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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

WOLVERINE WORLD WIDE, INC.
(Exact name of registrant as specified in its charter)

          Wolverine World Wide, Inc. (the "Company") is a leading designer, manufacturer and marketer of a broad line of quality casual shoes, rugged outdoor and work footwear, and constructed slippers and moccasins. The Company, a Delaware corporation, is the successor of a 1969 reorganization of a Michigan corporation of the same name, originally organized in 1906, which in turn was the successor of a footwear business established in Grand Rapids, Michigan in 1883.

          Consumers around the world purchased more than 36 million pairs of Company branded footwear during fiscal 1999, making the Company a global leader among U.S. shoe companies in the marketing of branded casual, work and outdoor footwear. The Company's products generally feature contemporary styling with patented technologies designed to provide maximum comfort. The products are marketed throughout the world under widely recognized brand names, including Bates®, Caterpillar®, Coleman®, Harley-Davidson®, Hush Puppies®, HyTest®, Merrell® and Wolverine®. The Company believes that its primary competitive strengths are its well-recognized brand names, broad range of comfortable footwear, patented comfort technologies, numerous distribution channels and diversified manufacturing and sourcing base.

          The Company's footwear is sold under a variety of brand names designed to appeal to most consumers of casual, work and outdoor footwear at numerous price points. The Company's footwear products are organized under three operating divisions: (i) the Wolverine Footwear Group, focusing on work, outdoor and lifestyle boots and shoes, (ii) the Performance Footwear Group, focusing on the Caterpillar® and Merrell® product lines of performance and lifestyle footwear and (iii) the Casual Footwear Group, focusing on Hush Puppies® brand comfortable casual shoes, slippers and moccasins under the Hush Puppies® brand and other private labels for third party retailers and children's footwear under various Company brands. The Company's Global Operations Group is responsible for manufacturing, sourcing and distribution in support of the various Company brands. The Company's footwear is distributed domestically through 58 Company-owned retail stores and to over 20,000 active accounts including department stores, footwear chains, catalogs, specialty retailers, mass merchants and Internet retailers. Many of these retailers operate multiple storefront locations. The Company's products are distributed worldwide in over 130 markets through licensees and distributors.

          The Company, through its Wolverine Leathers Division, operates a Company-owned tannery and is one of the premier tanners of quality pigskin leather for the shoe and leather goods industries. The pigskin leather tanned by the Company is used in a significant portion of the footwear manufactured and sold by the Company, and is also sold to Company licensees and other domestic and foreign manufacturers of shoes. In addition, Wolverine Procurement, Inc., a Company-owned subsidiary, both performs skinning operations and purchases raw pigskins which it then cures and sells to the Wolverine Leathers Division and to outside customers for processing into pigskin leather products.

          For financial information regarding the Company, see the consolidated financial statements of the Company, which are attached as Appendix A to this Form 10-K. Effective January 4, 1998, the Company adopted Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information. The Company has one reportable operating segment, Branded Footwear. The "Branded Footwear" segment is engaged in the manufacture and marketing of branded footwear, including casual shoes, slippers, moccasins, dress shoes, boots, uniform shoes and work shoes.

          The Company manufactures and markets a broad range of footwear styles including shoes, boots and sandals under many recognizable brand names including Bates®, Caterpillar®, Coleman®, Harley-Davidson®, Hush Puppies®, Hy-Test®, Merrell® and Wolverine®. The Company through its wholly owned subsidiary, Wolverine Slipper Group, Inc., also manufactures constructed slippers and moccasins and markets them under the Hush Puppies®, Joe Boxer®, and Turtle Fur® trademarks and on a private label basis. The Company combines quality materials and skilled workmanship from around the world to produce footwear according to its specifications at both Company-owned and independent manufacturing facilities.

          The Company's three branded footwear operating divisions are described below.

          Wolverine® Work and Industrial Footwear. The Company believes the Wolverine® brand has built its reputation by making quality, durable and comfortable work boots and shoes. The development of DuraShocks® technology allowed the Wolverine® brand to introduce a broad line of work footwear with a focus on comfort. The recently developed Wolverine Fusion™ and Wolverine Durashocks Motion Control™ technologies continue the Company's tradition of comfortable work and industrial footwear. The Wolverine Work product line features work boots and shoes, including steel toe boots and shoes, targeting male and female industrial and farm workers.

          Wolverine® Rugged Outdoor and Sport Footwear. The Wolverine® rugged outdoor and sport product lines incorporate DuraShocks®, DuraShocks SR™, Wolverine Fusion™ and Wolverine Durashocks Motion Control™ technology and other comfort features into products designed for rugged outdoor use. This broad product line targets active lifestyles and includes all-terrain sport boots, walking shoes, trail hikers, rugged casuals and outdoor sandals. The Company also produces boots that target hunters, fishermen and other active outdoor users. Warmth, waterproofing and comfort are achieved through the use of Gore-Tex® and Thinsulate® brand fabrics and the Company's performance leathers and patented DuraShocks® technologies. In addition, the Company produces Wolverine® brand rubber footwear for hunters, fishermen and farm workers.

          Bates® Uniform Footwear. The Company's Bates Uniform Footwear Division is an industry leader in supplying footwear to military and civilian uniform users. The Bates Uniform Footwear Division utilizes DuraShocks®, DuraShocks SR™, Cool Tech™ and other proprietary comfort technologies in the design of its military-style boots and oxfords including the Bates® Enforcer Series™ and Special Ops™ footwear lines. The Bates Uniform Footwear Division contracts with the U.S. Department of Defense and other governmental organizations to supply military footwear. Civilian uniform uses include police, security, postal, restaurant and other industrial occupations. Bates Uniform Footwear Division products are also distributed through specialty retailers and catalogs.

          HyTest®. The HyTest® product line consists primarily of high quality work boots and shoes designed to protect male and female industrial workers from foot injuries. HyTest® footwear incorporates various safety features into its product lines, including steel toe footwear and electrical hazard, static dissipating and conductive footwear to protect against hazards of the workplace. In addition, HyTest® brand footwear incorporates features such as FootRests® comfort technology to provide comfort together with safety for working men and women. HyTest® footwear is distributed primarily through a network of Shoemobile™ mobile truck retail outlets providing direct sales to workers at industrial facilities.

          Harley-Davidson® Footwear. Pursuant to a License Agreement with the Harley-Davidson Motor Company, the Company has the exclusive right to manufacture, market, distribute and sell Harley-Davidson® footwear throughout the world. Harley-Davidson® brand footwear products include motorcycle, casual, fashion, work and western footwear for men, women and children. Harley-Davidson® footwear is sold globally through a network of 600 independent Harley-Davidson ® dealerships as well as through department stores and specialty retailers.

          Coleman® Footgear. The Company has been granted the exclusive worldwide rights to manufacture, market, distribute and sell outdoor footwear under the Coleman® brand. Coleman® brand footwear products include lightweight hiking boots, outdoor sport boots, rubber footgear and outdoor sandals, which are sold primarily at value-oriented prices through specialty retailers and mass merchants.

          Caterpillar® Footwear. The Company has been granted the exclusive worldwide rights to manufacture, market and distribute footwear under the Caterpillar®, CAT & Design®, Walking Machines® and other trademarks. The Company believes the association with Caterpillar® equipment enhances the reputation of its boots for quality, ruggedness and durability. Caterpillar® brand footwear products include work boots and shoes, sport boots, rugged casuals and lifestyle footwear. In addition, the Company also manufactures and markets CAT® Marine Power footwear, designed for industrial and recreational marine uses. Caterpillar® brand products target work and industrial users and active lifestyle users. Prior to 1999, the Caterpillar® Footwear Group operated as a separate division of the Company. Caterpillar® footwear is marketed in over 130 countries worldwide.

          Merrell® Footwear. The Merrell® product line, acquired by the Company in October 1997, consists primarily of technical hiking and rugged outdoor footwear designed for backpacking, day hiking and rugged every day use. In 1999, Merrell® introduced the "After-Sport" product line, incorporating Merrell's® technical hiking and outdoor expertise with Wolverine Performance Leathers™ and other technical materials to create shoes with unique styling, performance and comfort features. Merrell® products are sold primarily through outdoor specialty retailers, department stores and catalogs. Prior to 1999, the Merrell® footwear product line was part of The Wolverine Footwear Group.

          The Hush Puppies Company. The Company believes that the 40-year heritage of the Hush Puppies® brand as a pioneer of comfortable casual shoes positions the brand to capitalize on the global trend toward more casual workplace and leisure attire. The diverse product line includes numerous styles for both work and casual wear and utilizes comfort features, such as the Comfort Curve® sole, HPO2® cushioning,

patented Bounce® technology and light weight Zero-G™ constructions. Hush Puppies® shoes are sold to men, women and children in over 80 countries.

          Wolverine Slipper Group, Inc. Through its wholly owned subsidiary, Wolverine Slipper Group, Inc., the Company is one of the leading suppliers of constructed slippers in the United States. Prior to 1999 these activities were operated as a division of the Company. The styling of Wolverine Slipper Group's footwear reflects consumer demand for the "rugged indoor" look by using natural leathers such as moosehide, shearling and suede in constructed slipper and indoor and outdoor moccasin designs. Wolverine Slipper Group, Inc., designs and manufactures constructed slippers, aftersport footwear and moccasins on a private label basis according to customer specifications. Such products are manufactured for leading United States retailers and catalogs, such as Nordstrom, J.C. Penney, L.L. Bean, Eddie Bauer and Lands' End. In addition to its traditional line of private label slippers, Wolverine Slipper Group, Inc. also manufactures and markets slipper products under the popular Hush Puppies®, Turtle Fur® and Joe Boxer® brands and has developed a College Clogs™ program for the sale of licensed collegiate slipper products.

          The Children's Footwear Group. The Children's Footwear Group was formed in 1998 to consolidate the Company's rapidly growing Hush Puppies® and Caterpillar® children's footwear business with the recently started children's footwear programs under the Coleman® , Wolverine®, and Harley-Davidson® brands. The Company believes the consolidation facilitates the dedicated marketing, sourcing and sales programs that are necessary to extend the Company's high-profile, global brands into the children's footwear market segment.

          In addition to the manufacture and marketing of the Company's footwear products that are reported in the Branded Footwear segment, the Company also (i) operates a Company-owned pigskin tannery through its Wolverine Leathers Division, (ii) purchases and cures raw pigskins for sale to various customers through its wholly owned subsidiary Wolverine Procurement, Inc., (iii) operates 58 domestic retail footwear stores and (iv) licenses the Company's brand names for use on non-footwear products.

          1.          The Wolverine Leathers Division. The Wolverine Leathers Division produces pigskin leathers primarily for use in the footwear industry. The Wolverine Leathers Division is the largest domestic tanner of pigskin. Wolverine Leathers® brand products are manufactured in the Company's pigskin tannery located in Rockford, Michigan. The Company believes these leathers offer superior performance and cost advantages over cowhide leathers. The Company's waterproof, stain resistant and washable leathers are featured in many of the Company's domestic footwear lines and many products offered by the Company's international licensees and distributors. Wolverine performance leathers are also featured in certain outside brands of athletic and outdoor footwear.

          2.          Wolverine Procurement, Inc. Wolverine Procurement, Inc. both performs skinning operations and purchases raw pigskins from third parties, which it then cures and sells to the Wolverine Leathers Division and to outside customers for processing into pigskin leather products.

          3.          Retail Stores. The Company operated 58 domestic retail shoe stores as of February, 2000, under three formats, consisting of 56 factory outlet stores, one mall-based store called Up Footgear™ and one mall-based Hush Puppies® specialty store. The Company expects the scope of its retail operations to remain relatively consistent in the foreseeable future. Most of the Company's 56 factory outlet stores carry a large selection of first quality Company branded footwear at a discount to conventional retail prices. The Up Footgear™ prototype store features Company brands such as Wolverine®, Merrell®, Hush Puppies®, Caterpillar® and Harley-Davidson®. This store also carries a selection of branded footwear from other manufacturers. The regional mall-based full-service, full-price Hush Puppies® Specialty Store, features a broad selection of men's, women's and children's Hush Puppies® brand footwear and other Company brands and is used by the Company to test new styles and merchandising strategies.

            4.          Apparel and Accessory Licensing. The Company's Apparel and Accessory Licensing Division licenses the Company's brands for use on non-footwear products including apparel, eyewear, watches, socks, handbags and plush toys. Current licensing programs include Hush Puppies® brand apparel, eyewear and plush toys and watches under the Wolverine® and Hush Puppies® brands.

                    The Company's overall marketing strategy is to develop brand-specific plans and related promotional materials for the United States market to foster a differentiated and globally consistent image for each of the Company's core footwear brands. Each footwear brand group has its own marketing personnel who develop the marketing strategy for products within that group. Domestic marketing campaigns target both the Company's retail accounts and consumers, and strive to increase overall brand awareness for the Company's branded products. The Company's advertisements typically emphasize fashion, comfort, quality, durability, functionality and other performance and lifestyle aspects of the Company's footwear. Components of the brand-specific plans include print, radio and television advertising, in-store point of purchase displays, promotional materials, and sales and technical assistance.

          The Company's footwear brand groups provide its international licensees and distributors with creative direction and materials to convey consistent messages and brand images. Examples of marketing assistance provided by the Company to its licensees and distributors are (i) direction concerning the categories of footwear to be promoted, (ii) photography and layouts, (iii) broadcast advertising, including commercials and film footage, (iv) point of purchase presentation specifications, blueprints and packaging, (v) sales materials, and (vi) consulting concerning retail store layout and design. The Company believes its footwear brand names provide a competitive advantage. In support of this belief, the Company makes significant expenditures on marketing and promotion to support the position of its products and enhance brand awareness.

          The Company uses a wide variety of distribution channels to distribute its branded footwear products. To meet the diverse needs of its broad customer base, the Company uses three primary distribution strategies.

          In addition to its wholesale activities, the Company also operates domestic retail shoe stores as described above. The Company is developing various programs both independently and with its retail customers for the distribution of its products over the Internet.

          A broad distribution base insulates the Company from dependence on any one customer. No customer of the Company accounted for more than 10% of the Company's net sales and other operating income in fiscal 1999.

          Footwear sales are seasonal with significant increases in sales experienced during the fall hunting season, Christmas, Easter and back-to-school periods. Due to this seasonal nature of footwear sales, the Company experiences some fluctuation in its levels of working capital. The Company provides working capital for such fluctuations through internal financing and through a revolving credit agreement that the Company has in place. The Company expects the seasonal sales pattern to continue in future years.

          The Company records revenue from foreign sources through a combination of sales of branded footwear products generated from the Company's wholly owned operations in Canada and the United Kingdom, and from royalty income through a network of independent licensees and distributors. The Company's owned operations include Hush Puppies UK, Ltd., Merrell Europe Ltd., Hush Puppies Canada Footwear, Ltd., Wolverine CIS, Ltd. and the Merrell Canada division. The Company's owned operations are located in markets where the Company believes it can gain a strategic advantage.

          The Company derives royalty income from sales of Company footwear bearing the Hush Puppies®, Wolverine®, Bates®, HyTest®, Merrell® and other trademarks by independent distributors and licensees. The Company also derives royalty income from sales of footwear bearing the Caterpillar®, Coleman® and Harley-Davidson® trademarks through foreign distributors. License and

distribution arrangements enable the Company to develop international markets without the capital commitment required to maintain inventories or fund localized marketing programs. In fiscal 1999, the Company's wholly owned foreign operations, together with the Company's foreign licensees and distributors sold an estimated 18 million pairs of footwear, which is similar to the level of international sales in fiscal 1998.

          The Company continues to develop a global network of licensees and distributors to market its footwear brands. The Company assists in designing products that are appropriate to each foreign market but are consistent with the global brand position. The licensees and distributors then purchase goods from either the Company or authorized third-party manufacturers pursuant to a distribution agreement or manufacture branded products consistent with Company standards pursuant to a license agreement. Distributors and licensees are responsible for independently marketing and distributing Company branded products in their respective territories, with product and market support provided by the Company.

          The Company controls the sourcing and manufacture of approximately 75% of the pairs marketed under the Company's brand names globally. The balance is controlled directly by the Company's licensees. Of the pairs controlled by the Company, approximately 80% are purchased or sourced from third parties, the remainder are produced at Company-owned facilities. The Company's footwear is manufactured at Company-owned facilities in several domestic and certain affiliated foreign facilities located in Michigan, Arkansas, Missouri, New York, the Caribbean Basin, Costa Rica, Mexico and Canada. The Company has implemented a "twin plant" concept whereby a majority of the labor intensive cutting and fitting construction of the "upper" portion of shoes and boots is performed at the Company's facilities in the Caribbean Basin, Costa Rica and Mexico and the technology intensive construction, or "bottoming," is performed at the Company's domestic and Canadian facilities.

          The Company's factories each have the flexibility to produce a variety of footwear, and depart from the industry's historic practice of dedicating a given facility to production of specific footwear products. This flexibility allows the Company to quickly respond to changes in market preference and demand. The Company produces various products for both men and women in most of its domestic and international facilities, allowing the Company to respond to both market and customer-specific demand.

          The Company sources certain footwear from a variety of foreign manufacturing facilities in the Asia-Pacific region, Central and South America, India and Europe. The Company maintains technical offices in the Asia-Pacific region to facilitate the sourcing and importation of quality footwear. The Company has established guidelines for each of its third-party manufacturers in order to monitor product quality, labor practices and financial viability. In addition, the Company has developed its "Engagement Criteria for Partners & Sources" to require that its domestic and foreign manufacturers, licensees and distributors use ethical business standards, comply with all applicable health and safety laws and regulations, are committed to environmentally safe practices, treat employees fairly with respect to wages, benefits and working conditions, and do not use child or prison labor.

          The Company's domestic manufacturing operations allow the Company to (i) reduce its lead time, enabling it to quickly respond to market demand and reduce inventory risk, (ii) lower freight and shipping costs, and (iii) closely monitor product quality. The Company's foreign manufacturing strategy allows the Company to (i) benefit from lower labor costs, (ii) source the highest quality raw materials from around

the world, and (iii) avoid additional capital expenditures necessary for factories and equipment. The Company believes that its overall global manufacturing strategy gives the Company maximum flexibility to properly balance the need for timely shipments, high quality products and competitive pricing.

          The Company owns and operates through its Wolverine Leathers Division a pigskin tannery, which is one of the premier tanners of quality leather for the footwear industry. The Company and its licensees receive virtually all of their pigskin requirements from the tannery. The Company believes the tannery provides a strategic advantage for the Company by producing leather using proprietary technology at prices below those available from other sources. The continued operation of this tannery is important to the Company's competitive position in the footwear industry.

          The Company's principal required raw material is quality leather, which it purchases from a select group of domestic and offshore suppliers, including the Company's tannery. The global availability of shearling and cowhide leather eliminates any reliance by the Company upon a sole supplier. The Company currently purchases the vast majority of the raw pigskins used in a significant portion of its tannery operations from two domestic sources. One of these sources has been a reliable and consistent supplier for over 30 years. The Company purchases all of its other raw materials and component parts from a variety of sources, none of which is believed by the Company to be a dominant supplier.

          The Company is subject to the normal risks of doing business abroad due to its international operations, including the risk of expropriation, acts of war, political disturbances and similar events, the imposition of trade barriers, quotas and tariffs and loss of most favored nation trading status. With respect to international sourcing activities, management believes that over a period of time, it could arrange adequate alternative sources of supply for the products currently obtained from its foreign suppliers. A sustained disruption of such sources of supply could, particularly on a short-term basis, have an adverse impact on the Company's operations.

          The Company holds a significant portfolio of registered and common law trademarks that identify its branded footwear products. The trademarks that are most widely used by the Company include Hush Puppies®, Wolverine®, Bates®, Wolverine Fusion™, DuraShocks®, Hidden Tracks®, Bounce®, Comfort Curve®, HPO2™, HyTest®, Merrell® and FootRests®. The Company has obtained the right to manufacture, market and distribute footwear throughout most countries of the world under the Caterpillar®, Harley-Davidson® and Coleman® trademarks and the right to manufacture, market and distribute slippers in the United States and certain other countries under the Turtle Fur® and Joe Boxer® trademarks pursuant to license agreements with the respective trademark owners. All of the Company's licenses are long term and extend for four or more years with renewal options. The licenses are subject to customary approval, performance and default provisions. Pigskin leather produced by the Company's Wolverine Leathers Division is sold under the trademarks Wolverine Leathers®, Weather Tight® and All Season Weather Leathers.™

          The Company believes that its products are identified by consumers by its trademarks and that its trademarks are valuable assets. The Company is not aware of any infringing uses or any prior claims of ownership of its trademarks that could materially affect its current business. It is the policy of the Company to pursue registration of its primary marks whenever possible and to vigorously defend its trademarks against infringement or other threats to the greatest extent practicable under the laws of the

United States and other countries. The Company also holds several patents, copyrights and various other proprietary rights. The Company protects all of its proprietary rights to the greatest extent practicable under applicable laws.

          At March 25, 2000, the Company had a backlog of orders of approximately $158 million compared with a backlog of approximately $146 million at March 27, 1999. While orders in backlog are subject to cancellation by customers, the Company has not experienced significant cancellation of orders in the past and the Company expects that substantially all of the orders will be shipped in fiscal 2000. The backlog at a particular time is affected by a number of factors, including seasonality and the schedule for the manufacture and shipment of products. Accordingly, a comparison of backlog from period to period is not necessarily meaningful and may not be indicative of eventual actual shipments.

          The Company's footwear lines are manufactured and marketed in a highly competitive environment. The Company competes with numerous domestic and foreign manufacturers and importers of footwear, some of which are larger and have greater resources than the Company. The Company's major competitors for its brands of footwear are located in the United States. The Company has at least ten major competitors in connection with the sale of its work shoes and boots, at least eight major competitors in connection with the sale of its sport boots, and at least fifteen major competitors in connection with the sale of its casual and dress shoes. Product performance and quality, including technological improvements, product identity, competitive pricing, and the ability to adapt to style changes are all important elements of competition in the footwear markets served by the Company. The footwear industry in general is subject to changes in consumer preferences. The Company strives to maintain its competitive position through promotion of brand awareness, manufacturing efficiencies, its tannery operations, and the style, comfort and value of its products. Future sales by the Company will be affected by its continued ability to sell its products at competitive prices and to meet shifts in consumer preferences.

          Because of the lack of reliable published statistics, the Company is unable to state with certainty its position in the footwear industry. Market shares in the footwear industry are highly fragmented and no one company has a dominant market position; however, the Company believes it is among the largest domestic manufacturers of footwear.

          In addition to normal and recurring product development, design and styling activities, the Company engages in research and development related to new and improved materials for use in its branded footwear and other products and in the development and adaptation of new production techniques. The Company's continuing relationship with the Biomechanics Evaluation Laboratory at Michigan State University, for example, has led to specific biomechanical design concepts, such as Bounce®, DuraShocks® and Hidden Tracks® comfort technologies, that have been incorporated in the Company's footwear. While the Company continues to be a leading developer of footwear innovations, research and development costs do not represent a material portion of operating expenses.

          Compliance with federal, state and local provisions which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment have not had, nor are they expected to have, any material effect on the capital expenditures, earnings or competitive position of the Company. The Company uses and generates, and in the past has used and generated, certain substances and wastes that are regulated or may be deemed hazardous under certain federal, state and local regulations with respect to the environment. The Company from time to time works with federal, state and local agencies to resolve cleanup issues at various waste sites or other regulatory issues.

          As of January 1, 2000, the Company had approximately 5,900 domestic and foreign production, office and sales employees. Approximately 1,400 employees were covered by eight union contracts expiring at various dates through February 11, 2002. The Company has experienced no work stoppages since 1990. The Company presently considers its employee relations to be good.

          The Company either directly or through its subsidiaries owned or leased the following offices and manufacturing facilities as of January 1, 2000:

          In addition, the Company's subsidiary, Hush Puppies Retail, Inc., operates retail stores through leases with various third-party landlords. The Company believes that its current facilities are suitable and adequate to meet its anticipated needs for the next twelve months.

          The Company is involved in litigation and various legal matters arising in the normal course of business, including certain environmental compliance activities. The Company has considered facts that have been ascertained and opinions of counsel handling these matters, and does not believe the ultimate resolution of such proceedings will have a material adverse effect on the Company's financial condition or results of operations.

          No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report.

          The following table lists the names and ages of the Executive Officers of the Company as of the date of this Annual Report on Form 10-K, and the positions presently held with the Company. The information provided below the table lists the business experience of each such Executive Officer during

          Geoffrey B. Bloom has served the Company as Chief Executive Officer and Chairman of the Board since April 1996. From 1993 to 1996 he served the Company as President and Chief Executive Officer.

          John Deem has served the Company as Executive Vice President and President, Casual Footwear Group since July 1998. From 1996 to July 1998, he served as Vice President of Global Product Development. From 1992 to 1996 he served as Executive Vice President of Product Development and Marketing at Dexter Shoe Company.

          Steven M. Duffy has served the Company as Executive Vice President since April 1996 and is President of the Company's Global Operations Group. From 1993 to 1996 he served the Company as Vice President.

          V. Dean Estes has served the Company as Vice President since 1995. Mr. Estes is also President of the Wolverine Footwear Group. Since he joined the Company in 1975, Mr. Estes has served in various positions relating to the sales, marketing and product development functions of the Company's work boot and shoe and related businesses.

          Stephen L. Gulis, Jr., has served the Company as Executive Vice President, Chief Financial Officer and Treasurer since April 1996. From 1994 to April 1996 he served the Company as Vice President and Chief Financial Officer.

          Blake W. Krueger has served the Company as Executive Vice President, General Counsel and Secretary since April 1996. From 1993 to April 1996 he served the Company as General Counsel and Secretary. From 1985 to 1996 he was a partner with the law firm of Warner Norcross & Judd LLP.

          Thomas P. Mundt has served the Company as Vice President of Strategic Planning and Corporate Communications since April 1996. From December 1993 to April 1996, he served the Company as Vice President of Strategic Planning and Treasurer.

          Timothy J. O'Donovan has served the Company as Chief Operating Officer and President since April 1996. From 1982 to April 1996 he served the Company as Executive Vice President.

          Nicholas P. Ottenwess has served as Corporate Controller of the Company since September 1997. From 1993 to September 1997 he served as Vice President of Finance & Administration for The Hush Puppies Company.

          Robert J. Sedrowski has served the Company as Vice President of Human Resources since October 1993.

          James D. Zwiers has served the Company as Associate General Counsel and Assistant Secretary since January 1998. From 1995 to 1998 he was an attorney with the law firm of Warner Norcross & Judd LLP.

                    Wolverine World Wide, Inc. common stock is traded on the New York Stock Exchange and the Pacific Exchange, Inc. under the symbol "WWW." The following table shows the high and low sale prices by calendar quarter for 1999 and 1998 as reported on the New York Stock Exchange. The number of stockholders of record of common stock on February 15, 2000, was 2,142.

          Dividends of $.035 were declared for the first quarter of fiscal 2000.

Five-Year Operating and Financial Summary (1)
(Thousands of Dollars, Except Per Share Data)

          Net sales and other operating income decreased 0.6% to $665.6 million in 1999 as compared to $669.3 million in 1998. On a combined basis, net sales and other operating income for the Company's branded footwear businesses, consisting of the Casual Footwear Group (comprised of The Hush Puppies Company, the Children's Footwear Group, Wolverine Slipper Group and the Company's Russian wholesale business), the Wolverine Footwear Group (comprised of the Wolverine® , HyTest®, Coleman®, Bates® and Harley-Davidson® brands), and the Performance Footwear Group (comprised of the Caterpillar® and Merrell® brands), decreased $5.5 million (0.9%) for 1999 as compared to 1998. The Company's other business units, consisting of Wolverine Retail, Wolverine Leathers, and Wolverine Procurement operations, reported a $1.8 million (2.5%) increase in net sales and other operating income in 1999 as compared to 1998.

          The Casual Footwear Group reported a $49.7 million (19.2%) decline in 1999 net sales and other operating income when compared to 1998. The decline was experienced primarily in The Hush Puppies Company, which reported a net sales and other operating income decrease of $39.5 million (21.3%) in 1999 as compared to 1998. This decrease relates primarily to a shortfall in the U.S. wholesale operation as a result of a slow down in the sales of classic suede casuals, along with the planned reduction in the specialty store distribution segment of the Hush Puppies U.K. wholesale operation. The closing of the Company's Russian wholesale footwear business accounted for an additional $5.0 million decline.

          The Wolverine Footwear Group reported record net sales and other operating income reflecting an increase of $15.4 million (6.1%) in 1999 as compared to 1998. Harley-Davidson footwear, which began operations late in the third quarter of 1998, contributed a majority of this increase. The Bates footwear division, including shipments to the United States Department of Defense, recognized a decrease in net sales and other operating income from the prior year as a result of a slow down in draw orders against contracts. The work boot business, comprised of the Wolverine Boots and Shoes division and HyTest Boots and Shoes, reported a slight increase in net sales and other operating income over the 1998 level.

          The Performance Footwear Group continued its strong growth reflecting an increase in net sales and other operating income of $28.8 million (32.8%) for 1999 over 1998. The Merrell outdoor footwear business accounted for the increase as this business offered new products and expanded its retail distribution channels.

          Within the Company's other business units, Wolverine Leathers and Wolverine Procurement accounted for substantially all of the $1.8 million increase in net sales and other operating income in 1999 over 1998. Wolverine Retail reported flat net sales and other operating income in 1999 as compared to 1998.

          As discussed in the notes to the consolidated financial statements, the Company recorded a non-recurring, pre-tax charge to earnings of $14.0 million in the second quarter of 1999 related to the closing of its Russian wholesale footwear business, of which $6.9 million is reflected in cost of goods sold for

          Gross margin as a percentage of net sales and other operating income of 31.3% in 1999 decreased slightly compared to the prior year's level of 31.8%. Gross margin dollars decreased $4.0 million or 1.9% in 1999 to $208.6 million as compared to $212.6 million in 1998. Excluding $6.9 million of the Russian restructuring charge that affected cost of goods sold, gross margin as a percentage of net sales and other operating income would have been 32.4% in 1999 and gross margin dollars would have increased $2.9 million or 1.4% in 1999 to $215.5 million. The gross margin percentage for the branded footwear businesses increased to 31.2% (excluding the Russian restructuring charge) in 1999 from 30.8% in 1998. Gross margins of the branded footwear businesses were favorably affected by the performance of the Wolverine Footwear and Performance Footwear Groups as their respective brands carry higher initial margins. The gross margin percentage for the other business units increased to 41.7% for 1999 compared to 39.7% for 1998, which resulted primarily from higher margin achievement from Wolverine Leathers and Wolverine Procurement.

          Selling and administrative expenses of $148.0 million for 1999 increased $4.6 million (3.2%) from the 1998 level of $143.4 million and, as a percentage of net sales and other operating income, increased to 22.2% in 1999 from 21.4% in 1998. Excluding $6.6 million of the Russian restructuring charge that affected selling and administrative expenses, these expenses for 1999 would have been $141.4 million, a decrease of $2.0 million from 1998 and, as a percentage of net sales and other operating income, would have been 21.2% in 1999. The change in selling and administrative expenses (excluding the Russian restructuring charge) includes increased depreciation expense of $1.5 million related to the recent investments in warehousing infrastructure and information services and $4.7 million in employee benefits that were offset by $8.2 million of cost reductions in travel, payroll and other selling and administrative expenses.

          Interest expense of $11.1 million was $2.6 million greater in 1999 than the 1998 level of $8.4 million. The increase in interest expense reflects a full year of additional borrowings on the Company's revolving credit facility for the repurchase of 2.2 million shares of the Company's common stock during the last half of 1998, increased borrowings to support investments in working capital and lower capitalization of interest due to the completion of capital projects during 1999.

          The 1999 effective tax rate of 34.6% increased from 32.6% in 1998 primarily as a result of earnings from certain foreign subsidiaries, which are taxed generally at lower rates, becoming a smaller percentage of total consolidated earnings and other 1999 tax adjustments.

          Net earnings for 1999 were $32.4 million compared to net earnings of $41.7 million reported for 1998. Diluted earnings per share for 1999 were $0.78 compared to $0.97 in 1998. Excluding the Russian restructuring charge, net earnings would have been $41.8 million or $1.01 diluted earnings per share in 1999.

          Net sales and other operating income increased 0.6% to $669.3 million in 1998 as compared to $665.1 million in 1997. The Company's branded footwear businesses contributed a $10.1 million (1.7%)

          The Casual Footwear Group reported a net sales and other operating income decrease of $21.6 million (7.7%) in 1998 as compared to 1997. The Hush Puppies Company reported a $29.8 million (13.0%) decline in 1998 net sales and other operating income from the 1997 level as a result of decreased demand for the Hush Puppies classics suede casual line and the planned reduction in the specialty store distribution segment of the Hush Puppies U.K. wholesale operation. A $5.0 million increase in net sales and other operating income contributed by the Company's Russian operations partially offset the shortfall in The Hush Puppies Company.

          The Wolverine Footwear Group reported record net sales and other operating income and experienced a $9.6 million (4.0%) increase in 1998 despite unseasonably warm weather during the key boot selling season. Harley-Davidson brand footwear, manufactured under a license acquired in 1998, began shipping in the third quarter and contributed a majority of the increase. The work boot business reported a 1.2% decrease in net sales and other operating income from 1997 primarily related to the sale of five Company-owned distribution units over the preceding eighteen months.

          The Performance Footwear Group reported a $22.1 million (33.6%) increase in net sales and other operating income in 1998 as compared to 1997. The Merrell outdoor footwear business, which was acquired in the fourth quarter of 1997, contributed the majority of this increase. The Caterpillar Footwear Group recognized a 2.8% decrease in 1998 net sales and other operating income from the 1997 level, which was related primarily to unfavorably warm weather in the fourth quarter of 1998 and difficult global economic conditions in the last half of the year.

          Within the Company's other business units, Wolverine Retail's net sales and other operating income increased $1.2 million in 1998 compared to 1997. Wolverine Leathers and Wolverine Procurement combined for a net sales and other operating income decrease of $7.1 million in 1998 as compared to 1997. This decrease related primarily to reduced demand for the Hush Puppies classics suede casual line and price reductions for cowhide leather, making it a cost-effective alternative to pigskin supplied by this business unit.

          Gross margin as a percentage of net sales and other operating income increased to 31.8% in 1998 from 30.7% in 1997. Gross margin dollars increased $8.5 million (4.2%) in 1998 to $212.6 million as compared to $204.1 million in 1997. The gross margin percentage for the branded footwear businesses increased to 30.8% in 1998 from 30.4% in 1997. The increase was due primarily to higher initial gross margins, efficiencies resulting from the 1997 factory restructuring that was fully implemented in 1998 and the elimination of unprofitable product lines. Gross margins for the Company's other business units increased from 33.0% in 1997 to 37.9% in 1998 primarily as a result of improved labor efficiencies and lower raw material costs experienced in Wolverine Leathers.

          Selling and administrative expenses as a percentage of net sales and other operating income increased to 21.4% in 1998 from 20.6% in 1997 as these costs increased $6.2 million (4.6%) to $143.4 million in 1998 from $137.2 million in 1997. The increase in selling and administrative expenses as a percentage of net sales and other operating income resulted primarily from costs associated with the start up of the new 350,000 square foot Howard City, Michigan distribution center, increased spending for media advertising on the Company's core brands and increased investments in branded marketing and

          Interest expense of $8.4 million was $2.9 million (54.9%) greater in 1998 than the 1997 level of $5.5 million. The increase in interest expense for 1998 reflects additional borrowings on the Company's revolving credit facility to support the repurchase of 2.2 million shares of the Company's common stock during 1998, the 1997 fourth quarter acquisition of the Merrell outdoor footwear business and increased working capital requirements in 1998 as compared to 1997.

          The 1998 effective tax rate of 32.6% increased from 32.0% in 1997 as a result of earnings from certain foreign subsidiaries, which are taxed generally at lower rates, becoming a smaller percentage of total consolidated earnings.

          Net earnings of $41.7 million for 1998 reflect a 0.3% increase over net earnings of $41.5 million reported for 1997. Diluted earnings per share for 1998 were $0.97 compared to $0.96 in 1997. Increased net earnings are primarily a result of the items noted above.

          Net cash provided by operating activities was $47.2 million in 1999 compared to net cash used in operating activities of $4.5 million in 1998. Cash of $23.4 in 1999 and $54.7 million in 1998 was used to fund working capital requirements, an improvement of $31.3 million. Accounts receivable of $170.7 million at January 1, 2000 reflect an $18.6 million (12.2%) increase over the $152.1 million balance at January 2, 1999. Inventories of $168.0 million at January 1, 2000 increased by $1.0 million (0.6%) over the $167.0 million balance at January 2, 1999. The expansion of the Merrell business and the addition of the Harley-Davidson business increased accounts receivable and inventories by $15.6 million and $12.3 million, respectively, over the 1998 balances. As of year-end 1999, the Company's order backlog was up 10.0% over the prior year's level. Accounts payable of $23.4 million at January 1, 2000 reflect a $5.5 million (31.0%) increase from the $17.9 million balance at January 2, 1999. The increase in accounts payable is primarily attributable to the timing of 1999 year-end payments.

          Additions to property, plant and equipment of $19.4 million in 1999 compare to $32.4 million reported in 1998. A majority of these expenditures were related to the replacement of legacy information systems and purchases of manufacturing equipment necessary to upgrade the Company's footwear and leather manufacturing facilities. Depreciation and amortization expense of $14.9 million in 1999 compares to $13.0 million in 1998. This increase was a result of the capital investments noted above and the amortization of goodwill and other intangibles related to the acquisitions made during the past three years.

          The Company maintains short-term borrowing and commercial letter-of-credit facilities of $69.1 million, of which $30.4 million and $30.1 million were outstanding at the end of 1999 and 1998, respectively. Long-term debt, including current maturities, of $139.2 million at the end of 1999 decreased $22.4 million from the $161.7 million balance at the end of 1998. The decrease in debt primarily resulted from payments made out of cash flows generated from operations.

          It is expected that continued Company growth will require increases in capital funding over the next several years. The Company has a long-term domestic revolving credit facility of $165.0 million

          The Company declared dividends of $4.9 million in 1999, or $0.12 per share, which reflects a 9.1% increase over the $4.6 million, or $0.11 per share, declared in 1998. Additionally, shares issued under stock incentive plans provided cash of $1.4 million in 1999 compared to $4.1 million during 1998.

          The current ratio at year-end was 7.2 to 1.0 in 1999 compared to 6.7 to 1.0 at year-end 1998. The Company's total debt to total capital ratio decreased to .30 to 1.0 in 1999 from .36 to 1.0 in 1998.

          The Company has assets, liabilities and inventory purchase commitments outside the United States that are subject to fluctuations in foreign currency exchange rates. A substantial portion of inventory sourced from foreign countries is purchased in U.S. dollars and is accordingly not subject to exchange rate fluctuations. Similarly, revenues from products sold in foreign countries under licensing and distribution arrangements are denominated in U.S. dollars. As a result, the Company engages in forward foreign exchange and other similar contracts to reduce its economic exposure to changes in exchange rates on a limited basis because the associated risk is not considered significant.

          Assets and liabilities outside the United States are primarily located in Canada and the United Kingdom. The Company's investment in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. Accordingly, the Company does not hedge these net investments. As a result of management's decision to exit its Russian wholesale footwear operations in the second quarter of 1999, the Company's previous exposure to foreign currency risk in Russia was substantially eliminated as of the end of the year.

          Because the Company markets, sells and licenses its products throughout the world, it could be significantly affected by weak economic conditions in foreign markets that could reduce demand for its products.

          The Company is exposed to changes in interest rates primarily as a result of its long-term debt requirements. The Company's interest rate risk management objectives are to limit the effect of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve its objectives, the Company maintains a significant percentage of fixed-rate debt (70% at January 1, 2000) to take advantage of lower relative interest rates currently available and finances seasonal working capital needs with variable-rate debt. The Company has not historically utilized interest swap or similar hedging arrangements to fix interest rates, but in 1998 entered into an interest rate lock agreement to fix the interest rate prior to the issuance of 6.5% senior notes in the amount of $75 million. The contract was settled in 1998 and resulted in a prepayment of $2.2 million that is being amortized over the term of the senior notes. The amortization of the prepayment creates an effective interest rate of 6.78% on the senior debt.

          The table that follows provides principal cash flows and related interest rates of the Company's short- and long-term debt by fiscal year of maturity. For foreign currency-denominated debt, the information is presented in U.S. dollar equivalents. Variable interest rates are based on the weighted average rates of the portfolio at January 1, 2000.

The Company does not enter into contracts for speculative or trading purposes, nor is it a party to any leveraged derivative instruments.

          As of the date of this Annual Report, the Company has not experienced any Year 2000 issues arising from its systems or those of its material vendors and suppliers. To the extent that there might be any ongoing Year 2000 issues that might arise at a later date, the Company has contingency plans in place to address such issues. The Company continues to maintain contact with third parties with whom it has material relationships, such as vendors, suppliers and financial institutions, with respect to such third parties' Year 2000 compliance and any ongoing Year 2000 issues that might arise at a later date. A significant amount of the Company's Year 2000 issues were resolved by the installation of new systems designed to manage order processing, warehousing and finance on an fully integrated enterprise-wide basis (the "Base System"). The final cost of the Base System was $21.8 million. Final costs for other reprogramming and replacement to address Year 2000 issues not addressed by the Base System totaled $2.5 million.

          In light of the Company's efforts, the Year 2000 issue has had no material adverse effect to date on the operations or results of operations of the Company, and is not expected to have a material impact on the Company's financial statements. However, there can be no assurance that the Company or any third parties will not have ongoing Year 2000 issues that may have a material adverse effect on the Company's business, operating results and financial condition in the future.

          Inflation has not had a significant effect on the Company over the past three years nor is it expected to have a significant effect in the foreseeable future. The Company continuously attempts to minimize the effect of inflation through cost reductions and improved productivity.

          This discussion and analysis of financial condition and results of operations, the letter to the stockholders from the Chairman and the President and other sections of this report, contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the footwear business, worldwide economics and about the Company itself. Certain statements are forward-looking, including those relating to: the Three-Year Strategic Growth Plan; projected targets; sales levels and growth; projected earnings and growth; earnings per share; results for years 2000 to 2002; balance sheet strength; projected cash flows; cash flow growth; debt reductions; projected capital and debt ratios; projected return on assets and equity; addition of new licensed footwear brands; acquisition of additional footwear businesses; meeting or exceeding strategic plan goals; management changes, skills and responsibilities; sufficiency of infrastructure; capital expenditure requirements; product development; and marketing programs. In addition, words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Risk Factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements.

          Risk Factors include, but are not limited to, uncertainties relating to changes in demand for the Company's products; changes in consumer preferences or spending patterns; the cost and availability of inventories, services, labor and equipment furnished to the Company; cost and availability of contract manufacturers; the degree and type of competition by the Company's competitors; changes in government and regulatory policies; changes in trading policies or import and export regulations; changes in interest rates, tax laws, duties or applicable assessments; technological developments; changes in local, domestic or international economic and market conditions; the size and growth of the overall footwear markets; changes in the amount or severity of inclement weather; changes due to the growth of Internet commerce; changes in consumer preference; popularity of particular designs and categories of footwear; consumer demand for new products developed by the Company and its competitors; the ability of the Company to manage and forecast its growth and inventories; the ability to secure and protect trademarks, patents and other intellectual property; changes in business strategy or development plans; and the ability to attract and retain qualified personnel. These matters are representative of the Risk Factors that could cause a difference between an ultimate actual outcome and a forward-looking statement. Historical operating results are not necessarily indicative of the results that may be expected in the future. The Risk Factors included here are not exhaustive. Other Risk Factors exist, and new Risk Factors emerge from time-to-time, that may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Furthermore, the Company undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

          The response to this item is set forth under the caption "Market Risk" in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and is here incorporated by reference.

          The response to this Item is set forth in Appendix A of this Annual Report on Form 10-K and is here incorporated by reference.

          None.

          The information regarding directors of the Company contained under the captions "Board of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the definitive Proxy Statement of the Company dated March 10, 2000, is incorporated herein by reference. The information regarding Executive Officers is provided in the Supplemental Item following Item 4 of Part I above.

          The information contained under the captions "Compensation of Directors," "Executive Compensation," "Employment Agreements and Termination of Employment and Change in Control Arrangements," and "Compensation Committee Report on Executive Compensation" in the definitive Proxy Statement of the Company dated March 10, 2000, is incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management.

          The information contained under the captions "Ownership of Common Stock" and "Securities Ownership of Management" contained in the definitive Proxy Statement of the Company dated March 10, 2000, is incorporated herein by reference.

          The information regarding certain employee loans following the caption "Executive Compensation," under the subheading "Stock Options," and the information contained under the captions "Compensation of Directors" and "Certain Relationships and Related Transactions" contained in the definitive Proxy Statement of the Company dated March 10, 2000, are incorporated herein by reference.

          Item 14(a)(1). Financial Statements. Attached as Appendix A.

          The following consolidated financial statements of Wolverine World Wide, Inc. and subsidiaries are filed as a part of this report:

          Item 14(a)(2).    Financial Statement Schedules. Attached as Appendix B.

          The following consolidated financial statement schedule of Wolverine World Wide, Inc. and subsidiaries is filed as a part of this report:

          All other schedules (I, III, IV, and V) for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.

          Item 14(a)(3).    Exhibits.

          The following exhibits are filed as part of this report:

____________________________

*Management contract or compensatory plan or arrangement.

          The Company will furnish a copy of any exhibit listed above to any stockholder without charge upon written request to Mr. Blake W. Krueger, Executive Vice President, General Counsel and Secretary, 9341 Courtland Drive, Rockford, Michigan 49351.

          No reports on Form 8-K were filed in the fourth quarter of the fiscal year ended January 1, 2000.

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.

                    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.

Stockholders' equity:
Common stock, $1 par value: authorized 80,000,000 shares;
issued, including treasury shares: 1999--44,426,322 shares;
1998--43,832,070 shares	44,426		43,832
Additional paid-in capital	76,752		72,825
Retained earnings	255,265		227,829
Accumulated other comprehensive loss	(614	)	(1,014	)
Unearned compensation	(5,974	)	(5,999	)
Cost of shares in treasury: 1999--3,125,952 shares; 1998--3,067,177 shares	(37,750	)	(37,153	)
Total stockholders' equity	332,105		300,320
Total liabilities and stockholders' equity	$534,395		$521,478

( ) Denotes deduction.
See accompanying notes to consolidated financial statements.

Depreciation of plant, equipment and software is computed using the straight-line method. The depreciable lives for buildings and improvements range from five to forty years; from three to ten years for machinery and equipment; and from three to ten years for software.

As required, the Company adopted the American Institute of Certified Public Accountants Statement of Position (SOP) 98-1, Accounting for the Costs of Computer Software Developed and Obtained for Internal Use, in 1999. The SOP provides guidelines for determining whether costs should be expensed or capitalized for computer software developed or purchased for internal use. The Company's accounting policies for such items were already in substantial compliance with SOP 98-1 and, therefore, the adoption did not have a material effect on its 1999 consolidated financial position or results of operations.

The following table sets forth the reconciliation of weighted average shares used in the computation of basic and diluted earnings per share:

Options to purchase 1,651,494 shares of common stock in 1999, 989,662 shares in 1998 and 116,275 shares in 1997 have not been included in the denominator for computation of diluted earnings per share because related exercise prices were greater than the average market price for the period and, therefore, were antidilutive.

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, which is effective for fiscal years beginning after June 15, 2000. SFAS No. 133 requires companies to record derivative instruments on the balance sheet at fair value and establishes accounting rules for changes in fair value that result from hedging activities. The Company does not currently engage in significant hedging activities that require use of derivative instruments and does not believe the adoption of SFAS No. 133 will have a material effect on its consolidated financial position or future results of operations.

The Company does not require collateral or other security on trade accounts receivable.

On October 17, 1997, the Company acquired the assets of the Merrell outdoor footwear business from the Outdoor Division of Sports Holding Corp. for cash of $15,753,000, including related transaction expenses, and a $500,000 note payable.

The acquisition was accounted for using the purchase method and, accordingly, the operating results of the Merrell business are included in the consolidated statements of operations since the date of acquisition. The purchase price was allocated to the net assets acquired based on their fair market value at the date of acquisition. Goodwill and other intangibles recognized in connection with this transaction totaled $5,914,000.

Consolidated net sales would have approximated $685,000,000 in 1997 on a pro forma basis if the acquisition had occurred at the beginning of 1997. Consolidated pro forma net earnings for 1997 would not have been materially different from reported amounts .

Inventories of $131,711,000 at January 1, 2000 and $134,355,000 at January 2, 1999 have been valued using the LIFO method. If the FIFO method had been used, inventories would have been $11,219,000 and $14,455,000 higher than reported at January 1, 2000 and January 2, 1999, respectively.

Notes payable consist of unsecured short-term debt of the Company's Canadian and United Kingdom subsidiaries. The notes bear interest of up to 1% over the respective foreign bank base rate (7.5% and 7.1% weighted average base rate at January 1, 2000 and January 2, 1999, respectively).

The Company has short-term debt and commercial letter-of-credit facilities that allow for total borrowings up to $69,055,000 at January 1, 2000 ($68,399,000 at January 2, 1999). In addition to the notes payable discussed above, amounts outstanding under these facilities consist of letters-of-credit that totaled $30,446,000 and $30,075,000 at January 1, 2000 and January 2, 1999, respectively.

Long-term debt consists of the following obligations:

The 6.5% senior notes payable require payments of interest only through December 2002, at which time annual principal payments of $10,714,000 become due through the maturity date of December 8, 2008. In connection with the issuance of these senior notes, the Company entered into an interest rate lock agreement with a bank that was settled on November 4, 1998 and resulted in a prepayment of $2,200,000. This prepayment is being amortized over the term of the notes using the effective interest method.

The 7.81% senior notes payable to insurance companies require equal annual principal payments of $4,285,000 through 2003, with the balance due on August 15, 2004.

The Company has domestic and foreign revolving credit agreements that allow for borrowings of up to $183,362,000 ($174,005,000 in 1998), of which $18,362,000 pertains to the Company's United Kingdom and Canadian subsidiaries. The agreements require that interest be paid at variable rates based on both LIBOR and the domestic prime rate. The weighted average interest rate of outstanding borrowings under these facilities was 5.5% at January 1, 2000 and 6.7% at January 2, 1999. The domestic and United Kingdom facilities expire in October 2001, and the Canadian facility expires in April 2000. Maximum borrowings under the agreements were $103,450,000 in 1999 and $149,000,000 in 1998.

The long-term loan agreements contain restrictive covenants which, among other things, require the Company to maintain certain financial ratios and minimum levels of tangible net worth. At January 1, 2000, unrestricted retained earnings were $74,564,000. The agreements also impose restrictions on securing additional debt, sale and merger transactions and the disposition of significant assets.

Principal maturities of long-term debt during the four years subsequent to 2000 are as follows: 2001--$46,972,000; 2002--$14,999,000; 2003--$14,999,000; 2004--$15,003,000.

Interest costs of $563,000 in 1999, $1,145,000 in 1998 and $768,000 in 1997 were capitalized in connection with various capital improvement and computer hardware and software installation projects.

The Company leases machinery, transportation equipment and certain warehouse and retail store space under operating lease agreements which expire at various dates through 2012. At January 1, 2000, minimum rental payments due under all noncancelable leases are as follows: 2000--$7,411,000; 2001--$6,235,000; 2002--$4,587,000; 2003--$3,638,000; 2004--$2,560,000; thereafter--$12,295,000.

Rental expense under all operating leases consisted primarily of minimum rentals and totaled $10,249,000 in 1999, $9,085,000 in 1998 and $9,013,000 in 1997.

The Company has 2,000,000 authorized shares of $1 par value preferred stock, of which none is issued or outstanding.

On April 17, 1997 the Company announced a three-for-two stock split on shares of common stock outstanding at May 2, 1997. All share and per share data included in the consolidated financial statements have been retroactively adjusted for the increased shares resulting from the stock split.

The Company has a preferred stock rights plan that is designed to protect stockholder interests in the event the Company is confronted with coercive or unfair takeover tactics. One right is associated with each share of common stock currently outstanding. The rights trade with the common stock and become exercisable only upon the occurrence of certain triggering events. Each right, when exercisable, will entitle the holder to purchase one one-hundredth of a share of Series B junior participating preferred stock for $120. The Company has designated 500,000 shares of preferred stock as Series B junior participating preferred stock for possible future issuance under the Company's stock rights plan. Upon issuance for reasons other than liquidation, each share of Series B junior participating preferred stock will have 100 votes and a preferential quarterly dividend equal to the greater of $21 per share or 100 times the dividend declared on common stock.

In the event the Company is a party to a merger or other business combination, regardless of whether the Company is the surviving corporation, rights holders other than the party to the merger will be entitled to receive common stock of the surviving corporation worth twice the exercise price of the rights. The plan also provides for protection against self-dealing transactions by a 15% stockholder or the activities of an adverse person (as defined). The Company may redeem the rights for $.01 each at any time prior to a person being designated as an adverse person or fifteen days after a triggering event. Unless redeemed earlier, all rights expire on May 7, 2007.

The Company has stock incentive plans under which options to purchase shares of common stock may be granted to officers, other key employees and nonemployee directors. Options granted are exercisable over ten years and vest over various periods ranging up to three years. All unexercised options are available for future grants upon their cancellation.

A summary of the transactions under the stock option plans is as follows:

Shares available for grant under the stock option plans were 1,894,747 at January 1, 2000 and 1,131,544 at January 2, 1999.

The weighted-average grant-date fair value was $4.13 in 1999, $7.37 in 1998 and $7.91 in 1997 for stock options granted.

During September 1998, the Board of Directors approved the cancellation and reissuance of stock options representing 594,478 shares of common stock. The cancelled options had original exercise prices ranging from $21.00 to $27.97. The reissued options had an exercise price of $15.00, which was 38% above the closing market price on the date of reissuance.

The exercise prices of options outstanding at January 1, 2000 range from $1.73 to $30.56. A summary of stock options outstanding at January 1, 2000 by range of option price is as follows:

The Company has elected to follow Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock incentive plans because the alternative fair value accounting provided for under SFAS No.123, Accounting for Stock-Based Compensation, requires the use of option valuation models that were not specifically developed for valuing the types of stock incentive plans maintained by the Company. Under APB Opinion No. 25, compensation expense is recognized when the market price of the underlying stock award on the date of grant exceeds any related exercise price.

Wolverine World Wide, Inc.
Notes to Consolidated Financial Statements (cont.)

Pro forma information regarding net earnings and earnings per share is required by SFAS No. 123, and has been determined as if the Company had accounted for its stock awards using the fair value method. The fair value of these awards was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: risk free interest rate of 5.3% (5% in 1998 and 6% in 1997); dividend yield of 0.5%; expected market price volatility factor of 0.47 (0.46 in 1998 and 0.32 in 1997); and an expected option life of four years.

The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options which have no vesting provisions and are fully transferable. In addition, the model requires input of highly subjective assumptions. Because the Company's stock options have characteristics significantly different from traded options and the input assumptions can materially affect the estimate of fair value, in management's opinion, the Black-Scholes option model does not necessarily provide a reliable measure of the fair value of the Company's stock options.

For purposes of pro forma disclosures, the estimated fair value of stock options are amortized to expense over the related vesting period. The Company's pro forma information under SFAS No. 123 is as follows:

The Company also has nonvested stock award plans for officers and other key employees. Common stock issued under these plans is subject to certain restrictions, including prohibition against any sale, transfer or other disposition by the officer or employee (except for certain transfers for estate planning purposes for certain officers), and a requirement to forfeit the award upon termination of employment. These restrictions lapse over a three- to five-year period from the date of the award. Shares aggregating 340,665 in 1999, 195,625 in 1998 and 154,862 in 1997 were awarded under these plans. The weighted-average award-date fair value was $10.02 in 1999, $27.67 in 1998 and $23.75 in 1997 for the shares awarded. Rights to 11,956 shares in 1999, 4,000 shares in 1998 and 8,250 shares in 1997 were cancelled. Any future shares awarded reduce the number of shares identified as available for future grants in the stock option table. The market value of the shares awarded is recognized as unearned compensation in the consolidated statements of stockholders' equity and is amortized to operations over the vesting period.

The Company has noncontributory, defined benefit pension plans covering a majority of its domestic employees. The Company's principal defined benefit pension plan provides benefits based on the employee's years of service and final average earnings (as defined), while the other plans provide benefits at a fixed rate per year of service. The Company intends to annually contribute amounts deemed necessary to maintain the plans on a sound actuarial basis.

The Company has a Supplemental Executive Retirement Plan for certain current and former employees that entitles them to receive payments from the Company following retirement based on the employee's years of service and final average earnings (as defined). Under the plan, the employees are eligible for

Wolverine World Wide, Inc.
Notes to Consolidated Financial Statements (cont.)

reduced benefits upon early retirement. The Company also has individual deferred compensation agreements with certain former employees that entitle them to receive payments from the Company for a period of fifteen to eighteen years following retirement. The Company maintains life insurance policies with a cash surrender value of $16,100,000 at January 1, 2000 and $14,405,000 at January 2, 1999 that are intended to fund these deferred compensation benefits under the Supplemental Executive Retirement Plan and the deferred compensation agreements.

The Company has a defined contribution money accumulation plan covering substantially all employees that provides for Company contributions based on earnings. This plan is combined with the principal defined benefit pension plan for funding purposes. Contributions to the money accumulation plan were approximately $1,500,000 in 1999, 1998 and 1997.

The following summarizes the status of and changes in the Company's pension assets and related obligations for its defined benefit pension plans: