WELLCO ENTERPRISES, INC.
150 Westwood Circle
P.O. Box 188
Waynesville, North Carolina 28786
October 18, 2002
NOTICE OF ANNUAL MEETING
OF
STOCKHOLDERS
The annual meeting of stockholders of Wellco Enterprises, Inc. will be held in
the cafeteria of the Company's Waynesville, North Carolina, plant, located at
150 Westwood Circle, on Tuesday, November 19, 2002, at 3:00 P.M., EST, for the
purpose of taking action on the election of directors as more particularly
described in the accompanying Proxy Statement and such other matters as may
properly come before the meeting.
Only stockholders of record at the close of business on October 18, 2002, will
be entitled to vote at the meeting. This Notice and the accompanying Proxy
Statement are being mailed to stockholders on approximately October 25, 2002.
By Order of the Board of Directors
RICHARD A. WOOD, JR.
SECRETARY
YOUR VOTE IS IMPORTANT. EVEN IF YOU DO NOT PLAN TO
ATTEND THE MEETING, PLEASE RETURN YOUR SIGNED
PROXY!
Please complete and promptly return your Proxy in the postpaid envelope
provided. This will not prevent you from voting in person at the meeting. It
will, however, help to assure a quorum and avoid added proxy solicitation costs.
Wellco Enterprises, Inc.
150 Westwood Circle
P.O. Box 188
Waynesville, North Carolina 28786
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Wellco
Enterprises, Inc. (the "Company") for use at the 2002 Annual Stockholders
Meeting of the Company, to be held on November 19, 2002, and at any adjournment
thereof. The cost of solicitation will be borne by the Company. Mellon
Shareholder Services LLP, the transfer agent for the Company, has been retained
to assist in obtaining proxies, including proxies from brokerage houses and
others with respect to shares registered in their names but beneficially owned
by others, by such means as Mellon Shareholder Services LLP deems appropriate,
at a cost to the Company presently estimated at $5,000. Such brokerage houses
and others will be reimbursed for their out-of-pocket expenses incurred. Proxies
may also be solicited by some directors, officers or employees of the Company,
in person or by mail, telephone or telefax, without extra compensation to them.
The shares represented by the proxies received will be voted at the meeting, or
any adjournment thereof. On matters coming before the meeting as to which a
choice has been specified by the stockholder by means of the ballot on the
proxy, the shares represented will be voted accordingly. If no choice is so
specified, the shares will be voted in favor of the matters set forth in the
foregoing notice of meeting. The accompanying proxy appoints as proxy holders
Director Claude S. Abernethy, Jr., Vice-Chairman Rolf Kaufman and Director John
D. Lovelace(and each of them with full power of substitution, or any one of more
of them acting in the absence of the others) to vote at the Annual Meeting all
shares covered by the proxy. Management does not know of any other matters which
will be presented for action at the meeting, but the appointed proxy holders
intend to vote or act with respect to any other proposal which may be presented
for action, and matters incident to the conduct of the meeting, according to
their judgment in light of conditions then prevailing except as to election of
substitute nominees for director, as to which proxies will be voted for nominees
designated as hereinafter stated. Executed proxies may be revoked by written
revocation or later dated proxy delivered to the Secretary prior to or at the
meeting. Also, stockholders who are present at the meeting may withdraw their
proxies and vote in person if they so desire.
Stockholders of record at the close of business on October 18, 2002, will be
entitled to vote at the meeting. On that date, there were outstanding 1,182,746
shares of the Company's common stock. Each stockholder is entitled to one vote
for each share of stock on all matters to be presented at the meeting. A
plurality vote of the shares represented at the meeting, in person or by proxy,
is necessary for the election of each director. Cumulative voting is not
available at the meeting.
-2-
Stockholders having questions concerning the matters to be considered at the
meeting are invited to telephone the Company at (828) 456-3545, extension 102.
BOARD OF DIRECTORS
The Company's Board of Directors consists of nine directors divided into three
classes with each class having three directors serving for a term of three
years.
Your Board of Directors unanimously recommends the reelection of James T.
Emerson, David Lutz and Fred K. Webb, Jr. as Class II directors, whose terms
will expire in 2005. All of said nominees have consented in writing to serve if
elected.
The class, period of service as a director, age and principal occupation for at
least the past five years of each nominee for director and each person whose
term of office as a director will continue after the meeting are as follows:
NOMINEES FOR ELECTION:
Class II Directors Whose Term Expires in 2005:
- ---------------------------------------------
James T. Emerson has been a Director of the Company since January, 1996 and
previously served as a Director from 1988 until 1993, and is 80 years of age. He
was an industrial instrumentation engineer and consultant (retired 1983), and is
an investor. He is the uncle of Director/Vice President Fred K. Webb, Jr. and
Director John D. Lovelace. Director Katherine J. Emerson is married to the
nephew of James T. Emerson.
David Lutz has been a Director of the Company since January, 1996 and previously
served as a Director from 1984 until 1992. As of January 1, 2002, he is Chief
Executive Officer, President, Chief Operating Officer and Treasurer of the
Company and is 57 years of age. Since October, 1996, he served as President and
Chief Operating Officer and Treasurer of the Company. He served as Executive
Vice President and Treasurer of the Company from May until October, 1996, as
Secretary/Treasurer from 1986 until May 1996 and as Controller from 1974 until
1986.
Fred K. Webb, Jr. has been a Director of the Company since January, 1996. He is
Vice President of Marketing of the Company (since February 1999) and is 42 years
of age. He previously held the position of Special Projects Manager with the
Company ( August 1998 until February 1999). Before joining the Company, he was
employed as an Accounting Team Leader (since 1995) and Senior Staff Accountant
(since 1989) for United Guaranty Corporation (an insurance holding company). He
is the nephew of Director James T. Emerson and the cousin of Director John D.
Lovelace. Director Katherine J. Emerson is married to the cousin of Fred K.
Webb, Jr..
-3-
DIRECTORS CONTINUING IN OFFICE:
Class III Directors Whose Term Expires in 2003:
- ----------------------------------------------
Claude S. Abernethy, Jr. has been a Director of the Company since 1997 and
previously served as a Director from 1976 until 1994 and is 75 years of age. He
is Senior Vice President of IJL Wachovia (a securities brokerage firm), and a
Director of Air T Inc., Carolina Mills, Inc. and Director Emeritus of IJL
Wachovia, a division of Wachovia Securities, Inc.
Horace Auberry has been a Director of the Company since 1964 and is 71 years of
age. He is Chairman, Board of Directors and as of January 1, 2002 consultant to
the Company. He was Chairman, Board of Directors and Chief Executive Officer of
the Company (from October, 1996 until December 31, 2001) and was Chairman of the
Board of Directors and joint Chief Executive Officer from 1968 until October,
1996.
Rolf Kaufman has been a Director of the Company since 1962 and is 72 years of
age. He was President of the Company and joint Chief Executive Officer from 1968
until October 1996. Upon his retirement from the position of President on
September 30, 1996, Mr. Kaufman was elected by the Board of Directors to the
position of Vice Chairman, Board of Directors. As Vice Chairman, Mr. Kaufman is
retired from full time employment as President, while still being significantly
involved in several areas of the Company's business affairs.
Class I Directors for Term Expiring in 2004:
- -------------------------------------------
William M. Cousins, Jr. has been a Director of the Company since 1990 and is 78
years of age. He is President (since 1974) of William M. Cousins, Jr., Inc.
(management consultants), a Director (from 1991 through 1999) of
Alba-Waldensian, Inc. (an apparel manufacturing company) and a director of
Biosphere Medical, Inc. (since 1994).
Katherine J. Emerson is the information systems controller and accountant for
Master Gage and Tool Company (since 1994), a wholesale distributor of precision
measuring and gauging equipment and supplies and is 47 years of age. She is a
certified public accountant. Ms. Emerson is married to the nephew of Director
James T. Emerson, the cousin of Director/Vice President Fred K. Webb, Jr. and
the cousin of Director John D. Lovelace.
John D. Lovelace has been a Director of the Company since 1999 and is 53 years
of age. He is the Vice-President (since 1987) of Credit/Collections for United
Leasing Corporation, a company primarily engaged in the leasing of equipment.
Prior to joining United Leasing, he served as Assistant Vice President of Retail
Banking for United Virginia Bank. He is the nephew of Director James T. Emerson
and the cousin of Director/Vice President Fred K. Webb, Jr.. Director Katherine
J. Emerson is married to the cousin of John D. Lovelace.
-4-
It is intended that shares represented by the accompanying Proxy will be voted
for election of the above nominees unless authority for such vote is withheld.
In the event that any nominees should become unable to serve or for good cause
will not serve, it is intended that such shares will be voted for substitute
nominees designated by the present Board of Directors of the Company.
BOARD AND COMMITTEE MEETINGS
During the Company's last full fiscal year, there was one regular (the 2001
Annual) and two special meetings of the Board of Directors. In addition, the
Company has for a number of years followed the practice, permissible under North
Carolina corporation law, of approving corporate resolutions by unanimous
written consent without meeting. One such resolution was adopted by the Board of
Directors during the Company's last full fiscal year.
The Company has a standing Audit Committee of the Board of Directors. In
accordance with the American Stock Exchange requirements, the Company's Board of
Directors, on May 16, 2000, adopted a written charter for the Audit committee. A
copy of this charter was attached as Exhibit C to the October 13, 2000 Proxy
Statement. All directors not otherwise associated with the Company as an
officer, employee or consultant are designated as members of the Audit Committee
except for James T. Emerson who may not be deemed to be independent as defined
by Section 121(A) of the American Stock Exchange Company Guide. Accordingly,
Directors Cousins, Katherine Emerson, Abernethy and Lovelace were the members of
such Committee for the 2002 fiscal year with Director Cousins serving as
Chairman. All members serving on the Audit Committee are independent as defined
by Section 121(A) of the American Stock Exchange Company Guide.
The Audit Committee held four meetings (three in person and one by phone) during
the Company's last fiscal year at which representatives of the Company's
independent auditors, Deloitte & Touche LLP were present. The Audit Committee
recommends to the Board the firm to be designated as the Company's auditors, and
performs other functions which are stated in the below Audit Committee Report.
The Board has a standing Compensation Committee, and Directors Cousins, James T.
Emerson, Katherine Emerson, Abernethy and Lovelace were the members of such
Committee for the 2002 fiscal year with Director James T. Emerson serving as
Chairman. The Compensation Committee did not formally meet during the 2002
fiscal year.
The Company does not have a standing Nominating Committee. Nominees to serve on
the Board of Directors are determined by a vote of the entire Board of
Directors.
Audit Committee Report
In accordance with its written charter adopted May 16, 2000 by the Board of
Directors (Board), the Audit Committee of the Board (Committee) assists the
Board in fulfilling its
-5-
responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company. During fiscal 2002,
the Committee or the Chairman thereof, held four meetings (three in person and
one by phone), to discuss with management and the independent auditor the
financial information contained in the Securities and Exchange Commission Form
10-Q filing for the three fiscal quarters and the annual Form 10-K.
In discharging its oversight responsibility as to the audit process and
consistent with Independence Standards Board Standard No. 1 ("Independence
Discussions with Audit Committees"), the Audit Committee obtained from the
independent auditors a formal written statement describing all relationships
between the auditors and the Company that might bear on the auditors'
independence. The Committee also discussed with the auditors any relationships
that may impact their objectivity and independence and satisfied itself as to
the auditors' independence. The Committee also discussed with management and the
independent auditors the quality and adequacy of the Company's internal
controls. The Committee reviewed with the independent auditors their audit
plans, audit scope, and identification of audit risks.
The Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees".
The Committee chairman reviewed with the independent auditors and management the
audited financial statements of the Company for the fiscal year ended June 29,
2002. Management has the responsibility for the preparation and content of those
statements.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Committee Chairman recommended, on behalf of the
Committee, to the Board that the Company's audited financial statements be
included in its Annual Report on Form 10-K for the fiscal year ended June 29,
2002, for filing with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Board of Directors
Claude S. Abernethy, Jr. John D. Lovelace
William M. Cousins, Jr., Chairman Katherine Emerson
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the Committee) of the Board of Directors submits
recommendations to the Board of Directors as to the type and amount of
compensation for three executive officers of the Company (Mr. Auberry, Chairman,
Board of Directors; Mr. Lutz, Chief Executive Officer, President, Chief
Operating Officer, and Treasurer; and Mr. Webb, Vice President of Marketing).
The Committee consists of all directors not otherwise associated with the
-6-
Company and, in the 2002 fiscal year, consisted of five members.
The Committee did not formally meet during the year to consider and make
recommendations to the Board of Directors. In the 2002 fiscal year, the Board of
Directors did not modify or reject any action or recommendation of the
Compensation Committee.
The Committee does not use any compensation consultants in making its decisions
and recommendations, and does not relate compensation of the above named
executive officers to that of any other entity or industry grouping.
Each of the named executive officers received an annual cash bonus for said
fiscal year which is based on a specified percentage of consolidated net income,
as defined. Each executive officer's percentage has remained constant for the
past several years. No one of the above named executive officers has a
guaranteed or minimum amount of bonus. Although not a frequent occurrence, the
Committee from time to time may give discretionary additional bonuses for
extraordinary achievement.
All officers of the Company participate in fringe benefit plans (group health
insurance, group life insurance and long-term disability) to the same extent and
under the same terms as all other salaried employees of the Company. Mr. Auberry
and Mr. Lutz each receive perquisites whose value aggregates much less than 10%
of their total annual salary and bonus.
Submitted by the Compensation Committee of the Board of Directors
William M. Cousins, Jr. Claude S. Abernethy, Jr.
Katherine Emerson James T. Emerson, Chairman John D. Lovelace
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee has ever served as an officer or
employee of the Company or had any relationship requiring disclosure by the
Company under any paragraph of Item 404 of Regulation S-K of the Securities and
Exchange Commission. No executive officer of the Company has ever served as a
director or member of the compensation committee of any other entity one of
whose executive officers has ever been a member to the Company's Compensation
Committee or Board of Directors.
COMPENSATION OF DIRECTORS
Directors' fees are $4,250 per year; $1,000 per meeting for each Board meeting
attended in person; $1,000 per meeting for each committee meeting attended in
person that is held apart from the day of a Board meeting; and $500 for each
committee and Board phone meeting. Directors who are full-time employees of the
Company do not receive any directors' fees. Travel expenses of directors
-7-
incurred traveling to and from meetings are reimbursed by the Company.
INDEPENDENT AUDITORS
The firm of Deloitte & Touche LLP served as the Company's independent auditors
for the fiscal year ended June 29, 2002 Deloitte & Touche LLP and its
predecessor firm, Touche Ross & Co., have served in this capacity since the
Company's 1979-80 fiscal year. The Board of Directors has not selected
independent auditors for the fiscal year beginning June 30, 2002. The Board of
Directors has a policy of selecting and engaging independent auditors a few
months prior to the end of the Company's fiscal year. A representative of
Deloitte & Touche LLP has been requested and is expected to be present at the
stockholders meeting. Such representative will have the opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions.
INDEPENDENT AUDITORS FEES FOR THE FISCAL YEAR ENDED JUNE 29, 2002
The following table shows the aggregate fees billed to the Company by its
independent auditors, Deloitte & Touch LLP for professional services rendered
during the fiscal year ended June 29, 2002:
Description of Fees Amount
Audit Fees (1) $105,000
Financial Information Systems
Design and Implementation Fees $0
All Other Fees (2) $28,000
(1) Includes fees for audits of the June 29, 2002 consolidated financial
statements of the Company and its subsidiaries, and reviews of the
related quarterly financial statements included in quarter reports on
Form 10-Q for the 2002 fiscal year and direct engagement expenses.
(2) The Audit Committee of the Company's Board of Directors has considered
whether the rendering of such non-audit services by Deloitte & Touche
LLP is compatible with maintaining the principal accountant's
independence.
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's common stock to the Standard & Poor's 500 Stock Index and an index of
peer companies that produce non-athletic footwear. The Standard & Poor's 500
Stock Index is a broad equity market index published by Standard & Poor's. The
index of peer companies was
-8-
constructed by the Company and includes the Company and R. G. Barry; Brown Shoe,
Inc.; Genesco, Inc.; Phoenix Footwear Group, Inc.; Justin Industries; McRae
Industries; Rocky Shoes & Boots, Inc.; Stride Rite Corp.; Timberland Co.; Weyco
Group, Inc; and Wolverine World Wide. In constructing the peer index, the return
of each component company was weighted according to its respective stock market
capitalization. The graph assumes the investment of $100 in the Company's common
stock, the Standard and Poor's 500 Stock Index and the peer index at the end of
the Company's 1997 fiscal year.
Total Stockholder Return
1997 1998 1999 2000 2001 2002
WELLCO $100 $88 $69 $85 $81 $129
S & P 500 $100 $130 $160 $171 $146 $120
PEER GROUP $100 $102 $82 $91 $129 $127
EXECUTIVE COMPENSATION
Compensation Summary
The following Summary Compensation Table shows certain information concerning
the compensation of each of the Company's highly compensated executive officers
whose total annual salary and bonus exceeded $100,000 during the last fiscal
year:
-9-
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
LONG TERM
OTHER COMPENSA-
ANNUAL TION-STOCK ALL OTHER
NAME AND PRINCIPAL COMPEN- OPTION COMPEN-
POSITION: YEAR SALARY BONUS SATION(1) GRANTS SATION(2)
Horace Auberry,
Chairman of the Board
and Consultant to the
Company (4) 2002 $119,964 $17,057 $2,788
2001 $159,952 $28,836 $3,549 (3)60,000 $964
2000 $155,272 $25,810 $3,582 $964
David Lutz, Chief
Executive Officer,
President, Chief
Operating Officer and
Treasurer (5) 2002 $116,636 $10,235 $960
2001 $106,652 $17,302 $3,326 10,000
2000 $103,532 $15,486 $3,350
Chandra Wijewickrama,
V.P. - Caribbean
Operations (6) 2002 $84,630 $24,804
2001 $82,130 $23,577 7,500
(1) Amounts represent reimbursement for income taxes and commissions paid.
(2) Life insurance premiums paid by the Company for benefit of the named
executive officer.
(3) Options for 10,000 shares are immediately exercisable and 50,000 are
unexercisable.
(4) Chief Executive Officer through December 31, 2001.
(5) Chief Executive Officer since January 1, 2002.
(6) Elected to office of V.P. - Caribbean Operations on November 14, 2000.
Stock Options
There were no individual grants of stock options to the named executive officers
during the fiscal year ended June 29, 2002.
The following table shows, on an aggregated basis, for executive officers named
in the Summary Compensation Table each exercise of stock options during the 2002
fiscal year and the fiscal year-end value of unexercised options.
-10-
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTION IN-THE-MONEY
SHARES SHARES OPTIONS
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISEABLE UNEXERCISEABLE(2)
Horace Auberry (1) 45,000/50,000(3) $149,350/$265,250
David Lutz (1) 45,000/0 $254,350/$0
Chandra
Wijewickrama (1) 12,500/0 $48,225/$0
(1) In fiscal year 2002, there were no exercises of options for the
executive officers named in the Summary Compensation Table.
(2) Excess of the total market value at June 29, 2002 of the shares over
the total exercise price.
(3) On July 12, 2000, the Company and Chairman Auberry entered into an
employment agreement. The agreement included 50,000 options which vest
not later than June 30, 2005, with accelerated vesting based on the
Company reaching certain defined earnings per share. All of the 50,000
options are unexercisable.
Employment Contracts and Termination of Employment and Change-in-Control
Agreements
On July 12, 2000 the Company and Chairman Auberry entered into an employment
Agreement. Under this Agreement, Auberry would continue full-time employment
with the Company through December 31, 2000, or for a later period of time as
subsequently agreed to between the Company and Auberry. The salary and bonus
compensation of Auberry during the period of full-time employment was an annual
salary of $159,952 and a cash bonus equal to 2.5% of the Company's consolidated
net income after taxes and after all bonuses. On January 1, 2002, Auberry
reduced his time devoted to employment with the Company to approximately 50% of
full time, and his annual salary was reduced to $79,976. Effective June 30,
2002, the Agreement was amended to provide that Auberry will work as a
consultant to the Company and be compensated on the basis of actual hours worked
at a rate of $100 per hour. In addition, the amendment eliminated the cash
bonus. The Agreement has a term which expires on December 31, 2006.
Under the Agreement, Auberry was granted an option to purchase up to 50,000
shares of the Company's common stock at a price of $9.125 per share. These
options vest not later than June 30, 2005, with accelerated vesting based on the
Company reaching certain defined earnings per share. Expiration of such options
shall be the earlier of the fifth anniversary of the date on which such options
vest or one year after the Chairman's separation from employment under the
Agreement. In addition, for the period from July 1, 2000 until the end of the
Agreement, Auberry will not engage in the footwear industry other than through
his employment with the Company, and Auberry will assign to the Company certain
developments conceived by him. In consideration for these provisions and for a
period of five years after the Company first realizes revenues from such
developments, Auberry will receive additional cash compensation equal to 7.5% of
royalty income received from unaffiliated entities for these developments and
..225% of the Company's sales of products embodying these developments. As of the
date of this proxy, Auberry had earned $2,000 additional compensation as
provided for in the Agreement and none of the options in the Agreement had
vested.
The Company does not have employment contracts with any executive officer other
than the Chairman of the Board. There are no compensation plans or arrangements
that will result from the
-11-
resignation, retirement or termination of any executive officer, or that will
result from a change-in- control of the Company or a change in any executive
officer's responsibilities following a change-in- control.
Long-Term Incentive Plans
The Company does not have any type of long-term incentive plans for any
executive officer or other employee.
Pension Plan
The Company's executive officers and all other salaried employees participate in
an Administrative Employee Pension Plan (the Plan). Benefits under the Plan are
based on years of service and average annual earnings. The following table
illustrates the amount of annual pension benefits based on the years of service
and average annual compensation levels shown:
PENSION PLAN TABLE
YEARS OF SERVICE
---------------------------------------------
AVERAGE
ANNUAL
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
$125,000 $14,900 $19,900 $24,900 $29,800 $34,800
$150,000 18,300 24,400 30,500 36,600 42,700
$175,000 21,700 28,900 36,100 43,300 50,600
$200,000 25,100 33,400 41,700 50,100 58,400
The Plan provides benefits based on final average compensation, defined in the
Plan as the average of the consecutive five highest of the last ten years
compensation, and on years of service. Compensation under the Plan is
essentially equivalent to the aggregate amounts reported as annual salary and
bonus compensation in the Summary Compensation Table above. Total years of
service are limited to 35 and benefits are computed on a straight life annuity
basis. Mr. Auberry and Mr. Wijewickrama named in the Summary Compensation Table
have more than the maximum 35 years of service. Mr. Lutz would have more than 35
years of service under the plan, assuming his employment to age 65.
SECURITY OWNERSHIP
The number of shares of common stock (the Company's only voting security)
beneficially owned or held under option by (a) all executive officers, directors
and nominees for director and (b) each person or entity owning more than 5% of
the outstanding shares of common stock (including persons or entities who may be
deemed a group for purposes of the federal securities laws), as known by
management of the Company, based upon information furnished to the Company by or
on behalf of such person or entity, as "beneficial ownership" is defined under
Rule 13d-3 under the Securities Exchange Act of 1934, is set forth in the
following table:
-12-
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP ON SEPTEMBER 27, 2002
SOLE
VOTING SHARED
AND VOTING AND TOTAL PERCENT
DISPOSITIVE DISPOSITIVE STOCK BENEFICIAL OF
NAME POWER POWER(1) OPTIONS OWNERSHIP CLASS(2)
Officers and Directors:
Horace Auberry 75,465 1,540 45,000 122,005 9.06%
David Lutz * 4,500 45,000 49,500 3.68%
Fred K. Webb, Jr. * 500 12,000 12,500 0.93%
Directors :
James T. Emerson * 766,872 766,872 56.96%
Rolf Kaufman 48,620 6,600 4,000 59,220 4.40%
Claude S. Abernethy, Jr. 9,000 2,000 11,000 0.82%
William M. Cousins, Jr. 3,000 3,000 0.22%
John D. Lovelace 2,000 2,000 0.15%
Katherine J. Emerson 300 4,000 4,300 0.32%
Officers:
Chandra Wijewickrama 12,500 12,500 0.93%
Other Officers 14,400 24,000 38,400 2.85%
All Officers and Directors as
a Group (14) 915,157 16,640 149,500 1,081,297 80.32%
Owners of More Than 5% of the Company's Common Shares:
Other than Officer/Director Auberry and Director Emerson shown above, the
Company is not aware of any other beneficial owner of more than five percent of
its Common Shares.
* Nominee for reelection to the Board of Directors.
(1) Shares owned jointly with spouse and shares held by spouse and children
over whom the listed person may have substantial influence by reason of
the relationship are shown as shared voting and dispositive power.
(2) Percent of total shares outstanding (1,182,746) and shares issuable
under options exercisable within 60 days (163,500).
-13-
STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING
Proposals of qualified stockholders intended to be presented at the Company's
2003 Annual Stockholders Meeting must be received by the Secretary at the
address stated herein no later than June 30, 2003, in order to be considered for
inclusion in the Company's Proxy Statement and Proxy for that meeting.
By Order of the Board of Directors
RICHARD A. WOOD, JR.
Secretary
Waynesville, North Carolina
October 18, 2002
A copy of the Company's 2002 Form 10-K (Annual Report filed with the Securities
and Exchange Commission) is available at no charge to any stockholder requesting
it. Requests should be made in writing and addressed to the Secretary, Wellco
Enterprises, P. O. Box 188, Waynesville, NC 28786.
-14-