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Steven Madden, Ltd. – ‘DEFR14A’ on 6/12/01

On: Tuesday, 6/12/01, at 4:40pm ET · Accession #: 1019056-1-500209 · File #: 0-23702

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 6/12/01  Steven Madden, Ltd.               DEFR14A                1:99K                                    Borer Fin’l Comms Inc

Revised Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFR14A     Revised Definitive Proxy Solicitation Material        36    165K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Biographical Summaries of Nominees for the Board of Directors Compensation of Directors and Executive Officers Employment Agreements Recent Developments
1	1st Page - Filing Submission
5	Biographical Summaries of Nominees for the Board of Directors
10	Recent Developments
14	Compensation of Directors and Executive Officers
16	Employment Agreements

DEFR14A 1st Page of 36 TOC ↑Top Previous Next ↓Bottom Just 1st
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. 1)

[X] Filed by Registrant

[ ] Filed by a Party other than the Registrant

Check the appropriate box:

[ ] Preliminary Proxy Statement

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

STEVEN MADDEN, LTD.
(Name of Registrant As Specified in its Charter)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

N/A
-----------------------------------------------------------------------

2) Aggregate number of securities to which transaction applies:

N/A
------------------------------------------------------------------------

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)

N/A
------------------------------------------------------------------------

4) Proposed maximum aggregate value of transaction:

N/A
------------------------------------------------------------------------

(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and date of its filing.

1) Amount Previously Paid:
N/A
---------------------------------------------------

2) Form, Schedule or Registration Statement No.:
N/A
---------------------------------------------------

3) Filing Party:
N/A
---------------------------------------------------

4) Date Filed:
N/A
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DEFR14A 2nd Page of 36 TOC 1st Previous Next ↓Bottom Just 2nd
STEVEN MADDEN, LTD.
52-16 BARNETT AVENUE
LONG ISLAND CITY, NY 11104

----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 10, 2001
----------------------------------------

To the Stockholders of Steven Madden, Ltd.:

Since the mailing of our Proxy Statement, dated April 25, 2001, the
Board of Directors of Steven Madden, Ltd., a Delaware corporation (the
"Company"), announced the restructuring of several key management positions and
the postponement of the Company's annual meeting of stockholders. As a result, a
new meeting has been scheduled and new directors have been nominated for
election by the Company's stockholders.

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of the Company, will be held on July 10, 2001, at the
Company's showroom located at 1370 Avenue of the Americas, 12th Floor, New York,
New York at 10:00 a.m., local time, and thereafter as it may from time to time
be adjourned, for the purposes stated below.

1. To elect nine (9) directors to the Board of Directors
of the Company for a one (1) year term;

2. To approve an amendment to the Company's 1999 Stock
Plan to increase the maximum number of shares of the Company's
common stock subject to the plan from 975,000 shares to
1,600,000 shares;

3. To ratify the appointment of Richard A. Eisner &
Company, LLP as independent public accountants for the Company
for fiscal year 2001; and

4. To transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.

All stockholders are cordially invited to attend the Annual Meeting.
Only those stockholders of record at the close of business on June 5, 2001 are
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. A complete list of stockholders entitled to vote at the Annual Meeting
will be available at the Meeting.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ CHARLES KOPPELMAN
----------------------------------
June 12, 2001 Charles Koppelman
Acting Chairman of the Board

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE AND SIGN THE
ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE TO AMERICAN
STOCK TRANSFER & TRUST COMPANY, 40 WALL STREET, NEW YORK, NEW YORK 10005.

DEFR14A 3rd Page of 36 TOC 1st Previous Next ↓Bottom Just 3rd
STEVEN MADDEN, LTD.
52-16 Barnett Avenue
Long Island City, NY 11104

PROXY STATEMENT

INTRODUCTION

This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Steven Madden, Ltd., a
Delaware corporation (the "Company"), for use at the annual meeting of the
Company's stockholders to be held at the Company's showroom located at 1370
Avenue of the Americas, 12th Floor, New York, New York on July 10, 2001 at 10:00
a.m., local time, and at any adjournments thereof (the "Annual Meeting").

The Annual Meeting has been called to consider and take action on
the following proposals: (i) to elect nine (9) directors to the Board of
Directors of the Company for a one (1) year term, (ii) to approve an amendment
to the Company's 1999 Stock Plan to increase the maximum number of shares of
Company's common stock subject to the plan from 975,000 shares to 1,600,000
shares, (iii) to ratify the selection of Richard A. Eisner & Company, LLP as
independent public accountants for the Company for fiscal year 2001, and (iv) to
transact such other business as may properly come before the Annual Meeting or
any adjournments thereof. The Board of Directors knows of no other matters to be
presented for action at the Annual Meeting. However, if any other matters
properly come before the Annual Meeting, the persons named in the proxy will
vote on such other matters and/or for other nominees in accordance with their
best judgment. The Company's Board of Directors recommends that the stockholders
vote in favor of each of the proposals. Only holders of record of common stock,
$.0001 par value (the "Common Stock"), of the Company at the close of business
on June 5, 2001 (the "Record Date") will be entitled to vote at the Annual
Meeting.

The principal executive offices of the Company are located at
52-16 Barnett Avenue, Long Island City, NY 11104 and its telephone number is
(718) 446-1800. The approximate date on which this Proxy Statement, the proxy
card and other accompanying materials are first being sent or given to
stockholders is June 12, 2001. The Company's Annual Report for the fiscal year
ended December 31, 2000, including audited financial statements, is being sent
to stockholders together with this Proxy Statement and is incorporated herein by
reference.

INFORMATION CONCERNING SOLICITATION AND VOTING

As of the Record Date, there were outstanding 11,595,905 shares of
Common Stock held by approximately 69 holders of record and 4,129 beneficial
owners. Only holders of shares of Common Stock on the Record Date will be
entitled to vote at the Annual Meeting. The holders of Common Stock are entitled
to one vote on all matters presented at the meeting for each share held of
record. The presence in person or by proxy of holders of record of a majority of
the shares outstanding and entitled to vote as of the Record Date shall be
required for a quorum to transact business at the Annual Meeting. If a quorum
should not be present, the Annual Meeting may be adjourned until a quorum is

DEFR14A 4th Page of 36 TOC 1st Previous Next ↓Bottom Just 4th
obtained. Each nominee to be elected as a director named in Proposal 1 must
receive a plurality of the votes of shares of Common Stock present in person or
represented by proxy at the Annual Meeting with respect to such proposal. The
amendment to the Company's 1999 Stock Plan described in Proposal 2 and the
ratification of the selection of Richard A. Eisner & Company, LLP as independent
public accountants of the Company for fiscal year 2001 described in Proposal 3
must be approved by the affirmative vote of the holders of a majority of the
total votes cast on such proposals in person or by proxy. Abstentions and broker
non-votes will have no effect with respect to any of the Proposals. Brokers who
hold shares in street name may vote on behalf of beneficial owners with respect
to Proposals 1,2 and 3. The approval of all other matters to be considered at
the Annual Meeting requires the affirmative vote of a majority of the eligible
votes cast at the Annual Meeting on such matters.

The expense of preparing, printing and mailing this Proxy
Statement, exhibits and the proxies solicited hereby will be borne by the
Company. In addition to the use of the mails, proxies may be solicited by
officers and directors and regular employees of the Company, without additional
remuneration, by personal interviews, telephone, telegraph or facsimile
transmission. The Company will also request brokerage firms, nominees,
custodians and fiduciaries to forward proxy materials to the beneficial owners
of shares of Common Stock held of record and will provide reimbursements for the
cost of forwarding the material in accordance with customary charges.

Proxies given by stockholders of record for use at the Annual
Meeting may be revoked at any time prior to the exercise of the powers
conferred. In addition to revocation in any other manner permitted by law,
stockholders of record giving a proxy may revoke the proxy by an instrument in
writing, executed by the stockholder or his attorney authorized in writing or,
if the stockholder is a corporation, under its corporate seal, by an officer or
attorney thereof duly authorized, and deposited either at the corporate
headquarters of the Company at any time up to and including the last business
day preceding the day of the Annual Meeting, or any adjournment thereof, at
which the proxy is to be used, or with the chairman of such Annual Meeting on
the day of the Annual Meeting or adjournment thereof, and upon either of such
deposits the proxy is revoked.

ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
SPECIFIED ON SUCH PROXIES. PROXIES WILL BE VOTED IN FAVOR OF A PROPOSAL IF NO
CONTRARY SPECIFICATION IS MADE. ALL VALID PROXIES OBTAINED WILL BE VOTED AT THE
DISCRETION OF THE PERSONS NAMED IN THE PROXY WITH RESPECT TO ANY OTHER BUSINESS
THAT MAY COME BEFORE THE ANNUAL MEETING.

None of the matters to be acted on at the Annual Meeting give rise
to any statutory right of a stockholder to dissent and obtain the appraisal of
or payment for such stockholder's shares.

DEFR14A 5th Page of 36 TOC 1st Previous Next ↓Bottom Just 5th
PROPOSAL ONE

TO ELECT NINE DIRECTORS TO SERVE FOR ONE YEAR AND UNTIL THEIR SUCCESSORS HAVE
BEEN DULY ELECTED AND QUALIFIED

Under the By-Laws of the Company (the "By-Laws"), the Board of
Directors of the Company is required to be comprised of a minimum of one (1)
director, subject to which limitation the number of directors may be fixed from
time to time by action of the stockholders or of the directors, with all
directors elected by the stockholders each year at the annual stockholders
meeting. The Company's board presently consists of eight (8) directors whose
terms expire at the Annual Meeting, except for Mr. Steven Madden who will resign
as a director of the Company effective July 1, 2001 and who has not been
nominated to serve as a director in the Proxy Statement. Officers are elected
annually by and serve at the discretion of the Board of Directors.

The Board has nominated nine (9) candidates to serve as directors.
The names and biographical summaries of the nine (9) persons who have been
nominated by the Board of Directors to stand for election at the Annual Meeting
have been provided below for your information. The Board of Directors has
proposed that these persons be elected at the Annual Meeting to serve until the
next annual meeting of stockholders. The proxies will be voted for the election
of the nine (9) nominees listed below as directors of the Company unless
otherwise specified on the form provided. A plurality of the votes of shares of
Common Stock present in person or represented by proxy at the Annual Meeting
will be necessary to elect the directors listed below. If, for any reason, any
of the nominees shall be unable or unwilling to serve, the proxies will be voted
for a substitute nominee who will be designated by the Board of Directors at the
Annual Meeting. Stockholders may abstain from voting by marking the appropriate
boxes on the enclosed proxy. Abstentions shall be counted separately and shall
be used for purposes of calculating quorum.

Biographical Summaries of Nominees for the Board of Directors

Charles Koppelman has been a director of the Company since June 1998
and acting Chairman of the Board since June 2000. As of July 1, 2001, Mr.
Koppelman will become the Company's Executive Chairman of the Board. In
addition, Mr. Koppelman will also be the Chairman of the newly created Office of
the Chairperson which is responsible for corporate policy and strategic planning
and presently scheduled to remain in effect until December 31, 2001. Presently,
Mr. Koppelman serves as the Chairman and Chief Executive Officer of EMI Music
Publishing Worldwide and as Chairman and Chief Executive Officer of EMI Record
Group, North America. From 1988 to 1997, Mr. Koppelman served as the Chairman
and Chief Executive Officer of EMI Capital Music, N.A. See "Recent
Developments."

Jamieson Karson has been a director of the Company since January 2,
2001. As of July 1, 2001, Mr. Karson will become the Company's Chief Executive
Officer and Vice Chairman of the Board. As Chief Executive Officer, Mr. Karson
will be a member of the newly created Office of the Chairperson. Mr. Karson has
practiced law for over 17 years. He has been a partner in the New York City law
firm of Tannenbaum Helpern Syracuse & Hirshtritt LLP since January 1, 1997 where
he served on the firm's three person Finance Committee. Previously, he was a
partner at the law firm of Karson McCormick from February 1992 through December
31, 1996. Prior to that, Mr. Karson was an associate attorney at the law firm of
Shea & Gould. See "Recent Developments."

DEFR14A 6th Page of 36 TOC 1st Previous Next ↓Bottom Just 6th
Rhonda J. Brown has been the President of the Company since February
2000, a director of the Company since October 1996 and will become a member of
the newly created Office of the Chairperson in July 2001. Ms. Brown also served
as Chief Operating Officer of the Company from July 1996 to January 2001. Prior
to joining the Company, Ms. Brown served as President and Chief Executive
Officer of Icing, Inc. from May 1995 to December 1995. Previously, from August
1992 to December 1994, Ms. Brown served as Merchandise President of Macy's East,
a division of R.H. Macy & Co., Inc. From July 1988 to July 1992. Ms. Brown
served as Senior Vice-President and General Merchandise Manager of Lord &
Taylor, a division of the May Company. See "Recent Developments."

Arvind Dharia has been the Chief Financial Officer of the Company since
October 1992 and a director since December 1993. From December 1988 to September
1992, Mr. Dharia was Assistant Controller of Millennium III Real Estate Corp.
See "Recent Developments."

Gerald Mongeluzo has been President of Adesso-Madden, Inc., a wholly
owned subsidiary of the Company, since September 1995. Previously, Mr. Mongeluzo
was the founder and President of Adesso Shoes, Inc., a buying agent of private
label shoes. From 1987 through 1991, Mr. Mongeluzo was the President of the
Prima Barabaro Division of Cells Enterprise, Inc. Mr. Mongeluzo founded Prima
Shoes, Inc., a buying agent of private label shoes, and served as its President
from 1974 to 1987.

Marc S. Cooper has served as a Managing Director of Peter J. Solomon
Company in its Mergers and Acquisitions Department since May 1999. Previously,
Mr. Cooper worked at Barington Capital Group from March 1992 to May 1999, where
he was a founding member and Vice Chairman overseeing its investment banking
operations. Prior to his tenure with Barington Capital Group, Mr. Cooper spent
three years as a partner of Scharf Brothers, a private merchant banking firm.
Currently, Mr. Cooper serves as a director of Thinking Tools, Inc. and Precache,
Inc.

John L. Madden has been a director of the Company since the Company's
inception. Since April 1998, Mr. Madden has owned and managed a branch office of
Tradeway Securities Group, Inc. in Florida. From May 1996 through December 1996,
Mr. Madden formed JLM Consultants, Inc. which acted as a branch office of Merit
Capital, Inc. for several broker-dealers. From May 1994 to May 1996, Mr. Madden
served as Vice President of Investments for GKN Securities, Inc. From August
1993 to April 1994, Mr. Madden was employed by Biltmore Securities, Inc. as
Managing Director and registered sales representative. Mr. Madden is the brother
of Steven Madden, the Company's founder and as of the date of this Proxy
Statement Chief Executive Officer. See "Recent Developments."

Peter Migliorini has been a director of the Company since October 1996.
From 1994 to present, Mr. Migliorini has served as Sales Manager for Greschlers,
Inc., a major supply company located in Brooklyn, New York. From 1987 to 1994
Mr. Migliorini served as Director of Operations for Mackroyce Group. Mr.
Migliorini has previously served in a number of capacities, ranging from
Assistant Buyer to Chief Planner/Coordinator for several shoe companies
including Meldico Shoes, Perry Shoes, and Fasco Shoes. See "Recent
Developments."

DEFR14A 7th Page of 36 TOC 1st Previous Next ↓Bottom Just 7th
Heywood Wilansky has been a director of the Company since January 2,
2001. Mr. Wilansky served as the President and Chief Executive Officer of
Bon-Ton Stores, Inc, from August 1995 to July 2000 and a director of Bon-Ton
Stores, Inc. from August 1995 to present. Prior to that, he was employed by The
May Department Stores Company for more than 19 years, last serving as President
and Chief Executive Officer of the Foley's division from1992 to 1995. Mr.
Wilansky is a director of First Washington Realty Trust, a real estate
organization which principally owns neighborhood shopping centers.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends a vote FOR the
election of Ms. Rhonda Brown and Messrs. Charles Koppelman, Jamieson Karson,
Arvind Dharia, Gerald Mongeluzo, Marc Cooper, John L. Madden, Peter Migliorini
and Heywood Wilansky. Unless otherwise instructed or unless authority to vote is
withheld, the enclosed proxy will be voted FOR the election of the above listed
nominees and AGAINST any other nominees.

Director Compensation

Directors who are also employees of the Company are not paid any
fees or other remuneration for service on the Board or any of its Committees.
Each non-employee director receives (i) an annual grant of options to purchase
10,000 shares of Common Stock at an exercise price per share equal to two
dollars ($2.00) above the fair market value of the Common Stock on the date of
grant and (ii) twenty thousand dollars ($20,000) in immediately available funds.
In addition, non-employee directors are reimbursed by the Company for all
expenses related to attending meetings.

On July 18, 2000, the Company granted Mr. Koppelman 50,000 options
at an exercise price of $7.00 per share as compensation for assuming the duties
of Chairman of the Board of the Company pursuant to a letter dated July 25, 2000
(the "Option Letter"). These options vested on July 18, 2000 and will expire on
July 18, 2005. The Option Letter provided that if Mr. Koppelman continued his
service as acting Chairman of the Board, he was entitled to receive 75,000
options at an exercise price of $7.00 per share which options were issued on May
31, 2001. In addition, he was also entitled to receive 75,000 options on each of
May 31, 2002, 2003 and 2004 at an exercise price per share equal to the closing
bid price of the Company's common stock on the date of grant (the "Additional
Options"). In connection with the execution of his Employment Agreement with the
Company, Mr. Koppelman surrendered all of the Additional Options. See
"Employment Agreements."

Meetings and Committees of the Board of Directors

The Board of Directors met six (6) times during the fiscal year
ended December 31, 2000. The Board of Directors has standing Audit, Real Estate
and Compensation Committees.

The Audit Committee of the Board of Directors has consisted of
directors Charles Koppelman, Peter Migliorini and Heywood Wilansky, none of whom
was an employee of the Company during 2000. The Audit Committee is primarily
responsible for reviewing the services performed by the Company's independent

DEFR14A 8th Page of 36 TOC 1st Previous Next ↓Bottom Just 8th
public accountants, evaluating the Company's accounting policies and its system
of internal controls, and reviewing significant finance transactions.

The audit functions of the Audit Committee are focused on three
areas:

- the adequacy of the Company's internal controls and financial
reporting process and the reliability of the Company's
financial statements.

- the independence and performance of the Company's independent
public accountants.

- the Company's compliance with legal and regulatory
requirements.

The Audit Committee meets with management periodically to consider
the adequacy of the Company's internal controls and the objectivity of its
financial reporting. The Audit Committee discusses these matters with the
Company's independent public accountants and with appropriate Company financial
personnel. Meetings are held with the independent public accountants who have
unrestricted access to the Audit Committee. The Audit Committee also recommends
to the Board the appointment of the independent public accountants and reviews
periodically their performance and independence from management. In addition,
the Audit Committee reviews the Company's financing plans and reports
recommendations to the full Board of Directors for approval and to authorize
action. The Directors who served on the Audit Committee during 2000 were all
"Independent" for purposes of The Nasdaq Stock Market listing standards. That
is, the Board of Directors has determined that no member of the Audit Committee
had a relationship to the Company that may interfere with its independence from
the Company and its management. At the first meeting of the Board of Directors
Meeting following the Annual Meeting, Charles Koppelman will relinquish his
membership on the Audit Committee and Marc Cooper will be nominated to be a
member of the Audit Committee. The Board has adopted a written charter setting
out the audit related functions the Audit Committee is to perform. A copy of
that charter is attached to this Proxy Statement as Annex B.

Management has primary responsibility for the Company's financial
statements and the overall reporting process, including the Company's system of
internal controls. The independent public accountants audit the annual financial
statements prepared by management, express an opinion as to whether those
financial statements present fairly the financial position, results of
operations and cash flows of the Company in conformity with generally accepted
accounting principles and discuss with the Audit Committee any issues they
believe should be raised with the Audit Committee. During 2000, the Audit
Committee met two (2) times.

Audit Committee Report

This year, the Audit Committee reviewed the Company's audited
financial statements and met with both management and Richard A. Eisner &
Company, LLP, the Company's independent public accountants, to discuss such
audited financial statements. Management has represented to the Audit Committee
that the financial statements were prepared in accordance with generally
accepted accounting principles. The Audit Committee has received from and
discussed with Richard A. Eisner & Company, LLP the written disclosure and the

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letter required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees). These items relate to that firm's
independence from the Company. The Audit Committee also discussed with Richard
A. Eisner & Company, LLP any matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). Based on these
reviews and discussions, the Audit Committee recommended to the Board that the
Company's audited financial statements be included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000.

Audit Fees

For the year ended December 31, 2000, the Company incurred
professional fees to its independent public accountants in the amount of
$120,000 related to auditing services.

Financial Information Systems Design and Implementation Fees

For the year ended December 31, 2000, there were no fees billed by
the Company's independent public accountants for professional services rendered
for information technology services relating to financial information systems
design and implementation.

All Other Fees

For the year ended December 31, 2000, the Company incurred
professional fees to its independent public accountants in the amount of
$236,000 related to all other services.

The Audit Committee has considered whether the non-audit services
provided by the Company's independent public accountants during the year ended
December 31, 2000 were compatible with the independent public accountants'
independence and has concluded that the Company's independent public accountants
have maintained its independence.

AUDIT COMMITTEE

Charles Koppelman,
Peter Migliorini
Heywood Wilansky

The Compensation Committee of the Board of Directors has consisted
of directors Charles Koppelman, John Madden and Peter Migliorini. The
Compensation Committee is primarily responsible for approving salaries, bonuses
and other compensation for the Company's Chief Executive Officer and named
executive officers, reviewing management recommendations relating to new
incentive compensation plans and changes to existing incentive compensation
plans, and administering the Company's stock plans, including granting options
and setting the terms thereof pursuant to such plans (all subject to approval by
the Board of Directors). During 2000, the Compensation Committee met two (2)
times.

The Real Estate Committee of the Board of Directors has consisted
of directors Steven Madden, Rhonda Brown and Jamieson Karson. The Real Estate
Committee is primarily responsible for overseeing real estate transactions for
the Company. In light of the Company's aggressive retail store expansion plan,
the Real Estate Committee was formed to consider proposed real estate
transactions for approval. During 2000, the Real Estate Committee met twelve
(12) times.

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Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission ("SEC") initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than ten percent stockholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge, based solely on its review of
the copies of such reports furnished to the Company during the year ended
December 31, 2000, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
satisfied.

Recent Developments

On June 20, 2000, Steven Madden, the Company's former Chairman and
current Chief Executive Officer, was indicted in the United States District
Courts for the Southern District and Eastern District of New York. The
indictments alleged that Mr. Madden engaged in securities fraud and money
laundering activities. In addition, the Securities and Exchange Commission filed
a complaint in the United States District Court for the Eastern District of New
York alleging that Mr. Madden violated Section 17(a) of the Securities Exchange
Act of 1934, as amended. On May 23, 2001, Steven Madden entered into a plea
agreement with the U.S. Attorney's Office related to the federal charges filed
against him. In addition, Mr. Madden reached a separate settlement agreement
with the Securities and Exchange Commission regarding the allegations contained
in its complaint. As a result, Mr. Madden has informed the Company that
effective as of July 1, 2001, he will resign as the Company's Chief Executive
Officer and as a member of the Company's Board of Directors. Mr. Madden will
thereafter serve as the Company's Creative and Design Chief, a non-executive
position. It is expected that Mr. Madden will be sentenced in September 2001 and
will return to work for the Company as its Creative and Design Chief following
his incarceration. Under the settlement agreement with the Securities and
Exchange Commission, Mr. Madden has agreed to not serve as an officer or
director of a publicly traded company for 7 years.

Neither the indictments nor the Securities and Exchange Commission
complaint allege any wrongdoing by the Company or its other officers and
directors. In connection with Steven Madden relinquishing his position as Chief
Executive Officer of the Company, the Company entered into an amended employment
agreement with Steven Madden and new employment agreements with Charles
Koppelman and Jamieson Karson. See "Employment Agreements."

On March 14, 2001, the Company became aware that the Securities and
Exchange Commission had issued a formal order of investigation with respect to
trading in the Company's securities. The Company has reason to believe that the
Staff is investigating possible securities law violations by persons trading in
the Company's securities prior to June 20, 2000 who may have been in possession
of alleged material, non-public information. As previously disclosed on Form 4's
filed with the Securities and Exchange Commission, certain officers and
directors of the Company sold shares of the Company's common stock during 1999
and the first half of 2000. Each of such officers and directors has denied
having knowledge of any material, non-public information prior to engaging in
such transactions.

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Directors and Executive Officers

Certain information concerning the directors and executive
officers of the Company is set forth below:

Name Age Position(s) with the Company
---- --- ----------------------------

Charles Koppelman 60 Chairman of the Board(1)

Steven Madden 44 Chief Executive Officer and Director(2)

Rhonda Brown 45 President and Director(3)

Arvind Dharia 51 Chief Financial Officer, Director and Secretary

Richard Olicker 43 Chief Operating Officer(4)

Gerald Mongeluzo 60 President of Adesso-Madden, Inc., Director
Nominee

Mark Jankowski 40 General Merchandise Manager

Robert Schmertz 37 President of Shoe Biz, Inc. and Diva
Acquisition Corp.

Joseph Masella 52 President of l.e.i. Footwear and Stevies, Inc.

Les Wagner 60 Vice President of Real Estate of Steven Madden
Retail, Inc. and Director(5)

John L. Madden 53 Director

Peter Migliorini 52 Director

Jamieson Karson 43 Director(6)

Heywood Wilansky 52 Director(7)

John Basile 49 Executive Vice President and Director(8)

Marc Cooper 39 Director Nominee

-----------------

(1) Mr. Koppelman was appointed Acting Chairman of the Board in June 2000.
Effective July 1, 2001, Mr. Koppelman will serve as Executive Chairman of
the Board. See "Recent Developments."
(2) Mr. Madden held the additional titles of President until February 2000 and
Chairman of the Board until June 2000. Mr. Madden has informed the Company
that, as of July 1, 2001, he will resign as a director and Chief Executive
Officer of the Company. On July 1, 2001, Mr. Madden will become the
Company's Creative and Design Chief. See "Recent Developments."
(3) Ms. Brown was appointed President in February 2000 and relinquished her
position as Chief Operating Officer in January 2001.
(4) Mr. Olicker commenced his employment with the Company in January 2001.
(5) Mr. Wagner resigned as officer of Steven Madden Retail, Inc. and a director
of the Company in March 2001.
(6) Mr. Karson was appointed as a director of the Company in January 2001.
Effective July 1, 2001, Mr. Karson will serve as the Company's Chief
Executive Officer and Vice Chairman of the Board. See "Recent
Developments."
(7) Mr. Wilansky was appointed as a director of the Company in January 2001.
(8) Mr. Basile resigned as officer and director of the Company in December
2000.

DEFR14A 12th Page of 36 TOC 1st Previous Next ↓Bottom Just 12th
See "Biographical Summaries of Nominees for the Board of Directors" for
biographical summaries of Ms. Rhonda Brown and Messrs. Charles Koppelman,
Jamieson Karson, Arvind Dharia, Gerald Mongeluzo, Marc Cooper, John L. Madden,
Peter Migliorini and Heywood Wilansky.

Steven Madden has been the Chief Executive Officer and a director since
the Company's inception. In February 2000, Mr. Madden relinquished the position
of President which he held since the Company's inception, and in June 2000, Mr.
Madden resigned as Chairman of the Board. Mr. Madden has informed the Company
that, effective as of July 1, 2001, he will resign as the Company's Chief
Executive Officer and as a member of the Company's Board of Directors. As of
July 1, 2001, Mr. Madden will become the Company's Creative and Design Chief. In
1980, Mr. Madden joined L.J. Simone, a domestic footwear manufacturer, as an
Account Executive. After leaving L.J. Simone in 1988, Mr. Madden joined M.C.M.
Footwear, where he commenced the design, development and marketing of the
"Souliers" line of footwear for women. In 1990, Mr. Madden founded the Company.
See "Recent Developments."

Richard Olicker has been Chief Operating Officer of the Company since
January 3, 2001. Prior to joining the Company, Mr. Olicker spent more than 12
years at AeroGroup International, Inc., marketers of Aerosoles and What's What
shoes. As cofounder of Aerosoles, Mr. Olicker served as President of the
company's private label division and was responsible for managing all aspects of
sourcing, production, pricing, sales, service, systems and finance. Mr. Olicker
began his career in footwear in 1982 as the General Counsel and Licensing
Director at El Greco Leather Products and later held an executive position with
the apparel licensing firm New Retail Concepts, Inc.

Mark Jankowski has been the General Merchandise Manager of the Company
since December 2000. Previously, Mr. Jankowski had been the President of Steve
Madden Retail, Inc. from February 1999 to December 2000 and the Company's Vice
President of Product Development from 1995 to 1999. From 1980 to 1995, Mr.
Jankowski held several positions at Edison Brothers including Head of Buying.

Robert Schmertz has been the President of Shoe Biz, Inc., a wholly
owned subsidiary of Steve Madden Retail Inc. since May 1998 and President of
Diva Acquisition Corp. since January 2001. Before joining the Company, Mr.
Schmertz was President of Daniel Scott Inc. from November 1995 to May 1998.
Previously, Mr. Schmertz was the East Coast Sales Manager for Impo International
from January 1993 through November 1995. From April 1990 to December 1992, Mr.
Schmertz served as a sales representative for Espirit de Corp. based in San
Francisco, California.

Joseph Masella has been President of Stevies, Inc. since April 2000 and
the Company's l.e.i. Footwear Division since July 1998. Previously, he was Vice
President-Sales of the Company's Adesso-Madden subsidiary since October 1995.
From 1992 to 1995, Mr. Masella served as General Manager-Far East Division of US
Shoe Co.

Les Wagner was the Vice President-Real Estate for Steven Madden Retail,
Inc. from April 1999 to March 2001 and a Director of the Company from October
1996 to March 2001. Mr. Wagner resigned as officer of Steven Madden Retail, Inc.
and a Director of the Company in March 2001. From 1993 to 1996, Mr. Wagner

DEFR14A 13th Page of 36 TOC 1st Previous Next ↓Bottom Just 13th
served as the President of Baker/Leeds Shoe Store, a Division of Edison Brothers
Stores, Inc. Mr. Wagner has served in a number of other capacities for
Baker/Leeds from 1963 to 1993 which included, General Merchandise Manager from
1989 to 1993; Vice President Real Estate Northeast Area from 1988 to 1989; and
President, Gussini Discount Shoe Division from 1987 to 1988. Mr. Wagner attended
Harvard University, completing the Advanced Management Program (AMP 100).

John Basile was the Company's Director of Operations from June 1994
until December 1997 and the Company's Executive Vice President from January 1998
through December 2000. Mr. Basile was a director of the Company from November
1996 through December 2000. Mr. Basile resigned as officer and Director of the
Company in December 2000. Currently, Mr. Basile is a consultant to the Company.
From 1990 to 1994, Mr. Basile was Executive Vice President of Cougar U.S.A.
responsible for the United States Division of Susan Shoes of Canada. Previously,
Mr. Basile was a Sales Manager at Bellini Imports from 1980 to 1990.

DEFR14A 14th Page of 36 TOC 1st Previous Next ↓Bottom Just 14th
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Summary Compensation Table

The following table sets forth for each of the last three fiscal years
ended December 31, 2000, December 31, 1999 and December 31, 1998 the
remuneration paid by the Company to its Chief Executive Officer and the four
other most highly compensated executive officers:

[Enlarge/Download Table]

SUMMARY COMPENSATION TABLE
---------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------------------------------------------
NAME AND FISCAL AWARDS OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(1) COMPENSATION

---------------------------------------------------------------------------------------------------------

Steven Madden, 2000 $300,000 $400,000 -0- $311,437(2)
Chief Executive Officer 1999 $275,000 $800,000 -0- $318,641(2)
1998 $274,231 $0.00 191,189 $315,394(2)

Rhonda Brown, 2000 $270,052 $581,150 190,575
President 1999 $257,278 $537,920 -0-
1998 $236,888 $242,493 188,811

John Basile, Executive 2000 $250,000 $614,047 -0-
Vice President(3) 1999 $299,135 $ 88,299 100,000
1998 $274,711 $189,000 250,000

Arvind Dharia, 2000 $171,769 $ 80,000 25,000 $ 91,743(4)
Chief Financial Officer 1999 $140,000 $ 39,367 25,000 $ 88,606(4)
1998 $140,000 $ 46,561 32,000 $ 86,891(4)

Gerald Mongeluzo 2000 $257,653 $ 75,000 -0-
President, Adesso- 1999 $249,769 $ 50,000 -0-
Madden, Inc. 1998 $230,992 $ 35,000 50,000

----------------------
(1) Options to purchase shares of Common Stock.
(2) Life insurance premium and other expenses paid on behalf of Mr. Madden.
(3) Mr. Basile's employment with the Company terminated in December 2000.
(4) Life insurance premium paid on behalf of Mr. Dharia.

DEFR14A 15th Page of 36 TOC 1st Previous Next ↓Bottom Just 15th
The following table sets forth certain information with respect to
options granted during the last fiscal year to the Company's executive officers
named in the above Summary Compensation Table.

[Enlarge/Download Table]

Option/SAR Grants In Last Fiscal Year
-------------------------------------

Percent of Potential Realizable Value
Number of Total at Assumed Annual Rates of
Securities Options/SARS Exercise Stock Price Appreciation
Underlying Granted to or Base for Option Term
Options/SARS Employees in Price --------------------------
Name Granted (#) Fiscal Year% ($/Sh) Expiration Date 5% 10%
---- ----------- ------------ -------- --------------- ---------- ------------

Rhonda Brown 190,575 38.9% $11.63 August 30, 2010 $1,393,874 $3,532,350

Arvind Dharia 25,000 5.1% $ 6.57 June 29, 2010 $ 103,296 $ 261,772

The following table sets forth certain information with respect to
options exercised during the last fiscal year by the Company's executive
officers named in the Summary Compensation Table, and with respect to
unexercised options held by such persons at the end of the last fiscal year:

Aggregate Option/SAR Exercises In Last Fiscal Year And Fiscal Year-End
Option/SAR Values
----------------------------------------------------------------------

[Enlarge/Download Table]

Shares Number of Securities Value of Unexercised in the
Acquired on Value Realized Underlying Unexercised Money Options/SARs at
Name Exercise (#) $ Options/SARS at FY-End (#) FY-End ($) (1)
---- ------------ -------------- ----------------------------- -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------

Steven Madden 100,000 $1,268,943 1,051,189 -- 4,734,238 --

Rhonda Brown 100,000 $1,036,803 230,454 142,931 0 0

Arvind Dharia 15,000 $ 157,488 95,750 6,250 118,136 6,625

John Basile 45,000 $ 418,359 470,000 -- 1,601,100 --

Gerald Mongeluzo -- -- 62,500 -- 25,625 --

-------------------
(1) Based upon a closing price on December 29, 2000 of $7.63 per share as
reported by The Nasdaq Stock Market.

DEFR14A 16th Page of 36 TOC 1st Previous Next ↓Bottom Just 16th
1999 Stock Plan

As of March 15, 1999, the Board of Directors of the Company adopted the
1999 Stock Plan (the "1999 Plan"), and on June 4, 1999 the Company's
stockholders approved the adoption of the 1999 Plan. In May 2000, the Company's
stockholders approved an amendment to the 1999 Plan increasing the number of
shares of common stock subject to the plan from 400,000 to 975,000 shares. As of
the Record Date, options to purchase 621,100 shares of Common Stock have been
granted pursuant to the 1999 Plan. The purpose of the 1999 Plan is to provide a
means whereby directors and selected employees, officers, agents, consultants,
and independent contractors of the Company, may be granted incentive stock
options and/or nonqualified stock options to purchase shares of common stock, in
order to attract and retain the services or advice of such directors, employees,
officers, agents, consultants, and independent contractors and to provide
additional incentive for such persons to exert maximum efforts for the success
of the Company by encouraging stock ownership in the Company. The 1999 Plan
Proposal is expected to provide even greater flexibility to the Company's
compensation methods, after giving due consideration to competitive conditions
and the impact of federal tax laws. See Proposal Number 2 - Amendment of the
1999 Stock Plan.

Other Options

In March 1995, the Company issued options to purchase 1,000,000 shares
of its Common Stock to a company wholly owned by Steven Madden. The options were
subsequently transferred to Steven Madden. The options which are fully
exercisable, have an exercise price of $1.75 and an exercise period of 10 years.
As of the Record Date, 500,000 of these options remain unexercised. Unearned
compensation was recorded in the amount of $575,000 which represented the
difference between the exercise price and the fair value of the stock on the
date of grant and was classified as a component of stockholders equity. The
unamortized portion was charged to operations in 1997 in connection with Steven
Madden's then-existing amended employment agreement.

Employment Agreements
---------------------

In July 1996, the Company entered into a three (3) year employment
agreement with Rhonda Brown pursuant to which Ms. Brown agreed to serve as the
Company's Chief Operating Officer. The Company agreed to pay Ms. Brown an annual
salary of $200,000 plus a 10% annual increase in the base salary. The agreement
provided that Ms. Brown received options to purchase 66,000 shares of the
Company's Common Stock at an exercise price equal to the closing bid price of
the Company's Common Stock on June 28, 1996, as quoted on The Nasdaq Stock
Market. As of May 1, 1998, the Company and Ms. Brown amended her employment
agreement so that (i) the term of her employment agreement is extended to July
31, 2001 and (ii) her annual base salary increase will be reduced from 10% per
annum to 5% per annum commencing on July 1, 2000. In addition, in the event that
a "change of control" of the Company occurs without Ms. Brown's consent, she is
entitled to receive an amount equal to the greater of (i) the balance of the
Base Salary during the remainder of the term, and (ii) the Base Salary for two
years and Ms. Brown's most recent annual bonus multiplied by the number of years
remaining under the agreement. As of March 15, 1999, the Company and Ms. Brown
executed a second amendment to her employment agreement. The second amendment
accelerated the reduction in her annual base salary increase from July 1, 2000
to July 1, 1999 and reduced by one half (1/2) the number of the options issuable

DEFR14A 17th Page of 36 TOC 1st Previous Next ↓Bottom Just 17th
as an option bonus. In February 2000, Ms. Brown was appointed as the President
of the Company and in January, 2001 Ms. Brown relinquished her title as Chief
Operating Officer.

In November 2000, the Company and Ms. Brown amended her employment
agreement to extend the term of her employment agreement to December 31, 2003.
The Company agreed to pay Ms. Brown an annual base salary of (i) two hundred
seventy five thousand dollars ($275,000) through December 31, 2000, (ii) three
hundred fifty thousand dollars ($350,000) from January 1, 2001 through June 30,
2002, and (iii) four hundred thousand dollars ($400,000) from July 1, 2002
through December 31, 2003. In addition, the most recent amendment provides that
Ms. Brown is entitled to receive a cash bonus equal to four percent (4%) of the
amount by which the aggregate EBIT-D (earnings before the payment of interest or
taxes or a deduction for depreciation) for the four (4) calendar quarters ending
on the most recent December 31st exceeds EBIT-D for the four (4) calendar
quarters ending on the preceding December 31st. The agreement also provides that
on each August 31st during the term of the Agreement, Ms. Brown is entitled to
receive options (the "Performance Options") to purchase 100,000 shares of Common
Stock of the Company. The options comprising the Performance Options are
exercisable at a price equal to the average closing bid price of the Company's
shares of Common Stock for the five trading days ending on August 29th. Ms.
Brown's employment agreement contains other customary provisions.

In January 1998, the Company entered into a four (4) year employment
agreement with Arvind Dharia, pursuant to which Mr. Dharia will serve as the
Company's Chief Financial Officer. The term of the agreement is subject to
automatic extension for one (1) year unless either party terminates the
agreement with ninety (90) days' prior notice. The Company agreed to pay Mr.
Dharia an annual salary of $140,000 subject to annual incremental increases of
ten percent (10%) commencing on the third anniversary of the employment
agreement. The agreement provides that Mr. Dharia receive options to purchase
25,000 shares of the Company's Common Stock on June 30 of each year during the
term of the agreement. The options are to vest quarterly over a period of one
(1) year and are exercisable at an exercise price equal to the closing bid price
of the Company's Common Stock on June 30 of each year, as quoted on The Nasdaq
Stock Market. If the Company does not extend the term of Mr. Dharia's employment
agreement (other than "for cause" or "total disability"), Mr. Dharia shall
receive severance pay equal to three months salary on the expiration of the
agreement. In addition, in the event of Mr. Dharia's total disability or death
the Company is obligated to pay Mr. Dharia or his estate an amount equal to the
appropriate salary for the twelve (12) month period immediately subsequent to
the date of his total disability or death. In the event Mr. Dharia's employment
agreement is terminated for any reason other than "for cause" or due to his
"total disability", the Company is obligated to pay Mr. Dharia the balance of
his salary and benefits, fifty percent (50%) on January 1 after the date of
termination and the remaining fifty percent (50%) one year after. Further, in
the event of a "change in control" of the Company, Mr. Dharia is entitled to
terminate the employment agreement and to receive the balance of his salary upon
termination and an amount equal to his bonus (if any) for the preceding calendar
year multiplied by the remaining years left under his employment agreement plus
$200,000 as severance pay. Mr. Dharia's employment agreement contains other
customary provisions.

In January 2001, the Company entered into a two (2) year employment
agreement with Richard Olicker pursuant to which Mr. Olicker agreed to serve as
the Company's Executive Vice President and Chief Operating Officer. The Company

DEFR14A 18th Page of 36 TOC 1st Previous Next ↓Bottom Just 18th
agreed to pay Mr. Olicker an annual base salary of $225,000 plus a 5% annual
increase in the base salary. The agreement provides that Mr. Olicker receive
options to purchase 75,000 shares of the Company's Common Stock at an exercise
price equal to the closing bid price of the Company's Common Stock on January 2,
2001, as quoted on The Nasdaq Stock Market. Mr. Olicker is entitled to receive a
cash bonus equal to two percent (2%) of the amount by which the aggregate EBIT-D
(earnings before the payment of interest or taxes or a deduction for
depreciation) for the fiscal year ending on the most recent December 31st
exceeds EBIT-D the fiscal year ending on the preceding December 31st. The
agreement also provides that Mr. Olicker receive a one time cash bonus of
$125,000 in the event that the aggregate EBIT-D for any 4 consecutive fiscal
quarters during the term of the agreement equals or exceeds $40,000,000. Mr.
Olicker's employment agreement contains other customary provisions.

In May 2001, the Company entered into an employment agreement with
Charles Koppelman pursuant to which Mr. Koppelman agreed to serve as the
Company's Executive Chairman of the Board. The term of Mr. Koppelman's
employment under the agreement is two (2) years commencing on July 1, 2001 and
ending on June 30, 2003. The Company agreed to pay Mr. Koppelman an annual base
salary of $125,000. The Company also agreed to provide Mr. Koppelman with an
annual $125,000 non-accountable expense allowance. The agreement provides that
on or about July 10, 2001 Mr. Koppelman will receive options to purchase 100,000
shares of the Company's Common Stock at an exercise price equal the closing
market price on the date prior to the grant date, as quoted on The Nasdaq Stock
Market. These options shall vest quarterly over the one year period following
the date of grant and shall be exercisable after vesting for a period of five
(5) years from the date of grant. The grant of these options is conditioned upon
approval by the Company's stockholders of the Amendment of the Company's 1999
Stock Plan. On or about July 10, 2001, the Company will also issue to Mr.
Koppelman 10,000 shares of restricted common stock, 25% of which shall become
unrestricted at the end of each of the four quarters following the date of
issuance. As of May 31, 2001, Mr. Koppelman received fully-vested options to
purchase 75,000 shares of the Company's Common Stock, which are exercisable for
a period of five (5) years from the date of grant at an exercise price of $7.00.
These options were granted pursuant to an outstanding letter agreement between
the Company and Mr. Koppelman (the "Option Letter"). In addition, the grant of
these options is conditioned upon approval by the Company's stockholders of the
Amendment of the Company's 1999 Stock Plan. Mr. Koppelman surrendered the
remaining 225,000 options to be granted to him pursuant to the Option Letter in
connection with the execution of his employment agreement. Pursuant to the terms
of the employment agreement, Mr. Koppelman is also entitled to receive annual
options to purchase 100,000 shares of the Company's Common Stock on the date of
the Company's annual meeting held in each of 2002, 2003, and 2004. Twenty five
percent (25%) of each annual option will vest at the end of each of the four
full calendar quarters after the applicable grant date. The annual options shall
be exercisable after vesting for a period of five (5) years from the date of
grant at an exercise price equal to the lesser of (a) the closing market price
on the applicable grant date, as quoted on The Nasdaq Stock Market (or such
other market or exchange on which the Company's Common Stock is listed or
traded) or (b) $13.50. In the event that Mr. Koppelman ceases to be either an
employee or director of the Company, any annual option not yet granted shall be
forfeited as of the date of termination; provided however, that if Mr.
Koppelman's employment shall have been terminated (or not extended) by the
Company other than For Cause (as defined in the agreement) or by Mr. Koppelman
with Good Reason (as defined in the agreement) any annual options which were

DEFR14A 19th Page of 36 TOC 1st Previous Next ↓Bottom Just 19th
granted prior to such termination shall be deemed granted as of the date prior
to the date of such termination. The employment agreement also provides that in
the event there is a "change of control" of the Company, (i) all unvested
options granted to Mr. Koppelman prior to such "change of control" shall
immediately vest (ii) if Mr. Koppelman is an employee or director of the Company
at the time of such "change of control", any annual options which have not been
granted prior to such change of control shall immediately be granted and vest,
and (iii) the exercise price of all unexercised options shall be reduced to
$7.00. Mr. Koppelman's Employment Agreement contains other customary provisions,
including provisions regarding confidentiality, solicitation and competition.

In May 2001, the Company entered into an employment agreement with
Jamieson Karson pursuant to which Mr. Karson agreed to serve as the Company's
Chief Executive Officer and Vice Chairman of the Board. The term of Mr. Karson's
employment under the agreement is three (3) years commencing on July 1, 2001 and
ending on June 30, 2004. The term will be automatically extended for successive
one year periods unless the Company timely notifies Mr. Karson of its intention
not to extend the term. In connection with the execution of his Employment
Agreement, Mr. Karson surrendered 5,000 options which had been granted to him
for his service as an outside director. The Company agreed to pay Mr. Karson an
annual salary of $375,000 which base salary will be subject to a 10% annual
increase on each July 1st of the term if the Company's net income for the four
calendar quarters ending on the most recent June 30th is greater than the net
income for the four calendar quarters ending on the preceding June 30th. In
addition, the agreement provides that: (a) Mr. Karson receive a cash bonus equal
to $100,000 for fiscal year 2001 pro-rated for the number of months he serves as
Chief Executive Officer in 2001 and (b) for each succeeding fiscal year that
occurs during the term of employment, Mr. Karson receive a cash bonus, in an
amount determined by the Board, not less than four percent (4%) of the increase
in the Company's EBITDA (earnings before interest, tax, depreciation and
amortization) over the EBITDA of the prior fiscal year. On or about July 10,
2001, Mr. Karson will receive options to purchase 100,000 shares of the
Company's Common Stock at an exercise price equal to the closing market price on
the date prior to the grant date as quoted on The Nasdaq Stock Market. These
options shall vest quarterly over the one year period following the date of
grant and shall be exercisable after vesting for a period of five (5) years from
the date of grant. The grant of these options is conditioned upon approval by
the Company's stockholders of the Amendment of the Company's 1999 Stock Plan. On
or about July 10, 2001, the Company will also issue to Mr. Karson 10,000 shares
of restricted common stock, 25% of which shall become unrestricted at the end of
each of the four quarters following the date of issuance. Subject to approval by
the Company's stockholders of the Amendment of the Company's 1999 Stock Plan and
subject to availability of shares under such plan or any other plan designated
by the Board of Directors and approved by the Company's stockholders, on or
about the date of the Company's annual meeting for each year of the term of the
agreement (beginning in 2002), Mr. Karson is entitled to receive, annual options
to purchase shares of the Company's Common Stock equal to the dollar amount of
the annual bonus received by Mr. Karson for the previous fiscal year; provided,
however, that no annual option shall be for greater than 100,000 shares. The
annual options shall vest quarterly over the one year period following the date
of grant and shall be exercisable after vesting for a period of five (5) years
from the date of grant at an exercise price equal to the closing price of the
Company's Common Stock on the applicable date of grant, as quoted on The Nasdaq
Stock Market (or such other market or exchange on which the Company's Common
Stock is listed or traded). In addition, in the event of Mr. Karson's total
disability or his death, the Company is obligated to continue to pay Mr. Karson

DEFR14A 20th Page of 36 TOC 1st Previous Next ↓Bottom Just 20th
(or Mr. Karson's estate) his base salary for the twelve (12) month period
immediately subsequent to the date of such total disability or death. In the
event Mr. Karson's employment agreement is terminated (or not extended) for any
reason other than For Cause (as defined in the agreement) or due to his death or
his total disability, the Company is obligated to pay Mr. Karson an amount equal
to the product of (i) Mr. Karson's base salary plus the cash bonus which Mr.
Karson was paid for the immediately preceding fiscal year multiplied by (ii) the
greater of (A) the number of years remaining on the term of the agreement or (B)
two. In the event that there is a "change of control" transaction terminating
Mr. Karson's employment, all unvested options to purchase shares of the
Company's Common Stock held by Mr. Karson will vest on the date of termination
and Mr. Karson will be entitled to receive a lump sum cash payment equal to (a)
the amount of compensation that is accrued and unpaid through the date of
termination and (b) three (3) times the total compensation (base salary and cash
bonus) received by Mr. Karson for the preceding 12 month period ending December
31. Mr. Karson's employment agreement contains other customary provisions,
including provisions regarding confidentiality, solicitation and competition.

In May 2001, the Company entered into an employment agreement with
Steven Madden, the Company's founder, pursuant to which Mr. Madden agreed to
serve as the Company's Creative and Design Chief. The employment agreement
amends and restates the prior employment agreement dated July 29, 1997 (and
amended February 28, 2000). The term of Mr. Madden's employment under the
agreement is ten (10) years commencing on July 1, 2001 and ending on June 30,
2011. The Company has agreed to pay Mr. Madden an annual base salary of
$700,000, which the Board may increase, but not decrease, at any time. For each
fiscal year during the term of the agreement, Mr. Madden is entitled to receive
a cash bonus in an amount determined by the Board, but not less than 2% of the
Company's EBITDA (earnings before interest, tax, depreciation and amortization
for such year); provided however, that the Company is not required to pay such
cash bonus for any fiscal year during which Mr. Madden is not actively engaged
in the duties of Creative and Design Chief for at least six months. Subject to
approval by the Company's stockholders of the Amendment of the Company's 1999
Stock Plan and subject to availability of shares under such plan or any other
plan designated by the Board of Directors and approved by the Company's
stockholders, on or about the date of the Company's annual meeting for each year
of the term (beginning in 2002), Mr. Madden is eligible to receive, during the
term of the agreement, annual options to purchase shares of the Company's common
stock in an amount equal to not less than 150% of the largest aggregate amount
of options granted to any other continuing full time employee of the Company
over the 12 month period up to and including the applicable grant date; provided
that all annual options shall be subject to final approval of the Board. The
annual options shall vest quarterly over the 1 year period following the date of
grant and shall be exercisable after vesting for a period of 5 years from the
grant date at an exercise price equal to the closing price of the Company's
Common Stock on the grant date as quoted on The Nasdaq Stock Market (or such
other market or exchange on which the Company's Common Stock is listed or
traded). The Company is not required to grant an annual option if Mr. Madden is
not actively engaged in the duties of Creative and Design Chief for at least six
months out of the twelve months immediately preceding the grant date for such
annual option. The Company also agreed to provide Mr. Madden with an annual
$200,000 non-accountable expense allowance which amount will be payable in equal
monthly installments; provided however, that the Company will not be required to
pay the non-accountable expense allowance for any month during which Mr. Madden
is not actively engaged in the duties of Creative and Design Chief.

DEFR14A 21st Page of 36 TOC 1st Previous Next ↓Bottom Just 21st
In addition, in the event of Mr. Madden's total disability or death,
the Company is obligated to continue to pay Mr. Madden (or Mr. Madden's estate)
Mr. Madden's base salary for the twelve (12) month period immediately subsequent
to the date of such total disability or death. In the event Mr. Madden's
employment agreement is terminated for any reason other than "for cause" or due
to his death or his total disability, the Company is obligated to pay Mr. Madden
the balance of his base salary that would have been paid over the full term of
the agreement if the agreement had not been terminated, fifty percent (50%) upon
termination and the remaining fifty percent (50%) in equal annual installments
until June 30, 2011. In the event there is a "change of control" transaction
terminating Mr. Madden's employment, all unvested options to purchase shares of
the Company's Common Stock held by Mr. Madden will vest on the date of
termination and Mr. Madden will be entitled to receive a lump sum cash payment
equal to (a) the amount of compensation that is accrued and unpaid through the
date of termination and (b) three (3) times the total compensation (base salary,
cash bonus and non-accountable expense allowance) received by Mr. Madden for the
preceding 12 month period ending December 31.

To the extent not previously assigned or consented to, except as
provided below, (i) Mr. Madden sold, assigned and transferred to the Company the
exclusive right and interest to his name and (ii) Mr. Madden consented to the
use of his name as trademarks, service marks, corporate names and/or internet
domain name addresses of the Company (the "Marks"). Mr. Madden also agreed to
never challenge the Company's ownership of his name or the validity of the
Company's ownership of the Marks or of any registration or application for
registration thereof. Mr. Madden may however use his name for all non-commercial
purposes and for use in connection with any business that is not in the design,
manufacture, sale, marketing or distribution of (i) branded or designer
footwear, apparel, accessories and other products in the categories of products
sold by, or under license from, the Company or any of its affiliates, (ii)
jewelry and other giftware, (iii) cosmetics, fragrances and other health and
beauty care items, (iv) housewares, furniture, home furnishings and related
products and (v) other products related to fashion, cosmetics or lifestyle (any
of such activities being a "competitive business"). Further, Mr. Madden agreed
to not directly or indirectly (i) engage in any competitive business in any
relationship or capacity, (ii) solicit any customers of the Company, or (iii)
solicit or employ any employee or agent to the Company, until the later of (a)
June 30, 2011 or (b) the date which is twelve (12) months after the date on
which Mr. Madden is no longer employed by the Company, or until twelve months
after the date of termination should Mr. Madden be terminated in connection with
a change of control. Mr. Madden's Employment Agreement contains other customary
provisions.

COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee ("Committee") is responsible for reviewing
and approving the Company's compensation policies and the compensation paid to
its executive officers, including the Chief Executive Officer and the other
named executive officers. The Compensation Committee is comprised of Charles
Koppelman, Peter Migliorini and John Madden each of whom were non-employee
Directors of the Company during 2000.

The Compensation Committee's goal is to develop executive compensation
policies and practices that are consistent with and linked to the Company's long
term goal of maximizing shareholder value. The program is designed to facilitate
the long-term success and growth of the Company through the attraction,
motivation, and retention of outstanding executives.

DEFR14A 22nd Page of 36 TOC 1st Previous Next ↓Bottom Just 22nd
The objectives of the Company's executive compensation programs are to:
(i) attract and retain the highest quality executives, (ii) inspire and motivate
executive officers to increase Company performance, (iii) align executive
officers' financial interest with those of the Company's long-term investors,
and (iv) reward executive officers for exceptional individual contributions to
the achievement of the Company's objectives.

Executive compensation consists of three components: base salary,
annual incentive bonuses and long-term incentive awards (stock options). Each
compensation component is offered to executives in varying combinations,
structured in each case, to meet varying business objectives and to provide a
level of total compensation comparable to similarly situated public companies.

The 2000 compensation of Steven Madden, the Company's Chief Executive
Officer, consisted primarily of base salary and discretionary bonus. The
Compensation Committee believes that Mr. Madden's compensation should be heavily
weighted towards enhancing stockholder value, and accordingly, a significant
portion of Mr. Madden's compensation during 2000 was in the form of a
discretionary bonus which bonus was based upon the Company's overall performance
as well as Mr. Madden's contributions to the growth and success of the Company.

The Company has negotiated employment agreements with respect to base
salary, annual incentive awards and stock option awards for each of the
Company's named executive officers based upon the Company's performance and the
individual performance of such named executives.

On May 1, 2001, the Board of Directors of the Company appointed Peter
Migliorini and Heywood Wilansky, both independent, non-employee directors of the
Company, to a special committee of the Board to consider, review and negotiate
the terms of employment agreements for each of Steven Madden, Charles Koppelman
and Jamieson Karson. The special committee, with the assistance of counsel,
participated in the negotiation and review of the employment agreements for each
of Messrs. Madden, Koppelman and Karson. The special committee was also assisted
in its review and negotiation of the employment agreements by a prominent
outside executive compensation consultation firm. After the special committee
reviewed the final employment agreements and received the written opinion of the
executive compensation consultation firm that such employment agreements were
reasonable, the special committee recommended that the Board of Directors
authorize the Company to enter into such agreements.

The Internal Revenue Code of 1986 prohibits the Company from taking a
tax deduction in any year for compensation paid the persons who would be named
executive officers in that year in excess of $1 million unless such compensation
is "performance-based compensation." The Company did not pay in 2000 any officer
compensation which will be subject to the $1 million deduction limitation;
however, the Company's Chief Executive Officer exercised options which when
combined with other compensation paid by the Company resulted in his total
compensation exceeding the $1 million deduction limitation. The Compensation
Committee will take into consideration the $1 million deduction limitation when
structuring future compensation packages for the Company's executive officers

DEFR14A 23rd Page of 36 TOC 1st Previous Next ↓Bottom Just 23rd
and, if appropriate and in the best interests of the Company, will conform such
packages to permit the Company to take a deduction for the full amount of all
compensation.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee makes all compensation decisions. During 2000, the
following directors served on the Compensation Committee: Charles Koppelman,
John Madden and Peter Migliorini. During the fiscal year 2000, no interlocking
relationship existed between the Company's Board of Directors or Compensation
Committee and the board of directors or compensation committee of any other
company.

COMPENSATION COMMITTEE

Charles Koppelman
John Madden
Peter Migliorini

DEFR14A 24th Page of 36 TOC 1st Previous Next ↓Bottom Just 24th
STOCK PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the
cumulative total shareholder return on the Common Stock during the period
beginning on December 31, 1996 and ending on December 31, 2000 with the
cumulative total return on the Russell 2000 Index and the Standard & Poor's
Footwear Index. The comparison assumes that $100 was invested on December 31,
1996 in the Company's Common Stock and in the foregoing indices and assumes the
reinvestment of dividends.

GRAPH APPEARS HERE

--------------------------------------------------------------------------------
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
--------------------------------------------------------------------------------
Steven Madden, Ltd. 100 147.55 165.85 371.94 148.78
--------------------------------------------------------------------------------
Russell 2000 Index 100 120.69 116.53 139.40 133.53
--------------------------------------------------------------------------------
S&P Footwear Index 100 66.90 64.80 76.23 91.31
--------------------------------------------------------------------------------

DEFR14A 25th Page of 36 TOC 1st Previous Next ↓Bottom Just 25th
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------

The following table sets forth information as of the Record Date with
respect to the beneficial ownership of the outstanding shares of the Company's
Common Stock by (i) each person known by the Company to beneficially own five
percent or more of the outstanding shares; (ii) the Company's officers and
directors; and (iii) the Company's officers and directors as a group. A person
is deemed to be a beneficial owner of any securities of which that person has
the right to acquire beneficial ownership within sixty (60) days. See
"Compensation of Directors and Executive Officers."

Amount and
Nature of Percentage
Name and Address Beneficial (%) of
of Beneficial Owner(1) Ownership(2) Class(2)
---------------------- ------------ ----------

Steven Madden(3) 2,241,005(4) 17.7%
BOCAP Corp.(5) 2,241,005(6) 17.7%
Charles Koppelman(7) 110,000(8) *
Jamieson Karson(9) 15,000(10) *
Rhonda Brown(11) 348,386(12) 2.9%
Arvind Dharia(13) 102,000(14) *
Gerald Mongeluzo(15) 62,500(16) *
Richard Olicker(17) 1,200 *
Mark Jankowski(18) 50,000(19) *
Robert Schmertz(20) 19,000(21) *
Joseph Masella(22) 27,425(23) *
John Madden(24) 15,000(25) *
Peter Migliorini(26) 20,000(27) *
Heywood Wilansky(28) 5,000(29) *
Kennedy Capital
Management, Inc.(30) 833,750 7.2%
Directors and Officers
as a Group (13 persons) 3,016,516 22.6%

* indicates beneficial ownership of less than 1%.

(1) Unless otherwise indicated, the address of each beneficial owner is c/o
Steven Madden, Ltd., 52-16 Barnett Avenue, Long Island City, New York
11104.
(2) Beneficial ownership as reported in the table above has been determined in
accordance with Item 403 of Regulation S-K of the Securities Act of 1933
and Rule 13(d)-3 of the Securities Exchange Act, and based upon 11,595,905
shares of Common Stock outstanding.
(3) Mr. Madden is Chief Executive Officer and a director of the Company.
Effective as of July 1, 2001, Mr. Madden will resign as a director and
Chief Executive Officer of the Company, and thereafter, will serve as the
Company's Creative and Design Chief.
(4) Includes (i) 1,184,816 shares of Common Stock held by BOCAP, a corporation
owned by Mr. Madden, (ii) 1,051,189 shares of Common Stock issuable upon
the exercise of options held by Mr. Madden. See "Executive
Compensation-Employment Agreements."
(5) BOCAP Corp. is a company wholly-owned by Steven Madden.
(6) Includes (i) 1,051,189 shares of Common Stock issuable upon the exercise of
options held by Mr. Madden and (ii) 5,000 shares of Common Stock held by
Mr. Madden.

DEFR14A 26th Page of 36 TOC 1st Previous Next ↓Bottom Just 26th
(7) Mr. Koppelman was appointed Acting Chairman of the Board in June 2000.
Effective July 1, 2001, Mr. Koppelman was appointed as Executive Chairman
of the Board.
(8) Includes (i) 50,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Koppelman and (ii) 10,000 shares of Common Stock to be
issued to Mr. Koppelman pursuant to his Employment Agreement with the
Company, but excludes options to be issued to Mr. Koppelman pursuant to his
Employment Agreement. See "Employment Agreements."
(9) Mr. Karson is a director of the Company. Effective July 1, 2001, Mr. Karson
will serve as the Company's Chief Executive Officer and Vice Chairman of
the Board.
(10) Includes (i) 5,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Karson and (ii) 10,000 shares of Common Stock to be
issued to Mr. Karson pursuant to his Employment Agreement with the Company,
but excludes options to be issued to Mr. Karson pursuant to his Employment
Agreement. See "Employment Agreements."
(11) Ms. Brown is a director and the President of the Company.
(12) Includes 348,386 shares of Common Stock issuable upon the exercise of
options held by Ms. Brown.
(13) Mr. Dharia is a director and the Chief Financial Officer of the Company.
(14) Includes 102,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Dharia.
(15) Mr. Mongeluzo is the President of Adesso-Madden, Inc., a subsidiary of the
Company.
(16) Includes 62,500 shares of Common Stock issuable upon the exercise of
options held by Mr. Mongeluzo.
(17) Mr. Olicker is the Chief Operating Officer of the Company.
(18) Mr. Jankowski is the General Merchandise Manager of the Company.
(19) Includes 50,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Jankowski.
(20) Mr. Schmertz is the President of Shoe Biz, Inc., a subsidiary of the Steven
Madden Retail, Inc. and the President of Diva Acquisition Corp.
(21) Includes 9,000 shares held by Mr. Schmertz's wife.
(22) Mr. Masella is the President of l.e.i. Footwear and Stevies, Inc., a
subsidiary of the Company.
(23) Includes 27,425 shares of Common Stock issuable upon the exercise of
options held by Mr. Masella.
(24) John Madden, a director of the Company, is the brother of Steven Madden.
(25) Includes 15,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Madden.
(26) Mr. Migliorini is a director of the Company.
(27) Includes 20,000 shares issuable upon the exercise of options held by Mr.
Migliorini
(28) Heywood Wilansky is a director of the Company.
(29) Includes 5,000 shares of Common Stock issuable upon the exercise of options
held by Mr. Wilansky.
(30) Based upon a Schedule 13G filed with the Securities and Exchange Commission
on February 14, 2001. The address for such stockholder is 10829 Olive
Blvd., St. Louis, MO 63141.

PROPOSAL TWO

AMENDMENT OF THE 1999 STOCK PLAN

At the 1999 Annual Meeting of Stockholders, the Company's stockholders
approved the adoption of the Company's 1999 Stock Plan (the "1999 Plan"). The
1999 Plan originally authorized up to 400,000 shares of Company common stock for
grants of non-qualified and incentive stock options. In May 2000, the Company's
stockholders approved an amendment to the 1999 Plan increasing the number of
shares of common stock subject to the plan from 400,000 to 975,000 shares. The
Board of Directors has amended the 1999 Plan, subject to stockholder approval,
to authorize 625,000 additional shares for future awards (the "1999 Plan
Proposal"). The affirmative vote of the holders of a majority of the total votes
cast on the 1999 Plan Proposal is needed to approve the 1999 Plan Proposal.

Because of the limited number of remaining shares that may be granted
under the 1999 Plan, the Board of Directors believes it is appropriate and
necessary at this time to authorize additional shares for future awards.
Authorization of these additional shares will allow grants to employees,
consultants and directors in furtherance of the Company's goal of continuing to
achieve significant gains in stockholder value and operating results.

The Company intends to continue awarding options in order to attract
and retain the services or advice of such directors, employees, officers,
agents, consultants, and independent contractors and to provide additional
incentive for such persons to exert maximum efforts for the success of the

DEFR14A 27th Page of 36 TOC 1st Previous Next ↓Bottom Just 27th
Company and its affiliates. The following is a summary of the principal features
of the 1999 Plan. The summary is qualified in its entirety by reference to the
complete text of the 1999 Plan, as proposed to be amended. The proposed
amendment to the 1999 Plan is set forth as Annex A to this Proxy Statement.

Description of the 1999 Plan

The maximum number of shares of Common Stock with respect to which
awards may be presently granted pursuant to the 1999 Plan is 975,000 shares. The
1999 Plan Proposal would authorize the use of up to an additional 625,000 shares
of the Company's common stock for a total of 1,600,000 shares being subject of
the 1999 Plan. Shares issuable under the 1999 Plan may be either treasury shares
or authorized but unissued shares. The number of shares available for issuance
will be subject to adjustment to prevent dilution in the event of stock splits,
stock dividends or other changes in the capitalization of the Company.

Subject to compliance with Rule 16b-3 of the Securities Exchange Act of
1934 (the "Exchange Act"), the Plan shall be administered by the Board of
Directors of the Company (the "Board") or, in the event the Board shall appoint
and/or authorize a committee, such as the Compensation Committee, of two or more
members of the Board to administer the Plan, by such committee (the "Plan
Administrator"). Except for the terms and conditions explicitly set forth in the
Plan, the Plan Administrator shall have the authority, in its discretion, to
determine all matters relating to the options to be granted under the Plan,
including, without limitation, selection of whether an option will be an
incentive stock option or a nonqualified stock option, selection of the
individuals to be granted options, the number of shares to be subject to each
option, the exercise price per share, the timing of grants and all other terms
and conditions of the options.

Options granted under the 1999 Plan may be "incentive stock options"
("Incentive Options") within the meaning of Section 422 of the Internal Revenue
Code (the "Code") or stock options which are not incentive stock options
("Non-Incentive Options" and, collectively with Incentive Options, hereinafter
referred to as "Options"). Each Option may be exercised in whole or in part;
provided, that only whole shares may be issued pursuant to the exercise of any
Option. Subject to any other terms and conditions herein, the Plan Administrator
may provide that an Option may not be exercised in whole or in part for a stated
period or periods of time during which such Option is outstanding; provided,
that the Plan Administrator may rescind, modify, or waive any such limitation
(including by the acceleration of the vesting schedule upon a change in control
of the Company) at any time and from time to time after the grant date thereof.
During an optionee's lifetime, any incentive stock options granted under the
Plan are personal to such optionee and are exercisable solely by such optionee.

The Plan Administrator can determine at the time the Option is granted
in the case of Incentive Options, or at any time before exercise in the case of
Non-Incentive Options, that additional forms of payment will be permitted. To
the extent permitted by the Plan Administrator and applicable laws and
regulations (including, without limitation, federal tax and securities laws and
regulations and state corporate law), an Option may be exercised by:

DEFR14A 28th Page of 36 TOC 1st Previous Next ↓Bottom Just 28th
(a) delivery of shares of Common Stock of the Company held by
an optionee having a fair market value equal to the exercise price, such fair
market value to be determined in good faith by the Plan Administrator;

(b) delivery of a properly executed notice of exercise,
together with irrevocable instructions to a broker, all in accordance with the
regulations of the Federal Reserve Board, to promptly deliver to the Company the
amount of sale or loan proceeds to pay the exercise price and any federal,
state, or local withholding tax obligations that may arise in connection with
the exercise; or

(c) delivery of a properly executed notice of exercise,
together with instructions to the Company to withhold from the shares of Common
Stock that would otherwise be issued upon exercise that number of shares of
Common Stock having a fair market value equal to the Option exercise price.

Upon a Change in Control of the Company, any award carrying a right to
exercise that was not previously exercisable shall become fully exercisable, the
restrictions, deferral limitations and forfeiture conditions applicable to any
other award granted shall lapse and any performance conditions imposed with
respect to awards shall be deemed to be fully achieved.

Options granted under the 1999 Plan may not be transferred, pledged,
mortgaged, hypothecated or otherwise encumbered other than by will or under the
laws of descent and distribution, except that the Plan Administrator may permit
transfers of awards for estate planning purposes if, and to the extent, such
transfers do not cause a participant who is then subject to Section 16 of the
Exchange Act to lose the benefit of the exemption under Rule 16b-3 for such
transactions.

For federal income tax purposes, the grant to an optionee of a
Non-Incentive Option will not constitute a taxable event to the optionee or to
the Company. Upon exercise of a Non-Incentive Option (or, in certain cases, a
later tax recognition date), the optionee will recognize compensation income
taxable as ordinary income, measured by the excess of the fair market value of
the Common Stock purchased on the exercise date (or later tax recognition date)
over the amount paid by the optionee for such Common Stock, and will be subject
to tax withholding. The Company may claim a deduction for the amount of such
compensation. The optionee will have a tax basis in the Common Stock purchased
equal to the amount paid plus the amount of ordinary income recognized upon
exercise of the Non-Incentive Option. Upon the subsequent sale of the Common
Stock received upon exercise of the Non-Incentive Option, an optionee will
recognize capital gain or loss equal to the difference between the amount
realized on such sale and his or her tax basis in the Common Stock, which may be
long-term capital gain or loss if the optionee holds the Common Stock for more
than one year from the exercise date.

For federal income tax purposes, neither the grant nor the exercise of
an Incentive Option will constitute a taxable event to the optionee or to the
Company, assuming the Incentive Option qualifies as an "incentive stock option"
under Code ss.422. If an optionee does not dispose of the Common Stock acquired
upon exercise of an Incentive Option during the statutory holding period, any
gain or loss upon subsequent sale of the Common Stock will be long-term capital
gain or loss, assuming the shares represent a capital asset in the optionee's
hands. The statutory holding period is the later of two years from the date the
Incentive Option is granted or one year from the date the Common Stock is

DEFR14A 29th Page of 36 TOC 1st Previous Next ↓Bottom Just 29th
transferred to the optionee pursuant to the exercise of the Incentive Option. If
the statutory holding period requirements are satisfied, the Company may not
claim any federal income tax deduction upon either the exercise of the Incentive
Option or the subsequent sale of the Common Stock received upon exercise
thereof. If the statutory holding period requirement is not satisfied, the
optionee will recognize compensation income taxable as ordinary income on the
date the Common Stock is sold (or later tax recognition date) in an amount equal
to the lesser of (i) the fair market value of the Common Stock on that date less
the amount paid by the optionee for such Common Stock, or (ii) the amount
realized on the disposition of the Common Stock less the amount paid by the
optionee for such Common Stock; the Company may then claim a deduction for the
amount of such compensation income.

The federal income tax consequences summarized hereinabove are based
upon current law and are subject to change.

The Board may amend, alter, suspend, discontinue or terminate the 1999
Plan at any time, except that any such action shall be subject to stockholder
approval at the annual meeting next following such Board action if such
stockholder approval is required by federal or state law or regulation or the
rules of any exchange or automated quotation system on which the Common Stock
may then be listed or quoted, or if the Board of Directors otherwise determines
to submit such action for stockholder approval. In addition, no amendment,
alteration, suspension, discontinuation or termination to the 1999 Plan may
materially impair the rights of any participant with respect to any Option
granted before amendment without such participant's consent. Unless terminated
earlier by action of the Board of Directors, the 1999 Plan shall terminate ten
(10) years after adoption by the shareholders.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends a vote FOR approval of
the 1999 Plan Proposal. Unless marked to the contrary, proxies received from
Stockholders will be voted in favor of the 1999 Plan Proposal.

PROPOSAL THREE

RATIFICATION OF THE SELECTION OF THE FIRM OF RICHARD A. EISNER &
COMPANY, LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY

The Board of Directors upon recommendation of the members of the Audit
Committee, concluded that the continued engagement of Richard A. Eisner &
Company, LLP as the Company's independent public accountants for the 2001 fiscal
year was in the best interests of the Company. The affirmative vote of the
holders of a majority of the total votes cast on this proposal is needed to
ratify the selection of the firm of Richard A. Eisner & Company, LLP as
independent public accountants for the Company. The Company has been advised
that a representative of Richard A. Eisner & Company, LLP will be present at the
meeting.

DEFR14A 30th Page of 36 TOC 1st Previous Next ↓Bottom Just 30th
Recommendation of the Board of Directors

The Board of Directors unanimously recommends a vote FOR the ratification of the
selection of Richard A. Eisner & Company, LLP as independent public accountants
for the Company. Unless marked to the contrary, proxies received from
stockholders will be voted in favor of the ratification of the selection of
Richard A. Eisner & Company LLP as independent public accountants for the
Company for fiscal year 2001.

STOCKHOLDER PROPOSALS AND SUBMISSIONS
FOR THE COMPANY'S 2002 ANNUAL MEETING

If any stockholder wishes to present a proposal for inclusion in the proxy
materials to be solicited by the Company's Board of Directors with respect to
the 2002 Annual Meeting of stockholders, that proposal must be presented to the
Company's secretary prior to December 1, 2001.

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. YOUR VOTE IS IMPORTANT. IF YOU ARE A
STOCKHOLDER OF RECORD AND ATTEND THE ANNUAL MEETING AND WISH TO VOTE IN PERSON,
YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE VOTE.

STEVEN MADDEN, LTD.

June 12, 2001 By: /s/ CHARLES KOPPELMAN
----------------------------
Charles Koppelman
Acting Chairman of the Board

DEFR14A 31st Page of 36 TOC 1st Previous Next ↓Bottom Just 31st
ANNEX A

STEVEN MADDEN, LTD.
1999 STOCK PLAN

This Steven Madden, Ltd. 1999 Stock Plan (the "1999 Plan") is hereby
amended as follows:

1. Section 3 of the 1999 Plan is amended by deleting Section 3 in its
entirety and replacing it with the following:

SECTION 3. STOCK SUBJECT TO THE PLAN. The stock subject to this Plan
shall be the Common Stock, presently authorized but unissued or subsequently
acquired by the Company. Subject to adjustment as provided in Section 7 hereof,
the aggregate amount of Common Stock to be delivered upon the exercise of all
options granted under the Plan shall not exceed in the aggregate 1,600,000
shares as such Common Stock was constituted on the effective date of the Plan.
If any option granted under the Plan shall expire, be surrendered, exchanged for
another option, canceled, or terminated for any reason without having been
exercised in full, the unpurchased shares subject thereto shall thereupon again
be available for purposes of the Plan, including for replacement options which
may be granted in exchange for such surrendered, canceled, or terminated
options.

2. Except as expressly amended hereby, the provisions of the Plan are
and shall remain in full force and effect.

3. This Amendment shall be effective immediately upon approval by the
Company's Board of Directors and stockholders of the Company.

Adopted by the Board of Directors
this 30th day of March, 2001

Approved by the Stockholders
this ____ day of July, 2001

A-1

DEFR14A 32nd Page of 36 TOC 1st Previous Next ↓Bottom Just 32nd
ANNEX B

AUDIT COMMITTEE CHARTER

STEVEN MADDEN, LTD.

The Audit Committee is appointed by the Company's Board of Director to
assist the Board in monitoring (1) the integrity of the financial statements of
the Company, (2) the compliance by the Company with legal and regulatory
requirements and (3) the independence and performance of the Company's auditors.

The members of the Audit Committee shall meet the independence and
experience requirements of The Nasdaq Stock Market. The members of the Audit
Committee shall be appointed by the Board.

The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee. The Audit Committee may
request any officer or employee of the Company or the Company's outside counsel
or independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.

The Audit Committee shall make regular reports to the Board.

The Audit Committee shall:

1. Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.

2. Review the annual audited financial statements with
management, including major issues regarding accounting and
auditing principles and practices as well as the adequacy of
internal controls that could significantly affect the
Company's financial statements.

3. Review an analysis prepared by management and the independent
auditor of significant financial reporting issues and
judgments made in connection with the preparation of the
Company's financial statements.

4. Review with management and the independent auditor the
Company's quarterly financial statements prior to the filing
of its Form 10-Q.

5. Meet periodically with management to review the Company's
major financial risk exposures and the steps management has
taken to monitor and control such exposures.

6. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent
auditor or management.

B-1

DEFR14A 33rd Page of 36 TOC 1st Previous Next ↓Bottom Just 33rd
7. Recommend to the Board the appointment of the independent
auditor, which firm is ultimately accountable to the Audit
Committee and the Board.

8. Approve the fees to be paid to the independent auditor.

9. Receive periodic reports from the independent auditor
regarding the auditor's independence, discuss such reports
with the auditor, and if so determined by the Audit Committee,
recommend that the Board replace the independent auditor.

10. Evaluate together with the Board the performance of the
independent auditor and, if so determined by the Audit
Committee, recommend that the Board replace the independent
auditor.

11. Review the appointment and replacement of the senior internal
auditing executive, if any.

12. Review the significant reports to management prepared by the
accounting department and management's responses.

13. Meet with the independent auditor prior to the audit to review
the planning and staffing of the audit.

14. Obtain from the independent auditor assurance that Section 10A
of the Securities Exchange Act of 1934 has not been
implicated.

15. Obtain reports from management, the Company's senior financial
executive and the independent auditor that the Company's
subsidiaries and/or affiliated entities are in conformity with
applicable legal requirements.

16. Discuss with the independent auditor the matters required to
be discussed by Statement on Auditing Standards No. 61
relating to the conduct of the audit.

17. Review with the independent auditor any problems or
difficulties the auditor may have encountered and any
management letter provided by the auditor and management's
response to that letter. Such review should include:

(a) Any difficulties encountered in the course of the
audit work, including any restrictions on the scope
of activities or access to required information; and
(b) Any changes required in the planned scope of the
audit.

18. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual
proxy statement.

19. Advise the Board with respect to the Company's policies and
procedures regarding compliance with applicable laws and
regulations and with the Company's Employee Handbook and/or
Code of Conduct.

20. Review with the Company's legal counsel legal matters that may
have a material impact on the financial statements, the
Company's compliance policies and any material reports or
inquiries received from regulators or governmental agencies.

B-2

DEFR14A 34th Page of 36 TOC 1st Previous Next ↓Bottom Just 34th
21. Meet at least annually with the chief financial officer, the
senior financial executive and the independent auditor in
separate executive sessions.

While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations and the Company's Employee Handbook
and/or Code of Conduct.

B-3

DEFR14A 35th Page of 36 TOC 1st Previous Next ↓Bottom Just 35th
STEVEN MADDEN, LTD. PROXY

STEVEN MADDEN, LTD.

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

PLEASE CLEARLY INDICATE A RESPONSE BY CHECKING ONE OF THE BOXES ([FOR] [WITHHOLD
AUTHORITY] [AGAINST] OR [ABSTAIN]) NEXT TO EACH OF THE THREE (3) PROPOSALS

The undersigned hereby appoint(s) Charles Koppelman as a proxy
(the "Proxy") for the undersigned, with the power of substitution and
resubstitution to vote any and all shares of capital stock of Steven Madden,
Ltd. (the "Company") which the undersigned would be entitled to vote as fully as
the undersigned could do if personally present at the Annual Meeting of the
Company, to be held on July 10, 2001, at 10:00 A.M. local time, and at any
adjournments thereof, hereby revoking any prior proxies to vote said stock, upon
the following items more fully described in the notice of and proxy statement
for the Annual Meeting (receipt of which is hereby acknowledged):

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS NO. 1, 2 AND 3.

1. ELECTION OF DIRECTORS
---------------------

VOTE

[ ] FOR ALL nominees listed below EXCEPT as marked to the
contrary below

[ ] WITHHOLD AUTHORITY to vote for ALL nominees listed
below (INSTRUCTION: To withhold authority to vote for
any individual nominee strike a line through the
nominee's name below.)

[ ] ABSTAIN

Charles Koppelman, Jamieson Karson, Rhonda J. Brown, Arvind Dharia, Gerald
Mongeluzo, Marc Cooper, John L. Madden, Peter Migliorini and Heywood Wilansky

2. AMENDMENT OF THE 1999 STOCK PLAN
--------------------------------

[ ] FOR the Amendment of the 1999 Stock Plan

[ ] AGAINST

[ ] ABSTAIN

DEFR14A Last Page of 36 TOC 1st Previous Next ↓Bottom Just 36th
3. RATIFICATION OF THE SELECTION OF RICHARD A. EISNER & COMPANY,
LLP. AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY FOR FISCAL YEAR 2001.
----------------------------------------------------------------------------

[ ] FOR the ratification of the selection of Richard A.
Eisner & Company, LLP.

[ ] AGAINST

[ ] ABSTAIN

THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE; UNLESS OTHERWISE
INDICATED, THIS PROXY WILL BE VOTED (1) FOR THE ELECTION OF THE NINE (9)
NOMINEES NAMED IN ITEM 1, (2) FOR THE AMENDMENT OF THE 1999 STOCK PLAN IN ITEM
2, (3) FOR THE RATIFICATION OF THE SELECTION OF RICHARD A. EISNER & CO., LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY FOR FISCAL YEAR 2001 IN ITEM 3
AND (4) IN THE DISCRETION OF THE PROXY ON ANY OTHER MATTER THAT MAY PROPERLY
COME BEFORE THE MEETING.

In his discretion, Charles Koppelman (or his substitute (s))
is authorized to vote upon such other business as may properly come before the
meeting.

Please mark, sign date and return this Proxy promptly using
the accompanying postage pre-paid envelope. THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF STEVEN MADDEN, LTD.

Dated:
-----------------------------------

-----------------------------------------
Signature

-----------------------------------------
Signature if jointly owned:

-----------------------------------------
Print name:

Please sign exactly as the name appears on your stock certificate. When shares
of capital stock are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, guardian, or corporate officer,
please include full title as such. If the shares of capital stock are owned by a
corporation, sign in the full corporate name by an authorized officer. If the
shares of capital stock are owned by a partnership, sign in the name of the
partnership by an authorized officer.

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘DEFR14A’ Filing	Date	First	Last	Other Filings

	6/30/11	20	21	10-Q
	8/30/10	15
	6/29/10	15
	7/18/05	7
	6/30/04	19		10-Q
	5/31/04	7
	12/31/03	17		10-K
	6/30/03	18		10-Q
	5/31/03	7
	7/1/02	17
	6/30/02	17		10-Q
	5/31/02	7		4
	12/31/01	5		10-K
	12/1/01	30
	7/31/01	16		4
	7/10/01	2	35
	7/1/01	5	26
Filed on:	6/12/01	2	30
	6/5/01	2	3
	5/31/01	7	18	4
	5/23/01	10		8-K
	5/1/01	22
	4/25/01	2		DEF 14A
	3/14/01	10
	2/14/01	26		SC 13G
	1/3/01	12
	1/2/01	5	18
	1/1/01	17
	12/31/00	3	24	10-K, 10-K/A
	12/29/00	15
	7/25/00	7
	7/18/00	7
	7/1/00	16
	6/20/00	10		8-K
	2/28/00	20
	12/31/99	14		10-K
	7/1/99	16
	6/4/99	16		DEF 14A, DEFA14A
	3/15/99	16
	12/31/98	14		10-K
	5/1/98	16
	7/29/97	20
	1/1/97	5
	12/31/96	5	24	10KSB
	6/28/96	16
				List all Filings

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Filing Submission 0001019056-01-500209 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Steven Madden, Ltd. – ‘DEFR14A’ on 6/12/01

On: Tuesday, 6/12/01, at 4:40pm ET · Accession #: 1019056-1-500209 · File #: 0-23702

Revised Definitive Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Revised Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents