Weighted Average Life (Years)	5 years
Gross Carrying Amount	$ 200	200
Accumulated Amortization	(200)	(193)
Net	$ 0	7
Customer Relationships [Member]
Amortizable intangible assets:
Weighted Average Life (Years)	15 years
Gross Carrying Amount	$ 3,500	3,500
Accumulated Amortization	(1,361)	(1,128)
Net	$ 2,139	$ 2,372

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INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
2017	$ 233
2018	233
2019	233
2020	233
2021	233
Thereafter	974
Total	$ 2,139	$ 2,379

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INTANGIBLE ASSETS (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 240,000	$ 273,000	$ 273,000
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)	$ 1,770,000	$ 0	$ 0

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OTHER ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Other Assets Noncurrent [Line Items]
Cash surrender value of life insurance	$ 15,604	$ 14,876
Amortizable intangible assets (See Note 7)	2,139	2,379
Investment in real estate	2,297	2,284
Other	2,745	1,604
Total other assets	$ 22,785	$ 21,143

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OTHER ASSETS (Details Textual) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	May 01, 2013	Dec. 31, 2016
Other Assets Noncurrent [Line Items]
Approximate Death Benefit Receive From Life Insurance Policies		$ 16.6
Asset Purchase Interest Percentage	50.00%
Payments to Acquire Buildings	$ 3.2

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SHORT-TERM BORROWINGS (Details Textual) - Revolving Credit Facility [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Short-term Debt [Line Items]
Line of Credit Facility, Amount, Total	$ 60.0
Line of Credit Facility, Maximum Amount Outstanding During Period	$ 28.4
Debt Instrument, Interest Rate at Period End	1.52%	1.18%
Line of Credit Facility, Expiration Date	Nov. 03, 2017
Long-term Line of Credit	$ 4.3	$ 26.6
Line of Credit Facility, Interest Rate Description	LIBOR plus 0.75%

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CONTINGENT CONSIDERATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Business Acquisition, Contingent Consideration [Line Items]
Beginning balance	$ 5,217	$ 5,675
Net gain on remeasurement of contingent consideration	0	(458)
Payment of contingent consideration	(5,217)	0	$ 0	$ (1,270)
Ending balance	$ 0	$ 5,217	$ 5,675

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CONTINGENT CONSIDERATION (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Business Acquisition, Contingent Consideration [Line Items]
Business Combination, Contingent Consideration Arrangements, Description	Contingent consideration was comprised of two earn-out payments that the Company was obligated to pay the former shareholders of The Combs Company (“Bogs”) in connection with the Company’s acquisition of Bogs in 2011. The estimate of contingent consideration was formula-driven and was based on Bogs achieving certain levels of gross margin dollars between January 1, 2011, and December 31, 2015.
Payment Of Contingent Consideration	$ 5,217	$ 0	$ 0	$ 1,270

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EMPLOYEE RETIREMENT PLANS (Details)	Dec. 31, 2016	Dec. 31, 2015
Asset Category:
Weighted Average Asset Alllocation	100.00%	100.00%
Equity Securities [Member]
Asset Category:
Weighted Average Asset Alllocation	54.00%	52.00%
Fixed Income Securities [Member]
Asset Category:
Weighted Average Asset Alllocation	38.00%	40.00%
Other Securities [Member]
Asset Category:
Weighted Average Asset Alllocation	8.00%	8.00%

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EMPLOYEE RETIREMENT PLANS (Details 1)	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.35%	4.62%
Rate of compensation increase	4.00%	4.00%

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EMPLOYEE RETIREMENT PLANS (Details 2) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Change in projected benefit obligation
Service cost		$ 1,638	$ 1,636	$ 1,263
Interest cost	[1]	2,449	2,665	2,586
Benefits paid		(1,900)
Change in plan assets
Fair value of plan assets, beginning of year		32,345
Benefits paid		(1,900)
Fair value of plan assets, end of year		32,278	32,345
Amounts recognized in the consolidated balance sheets consist of:
Long-term pension liability		(27,801)	(30,188)
Amounts recognized in accumulated other comprehensive loss consist of:
Net amount recognized		11,080	12,776	15,136
Defined Benefit Pension Plan [Member]
Change in projected benefit obligation
Projected benefit obligation, beginning of year		48,677	50,932
Service cost		1,328	1,345
Interest cost		1,833	2,051
Plan curtailment		(5,098)	0
Actuarial loss (gain)		2,282	(3,806)
Benefits paid		(3,943)	(1,845)
Projected benefit obligation, end of year		45,079	48,677	50,932
Change in plan assets
Fair value of plan assets, beginning of year		32,345	32,027
Actual return on plan assets		1,791	(320)
Administrative expenses		(315)	(150)
Contributions		2,400	2,633
Benefits paid		(3,943)	(1,845)
Fair value of plan assets, end of year		32,278	32,345	32,027
Funded status of plan		(12,801)	(16,332)
Amounts recognized in the consolidated balance sheets consist of:
Accrued liabilities - other		0	0
Long-term pension liability		(12,801)	(16,332)
Net amount recognized		(12,801)	(16,332)
Amounts recognized in accumulated other comprehensive loss consist of:
Accumulated loss, net of income tax benefit of $5,373, $6,631, $1,802 and $1,808, respectively		8,403	10,371
Prior service cost, net of income tax liability of $0, $0, ($91) and ($270), respectively		0	0
Net amount recognized		8,403	10,371
Supplemental Pension Plan [Member]
Change in projected benefit obligation
Projected benefit obligation, beginning of year		14,261	14,841
Service cost		310	291
Interest cost		616	614
Plan curtailment		(919)	0
Actuarial loss (gain)		1,527	(1,135)
Benefits paid		(386)	(350)
Projected benefit obligation, end of year		15,409	14,261	14,841
Change in plan assets
Fair value of plan assets, beginning of year		0	0
Actual return on plan assets		0	0
Administrative expenses		0	0
Contributions		386	350
Benefits paid		(386)	(350)
Fair value of plan assets, end of year		0	0	$ 0
Funded status of plan		(15,409)	(14,261)
Amounts recognized in the consolidated balance sheets consist of:
Accrued liabilities - other		(409)	(405)
Long-term pension liability		(15,000)	(13,856)
Net amount recognized		(15,409)	(14,261)
Amounts recognized in accumulated other comprehensive loss consist of:
Accumulated loss, net of income tax benefit of $5,373, $6,631, $1,802 and $1,808, respectively		2,820	2,828
Prior service cost, net of income tax liability of $0, $0, ($91) and ($270), respectively		(143)	(423)
Net amount recognized		$ 2,677	$ 2,405

[1] The decrease in interest cost in 2016 was primarily due to the adoption of the spot-rate approach, as described above.

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EMPLOYEE RETIREMENT PLANS (Details 3)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
Discount rate for determining projected benefit obligation	4.35%	4.62%
Long-term rate of return on plan assets	7.50%
Pension Plan, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate for determining projected benefit obligation	4.60%	4.17%	5.03%
Long-term rate of return on plan assets	7.50%	7.50%	7.50%
Discount rate in effect for determining service cost	4.81%	4.17%	5.03%
Discount rate in effect for determining interest cost	3.93%	4.17%	5.03%
Rate of compensation increase	4.00%	4.00%	4.00%
Supplemental Employee Retirement Plan, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate for determining projected benefit obligation	4.67%	4.17%	5.03%
Long-term rate of return on plan assets	0.00%	0.00%	0.00%
Discount rate in effect for determining service cost	4.84%	4.17%	5.03%
Discount rate in effect for determining interest cost	4.18%	4.17%	5.03%
Rate of compensation increase	4.00%	4.00%	4.00%

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EMPLOYEE RETIREMENT PLANS (Details 4) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
Benefits earned during the period		$ 1,638	$ 1,636	$ 1,263
Interest cost on projected benefit obligation	[1]	2,449	2,665	2,586
Expected return on plan assets		(2,430)	(2,364)	(2,343)
Net amortization and deferral		1,527	1,762	706
Net pension expense		$ 3,184	$ 3,699	$ 2,212

[1] The decrease in interest cost in 2016 was primarily due to the adoption of the spot-rate approach, as described above.

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EMPLOYEE RETIREMENT PLANS (Details 5)	Dec. 31, 2016 USD ($)
Defined Benefit Plan Disclosure [Line Items]
2017	$ 450,000
Defined Benefit Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
2017	2,308,000
2018	2,390,000
2019	2,530,000
2020	2,554,000
2021	2,572,000
2022 - 2026	13,183,000
Supplemental Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
2017	409,000
2018	423,000
2019	470,000
2020	504,000
2021	536,000
2022 - 2026	$ 4,035,000

XML

EMPLOYEE RETIREMENT PLANS (Details 6) - USD ($) $ in Thousands		Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		$ 32,278	$ 32,345
Other Assets [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total	[1]	90	91
Exchange traded funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		3,742	3,375
Pooled Fixed Income Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		4,345	5,423
US Government Agencies Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		1,061	1,103
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		2,519	2,703
Subtotal [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		32,188	32,254
Corporate Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		5,113	4,503
State And Municipal Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		1,538	1,337
Common Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		13,626	13,379
Preferred Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		244	431
Fair Value, Inputs, Level 1 [Member] | Exchange traded funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		3,742	3,375
Fair Value, Inputs, Level 1 [Member] | Pooled Fixed Income Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		4,345	5,423
Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		2,519	2,703
Fair Value, Inputs, Level 1 [Member] | Subtotal [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		23,489	24,262
Fair Value, Inputs, Level 1 [Member] | Corporate Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 1 [Member] | State And Municipal Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 1 [Member] | Common Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		12,656	12,352
Fair Value, Inputs, Level 1 [Member] | Preferred Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		227	409
Fair Value, Inputs, Level 2 [Member] | Exchange traded funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 2 [Member] | Pooled Fixed Income Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		1,061	1,103
Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 2 [Member] | Subtotal [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		8,699	7,992
Fair Value, Inputs, Level 2 [Member] | Corporate Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		5,113	4,503
Fair Value, Inputs, Level 2 [Member] | State And Municipal Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		1,538	1,337
Fair Value, Inputs, Level 2 [Member] | Common Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		970	1,027
Fair Value, Inputs, Level 2 [Member] | Preferred Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		17	22
Fair Value, Inputs, Level 3 [Member] | Exchange traded funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 3 [Member] | Pooled Fixed Income Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 3 [Member] | US Government Agencies Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 3 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 3 [Member] | Subtotal [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 3 [Member] | Corporate Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 3 [Member] | State And Municipal Obligations [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 3 [Member] | Common Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		0	0
Fair Value, Inputs, Level 3 [Member] | Preferred Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets, Total		$ 0	$ 0

[1] This category represents trust receivables that are not leveled.

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EMPLOYEE RETIREMENT PLANS (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Plan Asset Allocations	100.00%	100.00%
Defined Benefit Plan Percentage Of Minimum Fund Maintenance	80.00%
Defined Contribution Plan Employer Contribution Amount	$ 417,000	$ 350,000	$ 302,000
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets	7.50%
Defined Benefit Plan, Future Amortization of Unrecognized Loss	$ 544,000
Defined Benefit Plan, Future Amortization of Prior Service Cost (Credit)	63,000
Defined Benefit Plan, Benefits Paid	1,900,000
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	450,000
Defined Benefit Plan, Effect of Plan Amendment on Net Periodic Benefit Cost	$ 522,000
Scenario, Forecast [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Effect of Plan Amendment on Net Periodic Benefit Cost				$ 2,100,000
Pension Plan, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Accumulated Benefit Obligation		$ 43,700,000
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets	7.50%	7.50%	7.50%
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net (Gain) Loss, Tax	$ 5,373,000	$ 6,631,000
Other Comprehensive Income (Loss), Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service (Cost) Credit, Tax	0	0
Defined Benefit Plan, Benefits Paid	3,943,000	1,845,000
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	$ 2,308,000
Supplemental Employee Retirement Plan, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Accumulated Benefit Obligation		$ 14,200,000
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets	0.00%	0.00%	0.00%
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net (Gain) Loss, Tax	$ 1,802,000	$ 1,808,000
Other Comprehensive Income (Loss), Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service (Cost) Credit, Tax	91	270,000
Defined Benefit Plan, Benefits Paid	386,000	$ 350,000
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	$ 409,000
Minimum [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Plan Asset Allocations	20.00%
Minimum [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Plan Asset Allocations	20.00%
Minimum [Member] | Other securuties [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Plan Asset Allocations	0.00%
Maximum [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Plan Asset Allocations	80.00%
Maximum [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Plan Asset Allocations	80.00%
Maximum [Member] | Other securuties [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Actual Plan Asset Allocations	20.00%

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INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Current:
Federal	$ 5,965	$ 8,801	$ 7,339
State	1,027	1,314	1,131
Foreign	737	501	1,649
Total	7,729	10,616	10,119
Deferred	(2,645)	346	1,115
Total provision	$ 5,084	$ 10,962	$ 11,234

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INCOME TAXES (Details 1)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Effective Income Tax Rate Reconciliation [Line Items]
U.S. federal statutory income tax rate	35.00%	35.00%	35.00%
State income taxes, net of federal tax benefit	3.50%	3.40%	2.80%
Non-taxable municipal bond interest	(1.00%)	(1.00%)	(1.20%)
Foreign income tax rate differences	(0.60%)	0.40%	(0.80%)
Life insurance deferred tax reversal	(14.20%)	0.00%	0.00%
Other	0.30%	(0.10%)	0.40%
Effective tax rate	23.00%	37.70%	36.20%

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INCOME TAXES (Details 2) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred income tax assets:
Accounts receivable reserves	$ 341	$ 422
Pension liability	11,002	11,931
Accrued liabilities	2,648	2,383
Carryfoward losses	129	0
Foreign currency losses on intercompany loans	53	148
Deferred Tax Assets, Net of Valuation Allowance, Total	14,173	14,884
Deferred income tax liabilities:
Inventory and related reserves	(3,744)	(3,552)
Cash value of life insurance	(441)	(3,517)
Property, plant and equipment	(1,483)	(1,420)
Intangible assets	(8,284)	(7,753)
Prepaid expenses and other assets	(264)	(249)
Deferred Tax Liabilities, Gross	(14,216)	(16,491)
Net deferred income tax liabilities	$ (43)	$ (1,607)

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INCOME TAXES (Details 3) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred Tax Benefit [Line Items]
Current deferred income tax liabilities	$ 0	$ (1,537)
Non-current deferred income tax benefits	660	0
Non-current deferred income tax liabilities	(703)	(70)
Net deferred income tax liabilities	$ (43)	$ (1,607)

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INCOME TAXES (Details 4) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Contingency [Line Items]
Unrecognized tax benefits balance at January 1,	$ 284	$ 0	$ 124
Increases related to current year tax positions	239	284	0
Decreases related to prior period positions	0	0	(69)
Decreases due to settlements of tax positions	(248)	0	(55)
Unrecognized tax benefits balance at December 31,	$ 275	$ 284	$ 0

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INCOME TAXES (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Taxes [Line Items]
Income (Loss) from Continuing Operations before Income Taxes, Foreign	$ 2,700,000	$ 1,300,000	$ 5,000,000
Undistributed Earnings of Foreign Subsidiaries	$ 7,300,000
Income Tax Examination, Description	In general, the 2014 through 2016 tax years remain subject to examination by those taxing authorities.
Unrecognized Tax Benefits, Interest on Income Taxes Accrued	$ 70,000	$ 108,000
Reversal of Deferred Taxes Related To Corporate Owed Life Insurance	$ 3,100,000

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COMMITMENTS (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Operating Leased Assets [Line Items]
2017	$ 9,178
2018	8,291
2019	7,502
2020	6,036
2021	4,348
Thereafter	5,783
Total	$ 41,138

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COMMITMENTS (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operating Leased Assets [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 9,800,000	$ 9,100,000	$ 9,700,000
Operating Leases, Rent Expense, Contingent Rentals	441,000	$ 461,000	$ 512,000
Purchase Obligation, Due in Next Twelve Months	$ 51,500,000

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STOCK REPURCHASE PROGRAM (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Equity, Class of Treasury Stock [Line Items]
Payments For Repurchase Of Common Stock	$ 10,967	$ 9,858	$ 7,984
Stock Repurchased and Retired During Period, Shares	410,983	354,741	297,576
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	565,175

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Numerator:
Net earnings attributable to Weyco Group, Inc.	$ 8,185	$ 4,600	$ 1,000	$ 2,687	$ 7,013	$ 5,526	$ 2,040	$ 3,633	$ 16,472	$ 18,212	$ 19,020
Denominator:
Basic weighted average shares outstanding (in shares)									10,519	10,773	10,791
Effect of dilutive securities:
Employee stock-based awards (in shares)									53	86	97
Diluted weighted average shares outstanding (in shares)									10,572	10,859	10,888
Basic earnings per share (in dollars per share)	$ 0.79	$ 0.44	$ 0.09	$ 0.25	$ 0.65	$ 0.51	$ 0.19	$ 0.34	$ 1.57	$ 1.69	$ 1.76
Diluted earnings per share (in dollars per share)	$ 0.78	$ 0.44	$ 0.09	$ 0.25	$ 0.65	$ 0.51	$ 0.19	$ 0.33	$ 1.56	$ 1.68	$ 1.75

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EARNINGS PER SHARE (Details Textual) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	873,276	720,757	656,000
Weighted Average Price of Antidilutive Securities Excluded from Computation of Earnings Per Share (in dollars per share)	$ 26.86	$ 27.59	$ 27.76

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SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Product sales									$ 294,148	$ 316,985	$ 317,306
Licensing revenues									2,785	3,632	3,182
Net sales	$ 82,097	$ 79,069	$ 56,867	$ 78,900	$ 87,404	$ 91,227	$ 63,934	$ 78,052	296,933	320,617	320,488
Depreciation									3,670	3,612	3,659
Earnings from operations									21,236	29,785	30,657
Total assets	268,240				298,997				268,240	298,997	277,446
Capital expenditures									5,992	2,481	2,890
Wholesale [Member]
Segment Reporting Information [Line Items]
Product sales									224,752	247,738	240,247
Licensing revenues									2,785	3,632	3,182
Net sales									227,537	251,370	243,429
Depreciation									2,361	2,210	2,251
Earnings from operations									16,398	24,272	22,527
Total assets	234,005				267,265				234,005	267,265	244,278
Capital expenditures									3,650	1,329	1,305
Retail [Member]
Segment Reporting Information [Line Items]
Product sales									21,883	22,121	23,324
Licensing revenues									0	0	0
Net sales									21,883	22,121	23,324
Depreciation									461	535	553
Earnings from operations									2,109	2,519	3,300
Total assets	5,341				4,372				5,341	4,372	4,689
Capital expenditures									1,188	399	60
Other Segment [Member]
Segment Reporting Information [Line Items]
Product sales									47,513	47,126	53,735
Licensing revenues									0	0	0
Net sales									47,513	47,126	53,735
Depreciation									848	867	855
Earnings from operations									2,729	2,994	4,830
Total assets	$ 28,894				$ 27,360				28,894	27,360	28,479
Capital expenditures									$ 1,154	$ 753	$ 1,525

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SEGMENT INFORMATION (Details 1) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Sales	$ 82,097	$ 79,069	$ 56,867	$ 78,900	$ 87,404	$ 91,227	$ 63,934	$ 78,052	$ 296,933	$ 320,617	$ 320,488
Long-Lived Assets	82,243				82,357				82,243	82,357	85,000
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Sales									231,462	252,459	244,260
Long-Lived Assets	74,548				74,658				74,548	74,658	75,952
Canada [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Sales									17,958	21,031	22,493
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Sales									8,014	7,291	9,048
Australia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Sales									28,390	27,224	30,466
Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Sales									7,702	9,050	9,842
South Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Sales									3,407	3,562	4,379
Other [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-Lived Assets	$ 7,695				$ 7,699				$ 7,695	$ 7,699	$ 9,048

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SEGMENT INFORMATION (Details Textual)	12 Months Ended
	Dec. 31, 2016
Sales Revenue, Goods, Net [Member]
Segment Information [Line Items]
Segment Reporting, Disclosure of Major Customers	In 2016, 2015 and 2014, there was no single customer with sales above 10% of the Companys total sales.
United States [Member]
Segment Information [Line Items]
Number Of Stores Description	the Company operated 13 Company-owned stores in principal cities

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STOCK-BASED COMPENSATION PLANS (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.09%	1.36%	1.45%
Expected dividend yield	3.29%	3.12%	2.81%
Expected term (in years)	4 years 3 months 18 days	4 years 3 months 18 days	4 years 3 months 18 days
Expected volatility	21.30%	21.60%	17.80%

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STOCK-BASED COMPENSATION PLANS (Details 1) - Employee Stock Option [Member] - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Outstanding at beginning of year	1,351,826	1,355,416	1,260,866
Shares, Granted	277,800	299,700	331,600
Shares, Exercised	(123,294)	(279,090)	(218,150)
Shares, Forfeited or expired	(20,075)	(24,200)	(18,900)
Shares, Outstanding at end of year	1,486,257	1,351,826	1,355,416
Shares, Exercisable at end of year	762,132	594,906	603,834
Weighted average fair market value of options granted (in dollars per share)	$ 3.05	$ 3.30	$ 2.93
Weighted Average Exercise Price, Outstanding at beginning of year (in dollars per share)	26.09	25.36	24.41
Weighted Average Exercise Price, Granted (in dollars per share)	25.51	25.64	27.04
Weighted Average Exercise Price, Exercised (in dollars per share)	24.28	22.02	22.37
Weighted Average Exercise Price, Forfeited or expired (in dollars per share)	26.52	26.58	25.71
Weighted Average Exercise Price, Outstanding at end of year (in dollars per share)	26.13	26.09	25.36
Weighted Average Exercise Price, Exercisable at end of year (in dollars per share)	$ 26.07	$ 25.55	$ 23.66
Weighted Average Remaining Contractual Life (Years), Outstanding - December 31, 2016	3 years 7 months 6 days
Weighted Average Remaining Contractual Life (Years), Exercisable - December 31, 2016	2 years 7 months 6 days
Aggregate Intrinsic Value, Outstanding at December 31, 2016	$ 7,686,000
Aggregate Intrinsic Value, Exercisable at December 31, 2016	$ 3,989,000

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STOCK-BASED COMPENSATION PLANS (Details 2) - Non Vested Stock Options [Member] - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options, Outstanding at beginning of year	756,920	751,582	679,785
Number of Options, Granted	277,800	299,700	331,600
Number of Options, Vested	(293,720)	(275,187)	(243,303)
Number of Options, Forfeited	(16,875)	(19,175)	(16,500)
Number of Options, Outstanding at end of year	724,125	756,920	751,582
Weighted Average Exercise Price, Outstanding at beginning of year (in dollars per share)	$ 26.53	$ 26.74	$ 26.14
Weighted Average Exercise Price, Granted (in dollars per share)	25.51	25.64	27.04
Weighted Average Exercise Price, Vested (in dollars per share)	26.39	26.14	25.54
Weighted Average Exercise Price, Forfeited (in dollars per share)	26.37	26.59	25.98
Weighted Average Exercise Price, Outstanding at end of year (in dollars per share)	26.20	26.53	26.74
Weighted Average Fair Value, Outstanding at beginning of year (in dollars per share)	3.10	3.12	3.46
Weighted Average Fair Value, Granted (in dollars per share)	3.05	3.30	2.93
Weighted Average Fair Value, Vested (in dollars per share)	3.13	3.36	3.80
Weighted Average Fair Value, Forfeited (in dollars per share)	3.10	3.14	3.44
Weighted Average Fair Value, Outstanding at end of the year (in dollars per share)	$ 3.07	$ 3.10	$ 3.12

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STOCK-BASED COMPENSATION PLANS (Details 3)	12 Months Ended
	Dec. 31, 2016 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number of Options Outstanding | shares	1,486,257
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	3 years 7 months 6 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 26.13
Options Exercisable, Number Of Options Exercisable | shares	762,132
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 26.07
Exercise Price Range From $23.53 to $25.86 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower Range Limit (in dollars per share)	23.53
Exercise Prices, Upper Range Limit (in dollars per share)	$ 25.86
Options Outstanding, Number of Options Outstanding | shares	865,207
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	3 years 9 months 18 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 24.95
Options Exercisable, Number Of Options Exercisable | shares	373,832
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 24.14
Exercise Price Range From $27.04 to $28.50 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower Range Limit (in dollars per share)	27.04
Exercise Prices, Upper Range Limit (in dollars per share)	$ 28.50
Options Outstanding, Number of Options Outstanding | shares	621,050
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	3 years 3 months 18 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 27.77
Options Exercisable, Number Of Options Exercisable | shares	388,300
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 27.92

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STOCK-BASED COMPENSATION PLANS (Details 4) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of stock options exercised	$ 455	$ 1,705	$ 1,108
Cash received from stock option exercises	2,994	6,144	4,881
Income tax benefit from the exercise of stock options	178	665	432
Total fair value of stock options vested	$ 919	$ 925	$ 923

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STOCK-BASED COMPENSATION PLANS (Details 5) - Restricted Stock [Member] - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of Restricted Stock, Non-vested beginning of year	55,250	54,050	47,500
Shares of Restricted Stock, Issued	26,900	21,900	24,400
Shares of Restricted Stock, Vested	(22,025)	(20,700)	(17,850)
Shares of Restricted Stock, Forfeited	(1,625)	0	0
Shares of Restricted Stock, Non-vested end of year	58,500	55,250	54,050
Weighted Average Grant Date Fair Value, Non-vested beginning of year (in dollars per share)	$ 26.45	$ 26.58	$ 25.86
Weighted Average Grant Date Fair Value, Issued (in dollars per share)	25.51	25.64	27.04
Weighted Average Grant Date Fair Value, Vested (in dollars per share)	26.26	25.94	25.31
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share)	26.30	0	0
Weighted Average Grant Date Fair Value, Non-vested end of year (in dollars per share)	$ 26.09	$ 26.45	$ 26.58

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STOCK-BASED COMPENSATION PLANS (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 1,559,000	$ 1,559,000	$ 1,465,000
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	178,000	665,000	432,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$ 1,400,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 8 months 12 days
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	$ 230,000	$ 221,000	$ 183,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	58,500	55,250	54,050	47,500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Intrinsic Value, Amount Per Share	$ 31.30
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	2 years 9 months 18 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Nonvested	$ 1,800,000
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$ 1,900,000
Share Price	$ 31.30
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	2 years 8 months 12 days
Incentive Plan 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	17,100

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QUARTERLY FINANCIAL DATA (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Quarterly Financial Information [Line Items]
Net sales	$ 82,097	$ 79,069	$ 56,867	$ 78,900	$ 87,404	$ 91,227	$ 63,934	$ 78,052	$ 296,933	$ 320,617	$ 320,488
Gross earnings	33,303	29,322	22,291	27,127	35,839	32,610	24,423	28,737	112,043	121,609	123,068
Net earnings attributable to Weyco Group, Inc.	$ 8,185	$ 4,600	$ 1,000	$ 2,687	$ 7,013	$ 5,526	$ 2,040	$ 3,633	$ 16,472	$ 18,212	$ 19,020
Net earnings per share:
Basic	$ 0.79	$ 0.44	$ 0.09	$ 0.25	$ 0.65	$ 0.51	$ 0.19	$ 0.34	$ 1.57	$ 1.69	$ 1.76
Diluted	$ 0.78	$ 0.44	$ 0.09	$ 0.25	$ 0.65	$ 0.51	$ 0.19	$ 0.33	$ 1.56	$ 1.68	$ 1.75

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VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Valuation and Qualifying Accounts Disclosure [Line Items]
BEGINNING BALANCE	$ 2,257	$ 2,384	$ 2,293
Add - Additions charged to earnings	3,366	3,435	3,539
Deduct - Charges for purposes for which reserves were established	(2,919)	(3,562)	(3,448)
Deduct - Adjustment to reserve	(188)
ENDING BALANCE	2,516	2,257	2,384
Allowance for Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
BEGINNING BALANCE	1,176	1,227	1,233
Add - Additions charged to earnings	76	235	240
Deduct - Charges for purposes for which reserves were established	(90)	(286)	(246)
Deduct - Adjustment to reserve	(188)
ENDING BALANCE	974	1,176	1,227
Sales Returns and Allowances [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
BEGINNING BALANCE	1,081	1,157	1,060
Add - Additions charged to earnings	3,290	3,200	3,299
Deduct - Charges for purposes for which reserves were established	(2,829)	(3,276)	(3,202)
Deduct - Adjustment to reserve	0
ENDING BALANCE	$ 1,542	$ 1,081	$ 1,157