WEYCO GROUP INC (Form: 10-K, Received: 03/14/2005 06:05:37)

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SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

(Mark One)


þ		Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for fiscal year ended December 31, 2004, or


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

For 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, include 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

None

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

Common Stock - $1.00 par value per share

(Title of Class)

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 þ No o

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes þ No o

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $120,134,000.

As of February 16, 2005, there were outstanding 4,455,965 shares of Common Stock and 1,300,310 shares of Class B Common Stock. These shares have not been adjusted for the two-for-one stock split declared January 31, 2005 for shareholders of record on February 16, 2005 to be distributed on April 1, 2005. At the same date, the aggregate market value (based upon the average of the high and low trades for that day) of all common stock held by non-affiliates was approximately $162,375,000.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Corporation’s Annual Report to Shareholders for the year ended December 31, 2004, are incorporated by reference in Part II and Part IV of this report.

Portions of the Corporation’s Proxy Statement, dated March 11, 2005, prepared for the Annual Meeting of Shareholders scheduled for April 26, 2005, are incorporated by reference in Part III of this report.

TABLE OF CONTENTS


PART I
	Item 1. Business
	Item 2. Properties
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
PART II
	Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
	Item 6. Selected Financial Data
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A. Quantitative and Qualitative Disclosures about Market Risk
	Item 8. Financial Statements and Supplementary Data
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
	Item 9A. Control and Procedures
	Item 9B. Other Information
PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners of Management and Related Shareholder Matters
	Item 13. Certain Relationships and Related Transactions
	Item 14. Principal Accountant Fees and Services
PART IV
	Item 15. Exhibits and Financial Statement Schedules
EXHIBIT INDEX
SIGNATURES
Articles of Incorporation
Director Nonqualified Stock Option Agreement - Virgis Colbert
Director Nonqualified Stock Option Agreement - Robert Feitler
Director Nonqualified Stock Option Agreement - Thomas W. Florsheim, Sr.
Director Nonqualified Stock Option Agreement - Leonard Goldstein
Director Nonqualified Stock Option Agreement - Frederick P. Stratton, Jr.
Annual Report to Shareholders
Subsidiaries
Independent Registered Public Accounting Firm's Consent
Certification of Principal Executive Officer
Certification of Principal Financial Officer
Section 906 Certification of Chief Executive Officer
Section 906 Certification of Chief Financial Officer

PART I

Item 1. Business

The Company 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.

The Company and its subsidiaries engage in one line of business, the distribution of men’s footwear. The Company does not sell women’s shoes because this market differs significantly from the men’s market.

On May 20, 2002, the Company acquired from Florsheim Group, Inc. and its subsidiaries (collectively, “Florsheim”), certain assets of Florsheim’s U.S. wholesale business, including its accounts receivable, trademarks, and other information assets, wholesale inventory (with specified exceptions) and other specified assets, as well as the leaseholds and associated assets for 23 retail and outlet shoe stores. On July 1 and July 27, 2002, the Company acquired certain assets and assumed the operating liabilities of Florsheim Europe S.r.l. and Florsheim France SARL, respectively. This business consists of Florsheim’s European wholesale business, as well as three retail stores in Germany, Italy and France. The total purchase price of the acquistion was $48.5 million, including $1.7 million of acquisition costs.

The principal brands of shoes sold by the Company are “ Florsheim,” “Nunn Bush,” “Nunn Bush NXXT,” “Brass Boot,” “Stacy Adams,” and “SAO by Stacy Adams.” Trademarks maintained by the Company on these names are important to the business. The Company’s products consist of both mid-priced quality leather dress shoes which would be worn as a part of more formal and traditional attire and quality casual footwear of man-made materials or leather which would be appropriate for leisure or less formal occasions. The Company’s footwear, and that of the industry in general, is available in a broad range of sizes and widths, primarily purchased to meet the needs and desires of the American male population.

The Company purchases finished shoes from outside suppliers around the world. The majority of these foreign-sourced purchases are denominated in U. S. dollars. There have been few inflationary pressures in the shoe industry in recent years and leather and other component prices have been stable. It is anticipated that, when necessary, selling price increases could be initiated to offset periodic increases in costs of purchased shoes. The Company previously assembled a small portion of its footwear at one plant in Beaver Dam, Wisconsin. In December 2003, the Company ceased its manufacturing operations. All inventory is now purchased from foreign suppliers. The Beaver Dam facility still operates the Company’s reconditioning, rework and returned goods departments.

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The Company’s business is separated into two segments - wholesale and retail. Wholesale sales constituted approximately 86% of total sales in 2004, 87% in 2003 and 90% in 2002. At wholesale, shoes are marketed nationwide through more than 10,000 shoe, clothing and department stores. Sales are to unaffiliated customers, primarily in North America, with some distribution in Europe. Sales to the Company’s largest customer, J. C. Penney, were 12% of total sales in 2004 and 2003. Net sales to foreign customers were $10.8 million, $9.1 million and $5.9 million in 2004, 2003 and 2002, respectively. The Company employs traveling salesmen who sell the Company’s products to retail outlets. Shoes are shipped to these retailers primarily from the Company’s distribution center maintained in Glendale, Wisconsin. Although there is no clearly identifiable seasonality in the men’s footwear business, new styles are historically developed and shown twice each year, in spring and fall. In accordance with industry practices, the Company is required to carry 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 overseas, as well as licensing agreements with apparel and accessory manufacturers in the United States. Licensing revenues are included in net sales and constitute approximately 2% of total net sales in 2004 and 2003, and 1% in 2002.

Retail sales constituted approximately 12% of total sales in 2004, 11% in 2003 and 9% of total sales in 2002. In the retail division, there are currently 29 company-operated stores in principal cities of the United States and three retail stores in major cities in Europe. 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 in order to provide the consumer with as complete a selection as practically possible.

As of December 31, 2004, the Company had a backlog of $25 million of confirmed orders compared with $24 million as of December 31, 2003. This does not include unconfirmed blanket orders from customers. All orders are expected to be filled within one year.

As of December 31, 2004, the Company employed approximately 384 persons. Of those 384 employees, approximately 34 were members of collective bargaining units. The Company ratified new contracts covering the majority of these employees during 2002 and in early 2003. Future wage and benefit increases under the contracts are not expected to have a significant impact on the future operations or financial position of the Company.

Price, quality and service are all important competitive factors in the shoe industry and the Company has been recognized as a leader in all of them. Although the Company engages in no specific research and development activities, new products and new processes are continually being tested by the Company and used where appropriate, in order to produce the best value for the consumer, consistent with reasonable price. 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 or cash flows.

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 we file or furnish those reports to the SEC. The information on the website is not a part of this filing.

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Item 2. Properties

The following facilities are operated by the Company and its subsidiaries:

Square

Location

Character

Owned/Leased

Footage

% Utilized

Glendale, Wisconsin

One story office and distribution center

Owned

780,000

Beaver Dam, Wisconsin

Multistory factory

Leased (1)

100,000

Florence, Italy

One story office, warehouse and distribution facility

Leased (1)

9,500

100

(1) Not material leases.

In addition to the above-described distribution and warehouse facilities, the Company operates twenty-nine retail stores throughout the United States and three in Europe under various rental agreements. See Note 13 to Consolidated Financial Statements and Item 1. Business above.

Item 3. Legal Proceedings

Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders

Not Applicable

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Executive Officers of the Registrant

Served

Officer

Age

Office(s)

Since

Business Experience

Thomas W. Florsheim, Jr.

Chairman and Chief Executive Officer

1996

Chairman and Chief Executive Officer of the Company — 2002 to present; President and Chief Executive Officer of the Company — 1999 to 2002; President and Chief Operating Officer of the Company — 1996 to 1999; Vice President of the Company – 1988 to 1996

John W. Florsheim

President, Chief Operating Officer and Assistant Secretary

1996

President, Chief Operating Officer and Assistant Secretary of the Company – 2002 to present; Executive Vice President, Chief Operating Officer and Assistant Secretary of the Company – 1999 to 2002; Executive Vice President of the Company —1996 to 1999; Vice President of the Company — 1994 to 1996

James F. Gorman

Senior Vice President

1975

Senior Vice President of the Company – 2002 to present; Vice President of the Company — 1975 to 2002. On February 28, 2005, Mr. Gorman retired from the Company.

Peter S. Grossman

Senior Vice President

1971

Senior Vice President of the Company – 2002 to present; Vice President of the Company — 1971 to 2002

John F. Wittkowske

Senior Vice President, Chief Financial Officer and Secretary

1993

Senior Vice President, Chief Financial Officer and Secretary of the Company – 2002 to present; Vice President, Chief Financial Officer and Secretary of the Company — 1995 to 2002; Secretary/Treasurer of the Company — 1993 to 1995

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

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PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Information required by this Item is set forth on pages 6, 22 and 30 of the Annual Report to Shareholders for the year ended December 31, 2004, and is incorporated herein by reference.

Item 6. Selected Financial Data

Information required by this Item is set forth on page 6 of the Annual Report to Shareholders for the year ended December 31, 2004, and is incorporated herein by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information required by this Item is set forth on pages 7 through 11 of the Annual Report to Shareholders for the year ended December 31, 2004, and is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Information required by this Item is set forth on page 11 of the Annual Report to Shareholders for the year ended December 31, 2004, and is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

Information required by this Item is set forth on pages 12 through 26 of the Annual Report to Shareholders for the year ended December 31, 2004, and is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None

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Item 9A. Control 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 principal executive officer and principal 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”). 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 material 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 Company’s Management Report on Internal Control Over Financial Reporting is set forth on page 29 in the Annual Report to Shareholders for the year ended December 31, 2004, and is incorporated herein by reference.

Attestation Report of Registered Public Accounting Firm – The attestation report of Deloitte & Touche LLP, the Company’s independent registered public accounting firm, on management’s assessment of the effectiveness of the Company’s internal control over financial reporting is set forth on page 28 in the Annual Report to Shareholders for the year ended December 31, 2004, and is incorporated herein by reference.

Changes in Internal Control Over Financial Reporting – There have not been any 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 Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None

PART III

Item 10. Directors and Executive Officers of the Registrant

Information required by this Item is set forth on pages 1 through 5 of the Company’s proxy statement for the Annual Meeting of Shareholders to be held on April 26, 2005, and is incorporated herein by reference.

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Item 11. Executive Compensation

Information required by this Item is set forth on pages 8 through 12 of the Company’s proxy statement for the Annual Meeting of Shareholders to be held on April 26, 2005, and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners of Management and Related Shareholder Matters

Information required by this Item is set forth on pages 1, 2, 11 and 12 of the Company’s proxy statement for the Annual Meeting of Shareholders to be held on April 26, 2005, and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

Information required by this Item is set forth on pages 11 and 12 of the Company’s proxy statement for the Annual Meeting of Shareholders to be held on April 26, 2005, and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Information required by this Item is set forth on page 7 of the Company’s proxy statement for the Annual Meeting of Shareholders to be held on April 26, 2005, and is incorporated herein by reference.

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PART IV

Item 15. Exhibits and Financial Statement Schedules


(a)	The following documents are filed as a part of this report:

			Page Reference
			to Annual Report
	1. Financial Statements -

		Consolidated Statements of Earnings for the years ended December 31, 2004, 2003 and 2002	12

		Consolidated Balance Sheets - December 31, 2004 and 2003	13

		Consolidated Statements of Shareholders’ Investment for the years ended December 31, 2004, 2003 and 2002	14

		Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002	15

		Notes to Consolidated Financial Statements for the years ended December 31, 2004, 2003 and 2002	16 - 26

		Reports of Independent Registered Public Accounting Firm	27 - 28

			Page Reference
			to Form 10-K
	2. Financial Statement Schedules for the years ended December 31, 2004, 2003 and 2002.

		Schedule II - Valuation and Qualifying Accounts	9

		Report of Independent Registered Public Accounting Firm	10

	All other schedules have been omitted because of the absence of the conditions under which they are required.

	3. Exhibits and Exhibit Index. See the Exhibit Index included as the last part of this report, which is incorporated herein by reference. Each management contract and compensatory plan or arrangement required to be filed as a exhibit to this report is identified in the Exhibit Index by an asterisk following its exhibit number.

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SCHEDULE II

WEYCO GROUP, INC.

VALUATION AND QUALIFYING ACCOUNTS


	Deducted from Assets
	Doubtful			Cash			Returns and
	Accounts			Discounts			Allowances			Total
BALANCE, DECEMBER 31, 2001	$	1,800,000		$	69,000		$	1,080,000		$	2,949,000

Add — Additions charged to earnings		898,836			251,358			6,786,515			7,936,709

Acquisition – related charges		1,902,375			—			—			1,902,375

Deduct — Charges for purposes for which reserves were established		(1,726,211	)		(320,358	)		(6,786,515	)		(8,833,084	)


BALANCE, DECEMBER 31, 2002	$	2,875,000		$	—		$	1,080,000		$	3,955,000

Add — Additions charged to earnings		413,330			—			5,240,124			5,653,454

Deduct — Charges for purposes for which reserves were established		(1,270,330	)		(—	)		(4,615,124	)		(5,885,454	)


BALANCE, DECEMBER 31, 2003	$	2,018,000		$	—		$	1,705,000		$	3,723,000

Add — Additions charged to earnings		550,179			—			7,863,440			8,413,619

Deduct — Charges for purposes for which reserves were established		(253,179	)		(—	)		(7,003,440	)		(7,256,619	)


BALANCE, DECEMBER 31, 2004	$	2,315,000		$	—		$	2,565,000		$	4,880,000

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Weyco Group, Inc.:

We have audited the consolidated financial statements of Weyco Group, Inc. and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, and have issued our reports thereon dated March 7, 2005; such reports are incorporated by reference elsewhere in this Form 10-K. Our audits also included the consolidated financial statement schedule of the Company listed in Item 15. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, this consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 7, 2005

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EXHIBIT INDEX


		Incorporated Herein
Exhibit	Description	By Reference To
2.1	Asset Purchase Agreement, Florsheim Group, Inc., dated March 3, 2002	Exhibit 2.1 to Form 10-K for Year Ended December 31, 2001

3.1	Articles of Incorporation as Restated August 29, 1961, and Last Amended February 16, 2005

3.2	Bylaws as Revised January 21, 1991 and Last Amended January 28, 2002	Exhibit 3.2 to Form 10-K for Year Ended December 31, 2001

10.1*	Consulting Agreement — Thomas W. Florsheim, dated December 28, 2000	Exhibit 10.1 to Form 10-K for Year Ended December 31, 2001

10.2*	Employment Agreement — Thomas W. Florsheim, Jr., dated January 1, 1997, as amended January 1, 1999 and January 1, 2004	Exhibit 10.2 to Form 10-K for Year Ended December 31, 1996, and Amendment No. 1 filed as Exhibit 10.2 to Form 10-K for Year Ended December 31, 1998, and Amendment No. 2 filed as Exhibit 10.2 for Year Ended December 31, 2003

10.3*	Employment Agreement — John W. Florsheim, dated January 1, 1997, as amended January 1, 1999 and January 1, 2004	Exhibit 10.3 to Form 10-K for Year Ended December 31, 1996, and Amendment No. 1 filed as Exhibit 10.3 to Form 10-K for Year Ended December 31, 1998 and Amendment No. 2 filed as Exhibit 10.3 for Year Ended December 31, 2003

10.4*	Restated and Amended Deferred Compensation Agreement — Thomas W. Florsheim, dated December 1, 1995	Exhibit 10.3 to Form 10-K for Year Ended December 31, 1995

10.5*	Restated and Amended Deferred Compensation Agreement — Robert Feitler, dated December 1, 1995	Exhibit 10.4 to Form 10-K for Year Ended December 31, 1995

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EXHIBIT INDEX (cont.)


		Incorporated Herein
Exhibit	Description	By Reference To
10.6*	Excess Benefits Plan — Restated Effective as of January 1, 1989	Exhibit 10.6 to Form 10-K for Year Ended December 31, 1991

10.7*	Pension Plan — Amended and Restated Effective January 1, 1989	Exhibit 10.7 to Form 10-K for Year Ended December 31, 1991

10.8*	Deferred Compensation Plan — Effective as of January 1, 1989	Exhibit 10.8 to Form 10-K for Year Ended December 31, 1991

10.10*	Death Benefit Plan Agreement - Thomas W. Florsheim, dated November 8, 1993	Exhibit 10.10 to Form 10-K for Year Ended December 31, 1993

10.12*	1996 Nonqualified Stock Option Plan	Exhibit 10.12 to Form 10-K for Year Ended December 31, 1995

10.13*	1997 Stock Option Plan	Exhibit 10.13 to Form 10-K for Year Ended December 31, 1997

10.14*	Change of Control Agreement John Wittkowske, dated January 26, 1998	Exhibit 10.14 to Form 10-K for Year Ended December 31, 1997

10.15*	Change of Control Agreement Peter S. Grossman, dated January 26, 1998	Exhibit 10.15 to Form 10-K for Year Ended December 31, 1997

10.16*	Change of Control Agreement James F. Gorman, dated January 26, 1998	Exhibit 10.16 to Form 10-K for Year Ended December 31, 1997

10.17*	Change of Control Agreement David N. Couper, dated January 26, 1998	Exhibit 10.17 to Form 10-K for Year Ended December 31, 1997

10.18*	Weyco Group, Inc. Director Nonqualified Stock Option Agreement Virgis Colbert, dated May 19, 2003

10.19*	Weyco Group, Inc. Director Nonqualified Stock Option Agreement Robert Feitler, dated May 19, 2003

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EXHIBIT INDEX (cont.)


		Incorporated Herein
Exhibit	Description	By Reference To
10.20*	Weyco Group, Inc. Director Nonqualified Stock Option Agreement Thomas W. Florsheim, Sr., dated May 19, 2003

10.21*	Weyco Group, Inc. Director Nonqualified Stock Option Agreement Leonard Goldstein, dated May 19, 2003

10.22*	Weyco Group, Inc. Director Nonqualified Stock Option Agreement Frederick P. Stratton, Jr., dated May 19, 2003

13	Annual Report to Shareholders

21	Subsidiaries of the Registrant

23.1	Independent Registered Public Accounting Firm’s Consent Dated March 10, 2005

31.1	Certification of Principal Executive Officer

31.2	Certification of Principal Financial Officer

32.1	Section 906 Certification of Chief Executive Officer

32.2	Section 906 Certification of Chief Financial Officer

Management contract or compensatory plan or arrangement

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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.
(Registrant)

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 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 by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signatures and Titles		Date

/s/ Thomas W. Florsheim		March 11, 2005

Thomas W. Florsheim, Chairman Emeritus

/s/ Thomas W. Florsheim, Jr.		March 11, 2005

Thomas W. Florsheim, Jr., Chairman of the Board and Chief Executive Officer

/s/ John W. Florsheim		March 11, 2005

John W. Florsheim, President and Chief Operating Officer and Director

/s/ John Wittkowske		March 11, 2005

John Wittkowske, Senior Vice President, Chief Financial Officer and Secretary
(Principal Accounting Officer)

/s/ Robert Feitler		March 11, 2005

Robert Feitler, Director

/s/ Leonard J. Goldstein		March 11, 2005

Leonard J. Goldstein, Director

/s/ Frederick P. Stratton, Jr.		March 11, 2005

Frederick P. Stratton, Jr., Director

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EXHIBIT 3.1

ARTICLES OF INCORPORATION
OF
WEYCO GROUP, INC.

As Restated
August 29, 1961
and Amended through February 16, 2005

ARTICLE I

Name

The name of the corporation is WEYCO GROUP, INC.

ARTICLE II

Purposes

The purposes for which the corporation is organized are:

A. To manufacture, buy, sell and deal in shoes and footwear of all kinds and descriptions and in products related to or connected therewith;

B. To buy, sell and deal in real estate and improvements thereon;

C. Without limitation by reason of the foregoing paragraphs A and B, to engage in any lawful activity within the purposes for which corporations may be organized under the Wisconsin Business Corporation Law.

ARTICLE III

Authorized Shares

The aggregate number of shares of all classes which the corporation shall have authority to issue is 24,000,000 shares of common stock of the par value of one dollar ($1.00) per share consisting of 20,000,000 shares of a class designated “Common Stock” and 4,000,000 shares of a class designated “Class B Common Stock.”

Any and all such shares of Common Stock constituting authorized but unissued shares may be issued for such consideration, not less than the par value thereof, as shall be fixed from time to time by the Board of Directors. The powers, preferences, limitations and relative rights of the Common Stock and the Class B Common Stock shall be as follows:

1. Voting.

Except as may otherwise be required by law or except as may be expressly provided for herein, with respect to all matters upon which shareholders are entitled to vote or to which shareholders are entitled to give consent, the holders of the outstanding shares of Common Stock and the holders of the outstanding shares of Class B Common Stock shall vote together as a single class, and every holder of an outstanding share of Common Stock shall be entitled to cast thereon one (1) vote in person or by proxy for each share of Common Stock standing in his name on the stock transfer records of the corporation, and every holder of an outstanding share of Class B Common Stock shall be entitled to cast thereon ten (10) votes in person or by proxy for each

share of Class B Common Stock standing in his name on the stock transfer records of the corporation. Every reference herein or in the bylaws to a majority or other proportion of shares shall refer to such a majority or other proportion of votes entitled to be cast.

2. Dividends and Distributions.

(1) Dividends. Holders of Common Stock and Class B Common Stock shall be entitled to share ratably in all such dividends, payable in cash or otherwise, as may be declared thereon by the Board of Directors from time to time out of assets or funds of the corporation legally available therefor except that in the case of dividends or other distributions payable in stock of the corporation, including distributions pursuant to stock split-ups or divisions, which occur after the initial distribution of the Class B Common Stock to holders of Common Stock, only shares of Common Stock shall be distributed with respect to the Common Stock and only shares of Class B Common Stock shall be distributed with respect to the Class B Common Stock.

(b) Distributions. In the event the corporation shall be liquidated (either partially or completely)dissolved or wound up, whether voluntarily or involuntarily, the holders of the Common Stock and the Class B Common Stock shall be entitled to share ratably, as a single class, in the remaining net assets of the corporation; that is, an equal amount of net assets for each share of Common Stock and Class B Common Stock.

3. Restrictions on Transfer of the Class B Common Stock.

(1) No beneficial owner (as hereinafter defined) of shares of Class B Common Stock (hereinafter referred to as a “Class B Shareholder”) may transfer, and the corporation shall not register the transfer of, shares of Class B Common Stock of such Class B Shareholder, whether by sale, assignment, gift, bequest, appointment or otherwise, except to a Permitted Transferee of such Class B Shareholder. A “Permitted Transferee” shall be defined as (i) the Class B Shareholder; (ii) the spouse of the Class B Shareholder; (iii) any parent and any lineal descendant (including any adopted child) of any parent of the Class B Shareholder or of the Class B Shareholder’s spouse; (iv) any trustee, guardian or custodian for, or any executor, administrator or other legal representative of the estate of, any of the foregoing Permitted Transferees; (v) the trustee of a trust (including a voting trust) principally for the benefit of such Class B Shareholder and/or any of his or her Permitted Transferees; (vi) Thomas W. Florsheim or Robert Feitler or their lineal descendants; and(vii) any corporation, partnership or other entity if a majority of the beneficial ownership thereof is held by the Class B Shareholder and/or any of his or her Permitted Transferees. If a Class B Shareholder and all of his or her Permitted Transferees cease, for whatever reason, to hold a majority of the beneficial ownership of any corporation, partnership or other entity specified in clause (vii) above, then any and all shares of Class B Common Stock held by such corporation,

partnership or other entity shall automatically, without further deed or action by or on behalf of any party, be deemed to have been transferred to other than a Permitted Transferee with the result that such shares shall be deemed to have been converted into a like number of shares of Common Stock.

(b) Notwithstanding anything to the contrary set forth herein, any Class B Shareholder may pledge his shares of Class B Common Stock to a pledgee pursuant to a bona fide pledge of such shares as collateral security for indebtedness due to the pledgee, provided that such shares shall not be transferred to or registered in the name of the pledgee and shall remain subject to the provisions of this Paragraph 3. In the event of foreclosure, realization or other similar action by the pledgee, such pledged shares of Class B Common Stock may only be transferred to a Permitted Transferee of the pledgor or converted into shares of Common Stock, as the pledgee may elect.

(c) Any purported transfer of shares of Class B Common stock not permitted hereunder shall be void and of no effect. Any purported transferee of shares of Class B Common Stock purported to be transferred in violation of this Paragraph 3 shall have no rights as a shareholder of the corporation and no other rights against, or with respect to, the corporation, except the right to receive shares of Common Stock upon the conversion of his or her shares of Class B Common Stock into shares of Common Stock. The corporation and its transfer agent may, as

a condition to the transfer or the registration of a transfer of shares of Class B Common Stock to a purported Permitted Transferee, require the furnishing of such affidavits or other proof as they deem necessary to establish that such transferee is a Permitted Transferee.

(d) The corporation shall note on the certificates for shares of Class B Common Stock the restrictions on transfer and registration of transfer imposed by this Paragraph 3.

(e) Shares of Class B Common Stock shall be registered in the name(s) of the beneficial owner(s) thereof (as hereinafter defined) and not in “street” or “nominee” names; provided, however, certificates representing shares of Class B Common Stock issued in the initial distribution thereof to holders of the issued and outstanding Common Stock may be registered in the same name and manner as the certificates representing the shares of Common Stock with respect to which the shares of Class B Common Stock are issued. Any shares of Class B Common Stock registered in “street” or “nominee” name may be transferred to the beneficial owner of such shares on the record date for such initial distribution, upon proof satisfactory to the corporation and the Transfer Agent that such person was in fact the beneficial owner of such shares on such record date.

(f) For the purpose of this Paragraph 3 the term “beneficial owner(s)” of any shares of Class B Common Stock shall mean a person or persons who, or entity or entities which, have or share the power, either singly or

jointly, to direct the voting or disposition of such shares.

4. Conversion of the Class B Common Stock.

(a) Each share of Class B Common Stock may at any time or from time to time, at the option of the record holder thereof, be converted into one (1) fully paid and nonassessable share of Common Stock. Such conversion right shall be exercised by the surrender of the certificate representing such share of Class B Common Stock to be converted to the corporation at any time during normal business hours at the principal executive offices of the corporation (to the attention of the Secretary of the corporation), or if an agent for the registration or transfer of shares of Class B Common Stock is then duly appointed and acting (said agent being referred to in this Article III as the “Transfer Agent”), then at the office of the Transfer Agent, accompanied by (i) a written notice of the election by the holder thereof to convert and (ii) (if so required by the corporation or the Transfer Agent) by instruments of transfer, in form satisfactory to the corporation and to the Transfer Agent, duly executed by such holder or his duly authorized attorney, and (iii) transfer tax stamps or funds therefor, if required pursuant to Paragraph 4(e) below.

(b) As promptly as practicable after the surrender for conversion of a certificate representing shares of Class B Common Stock in the manner provided in Paragraph 4(a) above, and the payment in

cash of any amount required by the provisions of Paragraph 4(e), the corporation will deliver or cause to be delivered at the office of the Transfer Agent to, or upon the written order of, the holder of such certificate, a certificate or certificates representing the number of full shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of the certificate representing shares of Class B Common Stock, and all rights of the holder of such shares as such holder shall cease at such time and the person or persons in whose name or names the certificate or certificates representing the shares of Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock at such time; provided, however, that in the event any such surrender and payment are made on any date when the stock transfer records of the corporation shall be closed, the person or persons in whose name or names the certificate or certificates representing shares of Common Stock are to be issued will become the record holder or holders thereof for all purposes immediately prior to the close of business on the next succeeding day on which such stock transfer records are open.

(c) No adjustments in respect of dividends or other distributions shall be made upon the conversion of any share of Class B Common Stock; provided, however, that if a share shall be converted subsequent to the record date for the payment of a dividend or other distribution on shares of Class B Common Stock but prior to such payment, the registered holder of such share at the close of business on such record date shall be entitled to receive the dividend or other distribution payable on such share on the date set for payment of such dividend or other distribution notwithstanding the conversion thereof or the corporation’s default in payment of the dividend or distribution due on such date.

(d) The corporation covenants that it will at all times reserve and keep available, solely for the purpose of issuance upon conversion of the outstanding shares of Class B Common Stock, such number of shares of Common Stock as shall be issuable upon the conversion of all such outstanding shares; provided, that nothing contained herein shall be construed to preclude the corporation from satisfying its obligations in respect of the conversion of the outstanding shares of Class B Common stock by delivery of purchased shares of Common Stock which are held in the treasury of the corporation. The corporation covenants that if any shares of Common Stock required to be reserved for purposes of conversion hereunder require registration with or approval of any governmental authority under any Federal or State law before such shares of Common Stock may be issued upon conversion, the corporation

will cause such shares to be duly registered or approved, as the case may be. The corporation will endeavor to list the shares of Common Stock required to be delivered upon conversion prior to such delivery upon each national securities exchange, if any, upon which the outstanding Common Stock is listed at the time of such delivery. The corporation covenants that all shares of Common Stock which shall be issued upon conversion of the shares of Class B Common Stock will, upon issue, be fully paid and nonassessable (subject to the provisions of Wis. Stats. §180.40(6) or any successor law) and not subject to any preemptive rights.

(e) The issuance of certificates for shares of Common Stock upon conversion of shares of Class B Common Stock shall be made without charge for any stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the record holder of the share or shares of Class B Common Stock converted, the person or persons requesting the issuance thereof shall pay to the corporation the amount of any tax which may be payable in respect of any transfer involved in such issuance or shall establish to the satisfaction of the corporation that such tax has been paid.

(f) The outstanding shares of Class B Common Stock shall be deemed without further act on anyone’s part to be immediately and automatically converted into shares of Common Stock, and stock certificates formerly representing outstanding shares of Class B Common Stock shall thereupon and thereafter be deemed to represent a like

number of shares of Common Stock, in each of the instances set forth below:

i. All outstanding shares of Class B Common Stock shall be automatically converted into shares of Common Stock if and when the number of issued and outstanding shares of Class B Common Stock is less than two percent (2%) of the aggregate number of shares of Common Stock and Class B Common Stock then outstanding.

ii. All of the outstanding shares of Class B Common Stock shall be converted to Common Stock if and when the number of shares of the corporation’s Common Stock and Class B Common Stock owned by Thomas W. Florsheim and Robert Feitler and their Permitted Transferees falls below 10% of the aggregate number of outstanding shares of Common Stock and Class B Common Stock and remains continuously below 10% for one year thereafter.

iii. All outstanding shares of Class B Common Stock will be converted after the expiration of the 15 year period commencing on the date of the initial distribution of the Class B Common Stock, unless the Board of Directors extends the existence of the Class B Common Stock for an additional period of 5 years upon the approval of a majority of the independent directors, as defined below, provided that

the Board of Directors may reduce the term or impose additional restrictions if necessary to avoid a suspension of quotations of the Common Stock on the NASDAQ National Market System. In no event shall the Class B Common Stock remain outstanding longer than 20 years after the date of the initial distribution of the Class B Common Stock.

iv. All outstanding shares of Class B Common Stock will be converted if and when the Board of Directors declares a conversion (a) based on its determination, in its sole discretion, that there has been or in the absence of a conversion there will be a material adverse change in the liquidity, marketability or market value of the Common Stock due to a suspension or prospective suspension of quotations of the Common Stock on the NASDAQ National Market System or due to requirements under applicable state securities laws, or (b) in connection with its approval of any merger or consolidation of the corporation, any sale or lease of substantially all of its assets or the liquidation or dissolution of the corporation.

vi. For purposes of this Paragraph 4, “independent director” is a director who has not been employed by the corporation or any of its subsidiaries at any time within three years prior to the date of determination and who is not

Thomas W. Florsheim, Robert Feitler or a Permitted Transferee of either of them.

5. Subsequent Issuances of Class B Common Stock.

Following the initial distribution of the Class B Common Stock to the holders of the issued and outstanding Common Stock of the Corporation, the Board of Directors may only issue shares of the Class B Common Stock (a) in the form of a distribution or distributions pursuant to a stock dividend on or split-up of the shares of the Class B Common Stock, and only to the then record holders of the issued and outstanding shares of the Class B Common Stock in conjunction with and in the same ratio as a stock dividend on or split-up of the shares of the Common Stock, or (b) to the holders of options to acquire common stock of the corporation which were outstanding on April 7, 1987.

6. Preemptive Rights Denied.

No holder of shares of any class of stock of the corporation shall possess any preemptive right to acquire additional shares of any class or treasury shares of the corporation, or obligations of the corporation convertible into such shares, whether nor or hereafter authorized.

7. Limited Voting Provisions Inapplicable.

Outstanding shares of any class of stock of the corporation shall not be subject to the limited voting provisions of Section 180.25(9) of the Wisconsin Statutes.

ARTICLE IV

The number of directors of the corporation shall be fixed by, or in the manner provided in, the By-Laws, and may be altered from time to time as may be provided therein. The By-Laws may provide for the classification of directors.

ARTICLE V

At the time of the adoption of these Restated Articles of Incorporation, the address of the registered office of the corporation is 234 East Reservoir Avenue, Milwaukee 1, Wisconsin, and the name of the registered agent at such address is Frank L. Weyenberg.

ARTICLE VI

Except as set forth below, the affirmative vote of the holders of four-fifths of all classes of stock of the corporation entitled to vote in election of directors considered for the purpose of this Article as one class, shall be required (a) for the adoption of any agreement for the merger or consolidation of the corporation with our into any other corporation, or (b) to authorize any sale, lease or exchange of all or any substantial part of the assets of the corporation to, or any sale, lease or exchange to the corporation or any subsidiary thereof in exchange for securities of the corporation of any assets of, any other corporation, person or other entity, if, in either case, as of the record date for the determination of shareholders entitled to notice thereof and to vote thereon, such other corporation, person or entity is the beneficial owner, directly or indirectly, of more

than 5% of the outstanding shares of stock of the corporation entitled to vote in elections of directors, considered for the purposes of this Article as one class. Such affirmative vote shall be in addition to the vote of the holders of the stock of the corporation otherwise required by law or any agreement to which the corporation is a party.

For the purposes of this Article, any corporation, person or other entity shall be deemed to be the beneficial owner of any shares of stock of the corporation (i) which it has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise whether such right be absolute or conditional, or (ii) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (i) above), (a) by any “affiliate” or “associate”, as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934 as in effect on May 1, 1977 or (b) by any corporation, person or other entity acting in concert with it, or (iii) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (i) above), by any corporation, person or other entity with which it or any “affiliate” or “associate” (as defined above) of it, or any corporation, person or other entity acting in concert with it or with any “affiliate” or “associate” (as defined above) of it, has any agreement, arrangement or understanding with respect to acquiring, holding, voting or disposing of stock of the corporation. For the purposes of this Article, the outstanding shares of any class of stock of the corporation shall include shares deemed owned through application of clauses (i), (ii) and (iii) above but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of

conversion rights, warrants, or options or otherwise.

On the basis of information known to the corporation, the Board of Directors of the corporation shall make all determinations under this Article, including whether (i) a corporation, person or other entity beneficially owns more than 5% of the outstanding shares of stock of the corporation entitled to vote in elections of directors, or (ii) a corporation, person or other entity has the right to acquire shares of stock of the corporation, or (iii) a corporation, person or other entity is an “affiliate” or “associate” (as defined above) of another, or (iv) a corporation, person or other entity has any agreement, arrangement or understanding with respect to acquiring, holding, voting or disposing of stock of the corporation, or (v) a corporation, person or other entity is acting in concert with any other corporation, person or other entity; and all such determinations shall be conclusive.

The provisions of this Article shall not be applicable to: (i) any merger or consolidation of the corporation with or into any other corporation, or any sale, lease or exchange of all or any substantial part of the assets of the corporation to, or any sale, lease or exchange to the corporation or any subsidiary thereof in exchange for securities of the corporation of any assets of, any other corporation, person or other entity, if (a) such transaction shall have been approved by a resolution adopted by a number of directors which is one less than the number of the members of the Board of Directors of the corporation holding office at the time such resolution is adopted; or (b) the Board of Directors of the corporation shall by resolution have approved a memorandum of understand with such other corporation, person, or other entity with

respect to and substantially consistent with such transactions prior to the time that such other corporation, person or entity shall have become a holder of more than 5% of the outstanding shares of stock of the corporation entitled to vote in elections of directors; or (ii) any merger or consolidation of the corporation with, or any sale, lease or exchange to the corporation or any subsidiary thereof of any of the assets of, any other corporation of which a majority of the outstanding shares of all classes of stock entitled to vote in elections of directors is owned of record or beneficially by the corporation and its subsidiaries.

No amendment to the Restated Articles of Incorporation of this corporation shall amend, alter, change or repeal any of the provisions of this Article VI, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote of the holders of four-fifths of all classes of stock of the corporation entitled to vote in elections of directors, considered for the purposes of this Article as one class.

EXHIBIT 10.18

WEYCO GROUP, INC.
DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT

This stock option is granted by Weyco Group, Inc., a Wisconsin corporation (the “Company”), to Virgis Colbert (the “Director”) as of this 19 ^th day of May , 2003 .

W I T N E S S E T H :

WHEREAS, the Board of Directors of the Company (the “Board”), desiring to promote the growth and development of the Company and increase shareholder value by providing incentives for non-employee directors of the Company;

NOW, THEREFORE, it is agreed as follows:

1. Number of Shares Optioned; Option Price. The Company grants to the Director the right and option to purchase, on the terms and conditions hereof, all or any part of the aggregate of One Thousand, Five Hundred ( 1,500 ) shares of the presently authorized Common Stock of the Company, $1.00 par value, whether unissued or issued and reacquired by the Company, at the purchase price of Fifty Dollars and 37/100 ($ 50.37 ) per share. This Option is intended by the parties hereto to be, and shall be treated as, a nonqualified stock option.

2. Conditions of Exercise of Option During Director’s Lifetime. This option may be exercised by Director at any time during Director’s lifetime after November 19, 2003 . If the Director ceases to be a Director of the Company for any reason except death, Director may, at any time within 3 months after the date of such cessation of directorship but in no event later than the date of expiration of this option, exercise this option to the extent Director was entitled to do so on the date of such cessation of directorship.

3. Death of Director. If Director dies while still serving as a Director of the Company, this option, whether or not otherwise exercisable at the time of such death, shall be exercisable by the person or persons to whom the option is transferred by will or the laws of descent and distribution, within one year following Director’s death and in no event later than the expiration date of this option. This option or any portion of this option not so exercised following Director’s death shall expire.

4. Restrictions on Transfer of Underlying Shares; Deferral of Exercise. Neither the grant of this option nor the issuance of the underlying shares has been registered under the Securities Act of 1933 (the “Act”). Although the Company intends to exert its best efforts so that issuance of the shares purchasable upon the exercise of this option, when it first becomes exercisable, will be exempt from the registration requirements of the Act and any applicable state securities laws, if the exercise of this option would otherwise result in

the violation by the Company of any provision of the Act or of any state securities law, the Company may require that such exercise be deferred until the Company has taken appropriate action to avoid any such violation. In addition, the Director acknowledges that both this option and the underlying shares constitute “restricted securities,” may bear a legend restricting transfers, and may be transferred only in compliance with an exemption from the registration requirements of the Act (including Rule 144 thereunder) and applicable state law. Under Rule 144 under the Act, resales may not be permitted for the first year after the option has been exercised and fully paid, and resales during the second year would be subject to the volume limitations, notice requirements and other requirements of Rule 144.

5. Exercise of Option May Be In Whole Or In Part . Subject to the conditions stated in paragraphs 2, 3 and 4 hereof, this option may be exercised for part or all of the total number of shares stated in paragraph 1. All or any part of the shares subject to this option so exercisable may be purchased at any time, and from time to time, but in no event after the expiration date provided in paragraph 8.

6. Method of Exercising Option.

(a) This option shall be exercised by delivering to the Company at the office of its Secretary in Milwaukee, Wisconsin a written notice of the number of shares with respect to which the option will be exercised and of the intended date of exercise.

(b) Director shall pay the Company, on the date of exercise, the exercise price for the shares being purchased in full. No shares shall be issued until such payment is made therefore. Such payment may be made either (i) in cash or (ii) at the discretion of the Board, by delivering shares of the Company’s Common Stock which have been beneficially owned by the Director, the Director’s spouse, or both of them for a period of at least six months prior to the time of exercise (“Delivered Stock”) or a combination of cash and Delivered Stock. Delivered Stock shall be valued at its Fair Market Value determined as of the date of exercise of the option.

7. Ownership of Shares. Director shall not be deemed the holder of any shares subject to this option until such shares are fully paid and issued to him upon exercise of this option.

8. Expiration Date. This option shall expire at the close of business on May 19, 2013 , or earlier if the Director ceases to be a Director of the Company (see paragraphs 2 and 3).

9. Method of Valuation of Common Stock. The fair market value of the Company’s Common Stock on any date is deemed, for the purposes of this Agreement, to be either:

(a) The average of the highest and lowest sale prices of the stock on such date as reported by NASDAQ (the National Association of Securities Dealers, Inc. Automated Quotation System) or, in the absence of reported sales on NASDAQ on said date, the average of the closing bid and asked prices for the stock on NASDAQ on said date; or

(b) At any time when the stock is listed on any exchange, the average of the reported highest and lowest prices at which the shares are sold on such exchange on such date or, in the absence of reported sales on such exchange on said date, the average of the closing bid and asked prices for the stock on such exchange on such date.

10. No Rights in Shares Until Certificates Issued. Neither the Director nor his heirs, executor or administrator shall be, or have any of the rights or privileges of, a shareholder of the Company in respect of any of the shares issuable upon the exercise of the option herein granted, unless and until certificates representing such shares shall have been issued.

11. Prohibition Against Pledge, Attachment, etc. Except as otherwise provided, this option and the rights and privileges pertaining thereto shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.

12. Option Not Transferable During Director’s Lifetime. This option shall be exercisable, during the Director’s lifetime (to the extent exercisable), only by him and shall not be transferable by the Director other than by his will or by the laws of descent and distribution.

13. Changes in Stock. In the event there are any changes in the Common Stock of the Company through a stock split, stock dividend, combination or exchange of shares, or other similar change affecting the Common Stock of the Company, the Board shall make, such changes in the aggregate number, price and kind of shares subject to this option, as are appropriate and equitable to prevent any diminution or enlargement of the rights granted to or available for Director.

14. Dissolution or Merger. Upon the dissolution or liquidation of the Company or upon any merger in which the Company is not the surviving corporation and which is approved by the Company’s non-insider shareholders (a “triggering event”), the Company shall settle this option, if outstanding and exercisable, for cash. The amount of cash to be paid to the Director for this option if it has not been exercised, or any unexercised portion hereof if this option has been exercised in part, shall be equal to the difference between the exercise price and the fair market value of the Company’s Common Stock on the effective date of the triggering event.

15. Notices. Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company in care of its Secretary, Post Office Box 1188, Milwaukee, Wisconsin 53201, and any notice to be given to the Director may be addressed to him at his address as it appears on the Company’s records or at such other address as either party may hereafter designate in writing to the other. Any such notice shall have been deemed to have been duly given if and when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, certified and deposited, postage prepaid, in a post office or branch post office regularly maintained by the United States Government.

16. Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.

17. Wisconsin Contract. This option has been granted in Wisconsin and shall be construed under the laws of that state.

18. Government and Other Regulations. The obligation of Weyco Group, Inc. to sell and deliver shares of Common Stock under this agreement and the Plan shall be subject to all applicable laws, rules and regulations and the obtaining of all such approvals by governmental agencies as may be deemed necessary or desirable by the Board, including (without limitation) the satisfaction of all applicable federal, state and local tax withholding requirements.

IN WITNESS WHEREOF , the Company has caused this Agreement to be executed on its behalf by its Chief Executive Officer or President and to be sealed with its corporate seal, attested by its Secretary or one of its Assistant Secretaries, and the Director has hereunto set his hand and seal, all as of the day and the year first above written, which is the date of the granting of the option evidenced hereby.


		WEYCO GROUP, INC.

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

		Title: Chairman & CEO

		ATTEST:

		/s/ John Wittkowske
		Secretary

		/s/ Virgis Colbert
		Director

EXHIBIT 10.19

WEYCO GROUP, INC.
DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT

This stock option is granted by Weyco Group, Inc., a Wisconsin corporation (the “Company”), to Robert Feitler (the “Director”) as of this 19 ^th day of May , 2003 .

W I T N E S S E T H :

NOW, THEREFORE, it is agreed as follows:

Company may require that such exercise be deferred until the Company has taken appropriate action to avoid any such violation. In addition, the Director acknowledges that both this option and the underlying shares constitute “restricted securities,” may bear a legend restricting transfers, and may be transferred only in compliance with an exemption from the registration requirements of the Act (including Rule 144 thereunder) and applicable state law. Under Rule 144 under the Act, resales may not be permitted for the first year after the option has been exercised and fully paid, and resales during the second year would be subject to the volume limitations, notice requirements and other requirements of Rule 144.

6. Method of Exercising Option.

7. Ownership of Shares. Director shall not be deemed the holder of any shares subject to this option until such shares are fully paid and issued to him upon exercise of this option.

8. Expiration Date. This option shall expire at the close of business on May 19, 2013 , or earlier if the Director ceases to be a Director of the Company (see paragraphs 2 and 3).

9. Method of Valuation of Common Stock. The fair market value of the Company’s Common Stock on any date is deemed, for the purposes of this Agreement, to be either:

16. Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.

17. Wisconsin Contract. This option has been granted in Wisconsin and shall be construed under the laws of that state.


		WEYCO GROUP, INC.

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

		Title: Chairman & CEO

		ATTEST:

		/s/ John Wittkowske
		Secretary

		/s/ Robert Feitler
		Director

EXHIBIT 10.20

WEYCO GROUP, INC.
DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT

This stock option is granted by Weyco Group, Inc., a Wisconsin corporation (the “Company”), to Thomas W. Florsheim, Sr. (the “Director”) as of this 19 ^th day of May , 2003 .

W I T N E S S E T H :

NOW, THEREFORE, it is agreed as follows:

6. Method of Exercising Option.

7. Ownership of Shares. Director shall not be deemed the holder of any shares subject to this option until such shares are fully paid and issued to him upon exercise of this option.

8. Expiration Date. This option shall expire at the close of business on May 19, 2013 , or earlier if the Director ceases to be a Director of the Company (see paragraphs 2 and 3).

9. Method of Valuation of Common Stock. The fair market value of the Company’s Common Stock on any date is deemed, for the purposes of this Agreement, to be either:

16. Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.

17. Wisconsin Contract. This option has been granted in Wisconsin and shall be construed under the laws of that state.


		WEYCO GROUP, INC.

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

		Title: Chairman & CEO

		ATTEST:

		/s/ John Wittkowske
		Secretary

		/s/ Thomas W. Florsheim, Sr.
		Director

EXHIBIT 10.21

WEYCO GROUP, INC.
DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT

This stock option is granted by Weyco Group, Inc., a Wisconsin corporation (the “Company”), to Leonard Goldstein (the “Director”) as of this 19 ^th day of May , 2003 .

W I T N E S S E T H :

NOW, THEREFORE, it is agreed as follows:

6. Method of Exercising Option.

7. Ownership of Shares. Director shall not be deemed the holder of any shares subject to this option until such shares are fully paid and issued to him upon exercise of this option.

8. Expiration Date. This option shall expire at the close of business on May 19, 2013 , or earlier if the Director ceases to be a Director of the Company (see paragraphs 2 and 3).

9. Method of Valuation of Common Stock. The fair market value of the Company’s Common Stock on any date is deemed, for the purposes of this Agreement, to be either:

16. Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.

17. Wisconsin Contract. This option has been granted in Wisconsin and shall be construed under the laws of that state.


		WEYCO GROUP, INC.

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

		Title: Chairman & CEO

		ATTEST:

		/s/ John Wittkowske
		Secretary

		/s/ Leonard Goldstein
		Director

EXHIBIT 10.22

WEYCO GROUP, INC.
DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT

This stock option is granted by Weyco Group, Inc., a Wisconsin corporation (the “Company”), to Frederick P. Stratton, Jr. (the “Director”) as of this 19 ^th day of May , 2003 .

W I T N E S S E T H :

NOW, THEREFORE, it is agreed as follows:

6. Method of Exercising Option.

7. Ownership of Shares. Director shall not be deemed the holder of any shares subject to this option until such shares are fully paid and issued to him upon exercise of this option.

8. Expiration Date. This option shall expire at the close of business on May 19, 2013 , or earlier if the Director ceases to be a Director of the Company (see paragraphs 2 and 3).

9. Method of Valuation of Common Stock. The fair market value of the Company’s Common Stock on any date is deemed, for the purposes of this Agreement, to be either:

16. Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.

17. Wisconsin Contract. This option has been granted in Wisconsin and shall be construed under the laws of that state.


		WEYCO GROUP, INC.

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

		Title: Chairman & CEO

		ATTEST:

		/s/ John Wittkowske
		Secretary

		/s/ Frederick P. Stratton, Jr.
		Director

Exhibit 13

2004 ANNUAL REPORT

WEYCO Group, Inc.

To Our Shareholders:

2004 was a record year for our Company. Net sales were a record $223.0 million, up 3.4% from 2003 net sales of $215.8 million. Net earnings were $20.3 million, an increase of 18.3% over 2003 net earnings of $17.1 million. Diluted earnings per share were $3.45 in 2004 as compared to $2.91 in 2003, an increase of 18.6%.

Stacy Adams led our brands in growth this year with a 9% increase in net sales. Throughout the year, the brand’s dress shoe business was strong. We saw increases across a broad spectrum of accounts, from large department stores to small urban boutiques. We believe the brand’s moderate pricing and unique styling represents a great opportunity for continued growth. We also believe that licensing the Stacy Adams brand into various apparel and accessory categories in recent years has established it as a lifestyle brand, fueling further interest in our footwear offerings.

The Florsheim brand experienced a 1% increase for the year, with net sales of the brand up 11% for the second half of 2004. We achieved this increase despite continuing to de-emphasize the lower priced FLS sub-brand. Our continued focus is on growing the higher priced Florsheim products which include Florsheim, Florsheim Comfortech and Florsheim Imperial. Sales of our higher priced products were up 9% for the year.

Nunn Bush experienced flat net sales in 2004 as compared with 2003. Although this brand is challenged by a very competitive market in mid-tier department stores and shoe chains, it continues to be a major player in its category. We plan to continue to strengthen the brand in 2005 and beyond by introducing new and creative products. Nunn Bush was one of the first brands to introduce gel technology in comfort shoes approximately 6 years ago. At a recent trade show, we introduced an updated version of this technology with a new look for fall 2005 delivery. We are also trying to aggressively grow our Nunn Bush NXXT business with its contemporary footwear that appeals to a more fashion conscious consumer in his 30’s and 40’s.

Licensing revenues also contributed to our top-line growth, increasing 10% for the year. We have licensing partners for both the Florsheim and Stacy Adams brand. With Florsheim, the majority of licensing income comes from our partners who operate retail stores and wholesale businesses in Mexico, Australia and the Pacific Rim. Stacy Adams licensees primarily market branded apparel and accessories in the United States. Licensees for both of our brands enjoyed solid growth this year, leading to the 10% overall increase.

Our retail division’s performance was strong in 2004. Retail net sales increased 6%, with same store sales up 9%. At the end of the year, our retail division consisted of 29 retail stores in the United States, three in Europe, and an internet business. We view the retail business as an important part of our branding strategy for the Florsheim brand, as it is an environment where we can showcase our entire line and really get a feel for what the end consumer is looking for. Similar to the wholesale side of the Florsheim business, our goal with the Florsheim stores is to upgrade the brand by maintaining a limited number of highly visible, profitable stores in better shopping centers. During 2004, we closed three stores and opened two new ones in our efforts to maintain the quality and effectiveness of our retail stores.

While we had only moderate sales growth in 2004, our continued focus on gross margins and controlling selling and administrative expenses enabled us to leverage that growth into an 18.3% increase in net earnings.

Our balance sheet is strong. Cash generated from operations in 2004 was used to pay down approximately $16.6 million of debt. At December 31, 2004 we had cash and marketable securities of $21.8 million, with bank borrowings of only $11.4 million.

Looking to 2005, we are pleased with our portfolio of brands and see unique opportunities within each one. We look forward to the challenges and successes that lie ahead. We thank you for your interest in and support of our Company.


Thomas W. Florsheim, Jr.		John W. Florsheim
Chairman and		President and
Chief Executive Officer		Chief Operating Officer

SELECTED FINANCIAL DATA


	Years Ended December 31
	2004 ⁽¹⁾		2003 ⁽¹⁾		2002 ⁽¹⁾		2001		2000
Net sales	$	223,013,000	$	215,761,000	$	181,200,000	$	131,693,000	$	148,155,000

Net earnings	$	20,278,000	$	17,135,000	$	13,188,000	$	9,501,000	$	10,622,000

Diluted earnings per share	$	3.45	$	2.91	$	2.29	$	1.64	$	1.72

Weighted average diluted shares outstanding		5,881,139		5,878,287		5,753,442		5,792,501		6,162,351

Cash dividends per share	$	.43	$	.38	$	.34	$	.31	$	.29

Total assets	$	156,356,000	$	151,186,000	$	149,239,000	$	97,954,000	$	91,943,000

Bank borrowings	$	11,360,000	$	27,945,000	$	37,802,000	$	—	$	—

(1)

Includes the operating results of the acquired Florsheim business. See Note 3 to the Consolidated Financial Statements for additional information.

COMMON STOCK DATA


	2004						2003
					Cash						Cash
	Price Range				Dividends		Price Range				Dividends
Quarter:	High		Low		Declared		High		Low		Declared

First	$	37.00	$	30.14	$	.10	$	29.02	$	20.51	$	.09
Second		38.04		30.02		.11		35.06		28.12		.09
Third		37.00		29.75		.11		32.91		28.65		.10
Fourth		45.00		37.00		.11		38.22		27.63		.10

					$	.43					$	.38

There are 243 holders of record of the Company’s common stock and 114 holders of record of the Company’s Class B common stock as of February 16, 2005.

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

The Class B Common Stock is not listed nor does it trade publicly because of its limited transferability. See Note 14 to the Consolidated Financial Statements for additional information.

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

OVERVIEW

The Company is a distributor of men’s casual, dress and fashion shoes under the Florsheim, Nunn Bush, Nunn Bush NXXT, Brass Boot, Stacy Adams and SAO by Stacy Adams brand names. Inventory is purchased from third party overseas manufacturers. The majority of foreign-sourced purchases are denominated in U.S. dollars. The Company’s products are sold to shoe specialty stores, department stores and clothing retailers primarily in North America, with some distribution in Europe. The Company also has a retail division, which consists of 29 Company-owned retail stores in the United States, three in Europe, and an internet business. Sales in retail outlets are made directly to consumers by Company employees. The Company also has licensing agreements with third parties who sell its branded shoes overseas, as well as licensing agreements with apparel and accessory manufacturers in the United States. As such, the Company’s results are primarily affected by the economic conditions and the retail environment in the United States.

The Company’s net earnings have grown significantly over the three-year period ended December 31, 2004 from $13.2 million in 2002 to $17.1 million in 2003 and $20.3 million in 2004. Diluted earnings per share of $2.29 in 2002 increased to $2.91 in 2003 and reached $3.45 in 2004. The $48.5 million acquisition of the Florsheim brand and related assets in May 2002 has had a significant impact on the operating results of the Company, specifically sales and net earnings since the date of acquisition. Also, in 2002 the Company purchased a new building adjacent to its current distribution center primarily to store the Florsheim inventory, at a total cost of $6.3 million. In 2003, the Company expanded its distribution center into one contiguous facility and reconfigured its distribution systems to maximize efficiency, at a total cost of $8.5 million. These are the major events affecting the operating results for the three-year period ended December 31, 2004. A more detailed analysis of results follows.

The Company continues to maintain a $50 million 364-day borrowing facility. During 2004, the Company generated $19.9 million of cash from operations. The primary uses of this cash were to pay down borrowings and pay dividends.

ACQUISITION

On May 20, 2002, the Company acquired certain assets of Florsheim Group, Inc.’s domestic wholesale and retail operations. On July 1 and July 27, 2002, the Company acquired certain assets and assumed the operating liabilities of Florsheim Europe S.r.l and Florsheim France SARL, respectively. The total purchase price was $48.5 million, and the Company entered into a two-year revolving line of credit to fund the acquisition and related expenses. See Note 3 and 9 of the Notes to Consolidated Financial Statements for further details of the acquisition and borrowings under the line of credit.

RESULTS OF OPERATIONS

2004 vs. 2003

Overall net sales for the year ended December 31, 2004 reached $223.0 million, 3% above the prior year sales of $215.8 million. The growth reflects higher revenues in both the wholesale and retail operating segments (see Note 16 of the Notes to Consolidated Financial Statements for more information on operating segments). Wholesale net sales in 2004 were $192.6 million, up 3% from $187.3 million in the prior year. Retail net sales were $26.4 million in the current year, rising 6% over the prior year’s $24.9 million. Licensing revenues were $3.9 million in 2004, as compared with $3.6 million in the prior year.

The increase in wholesale net sales was driven by a 9% increase in sales of the Company’s Stacy Adams brand. The growth in Stacy Adams reflects the strengthening of its dress shoe business. Florsheim sales were up 1% over 2003, with third and fourth quarter sales up 11%. This increase in the second half of the year positively reflects the Company’s long-term strategy to reposition the Florsheim brand and align it with department stores and “better” shoe and clothing stores that provide an environment and image that properly represent the brand. Nunn Bush sales were flat in comparison to the prior year. In the retail segment, the Company closed three stores and opened two new stores in 2004. Same store sales were up 9% in 2004.

Gross earnings as a percent of net sales increased from 35.4% in 2003 to 37.2% in 2004. Gross margin improvements were achieved across all the Company’s brands and in the Company’s retail segment. Wholesale gross earnings as a percent of net sales increased 1.8%, from 30.5% in 2003 to 32.3% in 2004, which was mainly due to changes in product mix. Retail gross earnings as a percent of net sales increased from 63.2% in 2003 to 63.5% in 2004.

Selling and administrative expenses as a percent of net sales were 22.4% in the current year compared with 22.8% in 2003. This decrease is primarily the result of cost control efforts achieved in both of the Company’s operating segments. Wholesale selling and administrative expenses as a percent of net sales decreased from 19.9% in 2003 to 19.5% in 2004. Retail selling and administrative expenses as a percent of net sales also declined from 47.6% in the prior year to 46.9% in 2004.

Interest income for 2004 of $501,000 was comparable with $529,000 for 2003. Interest expense in the current year was $478,000 versus $1,375,000 for 2003. The decrease is the result of lower average borrowings in 2004 in comparison to 2003.

The effective tax rate for 2004 is 38.4% as compared with 35.8% in 2003. The 2003 effective tax rate included a 2.4% benefit due to the resolution of certain tax matters related to an audit of the Company’s 1996 federal tax return.

2003 vs. 2002

Overall net sales for the year ended December 31, 2003 of $215.8 million increased 19% compared with $181.2 million for 2002. The increase resulted from increases in both the wholesale and retail segments (See Note 16 of the Notes to Consolidated Financial Statements for more information on operating segments). Wholesale net sales in 2003 were $187.3 million, as compared with $163.6 million for 2002. Retail net sales for 2003 were $24.9 million, as compared with $15.9 million in 2002. Also included in overall net sales are licensing revenues of $3.6 million in 2003, as compared with $1.7 million in 2002.

For both the retail and wholesale segments and licensing revenues, the primary reason for the increase in net sales between 2002 and 2003 was due to 2003 including the Florsheim brand for a full year as compared with roughly seven months in 2002. In the Company’s other brands, wholesale net sales for the Nunn Bush brand were up 1% while the Stacy Adams brand was down 2%. The Nunn Bush brand held steady in a challenging retail environment, while the Stacy Adams brand saw increases in its dress shoe business, but decreases in its SAO casual business. Management believes that its SAO casual business was down in 2003 due to a shift by consumers from streetwear casual shoes toward athletic shoes. The Company responded to this shift with new designs in the SAO line for 2004. In the retail division, the Company closed one retail store and opened one new store during 2003. Same-store sales increased 1.4% in 2003.

Gross earnings as a percent of net sales increased from 32.6% in 2002 to 35.4% for 2003. Licensing revenues, which have no related cost of sales, had an effect of increasing gross margins by 0.5% between 2002 and 2003. The remaining increase was due to an increase in wholesale gross margins of 1.3%, from 29.2% in 2002 to 30.5% in 2003. This increase was due primarily to increased gross margins in the Company’s Florsheim division and was due to changes in product mix, as less excess and closeout merchandise was sold in 2003. In addition, 1% of the increase in overall gross margins is due to changes in the mix of wholesale and retail sales as a percentage of total sales. Retail sales, which carry a higher margin, comprised 11.5% of overall net sales in 2003 versus 8.8% in 2002.

Selling and administrative expenses as a percent of net sales were 22.8% in 2003 versus 20.8% in 2002. The increase is the result of increased wholesale selling and administrative expenses as a percent of net sales, from 18.4% in 2002 to 19.9% in 2003, and due to the previously discussed changes in the mix of wholesale and retail sales. Retail selling and administrative expenses as a percent of retail net sales dropped from 48.0% in 2002 to 47.6% in 2003.

The increase in wholesale selling and administrative expenses is primarily due to increased advertising expenses in 2003, as 2003 was the first year that the Company put forth full promotional efforts for the Florsheim brand. Advertising, net of co-op expenses, increased $1,843,000 in 2003. In addition, wholesale selling and administrative expenses included $478,000 of expenses related to eliminating manufacturing activities at the Company’s plant in Beaver Dam, Wisconsin, late in 2003. The product that was previously assembled in Beaver Dam is now purchased from an overseas manufacturer. Finally, wholesale selling and administrative expenses increased approximately $980,000

in 2003 due to increased pension expense which resulted from a curtailment loss due to the previously mentioned reduction in employees at Beaver Dam, as well as higher amortization of actuarial losses caused by the continued reduction in discount rates and lower than expected returns on prior year plan assets.

Interest income for 2003 was $529,000 as compared with $853,000 for 2002. This decrease was due to reductions in the average balance of marketable securities outstanding between 2002 and 2003.

Interest expense for 2003 was $1,375,000 as compared with $1,289,000 for 2002. The increase is primarily due to slightly higher average borrowings in 2003 due to the acquisition occurring mid-year in 2002.

The effective tax rate for 2003 is 35.8% as compared with 37.2% in 2002. The decrease in the rate is primarily due to the 2003 resolution of certain tax matters related to an audit of the Company’s 1996 federal tax return. The settlement had a favorable impact on the Company’s 2003 tax provision, as the Company had previously provided an amount in excess of the final settlement.

LIQUIDITY & CAPITAL RESOURCES

The Company’s primary source of liquidity is its cash and short-term marketable securities, which aggregated $10,695,000 at December 31, 2004 and $13,298,000 as of December 31, 2003. During 2004, the Company’s primary source of cash was from operations while its primary uses of cash were the repayment of $16,585,000 of borrowings under its Revolving Line of Credit (the “Line of Credit”) and the payment of $2.4 million of dividends.

Cash provided by operating activities in 2004 was down in comparison to the prior year. Higher net earnings in the current year were more than offset by the buildup of inventory in 2004 from unusually low levels at December 31, 2003.

The Company’s capital expenditures were $1,127,000, $9,834,000 and $8,195,000 in 2004, 2003 and 2002, respectively. Capital expenditures in 2003 and 2002 included $8.5 million and $6.3 million, respectively, related to the construction project to expand and reconfigure the Company’s distribution center. The project was completed in the third quarter of 2003, and was financed by draws on the line of credit. In 2004, capital expenditures returned to normal levels. Capital expenditures for 2005 are expected to remain at normal levels of approximately $1 to $2 million.

As of December 31, 2004, the Company had a total of $50 million available under its existing borrowing facility, of which total borrowings were $11,360,000. This facility includes certain financial covenants, including minimum net worth levels, minimum levels of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and a maximum ratio of funded debt to EBITDA. As of December 31, 2004 the Company was in compliance with all covenants. The Company’s borrowing facility expires April 30, 2005, and the Company intends to extend it an additional year at that time.

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 in 2005.

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 bank borrowings, deferred compensation agreements, unfunded supplemental pension plan, and its operating leases, which are discussed further in the notes to the financial statements. The Company also has significant obligations to purchase inventory. The bank borrowings, deferred compensation and supplemental pension obligations are recorded on the Company’s Consolidated Balance Sheets. 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.


	Payments Due by Period ( in 000’s)
			Less						More
			Than a		1 – 3		3 – 5		Than 5
	Total		Year		Years		Years		Years
Bank borrowings	$	11,360	$	11,360		—		—		—
Deferred compensation		1,592		1,592		—		—		—
Supplemental pension plan		3,312		199		452		431		2,230
Operating leases		10,457		2,547		3,582		1,378		2,950
Purchase obligations		21,637		21,637		—		—		—

Total	$	48,358	$	37,335	$	4,034	$	1,809	$	5,180

Future interest payments on bank borrowings have not been included in the above table as they have variable rates of interest. Related interest payments in 2004 were $509,000. The Company also has a qualified defined benefit pension plan. It does not expect to make any contributions to the plan in 2005. See Note 10 of the Notes to Consolidated Financial Statements.

OTHER

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 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 financial statements.

The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates as to the recovery of accounts receivable, as well as those used in the determination of liabilities related to pension benefits. The allowances for sales returns and doubtful accounts are fact-specific and take into account such factors as specific customer situations, historical experience and current and expected economic conditions. Changes in these allowances may be required if actual returns, discounts and bad debt activity varies from the original estimates.

The pension benefit obligation and pension expense are calculated in accordance with SFAS No. 87, “Employers’ Accounting for Pensions”, and are impacted by certain actuarial assumptions, including the discount rate and the expected rate of return on plan assets. These rates are evaluated on an annual basis considering such factors as market interest rates and historical asset performance. Actuarial valuations at December 31, 2004 used a discount rate of 5.75% and an expected rate of return on plan assets of 8.5%. A 0.5% decrease in the discount rate would increase annual pension expense by approximately $39,000. A 0.5% decrease in expected return on plan assets would increase annual pension expense by approximately $117,000.

New Accounting Pronouncement

In December 2004, the FASB issued SFAS No. 123(R ), “Accounting for Stock-Based Compensation”, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. See Note 2 of the Notes to Consolidated Financial Statements.

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 financial instruments. The Company does not hold or issue financial instruments for trading purposes. The Company does not have significant market risk on its marketable securities as those investments consist of high-grade securities and are held to maturity.

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. Forward exchange contracts are used to partially hedge against the earnings effects of such fluctuations.

At December 31, 2004, the Company has forward exchange contracts outstanding to sell 3,000,000 Canadian dollars at a total price of $2,293,000. Based on December 31, 2004 exchange rates, there are no significant gains or losses on these contracts. All contracts expire in less than one year. Assuming a 10% depreciation in the U.S. dollar at December 31, 2004, there would be a loss on forward exchange contracts of $272,000.

Interest Rates

The Company is exposed to interest rate fluctuations on borrowings under its Line of Credit. As of December 31, 2004, $11.4 million of commercial paper was outstanding at an average interest rate of 2.42%. The interest expense for 2004 was $413,000. Assuming a 10% increase in the Company’s weighted average interest rate on borrowings, interest expense in 2004 would have increased by $39,000.

Forward-Looking Statements

This report contains certain forward-looking statements with respect to the Company’s 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. These factors could include significant adverse changes in the economic conditions affecting overseas suppliers or the men’s footwear markets served by the Company, as well as changes in interest rates, discount rates, or currency exchange rates as discussed above.

CONSOLIDATED
STATEMENTS OF EARNINGS
For the years ended December 31, 2004, 2003 and 2002


	2004			2003			2002
NET SALES	$	223,013,334		$	215,760,531		$	181,200,118

COST OF SALES		140,017,783			139,315,498			122,062,238


Gross earnings		82,995,551			76,445,033			59,137,880

SELLING AND ADMINISTRATIVE EXPENSES		50,043,981			49,184,303			37,731,912


Earnings from operations		32,951,570			27,260,730			21,405,968

INTEREST INCOME		500,605			528,531			853,032

INTEREST EXPENSE		(477,807	)		(1,374,682	)		(1,289,159	)

OTHER INCOME AND EXPENSE, net		(71,694	)		275,222			18,077


Earnings before provision for income taxes		32,902,674			26,689,801			20,987,918

PROVISION FOR INCOME TAXES		12,625,000			9,555,000			7,800,000


Net earnings	$	20,277,674		$	17,134,801		$	13,187,918


BASIC EARNINGS PER SHARE	$	3.56		$	3.01		$	2.34


DILUTED EARNINGS PER SHARE	$	3.45		$	2.91		$	2.29

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

CONSOLIDATED BALANCE SHEETS
December 31, 2004 and 2003


	2004		2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	10,514,707	$	9,091,567
Marketable securities, at amortized cost		180,000		4,206,100
Accounts receivable, less reserves of $4,880,433 and $3,722,634 respectively		30,774,337		29,900,197
Accrued income tax receivable		—		228,074
Inventories		47,620,220		43,727,578
Deferred income tax benefits		1,681,135		2,483,037
Prepaid expenses and other current assets		1,779,189		968,264

Total current assets		92,549,588		90,604,817

MARKETABLE SECURITIES, at amortized cost		11,123,795		6,273,638
OTHER ASSETS		13,904,006		13,750,574
PLANT AND EQUIPMENT, net		27,910,304		29,689,257
TRADEMARK		10,867,969		10,867,969

	$	156,355,662	$	151,186,255


LIABILITIES AND SHAREHOLDERS’ INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings	$	11,359,536	$	27,944,830
Accounts payable		6,661,241		7,465,606
Dividend payable		631,351		563,642
Accrued liabilities -
Wages, salaries and commissions		3,566,277		4,335,408
Taxes other than income taxes		979,853		376,773
Other		3,950,485		3,567,665
Accrued income taxes		751,622		—

Total current liabilities		27,900,365		44,253,924

LONG-TERM PENSION LIABILITY		3,312,860		3,077,285
DEFERRED INCOME TAX LIABILITIES		5,394,516		5,009,158
SHAREHOLDERS’ INVESTMENT:
Common Stock, $1.00 par value, authorized 10,000,000 shares, issued and outstanding 4,440,565 shares in 2004 and 4,324,983 shares in 2003		4,440,565		4,324,983
Class B Common Stock, $1.00 par value, authorized 2,000,000 shares, issued and outstanding 1,302,110 shares in 2004 and 1,305,435 shares in 2003		1,302,110		1,305,435
Capital in excess of par value		6,820,136		4,189,138
Reinvested earnings		106,747,060		88,917,253
Accumulated other comprehensive income		438,050		109,079

Total shareholders’ investment		119,747,921		98,845,888

	$	156,355,662	$	151,186,255

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

CONSOLIDATED STATEMENTS
OF SHAREHOLDERS’ INVESTMENT
For the years ended December 31, 2004, 2003 and 2002


													Accumulated
				Class B			Capital						Other
	Common			Common			in Excess of			Reinvested			Comprehensive			Comprehensive
	Stock			Stock			Par Value			Earnings			Income/(Loss)			Income
Balance, December 31, 2001		2,839,787			909,031			3,889,388			65,953,557			—
Comprehensive Income -
Net earnings		—			—			—			13,187,918			—		$	13,187,918
Foreign currency translation adjustments		—			—			—			—			(231,636	)		(231,636	)
Additional minimum pension liability (net of tax of $552,594)		—			—			—			—			(864,311	)		(864,311	)

Total Comprehensive Income		—			—			—			—			—		$	12,091,971

Cash dividends declared ($.34 per share)		—			—			—			(1,917,816	)
Conversions of Class B Common Stock to Common Stock		6,423			(6,423	)		—			—			—
Stock options exercised		47,746			—			1,016,409			—			—
Income tax benefit from stock options exercised		—			—			149,688			—			—
Shares purchased and retired		(7,500	)		—			(56,438	)		(131,509	)		—

Balance, December 31, 2002		2,886,456			902,608			4,999,047			77,092,150			(1,095,947	)
Comprehensive Income -
Net earnings		—			—			—			17,134,801			—			17,134,801
Foreign currency translation adjustments		—			—			—			—			340,715			340,715
Additional minimum pension liability (net of tax of $552,594)		—			—			—			—			864,311			864,311

Total Comprehensive Income		—			—			—			—			—		$	18,339,827

Cash dividends declared ($.38 per share)		—			—			—			(2,158,520	)		—
Common stock dividend		1,463,354			437,269			(1,901,697	)		—			—
Conversions of Class B Common Stock to Common Stock		34,442			(34,442	)		—			—			—
Stock options exercised		50,881			—			962,061			—			—
Income tax benefit from stock options exercised		—			—			229,693			—			—
Shares purchased and retired		(110,150	)		—			(99,966	)		(3,151,178	)		—

Balance, December 31, 2003		4,324,983			1,305,435			4,189,138			88,917,253			109,079
Comprehensive Income -
Net earnings		—			—			—			20,277,674			—			20,277,674

Foreign currency translation adjustments		—			—			—			—			328,971			328,971

Total Comprehensive Income		—			—			—			—			—		$	20,606,645

Cash dividends declared ($.43 per share)		—			—			—			(2,447,867	)		—
Conversions of Class B Common Stock to Common Stock		3,325			(3,325	)		—			—			—
Stock options exercised		112,257			—			2,091,366			—			—
Income tax benefit from stock options exercised		—			—			539,632			—			—

Balance, December 31, 2004	$	4,440,565		$	1,302,110		$	6,820,136		$	106,747,060		$	438,050

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

CONSOLIDATED STATEMENTS
OF CASH FLOWS
For the years ended December 31, 2004, 2003 and 2002


	2004			2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	20,277,674		$	17,134,801		$	13,187,918
Adjustments to reconcile net earnings to net cash provided by operating activities -
Depreciation		2,517,417			2,322,794			2,104,960
Amortization		80,389			187,020			126,159
Deferred income taxes		1,187,260			978,527			1,164,000
Deferred compensation		48,000			197,292			184,380
Pension expense		712,959			992,050			13,971
Loss (gain) on sale of assets		116,174			(25,819	)		5,694
Increase in cash surrender value of life insurance		(579,168	)		(574,371	)		(551,394	)
Changes in operating assets and liabilities -
Accounts receivable		(874,140	)		2,270,598			852,193
Inventories		(3,892,642	)		6,013,355			(7,374,620	)
Prepaids and other current assets		(736,693	)		(165,156	)		(39,647	)
Accounts payable		(804,365	)		(3,803,107	)		5,672,219
Accrued liabilities and other		352,726			(258,149	)		1,439,578
Accrued income taxes		1,519,328			1,009,700			(2,468,382	)

Net cash provided by operating activities		19,924,919			26,279,535			14,317,029


CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Florsheim assets		—			(46,288	)		(48,477,847	)
Purchase of marketable securities		(6,106,521	)		(5,163,270	)		(6,004,234	)
Proceeds from maturities of marketable securities		5,262,953			4,808,799			9,899,355
Purchase of plant and equipment		(1,127,088	)		(9,833,66	)		(8,194,532	)
Proceeds from sales of plant and equipment		230,706			37,623			2,200

Net cash used for investing activities		(1,739,950	)		(10,196,796	)		(52,775,058	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs		—			—			(374,057	)
Cash dividends paid		(2,380,158	)		(2,086,763	)		(1,878,604	)
Shares purchased and retired		—			(3,361,294	)		(195,447	)
Proceeds from stock options exercised		2,203,623			1,012,943			1,064,155
Net (repayments) borrowings under revolving credit facilities		(16,585,294	)		(9,857,162	)		30,292,088

Net cash (used for) provided by financing activities		(16,761,829	)		(14,292,276	)		28,908,135


Net increase (decrease) in cash and cash equivalents		1,423,140			1,790,463			(9,549,894	)


CASH AND CASH EQUIVALENTS, at beginning of year	$	9,091,567		$	7,301,104		$	16,850,998


CASH AND CASH EQUIVALENTS, at end of year	$	10,514,707		$	9,091,567		$	7,301,104


SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds	$	10,037,356		$	7,543,171		$	9,069,613
Interest paid	$	509,125		$	1,383,664		$	893,957

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

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2004, 2003 and 2002

1. NATURE OF OPERATIONS

Weyco Group, Inc. is a U.S. based distributor of men’s branded footwear. The Company’s brands include Florsheim, Nunn Bush, Nunn Bush NXXT, Brass Boot, Stacy Adams and SAO by Stacy Adams. The Company’s products are primarily sold to unaffiliated retailers throughout the United States. The Company also has a wholesale operation in Europe and has licensing agreements with third parties to sell its products internationally. In addition, the Company also operates a retail division which is comprised of 29 retail stores in the United States, three in Europe, and an internet business.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation - The consolidated financial statements include the accounts of Weyco Group, Inc. and all subsidiaries (the “Company”). All significant intercompany items are eliminated in the consolidated financial statements.

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 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, 2004 and 2003, approximately $6.9 million and $6.3 million, respectively, of the Company’s cash and cash equivalents were held at one bank.

Inventories - Inventories are valued at cost, which is not in excess of market. Substantially all 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. The Company takes title to product at the time of shipping. See Note 6.

Plant and Equipment and Depreciation - Plant and equipment are stated at cost and depreciated using primarily the straight-line method over their estimated useful lives as follows: buildings and improvements, 10 to 39 years; machinery and equipment, 5 to 10 years; furniture and fixtures, 5 to 7 years.

Impairment of Long-Lived Assets - Plant and equipment and other long-term assets are reviewed for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. 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. There were no significant adjustments to the carrying value of long-lived assets in fiscal 2004, 2003, or 2002.

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. See Note 11.

Financial Instruments – The Company has entered into forward exchange contracts for the purpose of hedging against foreign currency risk. At December 31, 2004, the Company has financial contracts outstanding to sell 3,000,000 Canadian dollars at a total price of $2,293,000. These contracts all expire in 2005. Based upon year-end exchange rates, there were no significant gains or losses on outstanding contracts.

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. Revenue from third party licensing agreements is recognized in the period earned. For December 31, 2004, 2003 and 2002, licensing revenues were $3,937,000, $3,576,000 and $1,671,000, respectively.

Shipping and Handling Fees - The Company classifies shipping and handling fees billed to customers as revenues. The corresponding shipping and handling expenses are included in selling and administrative expenses and totaled $888,000, $1,174,000 and $1,118,000 for 2004, 2003 and 2002, respectively.

Advertising Costs - Advertising costs are expensed as incurred. Total advertising costs were $9,214,000, $9,265,000 and $6,426,000 in 2004, 2003 and 2002, 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 reduced net sales by $3,996,000, $3,838,000 and $2,842,000 for 2004, 2003 and 2002, respectively.

Foreign Currency Translation - Foreign currency balance sheet accounts are translated into U.S. dollars at the rates of exchange in effect at fiscal year end. Income and expenses are translated at the average rates of exchange in effect during the year. The related translation adjustments are made directly to a separate component of Shareholders’ Investment.

Earnings Per Share - Basic earnings per share excludes any dilutive effects of common stock options. Diluted earnings per share includes any dilutive effects of common stock options. See Note 15.

Comprehensive Income - Comprehensive Income includes net earnings and changes in Accumulated Other Comprehensive Income (Loss). The Company has chosen to report Comprehensive Income and Accumulated Other Comprehensive Income (Loss) in the Consolidated Statements of Shareholders’ Investment. At December 31, 2004 and 2003, Accumulated Other Comprehensive Income consisted entirely of cumulative translation adjustment gains.

Stock-Based Compensation - At December 31, 2004, the Company has two stock-based employee compensation plans, which are described more fully in Note 17. The Company accounts for those plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and related interpretations.

New Accounting Pronouncement – In December 2004, the FASB issued SFAS No. 123(R ), “Accounting for Stock-Based Compensation”. The revised statement establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. This statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS No. 123® requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is to be recognized over the period during which the employee is required to provide service in exchange for the award. The provisions of the revised statement are effective for the first interim reporting period that begins after June 15, 2005. Accordingly, the Company will change its method of accounting for employee stock-based compensation from the recognition and measurement principles of APB Opinion No. 25 to a fair value method commencing with the quarter ending September 30, 2005. The Company is currently evaluating the impact this pronouncement will have on its financial statements.

3. ACQUISITION

As part of the asset purchase agreement, the Company also agreed to purchase certain assets of Florsheim Europe S.r.l. and Florsheim France SARL , two wholly-owned subsidiaries of Florsheim. The acquisition of Florsheim Europe closed on July 1, 2002 for approximately $400,000 plus the assumption of operating liabilities. The acquisition of Florsheim France closed on July 27, 2002, for approximately $10,000 plus the assumption of certain operating liabilities. The domestic and foreign assets acquired and liabilities assumed are collectively referred to as the “Acquired Business.”

The total purchase price of the Acquired Business was $48.5 million, including $1.7 million of acquisition costs. The acquisition was accounted for using the purchase method of accounting and accordingly, the purchase price was allocated on a preliminary basis to identifiable assets acquired and liabilities assumed based upon their estimated fair values. The purchase price was finalized in 2003, resulting in a $46,000 net increase in the value of the trademark since December 31, 2002. The results of operations of the Acquired Business have been included in the consolidated financial statements since the respective dates of acquisition.

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” the acquired Florsheim trademark of $10.9 million is not being amortized, as it has an indefinite life. The Company completed an impairment test of the acquired trademark as of December 31, 2004, and found that no impairment currently exists.

The following table sets forth the unaudited proforma information for the Company as if the acquisition of the Acquired Business had occurred as of the beginning of 2002 (in thousands, except per share data):


	2002
Net sales	$	214,399
Net earnings	$	15,056

Basic earnings per share	$	2.67
Diluted earnings per share	$	2.62

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of all short-term financial instruments, except marketable securities, approximate fair value due to the short-term nature of those instruments. Marketable securities are carried at amortized cost. The fair value of marketable securities is estimated based upon quoted market rates (See Note 5). The carrying amount of short-term borrowings approximates fair value as it bears interest at current market rates.

5. INVESTMENTS

All of the Company’s investments are classified as held-to-maturity securities and reported at amortized cost pursuant to SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” as the Company has the intent and ability to hold all security investments to maturity.

A summary of the amortized cost and estimated market values of investment securities at December 31, 2004 and 2003 are as follows:


	2004				2003
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
Municipal bonds :
Current	$	180,000	$	180,702	$	4,206,100	$	4,045,776
Due from one through five years		6,397,040		6,608,618		4,374,350		4,644,362
Due from five through ten years		3,526,755		3,542,210		880,000		880,000
Due from ten through twenty years		1,200,000		1,207,250		1,019,288		1,026,353
Due from twenty through thirty years		—		—		—		—

Total	$	11,303,795	$	11,538,780	$	10,479,738	$	10,596,491

The unrealized gains and losses on investment securities at December 31 are:


	2004				2003
	Unrealized		Unrealized		Unrealized		Unrealized
	Gains		Losses		Gains		Losses
Municipal bonds	$	253,976	$	18,991	$	313,495	$	196,742

6. INVENTORIES

At December 31, 2004 and 2003, inventories consist of:


	2004			2003
Finished shoes	$	60,033,352		$	56,140,114
LIFO reserve		(12,413,132	)		(12,412,536	)

Total inventories	$	47,620,220		$	43,727,578

Finished shoes include inventory in-transit of $12,788,331 and $16,260,020 as of December 31, 2004 and 2003, respectively.

7. PLANT AND EQUIPMENT

At December 31, 2004 and 2003, plant and equipment consists of:


	2004			2003
Land	$	2,653,935		$	2,645,566
Buildings and improvements		19,541,497			19,526,186
Machinery and equipment		15,009,999			16,167,204
Retail fixtures and leasehold improvements		3,210,567			2,575,294

Plant and equipment		40,415,998			40,914,250
Less: accumulated depreciation		(12,505,694	)		(11,224,993	)

Plant and equipment, net	$	27,910,304		$	29,689,257

8. OTHER ASSETS

Other Assets include the following amounts at December 31:


	2004		2003
Pension asset (See Note 10)	$	6,480,681	$	6,837,669
Cash surrender value of life insurance		7,393,125		6,813,957
Unamortized debt issuance costs		—		60,878
Other investments		30,200		38,070

	$	13,904,006	$	13,750,574

9. SHORT-TERM BORROWINGS

At December 31, 2004, the Company had a 364-day $50 million unsecured Revolving Line of Credit (the “Line of Credit”) with a single bank expiring April 30, 2005. The Line of Credit allows for the issuance of up to $25 million in non-rated commercial paper at market interest rates and additional bank borrowings at a rate of LIBOR plus 150 basis points. The Line of Credit includes certain financial covenants, including minimum net worth levels, minimum levels of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and a maximum ratio of funded debt to EBITDA. As of December 31, 2004, the Company was in compliance with all covenants. Outstanding borrowings under the Line of Credit at December 31, 2004 consisted of $11.4 million of commercial paper with an average interest rate of 2.42%.

At December 31, 2003, outstanding borrowings under a prior $50 million line of credit were $27.9 million, consisting of $17.9 million of commercial paper with an average interest rate of 1.39% and $10 million of bank borrowings with an average interest rate of 2.7%. All debt issuance costs related to this previous line of credit have been fully amortized by December 31, 2004.

10. EMPLOYEE RETIREMENT PLANS

The Company had two defined benefit retirement plans covering substantially all employees which were combined into one plan as of December 31, 2003, 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 plans also have provisions for disability and death benefits. The Company’s funding policy for the defined benefit retirement 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’s pension plan weighted average asset allocation at December 31, 2004 and 2003, by asset category, is as follows:


	Plan Assets at December 31
	2004			2003
Asset Category -
Equity Securities		52	%		51	%
Fixed Income Securities		42	%		48	%
Other		6	%		1	%

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% - 100%; fixed income securities: 80% - 20%; 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 8.5% long-term rate of return on assets assumption.

Assumptions used in determining the funded status at December 31 are:


	2004			2003
Discount rate		5.75	%		6.0	%
Rate of compensation increase		4.5	%		4.5	%

All plans have a measurement date of December 31. The following is a reconciliation of the change in benefit obligation and plan assets for the years ended December 31, 2004 and 2003:

Change in projected benefit obligation


	2004			2003
Projected benefit obligation, beginning of year	$	27,097,000		$	22,283,000
Service cost		785,000			571,000
Interest cost		1,584,000			1,463,000
Plan amendments		713,000			75,000
Actuarial (gain) loss		(578,000	)		4,020,000
Benefits paid		(1,338,000	)		(1,316,000	)

Projected benefit obligation, end of year	$	28,263,000		$	27,096,000


Change in plan assets

Fair value of plan assets, beginning of year	$	24,021,000		$	20,295,000
Actual return on plan assets		1,834,000			4,870,000
Administrative expenses		(50,000	)		—
Contributions		120,000			172,000
Benefits paid		(1,338,000	)		(1,316,000	)

Fair value of plan assets, end of year	$	24,587,000		$	24,021,000


Funded status of plan	$	(3,676,000	)	$	(3,075,000	)
Unrecognized net actuarial loss		5,943,000			6,648,000
Unrecognized prior service cost		901,000			187,000

Net amount recognized	$	3,168,000		$	3,760,000


Amounts recognized in the balance sheets consist of:

Other assets	$	6,481,000		$	6,837,000
Long-term pension liability		(3,313,000	)		(3,077,000	)

Net amount recognized	$	3,168,000		$	3,760,000

The accumulated benefit obligation for the defined benefit pension plans was $24,954,000 and $23,562,000 at December 31, 2004 and 2003, respectively.

Information for the supplemental pension plan which has an accumulated benefit obligation in excess of plan assets:


	2004		2003
Projected benefit obligation	$	3,816,000	$	3,887,000
Accumulated benefit obligation	$	3,198,000	$	2,977,000
Fair value of pension assets	$	—	$	—

Assumptions used in determining net periodic pension cost at December 31 are:


	2004			2003			2002
Discount rate		6.0	%		6.75	%		7.25	%
Rate of compensation increase		4.5	%		5.0	%		5.0	%
Long-term rate of return on plan assets		8.5	%		8.5	%		8.5	%

The components of net periodic pension cost for the years ended December 31, 2004, 2003 and 2002, are:


	2004			2003			2002
Benefits earned during the period	$	785,000		$	571,000		$	498,000
Interest cost on projected benefit obligation		1,584,000			1,463,000			1,339,000
Expected return on plan assets		(1,993,000	)		(1,674,000	)		(1,738,000	)
Net amortization and deferral		337,000			440,000			(85,000	)
Curtailment loss		—			192,000			—

Net pension expense	$	713,000		$	992,000		$	14,000

The Company does not expect to make any contributions to its defined benefit pension plans in 2005.

Projected benefit payments for the plans as of December 31, 2004 are estimated as follows:


2005	$	1,513,000
2006		1,647,000
2007		1,658,000
2008		1,720,000
2009		1,723,000
2010-2014		9,034,000

The Company also has a defined contribution plan covering substantially all employees. The Company contributed $136,000, $125,000 and $106,000 to the plan in 2004, 2003 and 2002, respectively.

11. INCOME TAXES

The provision for income taxes includes the following components:


	2004			2003			2002
Current -
Federal	$	9,493,000		$	6,884,000		$	5,434,000
State		1,711,000			1,426,000			1,023,000
Foreign		234,000			266,000			179,000

Total		11,438,000			8,576,000			6,636,000
Deferred		1,187,000			979,000			1,164,000

Total provision	$	12,625,000		$	9,555,000		$	7,800,000

Effective tax rate		38.4	%		35.8	%		37.2	%

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, 2004, 2003 and 2002:


	2004			2003			2002
U. S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		3.4			3.4			3.1
Non-taxable municipal bond interest		(0.5	)		(0.6	)		(1.2	)
Resolution of prior period tax matters		—			(2.4	)		—
Other		0.5			0.4			0.3

		38.4	%		35.8	%		37.2	%

During 2003, the Company resolved certain matters related to an audit of its 1996 federal income tax return. The settlement had a favorable impact on the Company’s 2003 tax provision, as the Company had previously provided an amount in excess of the final settlement.

The foreign component of pretax net earnings was $884,000, $810,000 and $664,000 for 2004, 2003 and 2002, respectively.

The components of deferred taxes as of December 31, 2004 and 2003, are as follows:


	2004			2003
Deferred tax assets:
Accounts receivable reserves	$	896,000		$	784,000
Deferred compensation		621,000			1,176,000
Accrued Liabilities		1,470,000			1,181,000
Other		121,000			183,000

		3,108,000			3,324,000


Deferred tax liabilities:
Inventory reserves		(1,181,000	)		(841,000	)
Pension asset		(1,235,000	)		(1,536,000	)
Cash value of life insurance		(1,497,000	)		(1,332,000	)
Depreciation		(2,040,000	)		(1,761,000	)
Other		(869,000	)		(380,000	)

		(6,822,000	)		(5,850,000	)

Net deferred tax liability	$	(3,714,000	)	$	(2,526,000	)

The net deferred tax liability is classified in the consolidated balance sheets as follows:


	2004			2003
Current deferred income tax benefits	$	1,681,000		$	2,483,000
Noncurrent deferred income tax liabilities		(5,395,000	)		(5,009,000	)

	$	(3,714,000	)	$	(2,526,000	)

12. DEFERRED COMPENSATION

The Company expensed $48,000 in 2004, $197,000 in 2003 and $184,000 in 2002 in connection with deferred compensation agreements established with certain former executives. Amounts owed under these agreements are included in Accrued Wages, Salaries and Commissions on the Consolidated Balance Sheets. Obligations of $1.4 million were paid under these agreements in March 2004, and the remaining balance was paid in February 2005.

13. OPERATING LEASES

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. Total minimum rents were $2,632,000 in 2004, $2,569,000 in 2003, and $1,686,000 in 2002. Percentage rentals were $21,000 in 2004, $16,000 in 2003, and $36,000 in 2002.

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, 2004, are shown below. Renewal options exist for many long-term leases.


2005	$	2,547,000
2006		2,136,000
2007		1,446,000
2008		717,000
2009		661,000
Thereafter		2,950,000

Total	$	10,457,000

14. SHAREHOLDERS’ INVESTMENT

Each share of Class B common stock has 10 votes, may only be transferred to certain permitted transferees, is convertible to one share of common stock at the holder’s option and shares equally with the common stock in cash dividends and liquidation rights. Any outstanding shares of Class B Common Stock will convert into common stock on July 1, 2007.

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. The Company also buys back shares of its common stock from time to time in private transactions at prevailing prices. During 2002, the Company purchased 5,000 shares at a total cost of $126,750 under the program, and 2,500 shares at a total cost of $68,697 in private transactions. During 2003, the Company purchased 95,300 shares at a total cost of $2,862,992 under the program, and 14,850 shares at a total cost of $498,302 in private transactions. There were no repurchases of common shares in 2004. At December 31, 2004, the Company is authorized to buy an additional 813,100 shares under the program.

15. EARNINGS PER SHARE

The following table sets forth the computations of basic and diluted earnings per share:


	2004		2003		2002
Numerator:
Net earnings	$	20,277,674	$	17,134,801	$	13,187,918


Denominator:
Basic weighted average shares outstanding		5,690,185		5,693,716		5,640,291
Effect of dilutive securities :
Employee stock options		190,954		184,571		113,151

Diluted weighted average shares outstanding		5,881,139		5,878,287		5,753,442


Basic earnings per share	$	3.56	$	3.01	$	2.34

Diluted earnings per share	$	3.45	$	2.91	$	2.29

Diluted weighted average shares outstanding for 2004 exclude outstanding options to purchase 6,262 shares of common stock at a weighted average price of $37.17 because they are antidilutive. 2003 diluted weighted average shares outstanding exclude outstanding options to purchase 154,875 shares of common stock at a weighted average price of $33.70 because they were antidilutive. 2002 diluted weighted average shares outstanding exclude outstanding options to purchase 143,850 shares of common stock at a weighted average price of $24.21 because they were antidilutive.

16. SEGMENT INFORMATION

The Company determines its operating segments based on the information utilized by the Chief Executive Officer to allocate resources and assess performance. Based upon this criteria, the Company has determined that it operates in two business segments: wholesale distribution and retail sales of men’s footwear.

Wholesale shoes are marketed through more than 10,000 shoe, clothing and department stores. Most sales are to unaffiliated customers in North America, with some distribution in Europe. In 2004 and 2003, sales to the Company’s largest customer were 12% of total sales. There were no customers that accounted for 10% or more of total sales in 2002. There are no other individually significant customers.

In the retail division, the Company currently operates 29 company-owned stores in principal cities in the United States, three stores in Europe, and an internet business. 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 in order to provide the consumer with as complete a selection as practically possible.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies. The Company evaluates performance based on earnings from operations before income taxes. Summarized segment data for 2004, 2003 and 2002 are as follows:


	Wholesale
	Distribution		Retail		Total
2004
Product sales	$	192,629,000	$	26,447,000	$	219,076,000
Licensing revenues		3,937,000		—		3,937,000

Net sales		196,566,000		26,447,000		223,013,000
Depreciation		1,756,000		761,000		2,517,000
Earnings from operations		28,567,000		4,385,000		32,952,000
Total assets		149,205,000		7,151,000		156,356,000
Capital expenditures		403,000		724,000		1,127,000

2003
Product sales	$	187,327,000	$	24,858,000	$	212,185,000
Licensing revenues		3,576,000		—		3,576,000

Net sales		190,903,000		24,858,000		215,761,000
Depreciation		1,603,000		720,000		2,323,000
Earnings from operations		23,388,000		3,873,000		27,261,000
Total assets		144,380,000		6,806,000		151,186,000
Capital expenditures		9,241,000		593,000		9,834,000

2002
Product sales	$	163,644,000	$	15,885,000	$	179,529,000
Licensing revenues		1,671,000		—		1,671,000

Net sales		165,315,000		15,885,000		181,200,000
Depreciation		1,619,000		486,000		2,105,000
Earnings from operations		19,334,000		2,072,000		21,406,000
Total assets		142,955,000		6,284,000		149,239,000
Capital expenditures		8,113,000		82,000		8,195,000

All corporate assets are included in the wholesale distribution segment. Net sales above exclude intersegment sales.

17. STOCK-BASED COMPENSATION PLANS

The Company has two stock option plans: the 1996 Nonqualified Stock Option Plan and the 1997 Stock Option Plan. Under the plans, options to purchase common stock are granted to officers and key employees at prices not less than the fair market value of the common stock on the date of the grant. All options are fully vested six months after the date of grant, and most expire ten years from the grant date, with the exception of certain incentive stock options, which expire five years from the grant date. No stock-based employee compensation expense has been reflected in net income, as all options granted under those plans had an exercise price equal to or greater than the market value of the underlying common stock on the date of grant.

The following table summarizes the stock option activity under the Company’s plans for the years ended December 31:


	2004					2003					2002
				Weighted					Weighted					Weighted
				Average					Average					Average
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price
Outstanding at beginning of year		818,850		$	19.91		722,481		$	16.76		650,250		$	14.90
Granted		56,950			31.55		154,125			33.70		143,850			24.21
Exercised		(112,257	)		19.63		(57,756	)		17.49		(71,619	)		14.86
Forfeited		(750	)		33.58		—			—		—			—

Outstanding at end of year		762,793		$	20.81		818,850		$	19.91		722,481		$	16.76


Exercisable at end of year		761,943		$	20.79		818,850		$	19.91		578,631		$	14.91
Weighted average fair market value of options granted	$	11.11				$	11.28				$	7.58

The following table summarizes information about stock options outstanding at December 31, 2004:


			Weighted						Weighted
			Average						Average
Range of	Options		Remaining		Weighted Average		Options		Exercise Price of
Exercise Price	Outstanding		Contractual Life		Exercise Price		Exercisable		Exercisable Options
$9.06		87,750		1.93	$	9.06		87,750	$	9.06
$14.50 to $18.70		362,568		4.79		15.94		362,568		15.94
$24.08 to $30.91		161,625		7.83		26.04		161,625		26.04
$33.58 to $38.65		150,850		8.22		33.73		150,000		33.70

		762,793		3.07	$	20.81		761,943	$	20.79

At December 31, 2004, there are no shares remaining for stock option grants under the plans.

The following table illustrates the effect on net income and earnings per share as if the Company had applied the fair value recognition provisions of FASB Statement No. 123, “Accounting for Stock-Based Compensation”, as amended by SFAS No. 148, to stock-based employee compensation.


	2004		2003		2002
Net earnings, as reported	$	20,277,674	$	17,134,801	$	13,187,918
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		380,854		1,141,734		721,857


Pro forma net income	$	19,896,820	$	15,993,067	$	12,466,061


Earnings per share
Basic - as reported	$	3.56	$	3.01	$	2.34
Basic - pro forma	$	3.50	$	2.81	$	2.21

Diluted - as reported	$	3.45	$	2.91	$	2.29
Diluted - pro forma	$	3.38	$	2.72	$	2.17

The fair market value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used:


	2004			2003			2002
Risk-free interest rate		4.15	%		4.06	%		3.69	%
Expected dividend yields		1.22	%		1.30	%		1.45	%
Expected remaining life	8.8 yrs.			8.8 yrs.			8.8 yrs.
Expected volatility		26.0	%		25.0	%		25.0	%

18. QUARTERLY FINANCIAL DATA (Unaudited)


2004	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Net sales	$	61,743,369	$	49,786,360	$	55,841,100	$	55,642,505	$	223,013,334
Gross earnings	$	21,258,659	$	18,169,995	$	19,974,380	$	23,592,517	$	82,995,551
Net earnings	$	5,152,696	$	3,974,215	$	4,370,232	$	6,780,531	$	20,277,674
Net earnings per share
- Basic	$	.91	$	.70	$	.76	$	1.18	$	3.56
- Diluted	$	.88	$	.68	$	.74	$	1.14	$	3.45


2003	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Net sales	$	60,379,924	$	51,000,284	$	49,817,256	$	54,563,067	$	215,760,531
Gross earnings	$	20,184,824	$	17,613,896	$	17,042,947	$	21,603,366	$	76,445,033
Net earnings	$	4,671,194	$	3,593,444	$	3,508,974	$	5,361,189	$	17,134,801
Net earnings per share
- Basic	$	.82	$	.63	$	.62	$	.94	$	3.01
- Diluted	$	.80	$	.61	$	.59	$	.91	$	2.91

19. SUBSEQUENT EVENT

On January 31, 2005, the Company’s Board of Directors approved a two-for-one split of the Company’s Common Stock and Class B Common Stock, without a change in par value of either class. The stock split will be distributed April 1, 2005 to shareholders of record on February 16, 2005. The Company will issue approximately 4.4 million additional shares of Common Stock and approximately 1.3 million additional shares of Class B Common Stock in connection with the stock split. Pro forma earnings per share amounts on a post-split basis for the years ended December 31, 2004, 2003 and 2002 would be as follows:


	2004		2003		2002
Basic earnings per share
As Reported	$	3.56	$	3.01	$	2.34
Pro forma	$	1.78	$	1.50	$	1.17

Diluted earnings per share
As Reported	$	3.45	$	2.91	$	2.29
Pro forma	$	1.72	$	1.46	$	1.15

Information presented throughout this document has not been restated to reflect the two-for-one stock split.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Weyco Group, Inc.:

We have audited the accompanying consolidated balance sheets of Weyco Group, Inc. and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and the related consolidated statements of earnings, shareholders’ investment, and cash flows for each of the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements 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 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 audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Weyco Group, Inc. and subsidiaries as of December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 7, 2005 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 7, 2005

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Weyco Group, Inc.:

We have audited management’s assessment, included in the accompanying “Management’s Report on Internal Control Over Financial Reporting,” that Weyco Group, Inc. and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel 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. 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 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 financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2004 of the Company and our report dated March 7, 2005 expressed an unqualified opinion on those financial statements.

DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 7, 2005

MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING

Management of Weyco Group, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. 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 management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004. 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. Based on our assessment we believe that, as of December 31, 2004, the Company’s internal control over financial reporting is effective based on those criteria.

The Company’s independent registered public accounting firm has issued an audit report on our assessment of the Company’s internal control over financial reporting, as stated in their report which is included herein.

Thomas W. Florsheim, Jr.
Chairman and Chief Executive Officer
March 7, 2005

John Wittkowske
Senior Vice President and Chief Financial Officer
March 7, 2005

DIRECTORS

Thomas W. Florsheim

Chairman Emeritus

Thomas W. Florsheim, Jr.

Chairman and Chief Executive Officer

John W. Florsheim

President and Chief Operating Officer

Robert Feitler

Chairman, Executive Committee

Leonard J. Goldstein

Retired,

Former Chairman, President and Chief Executive Officer,

Miller Brewing Company

Frederick P. Stratton, Jr.

Chairman Emeritus

Briggs & Stratton Corporation,

Manufacturer of Gasoline Engines

OFFICERS

Thomas W. Florsheim, Jr.

Chairman and Chief Executive Officer

John W. Florsheim

President and Chief Operating Officer

James F. Gorman

Senior Vice President (Retired February 28, 2005)

Peter S. Grossman

Senior Vice President

John F. Wittkowske

Senior Vice President, Chief Financial Officer and Secretary

SUPPLEMENTAL INFORMATION

Annual Meeting

Shareholders are invited to attend Weyco Group, Inc.’s 2005 Annual Meeting at 10:00 a.m. on April 26, 2005, at the general offices of the Company, 333 W. Estabrook Boulevard, Glendale, Wisconsin.

Stock Exchange

The Company’s Common Stock (symbol WEYS) is listed on the NASDAQ Market System (NMS).

Transfer Agent and Registrar

American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038

Company Headquarters

Weyco Group, Inc.
333 W. Estabrook Boulevard
Glendale, WI 53212
414-908-1600
www.weycogroup.com

Other Information

Copies of the Company’s Annual Report to the Securities and Exchange Commission (Form 10-K), its Quarterly Reports to the Securities and Exchange Commission (Form 10-Q’s), or its Code of Business Ethics will be furnished without charge to any shareholder (including beneficial owners) upon written or telephone request.

Written requests should be sent to Investor Relations, Weyco Group, Inc., P. O. Box 1188, Milwaukee, Wisconsin 53201 or e-mailed to Investor.Relations@weycogroup.com . Telephone inquires should be made to (414) 908-1600.

EXHIBIT 21

WEYCO GROUP, INC.

SUBSIDIARIES OF THE REGISTRANT


	Incorporated
Name of Company	In	Subsidiary Of
Weyco Investments, Inc.	Nevada	Weyco Group, Inc.

Weyco Merger, Inc.	Wisconsin	Weyco Group, Inc.

Weyco Retail Corp.	Wisconsin	Weyco Group, Inc.

Florsheim Shoes Europe S.r.l.	Milan, Italy	Weyco Group, Inc.

Weyco France SARL	Paris, France	Weyco Group, Inc.

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-03025 and 333-56035 on Form S-8 of our reports dated March 7, 2005, relating to the consolidated financial statements and consolidated financial statement schedule of Weyco Group, Inc. and management’s report of the effectiveness of internal control over financial reporting, appearing in and incorporated by reference in this Annual Report on Form 10-K of Weyco Group, Inc. for the year ended December 31, 2004.

/s/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin
March 10, 2005

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 annual 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures or caused such disclosure controls 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 annual report is being prepared;

b) 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 based as of the end of the period covered by this report based on such evaluation; and

c) 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

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 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 11, 2005

/s/ Thomas W. Florsheim, Jr.

Thomas W. Florsheim, Jr.

Chairman and Chief Executive Officer

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.;

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 11, 2005

/s/ John F. Wittkowske

John F. Wittkowske

Senior Vice President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Weyco Group, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2004 as filed with the Securities & Exchange Commission on the date hereof (the “Report”), I, Thomas W. Florsheim, Jr., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas W. Florsheim, Jr.

Thomas W. Florsheim, Jr.

Chief Executive Officer
March 11, 2005

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.

EXHIBIT 32.2

CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Weyco Group, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2004 as filed with the Securities & Exchange Commission on the date hereof (the “Report”), I, John F. Wittkowske., Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John F. Wittkowske

John F. Wittkowske

Chief Financial Officer
March 11, 2005

/s/ John Wittkowske

March 11, 2005

John Wittkowske, Senior Vice President – Chief Financial Officer

	(a)	Each share of Class B Common Stock may at any time or from time to time, at the option of the record holder thereof, be converted into one (1) fully paid and nonassessable share of Common Stock. Such conversion right shall be exercised by the surrender of the certificate representing such share of Class B Common Stock to be converted to the corporation at any time during normal business hours at the principal executive offices of the corporation (to the attention of the Secretary of the corporation), or if an agent for the registration or transfer of shares of Class B Common Stock is then duly appointed and acting (said agent being referred to in this Article III as the “Transfer Agent”), then at the office of the Transfer Agent, accompanied by (i) a written notice of the election by the holder thereof to convert and (ii) (if so required by the corporation or the Transfer Agent) by instruments of transfer, in form satisfactory to the corporation and to the Transfer Agent, duly executed by such holder or his duly authorized attorney, and (iii) transfer tax stamps or funds therefor, if required pursuant to Paragraph 4(e) below.

	(b)	As promptly as practicable after the surrender for conversion of a certificate representing shares of Class B Common Stock in the manner provided in Paragraph 4(a) above, and the payment in



	/s/ John F. Wittkowske
	John F. Wittkowske
	Senior Vice President and Chief Financial Officer



/s/ Thomas W. Florsheim, Jr.
Thomas W. Florsheim, Jr.
Chief Executive Officer March 11, 2005



/s/ John F. Wittkowske
John F. Wittkowske
Chief Financial Officer March 11, 2005