UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2007
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ________
Commission File Number 0-23702
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STEVEN MADDEN, LTD.
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(Exact name of Registrant as specified in its charter)
Delaware 13-3588231
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
52-16 Barnett Avenue, Long Island City, New York 11104
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (718) 446-1800
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Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of November 6, 2007, the latest practicable date, there were 20,086,316
shares of common stock, $.0001 par value, outstanding.
STEVEN MADDEN, LTD.
FORM 10-Q
QUARTERLY REPORT
September 30, 2007
TABLE OF CONTENTS
PART I- FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets ............................. 1
Condensed Consolidated Statements of Operations ................... 2
Condensed Consolidated Statements of Cash Flows ................... 3
Notes to Unaudited Condensed Consolidated Financial Statements .... 4
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations .................. 14
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk ........ 23
ITEM 4. Controls and Procedures ........................................... 23
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings ................................................. 24
ITEM 1A. Risk Factors ...................................................... 24
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds ....... 24
ITEM 3. Defaults Upon Senior Securities ................................... 25
ITEM 4. Submission of Matters to a Vote of Security Holders ............... 25
ITEM 5. Other Information ................................................. 25
ITEM 6. Exhibits .......................................................... 25
Signatures ........................................................ 27
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31, September 30,
2007 2006 2006
-------------- -------------- --------------
(unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 24,632 $ 19,204 $ 43,356
Accounts receivable, net of allowances of $2,603, $1,009 and $2,681 6,810 7,317 6,539
Due from factor, net of allowances of $8,970, $11,499 and $11,355 51,994 40,208 52,652
Note receivable - related party 3,000 -- --
Inventories 36,265 33,660 35,736
Marketable securities - available for sale 39,061 72,542 50,457
Prepaid expenses and other current assets 6,393 5,929 5,855
Prepaid taxes 9,270 1,084 2,457
Deferred taxes 7,528 8,099 5,509
-------------- -------------- --------------
Total current assets 184,953 188,043 202,561
Property and equipment, net 25,705 22,842 22,089
Deferred taxes 6,419 6,794 5,321
Deposits and other 3,276 2,965 1,703
Marketable securities - available for sale 15,487 17,139 18,643
Goodwill - net 11,269 6,465 6,975
Intangibles - net 10,639 7,144 7,487
-------------- -------------- --------------
Total Assets $ 257,748 $ 251,392 $ 264,779
============== ============== ==============
LIABILITIES
Current liabilities:
Accounts payable $ 24,354 12,784 $ 18,196
Accrued expenses 14,115 14,056 14,557
Accrued incentive compensation 5,879 9,492 7,231
-------------- -------------- --------------
Total current liabilities 44,348 36,332 39,984
Deferred rent 3,425 3,136 3,535
-------------- -------------- --------------
Total Liabilities 47,773 39,468 43,519
-------------- -------------- --------------
Commitments, contingencies and other
STOCKHOLDERS' EQUITY
Preferred stock - $.0001 par value, 5,000 shares authorized;
none issued; Series A Junior Participating preferred stock -
$.0001 par value, 60 shares authorized; none issued
Common stock - $.0001 par value, 90,000 shares authorized, 25,739,
24,806 and 24,721 shares issued, 20,077, 21,106 and 21,021 outstanding 3 2 2
Additional paid-in capital 129,253 112,692 110,739
Retained earnings 164,551 133,561 145,041
Other comprehensive loss:
Unrealized (loss) on marketable securities (48) (641) (832)
Treasury stock - 5,662, 3,700 and 3,700 shares at cost (83,784) (33,690) (33,690)
-------------- -------------- --------------
Total Stockholder's Equity 209,975 211,924 221,260
-------------- -------------- --------------
Total Liabilities and Stockholders' Equity $ 257,748 $ 251,392 $ 264,779
============== ============== ==============
See accompanying notes to condensed consolidated financial statements - unaudited 1
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
Net sales:
Wholesale $ 85,998 $ 91,751 $ 246,913 $ 270,927
Retail 27,397 31,489 81,392 90,128
---------- ---------- ---------- ----------
113,395 123,240 328,305 361,055
---------- ---------- ---------- ----------
Cost of sales:
Wholesale 54,906 57,020 159,104 165,514
Retail 11,671 15,197 34,769 43,680
---------- ---------- ---------- ----------
66,577 72,217 193,873 209,194
---------- ---------- ---------- ----------
Gross profit:
Wholesale 31,092 34,731 87,809 105,413
Retail 15,726 16,292 46,623 46,448
---------- ---------- ---------- ----------
46,818 51,023 134,432 151,861
Commission and licensing fee income - net 4,335 3,850 15,450 10,437
Operating expenses (38,352) (32,999) (103,922) (100,654)
---------- ---------- ---------- ----------
Income from operations 12,801 21,874 45,960 61,644
Interest and other income, net 671 715 2,384 1,628
---------- ---------- ---------- ----------
Income before provision for income taxes 13,472 22,589 48,344 63,272
Provision for income taxes 2,533 9,942 17,354 27,069
---------- ---------- ---------- ----------
Net income $ 10,939 $ 12,647 $ 30,990 $ 36,203
========== ========== ========== ==========
Basic income per share $ 0.52 $ 0.61 $ 1.49 $ 1.74
========== ========== ========== ==========
Diluted income per share $ 0.52 $ 0.57 $ 1.43 $ 1.64
========== ========== ========== ==========
Basic weighted average common shares outstanding 20,863 20,880 20,832 20,850
Effect of dilutive securities - options/restricted stock 356 1,256 775 1,178
---------- ---------- ---------- ----------
Diluted weighted average common shares outstanding 21,219 22,136 21,607 22,028
========== ========== ========== ==========
See accompanying notes to condensed consolidated financial statements - unaudited 2
Condensed Consolidated Statements of Cash Flows
(unaudited) (in thousands)
Nine Months Ended
September 30,
----------------------------
2007 2006
------------ ------------
Cash flows from operating activities:
Net income $ 30,990 $ 36,203
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 5,842 4,722
Loss on disposal of fixed assets 600 1,858
Deferred taxes 514 --
Non-cash compensation 3,450 1,452
Provision for bad debts (935) 5,214
Deferred rent expense 289 268
Realized loss on marketable securities 588 825
Changes in:
Accounts receivable (1,087) (3,168)
Due from factor (9,257) (23,075)
Notes receivable - related party (3,000) --
Inventories (2,605) (1,441)
Prepaid expenses, prepaid taxes, deposits and other assets (8,930) (2,126)
Accounts payable and other accrued expenses 7,259 4,100
------------ ------------
Net cash provided by operating activities 23,718 24,832
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (7,894) (7,116)
Purchase of marketable securities (35,340) (19,867)
Sale/redemption of marketable securities 70,910 16,996
Acquisition, net of cash acquired (8,983) (15,404)
------------ ------------
Net cash provided by (used in) investing activities 18,693 (25,391)
------------ ------------
Cash flows from financing activities:
Proceeds from options exercised 5,154 5,781
Tax benefit from exercise of options 7,957 3,556
Purchase of treasury stock (50,094) (8,264)
------------ ------------
Net cash provided by (used in) financing activities (36,983) 1,073
------------ ------------
Net increase in cash and cash equivalents 5,428 514
Cash and cash equivalents - beginning of period 19,204 42,842
------------ ------------
Cash and cash equivalents - end of period $ 24,632 $ 43,356
============ ============
See accompanying notes to condensed consolidated financial statements - unaudited 3
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
NOTE A - BASIS OF REPORTING
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") for interim financial information and pursuant
to the rules and regulations of the Securities and Exchange Commission (the
"SEC"). Accordingly, they do not include all of the information and footnotes
required by GAAP for complete financial statements. In the opinion of
management, the accompanying statements include all adjustments (consisting only
of normal recurring items) that are considered necessary for a fair presentation
of the financial position of Steven Madden, Ltd. and its subsidiaries (the
"Company") and the results of its operations and cash flows for the periods
presented. The results of its operations for the three- and nine-month periods
ended September 30, 2007 are not necessarily indicative of the operating results
for the full year. It is suggested that these financial statements be read in
conjunction with the financial statements and related disclosures for the year
ended December 31, 2006 included in the Annual Report of Steven Madden, Ltd. on
Form 10-K filed with the SEC on March 9, 2007.
NOTE B - USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
The significant areas involving management estimates include allowances for bad
debts, returns and customer chargebacks. The Company provides reserves on trade
accounts receivables for future customer chargebacks and markdown allowances,
discounts, returns and other miscellaneous compliance related deductions that
relate to the current period sales. The Company evaluates anticipated
chargebacks by reviewing several performance indicators of its major customers.
These performance indicators, which include retailers' inventory levels, sell
through rates and gross margin levels, are analyzed by key account executives
and the Vice President of Wholesale Sales to estimate the amount of the
anticipated customer allowance.
NOTE C - RECLASSIFICATIONS
Certain prior period amounts have been reclassified to conform to the current
period presentation.
NOTE D - NOTE RECEIVABLE - RELATED PARTY
On June 25, 2007, the Company made a loan to Steve Madden, its Creative and
Design Chief and a principal shareholder of the Company, in the amount of
$3,000, in order for Mr. Madden to exercise options that were due to expire and
hold the underlying Company stock. Mr. Madden executed a secured promissory note
in favor of the Company that bears interest at an annual rate of 8% and is due
on the earlier of the date Mr. Madden ceases to be employed by the Company or
December 31, 2007. Pursuant to a pledge agreement between the Company and Mr.
Madden, the note is secured by 510,000 shares of the Company's common stock.
NOTE E - MARKETABLE SECURITIES
Marketable securities consist primarily of corporate and municipal bonds, U.S.
treasury notes and government asset-backed securities with maturities greater
than three months and up to five years at the time of purchase as well as
marketable equity securities. These securities, which are classified as
available-for-sale, are carried at fair value with unrealized gains and losses,
net of any tax effect, reported in shareholders' equity as accumulated other
comprehensive income (loss). Amortization of premiums and discounts is included
in interest income and is not material. The values of these securities may
fluctuate as a result of changes in market interest rates and credit risk.
4
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
NOTE F - INVENTORIES
Inventories, which consist of finished goods on hand and in transit, are stated
at the lower of cost (first-in, first-out method) or market.
NOTE G - REVENUE RECOGNITION
The Company recognizes revenue on wholesale sales when products are shipped
pursuant to its standard terms which are freight on board (FOB) warehouse or
when products are delivered to the consolidators as per the terms of the
customers' purchase order. Sales reductions for anticipated discounts,
allowances and other deductions are recognized when sales are recorded.
Customers retain the right to replacement of the product for poor quality or
improper or short shipments, which have historically been immaterial. Retail
sales are recognized when the payment is received from customers and are
recorded net of returns. The Company also generates commission income acting as
a buying agent by arranging to manufacture private label shoes to the
specifications of its clients. The Company's revenue includes partial recovery
of its design, product and development costs for the services provided to
certain suppliers in connection with the Company's private label business.
Commission revenue and product and development cost recoveries are recognized as
earned when title of the product transfers from the manufacturer to the customer
and is reported on a net basis after deducting operating expenses.
The Company licenses its trademarks for use in connection with the
manufacturing, marketing and sale of cold weather accessories, sunglasses,
eyewear, outerwear, watches, dresses and children's apparel. The license
agreements require the licensee to pay the Company a royalty and, in
substantially all of the agreements, an advertising fee based on the higher of a
minimum or a net sales percentage as defined in the various agreements. In
addition, under the terms of retail selling agreements, most of the Company's
international distributors are required to pay the Company a royalty based on a
percentage of net sales, in addition to a commission on the purchases of the
Company's products. Licensing revenue is recognized on the basis of net sales
reported by the licensees and/or international distributors minimum guaranteed
royalties, if higher. In substantially all of the Company's license agreements,
the minimum guaranteed royalty is earned and payable on a quarterly basis.
NOTE H - TAXES COLLECTED FROM CUSTOMERS
In June of 2006, the FASB issued Emerging Issues Task Force 06-03, "How Taxes
Collected from Customers and Remitted to Governmental Authorities Should Be
Presented in the Income Statement" ("EITF 06-03"). The consensus reached in EITF
06-03 allows companies to adopt a policy of presenting taxes in the income
statement on either a gross basis (included in revenues and costs) or net basis
(excluded from revenues). Taxes within the scope of EITF 06-03 would include
taxes that are imposed on a revenue transaction between a seller and a customer,
for example, sales taxes, use taxes, value-added taxes and some types of excise
taxes. The Company has consistently recorded all taxes within the scope of EITF
06-03 on a net basis.
NOTE I - SALES DEDUCTIONS
The Company supports retailers' initiatives to maximize the sales of its
products on the retail floor by subsidizing the co-op advertising programs of
such retailers, providing them with inventory markdown allowances and
participating in various other marketing initiatives of its major customers.
Such expenses are reflected in the Condensed Consolidated Statement of
Operations as deductions to sales. For the three- and nine-month periods ended
September 30, 2007, the total deduction to net sales for these expenses was
$11,118 and $30,799, respectively, as compared to $9,675 and $24,980 for the
comparable periods in 2006.
5
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
NOTE J - COST OF SALES
All costs incurred to bring finished products to the Company's distribution
center and, in the Retail Division, the costs to bring products to the Company's
stores, are included in the cost of sales line on the Consolidated Statement of
Operations. These include the cost of finished products, purchase commissions,
letter of credit fees, brokerage fees, sample expenses, custom duty, inbound
freight, royalty payments on licensed products, labels and product packaging.
All warehouse and distribution costs related to the Wholesale Division and
freight to customers, if any, are included in the operating expenses line item
of the Company's Condensed Consolidated Statement of Operations. The Company's
gross margins may not be comparable to other companies in the industry because
some companies may include warehouse and distribution costs as a component of
cost of sales, while other companies report on the same basis as the Company and
include them in operating expenses.
NOTE K - NET INCOME PER SHARE OF COMMON STOCK
Basic income per share is based on the weighted average number of common shares
outstanding during the period. Diluted income per share reflects the potential
dilution assuming common shares were issued upon the exercise of outstanding
options and the proceeds thereof were used to purchase outstanding common
shares. Diluted income per share also reflects the unvested and unissued shares
promised to employees that have a dilutive effect. In addition, diluted earnings
per share includes the amount of unrecognized share-based compensation costs
attributed to future services and the amount of tax benefits, if any, that would
be credited to Additional Paid In Capital assuming the exercise of options. For
both the three- and nine-month periods ended September 30, 2007, 300,000 stock
options have been excluded from the calculation because inclusion of such shares
would be anti-dilutive. No stock options have been excluded from the calculation
for the three and nine months ended September 30, 2006.
NOTE L - STOCK-BASED COMPENSATION
In March 2006, the Board of Directors approved the Steven Madden, Ltd. Stock
Incentive Plan (the "Plan") under which nonqualified stock options, stock
appreciation rights, performance shares, restricted stock, other stock-based
awards and performance-based cash awards may be granted to employees,
consultants and non-employee directors. The shareholders approved the Plan on
May 26, 2006. The number of shares that may be issued or used under the Plan
cannot exceed 1,200,000 shares. On May 25, 2007, the stockholders approved an
amendment to the Plan to increase the maximum number of shares that may be
issued under the Plan to 1,550,000. The following table summarizes the number of
Common Stock shares authorized for use in the Plan, the amount of stock-based
awards issued (net of expired or cancelled) and the amount of Common Stock
available for the grant of stock-based awards under the Plan:
Common Stock authorized 1,550,000
Stock- based awards granted net of expired or
cancelled 910,000
------------
Common Stock available for grant of stock -based
awards as of September 30, 2007 640,000
============
6
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
Note L - STOCK-BASED COMPENSATION (continued)
Total equity-based compensation for the three and nine months ended September 30
is as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Restricted stock $ 1,036 $ 768 $ 3,262 $ 1,331
Stock options 125 -- 188 121
------------ ------------ ------------ ------------
Total $ 1,161 $ 768 $ 3,450 $ 1,452
============ ============ ============ ============
Such compensation is included in operating expenses on the Company's Condensed
Consolidated Statements of Operations. The Company realized a tax benefit from
the exercise of stock options of $7,957 and $3,556 during the nine months ended
September 30, 2007 and 2006, respectively.
Stock Options
During the three- and nine-month periods ended September 30, 2007, there were
30,000 and 825,000 options exercised with a total intrinsic value of $865 and
$20,771, respectively, compared to 312,000 and 467,000 options exercised with a
total intrinsic value of $6,680 and $8,444 for the corresponding periods of last
year. No options vested during the three- and nine-month periods ended September
30, 2007, as compared to 30,000 options with a weighted average exercise price
of $11.84 that vested during the first nine months of last year. As of September
30, 2007, there were 300,000 unvested options with a weighted average exercise
price of $47.50 and an average vesting period of 1.6 years. There were no
unvested options as of September 30, 2006.
The Company estimates the fair value of options granted using the Black-Scholes
option-pricing model, which requires several assumptions. The expected term of
the options represents the estimated period of time until exercise and is based
on the historical experience of similar awards. Expected volatility is based on
the historical volatility of the Company's stock. The risk free interest rate is
based on the U.S. Treasury yield curve in effect at the time of the grant. With
the exception of special dividends paid in November of 2005 and 2006, the
Company historically has not paid regular dividends and thus the expected
dividend rate is assumed to be zero. The weighted average fair value of options
granted during the nine months ended September 30, 2007 was approximately $5.01
using the Black-Scholes option-pricing model assuming a volatility of 37%, a
risk free interest rate of 4.73%, an expected life of 3.13 years and no dividend
yield.
Activity relating to stock options granted under the Company's plans and outside
the plans during the nine months ended September 30, 2007 is as follows:
` Weighted
Weighted Average
Average Remaining Aggregate
Number of Exercise Contractual Intrinsic
Shares Price Term Value
------------ ------------ ------------ ------------
Outstanding at January 1, 2007 1,396,000 $ 8.75
Granted 300,000 47.50
Exercised (825,000) 6.25
Cancelled/Forfeited -- --
------------ ------------
Outstanding at September 30, 2007 871,000 $ 24.48 5.1 $ 3,750
============ ============ ============ ============
Exercisable at September 30, 2007 571,000 $ 12.38 6.4 $ 3,750
============ ============ ============ ============
7
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
Note L - STOCK-BASED COMPENSATION (continued)
Restricted Stock
The following table summarizes restricted stock activity during the nine months
ended September 30, 2007:
Weighted Average
Number of Fair Value at
Shares Grant Date
------------ ------------
Non-vested at January 1, 2007 391,000 $ 32.07
Granted 225,000 30.02
Vested (108,000) 32.24
Forfeited (7,000) 34.05
------------
Non-vested at September 30, 2007 501,000 $ 31.09
============
As of September 30, 2007, there was $12,898 of total unrecognized compensation
cost related to restricted stock awards granted under the Plan. This cost is
expected to be recognized over a weighted average of 3.2 years. During the year
ended December 31, 2006, 165,000 restricted stock awards were granted to the
Company's Creative and Design Chief. The Company determines the fair value of
its restricted stock awards based on the market price of its common stock on the
date of grant.
NOTE M - ACQUISITIONS
Compo Enhancements
On May 16, 2007, the Company acquired all of the equity interest of privately
held Compo Enhancements, LLC ("Compo"). Compo was founded in late 2005 as a
third party provider of e-commerce solutions for the Company. Management
believes that the acquisition enables the Company to fully integrate its
e-commerce business into the Company's Retail Division and operate its online
business internally. The acquisition was completed for a consideration of
$8,982, inclusive of transaction costs, subject to adjustments which include
certain earn-out provisions based on the Company's financial performance through
2012. The fair values assigned to tangible and intangible assets acquired and
liabilities assumed are based on management's estimates and assumptions, as well
as third-party independent valuations. On a preliminary basis, as of June 30,
2007, the Company allocated $3,800 to the value of customer relationships, $930
to the value of a non-compete agreement and $4,437 to goodwill. In September
2007, the Company waived the working capital adjustment provision in the
purchase agreement. As a result, goodwill was increased to $4,804. The value of
customer relationships is being amortized over ten years and the non-compete
agreement is being amortized over the five-year life of the agreement. The
results of operations of Compo have been included in the Company's Condensed
Consolidated Statements of Operations from the date of the acquisition.
Unaudited pro forma information related to this acquisition is not included, as
the impact of this transaction is not material to the Company's consolidated
results. In connection with the acquisition, Jeffrey Silverman, founder, CEO and
42% owner of Compo, has been appointed President of the Company. Mr. Silverman's
contract, which expires on December 31, 2009, provides for an annual salary of
$600 and an annual bonus based on EBIT. In addition, Mr. Silverman was granted
150,000 stock options with an exercise price of $45 and an additional 150,000
stock options with an exercise price of $50, all of which vest over three years.
8
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
NOTE M - ACQUISITIONS (CONTINUED)
Daniel M. Friedman
On February 7, 2006, the Company acquired all of the equity interest of
privately held Daniel M. Friedman and Associates, Inc. and D.M.F. International
(collectively, "Daniel M. Friedman"). Founded in 1995, Daniel M. Friedman is a
manufacturer and distributor of name brand fashion handbags and accessories. The
acquisition was completed for a consideration of $18,710, including transaction
costs plus certain earn-out provisions based on financial performance beginning
2008 through 2010. On April 10, 2007, an amendment to the agreement shortened
the earn-out period by one year through December 31, 2008 and advanced the
earn-out payments from 2008 to 2007. The resulting future earn-out payments will
be charged to goodwill.
The fair values assigned to tangible and intangible assets acquired and
liabilities assumed are based on management's estimates and assumptions, as well
as third-party independent valuations. The total preliminary purchase price has
been allocated as follows:
Current assets $ 9,772
Property, plant and equipment 289
Deposits 62
Intangible assets 8,400
Goodwill 4,918
Liabilities assumed (4,731)
------------
Net assets acquired $ 18,710
============
The results of operations of Daniel M. Friedman have been included in the
Company's Condensed Consolidated Statements of Operations from the date of the
acquisition. The following pro forma information presents the results of the
Company's operations as though the Daniel M. Friedman acquisition had been
completed as of the first day of the nine months ended September 30, 2006 below:
Net sales $ 365,087
Operating income 62,339
Net income 36,584
Basic earnings per share $ 1.75
Diluted earnings per share $ 1.66
NOTE N- GOODWILL AND INTANGIBLE ASSETS
The following is a summary of the carrying amount of goodwill by segment for the
nine months ended September 30, 2007:
------------Wholesale------- Net carrying
Women's Accessories Retail amount
------------ ------------ ------------ ------------
Balance at January 1, 2007 $ 1,547 $ 4,918 $ 0 $ 6,465
Acquisition of Compo 0 0 4,804 4,804
------------ ------------ ------------ ------------
Balance at September 30, 2007 $ 1,547 $ 4,918 $ 4,804 $ 11,269
------------ ------------ ------------ ------------
9
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
NOTE N- GOODWILL AND INTANGIBLE ASSETS (CONTINUED)
The following table details identifiable intangible assets as of September 30,
2007:
Estimated Accumulated Net carrying
lives Cost basis Amortization amount
------------ ------------ ------------ ------------
Trade name 6 years $ 200 $ 56 $ 144
Customer relationships 10 years 6,400 579 5,821
License agreements 3-6 years 5,600 1,790 3,810
Non-compete agreement 5 years 930 78 852
Other 3 years 14 2 12
------------ ------------ ------------
$ 13,144 $ 2,505 $ 10,639
------------ ------------ ------------
The estimated future amortization expense of purchased intangibles as of
September 30, 2007 is as follows:
2007 (remaining three months) $ 490
2008 1,962
2009 1,859
2010 1,856
2011 1,381
Thereafter 3,091
------------
$ 10,639
============
NOTE O - COMPREHENSIVE INCOME
Comprehensive income for the three and nine month periods ended September 30,
2007, after considering other comprehensive income, including unrealized gain on
marketable securities of $209 and $593, was $11,148 and $31,583, respectively.
For the comparable periods ended September 30, 2006, after considering other
comprehensive gain on marketable securities of $344 and $467, comprehensive
income was $12,991 and $36,670, respectively.
NOTE P - INCOME TAXES
Changes in the Company's geographic sales mix combined with revisions in state
and local tax law prompted the Company to re-evaluate its tax filing strategies.
As a result of such changes, the Company has determined that electing to file
each of the New York State and New York City tax returns on a combined basis
would maximize the tax benefits to the Company. The election to file combined
returns has reduced the Company's expected effective tax rate to approximately
40.0% in 2007 from 42.8% in 2006. The Company filed combined returns in 2006 and
was able to amend New York State and New York City returns for 2003 through 2005
resulting in an additional one-time tax benefit recognized in the third quarter
of 2007. The true-up of the tax provision for the first six months of the year
which was based on an effective tax rate of 42% resulted in an additional
one-time benefit in the current quarter of 2007. A reconciliation of the
Company's effective tax rate for the three- and nine-month periods ended
September 30, 2007 is as follows:
10
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
NOTE P - INCOME TAXES (CONTINUED)
Three months Nine months
ended ended
September 30, September 30,
-------------- --------------
Effective tax rate as of September 30, 2006 44.0% 42.8%
Reduction of state and local effective tax rates from filing
combined New York State and New York City returns
- net of federal income tax benefit (4.0) (2.8)
-------------- --------------
Expected effective tax rate as of September 30, 2007 40.0 40.0
One-time reductions to effective tax rate:
True-up of 2006 tax provision (13.3) (2.8)
Refund due on amended returns (5.2) (1.1)
True-up of the six month period ended June 30, 2007 (2.7) (0.2)
-------------- --------------
Effective tax rate as of September 30, 2007 18.8% 35.9%
============== ==============
The Company currently expects that the effective tax rate for the fourth quarter
of 2007 will remain at approximately 40%, however, the actual effective tax rate
for the fourth quarter and the year may be different.
Effective January 1, 2007, the Company adopted the provisions of the Financial
Accounting Standards Board ("FASB") Interpretation No. 48, "Accounting for
Uncertainty In Income Taxes" ("FIN 48"), which addresses the accounting for
uncertainty in income taxes recognized in the financial statements in accordance
with FASB Statement No. 109, "Accounting for Income Taxes." FIN 48 provides
guidance on the financial statement recognition and measurement of a tax
position taken on the Company's tax return. Pursuant to FIN 48, the Company has
opted to classify interest and penalties that would accrue according to the
provisions of relevant tax law as income tax expense on the Condensed
Consolidated Statements of Operations. The Company determines the amount of
interest expense to be recognized by applying the applicable statutory rate of
interest to the difference between the tax position recognized in accordance
with FIN 48 and the amount previously taken or expected to be taken on a tax
return. As required by FIN 48, the Company applied the "more-likely-than-not"
recognition threshold to all tax positions at the adoption date, which resulted
in no required adjustment to the opening balance of retained earnings. The
adoption of FIN 48 did not have a material impact on the Company's results of
operations and earnings per share. The Company's tax years 2003 through 2006
remain open to examination for most taxing authorities.
NOTE Q - RECENTLY ISSUED ACCOUNTING STANDARDS
In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157 clarifies the
principle that fair value should be based on the assumptions market participants
would use when pricing an asset or liability and establishes a fair value
hierarchy that prioritizes the information used to develop those assumptions.
Under the standard, fair value measurements would be separately disclosed by
level within the fair value hierarchy. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years, with early adoption permitted. The Company
has not yet determined the impact, if any, that the implementation of SFAS No.
157 will have on its results of operations or financial condition.
11
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
NOTE Q - RECENTLY ISSUED ACCOUNTING STANDARDS (CONTINUED)
In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("SFAS No. 159"). SFAS No. 159 permits entities to choose to measure many
financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. SFAS 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between entities that chose different measurement attributes for similar assets
and liabilities. SFAS No. 159 is effective for financial statements issued for
fiscal years beginning after November 15, 2007. The Company has not yet
determined the impact, if any, that the implementation of SFAS No. 159 will have
on its results of operations or financial condition.
NOTE R - COMMITMENTS, CONTINGENCIES AND OTHER
Legal proceedings:
(a) On August 10, 2005, the U.S. Customs Department ("Customs")
issued a report that asserts that certain commissions which
the Company treated as "buying agents' commissions" (which are
non-dutiable) should be treated as "selling agents'
commissions" and hence are dutiable. In the report, Customs
estimates that the Company had underpaid duties during the
calendar years of 1998 through 2004 in the amount of $1,051.
As of June 30, 2007, based on discussions with legal counsel,
the Company believed that the liability in this case,
including interest, was not likely to exceed $1,500.
Accordingly, as of December 31, 2006 the Company recorded a
reserve of $1,500. In September of 2007, Customs notified the
Company that it had finalized its assessment of the underpaid
duties to be $1,400. Pursuant to this assessment, the Company,
with the advice of legal counsel, has re-evaluated the
liability in the case, including interest and penalties, and
believes that it is not likely to exceed $2,700. The Company
increased its reserve by $1,208 in the third quarter of 2007.
Such reserve is subject to change to reflect the status of
this matter.
(b) The Company has been named as a defendant in certain other
lawsuits in the normal course of business. In the opinion of
management, after consulting with legal counsel, the
liabilities, if any, resulting from these matters should not
have a material effect on the Company's financial position or
results of operations. It is the policy of management to
disclose the amount or range of reasonably possible losses in
excess of recorded amounts.
Note S - Operating Segment Information
The Company's reportable segments are primarily based on methods used to
distribute its products. The wholesale segment, through sales to department and
specialty stores, and the retail segment, through the operation of retail stores
and the website, derive revenue from sales of branded women's, men's and kid's
footwear and accessories. In addition, the wholesale segment has a licensing
program that extends the Steve Madden, Steven by Steve Madden and Stevies brands
to accessories and ready-to-wear apparel. The first cost segment represents
activities of a subsidiary which earns commissions for serving as a buying agent
to mass-market merchandisers, shoe chains and other off-price retailers with
respect to their procurement of private label shoes.
12
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - Unaudited
September 30, 2007
($ in thousands except share and per share data)
NOTE S - OPERATING SEGMENT INFORMATION (CONTINUED)
-------------Wholesale Segments---------- Total
Women's Men's Accessories Wholesale Retail First Cost Consolidated
----------- ----------- ----------- ----------- ----------- ----------- ------------
Quarter ended,
September 30, 2007:
Net sales to external
customers $ 58,004 $ 15,203 $ 12,791 $ 85,998 $ 27,397 $ 113,395
Gross profit 21,039 5,936 4,117 31,092 15,726 46,818
Commissions and
licensing fees - net 771 -- -- 771 -- $ 3,564 4,335
Income (loss) from
operations 7,475 2,375 821 10,671 (1,434) 3,564 12,801
Segment assets $ 135,059 $ 21,594 $ 23,582 $ 180,235 $ 51,120 $ 26,393 $ 257,748
Capital expenditures $ 1,459 $ 1,885 $ -- $ 3,344
September 30, 2006:
Net sales to external
customers $ 62,789 $ 16,253 $ 12,709 $ 91,751 $ 31,489 $ 123,240
Gross profit 25,034 7,028 2,669 34,731 16,292 51,023
Commissions and
licensing fees - net 733 -- -- 733 -- $ 3,117 3,850
Income (loss) from
operations 13,879 3,290 (216) 16,953 1,804 3,117 21,874
Segment assets $ 161,837 $ 19,236 $ 23,289 $ 204,362 $ 43,068 $ 17,349 $ 264,779
Capital expenditures $ 1,181 $ 1,487 $ -- $ 2,668
-------------Wholesale Segments---------- Total
Women's Men's Accessories Wholesale Retail First Cost Consolidated
----------- ----------- ----------- ----------- ----------- ----------- ------------
Nine months ended,
September 30, 2007:
Net sales to external
customers $ 168,101 $ 39,260 $ 39,552 $ 246,913 $ 81,392 $ 328,305
Gross profit 60,262 15,589 11,958 87,809 46,623 134,432
Commissions and
licensing fees - net 2,872 -- -- 2,872 -- $ 12,578 15,450
Income (loss) from
operations 25,405 5,516 2,844 33,765 (383) 12,578 45,960
Segment assets $ 135,059 $ 21,594 $ 23,582 $ 180,235 $ 51,120 $ 26,393 $ 257,748
Capital expenditures $ 2,685 $ 5,209 $ -- $ 7,894
September 30, 2006:
Net sales to external
customers $ 183,101 $ 49,539 $ 38,287 $ 270,927 $ 90,128 $ 361,055
Gross profit 72,600 20,816 11,997 105,413 46,448 151,861
Commissions and
licensing fees - net 2,259 -- -- 2,259 -- $ 8,178 10,437
Income from operations 36,890 9,342 4,460 50,692 2,774 8,178 61,644
Segment assets $ 161,837 $ 19,236 $ 23,289 $ 204,362 $ 43,068 $ 17,349 $ 264,779
Capital expenditures $ 2,707 $ 4,404 $ 5 $ 7,116
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
- --------------------------------------------------------------------------------
The following discussion of the Company's financial condition and results of
operations should be read in conjunction with the unaudited Financial Statements
and Notes thereto appearing elsewhere in this document.
Statements in this "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and elsewhere in this document as well as statements
made in press releases and oral statements that may be made by the Company or by
officers, directors or employees of the Company acting on the Company's behalf
that are not statements of historical or current fact constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other unknown factors that could cause the
actual results of the Company to be materially different from the historical
results or from any future results expressed or implied by such forward-looking
statements. In addition to statements which explicitly describe such risks and
uncertainties, readers are urged to consider statements labeled with the terms
"believes," "belief," "expects," "intends," "anticipates" or "plans" to be
uncertain forward-looking statements. The forward-looking statements contained
herein are also subject generally to other risks and uncertainties that are
described from time to time in the Company's reports and registration statements
filed with the Securities and Exchange Commission.
Overview:
($ in thousands, except retail sales data per square foot and earnings per
share)
Steven Madden, Ltd. (together with its subsidiaries, the "Company") designs,
sources, markets and retails fashion-forward footwear for women, men and
children. In addition, the Company designs, sources, markets and retails name
brand and private label fashion accessories, such as handbags and belts, through
its Daniel M. Friedman Division. The Company distributes products through
department and specialty stores throughout the United States and Canada, its
retail stores, its e-commerce website and through special distribution
arrangements in Europe, Central and South America, Australia and Asia. The
Company's product line includes a broad range of updated styles which are
designed to establish or capitalize on market trends, complemented by core
products. The Company has established a reputation for its creative designs,
popular styles and quality products at accessible price points.
Consolidated net sales for the quarter ended September 30, 2007 were $113,395 as
compared to $123,240 in the same quarter of the prior year. Gross margin in the
third quarter of 2007 remained unchanged from the third quarter of 2006 at 41%.
Net income for the third quarter of this year was $10,939, including a one-time
gain of $2,692 resulting from tax savings related to prior periods and a
one-time charge of $1,208 related to the provisions for prior years custom
duties. Excluding these items, net income was $9,600, compared to $12,647 in the
same period last year. Diluted EPS for the third quarter was $0.52 per share,
including a one-time gain of $0.13 per share resulting from the above mentioned
tax savings and a one-time charge of $0.03 per share related to the provision
for prior years customs duties. Excluding these items, adjusted EPS for the
quarter was $0.42 on 21,219 diluted weighted average shares outstanding compared
to $0.57 per share on 22,136 diluted weighted average shares outstanding in the
third quarter of last year.
The recent expansion of the Company's international business, as well as the
continued growth in its private label business, resulted in an increase in the
First Cost Division income. For the quarter ended September 30, 2007, income
from operations in the First Cost Division increased to $3,564 from $3,117 in
the same period of last year.
The Company has pursued a number of initiatives to enhance gross margins such as
reducing freight costs, closeouts, store to store transfers and inventory
shrinkage combined with better inventory controls. As a result, the gross margin
in the Retail Division has increased to 57% in the third quarter of 2007 from
52% in the third quarter of 2006. This significant increase in gross margin
occurred despite the disappointing sales results. Same store sales (sales in
stores that were in operation throughout all of the third quarters of 2007 and
2006) decreased 15%. Store sales productivity decreased to sales per square foot
of $669 in the third quarter of 2007 from $746 sales per square foot in the same
quarter of last year.
Changes in the Company's geographic sales mix, combined with revisions in state
and local tax law, prompted the Company to re-evaluate its tax filing
strategies. The Company has determined that electing to file New York State and
14
New York City tax returns on a combined basis would maximize the tax benefits
provided by changes in New York State allocation regulations. The election to
file combined returns has reduced the Company's effective tax rate to 40.0% in
2007 from 42.8% in 2006. The Company filed combined returns in 2006 and was able
to file amended New York State and New York City returns for 2003 through 2005
resulting in an additional one-time tax benefit in the third quarter of 2007.
The true-up of the tax provision for the first six months of the year that was
based on an effective tax rate of 42.0% resulted in an additional one-time
benefit in the current quarter of 2007.
Pursuant to recent developments in the Company's case with Customs, Management,
with the advice of legal counsel, has increased its provision for its liability
in the case from the $1,500 previously recorded to $2,700. Accordingly, the
Company recorded a $1,208 charge in operating expenses during the third quarter
of 2007.
The Company's annualized inventory turnover increased to 7.8 times in the third
quarter of 2007, compared to 7.3 in the third quarter of 2006. The Company's
accounts receivable average collection days was 53 days in the third quarter of
2007 compared to 52 days in the third quarter of the previous year.
During the third quarter of 2007, Management demonstrated its commitment to
enhancing shareholder value as well as its confidence in the Company's future by
repurchasing 1,252,222 shares of the Company's common stock for $29,153 at an
average price of $23.28.
As of September 30, 2007, the Company had $79,180 in cash, cash equivalents and
marketable securities, no short or long-term debt, and total stockholders equity
of $209,975. Working capital decreased to $140,605 as of September 30, 2007,
compared to $162,577 as of September 30, 2006, primarily due to the cash used to
repurchase the Company stock in the third quarter.
15
The following tables set forth information on operations for the periods
indicated:
Selected Financial Information
Three Months Ended
September 30
($ in thousands)
2007 2006
------------------------- -------------------------
CONSOLIDATED:
- -------------
Net sales $ 113,395 100% $ 123,240 100%
Cost of sales 66,577 59 72,217 59
Gross profit 46,818 41 51,023 41
Other operating income - net of expenses 4,335 4 3,850 3
Operating expenses 38,352 34 32,999 27
Income from operations 12,801 11 21,874 17
Interest and other income, net 671 1 715 1
Income before income taxes 13,472 12 22,589 18
Net income 10,939 10 12,647 10
By Segment:
WHOLESALE DIVISION:
- -------------------
Net sales $ 85,998 100% $ 91,751 100%
Cost of sales 54,906 64 57,020 62
Gross profit 31,092 36 34,731 38
Other operating income 771 1 733 1
Operating expenses 21,192 25 18,511 20
Income from operations 10,671 12 16,953 19
RETAIL DIVISION:
- ----------------
Net sales $ 27,397 100% $ 31,489 100%
Cost of sales 11,671 43 15,197 48
Gross profit 15,726 57 16,292 52
Operating expenses 17,160 62 14,488 46
Income (loss) from operations (1,434) (5) 1,804 6
Number of stores 100 95
FIRST COST DIVISION:
- --------------------
Other commission income - net of expenses $ 3,564 100% $ 3,117 100%
16
Selected Financial Information
Nine Months Ended
September 30
($ in thousands)
2007 2006
------------------------- -------------------------
CONSOLIDATED:
- -------------
Net sales $ 328,305 100% $ 361,055 100%
Cost of sales 193,873 59 209,194 58
Gross profit 134,432 41 151,861 42
Other operating income - net of expenses 15,450 5 10,437 3
Operating expenses 103,922 32 100,654 28
Income from operations 45,960 14 61,644 17
Interest and other income, net 2,384 1 1,628 1
Income before income taxes 48,344 15 63,272 18
Net income 30,990 9 36,203 10
By Segment:
WHOLESALE DIVISION:
- -------------------
Net sales $ 246,913 100% $ 270,927 100%
Cost of sales 159,104 64 165,514 61
Gross profit 87,809 36 105,413 39
Other operating income 2,872 1 2,259 1
Operating expenses 56,916 23 56,980 21
Income from operations 33,765 14 50,692 19
RETAIL DIVISION:
- ----------------
Net sales $ 81,392 100% $ 90,128 100%
Cost of sales 34,769 43 43,680 48
Gross profit 46,623 57 46,448 52
Operating expenses 47,006 57 43,674 49
Income (loss) from operations (383) 0 2,774 3
Number of stores 100 95
FIRST COST DIVISION:
- --------------------
Other commission income- net of expenses $ 12,578 100% $ 8,178 100%
RESULTS OF OPERATIONS
($ in thousands)
Three Months Ended September 30, 2007 vs. Three Months Ended September 30, 2006
Consolidated:
- -------------
Total net sales for the three-month period ended September 30, 2007 decreased by
8% to $113,395 from $123,240 for the comparable period of 2006. Net sales in the
Retail Division decreased by 13% and net sales in the Wholesale Division
decreased by 6%. Gross margin in the third quarter of 2007 remained unchanged
from the third quarter of 2006 at 41%, as a significant increase in the Retail
Division's gross margin was offset by a decrease in the Wholesale Division.
Operating expenses increased in the third quarter of this year to $38,352 or 34%
of net sales, from $32,999 or 27% of net sales in the same period last year.
17
Commission and licensing fee income was $4,335 in the third quarter of 2007
compared to $3,850 in the third quarter of 2006. Excluding the one-time charge
for prior years customs duties, operating income was $14,009 in the third
quarter of this year and $12,801 after the one-time charge for prior period
custom duties compared to $21,874 in the same period last year. The Company's
effective tax rate decreased to 19% in the quarter ended September 30, 2007,
compared to 44% in same quarter last year due to a reduction in the cumulative
effective tax rate to 40% and a one-time tax benefit related to prior periods in
connection with filing combined tax returns for both New York State and New York
City. Exclusive of the one-time gain of $2,692 resulting from the above
mentioned tax savings and the one-time charge of $1,208 related to the provision
for prior year customs duties, net income was $9,600. Including these one-time
items, net income decreased to $10,939 in the third quarter of this year
compared to $12,647 in the same period last year. The decrease in income was
primarily due to the lower consolidated net sales and the increase in operating
expenses.
Wholesale Division:
- -------------------
Net sales from the Wholesale Division accounted for $85,998 or 76%, and $91,751
or 74% of total Company net sales for the third quarter of 2007 and 2006,
respectively. Net sales decreased in both the Steve Madden Womens and the Steven
Divisions due to the absence of fashion trends in the marketplace and the
nonexistence of a big item needed to drive significant sales volume in the
Divisions. The weak performance of sport casual business resulted in a decrease
of net sales in Steve Madden Mens Division. In addition, net sales for the third
quarter of 2006 included approximately $3,000 in net sales from Rule which is a
brand that was discontinued late in 2006. These decreases in net sales were
partially offset by net sales increases in the Candies, Stevies and Madden Girl
Divisions.
Gross profit margin decreased to 36% in the third quarter of this year from 38%
in the same period last year, due to an increase in markdowns and allowances in
the Steven Division required to liquidate retail inventory levels combined with
an increase in promotional selling in the other footwear brands. In the third
quarter of 2007, operating expenses increased to $21,192 from $18,511 for the
same period last year. The increase was caused primarily by the provision of
$1,208 for prior years custom duties and payroll costs related to additional
hires for a new division. Finally, an upgrade in the Company's communication
platform resulted in an increase of payments to third-party service providers.
Income from operations for the Wholesale Division decreased to $10,671 for the
three-month period ended September 30, 2007 compared to $16,953 for the
three-month period ended September 30, 2006. Excluding the one-time charge for
prior years customs duties, income from operations was $11,879.
Retail Division:
- ----------------
In the third quarter of 2007 net sales from the Retail Division accounted for
$27,397 or 24% of total Company net sales compared to $31,489 or 26% in the same
period last year. The Company opened five new stores during the twelve months
ended September 30, 2007. As a result, the Company had 100 retail stores as of
September 30, 2007 compared to 95 stores as of September 30, 2006. The 100
stores currently in operation include 94 under the Steve Madden brand, five
under the Steven brand and one e-commerce website. Comparable store sales (sales
of those stores, including the e-commerce website, that were open throughout the
third quarters of 2007 and 2006) decreased 15% in the third quarter of this year
due to the lower than expected early boot sales during the back to school
selling season and the absence of a significant fashion trend. The Company has
pursued a number of initiatives to enhance gross margins such as reducing
freight costs, close outs, store to store transfers and inventory shrinkage
combined with better inventory controls. As a result, the gross margin in the
Retail Division has increased to 57% in the third quarter of 2007 from 52% in
the third quarter of 2006. In the third quarter of 2007, operating expenses
increased to $17,160 from $14,488 in the third quarter last year due largely to
the incremental increase in payroll, rent and depreciation expenses related to
the addition of five new stores. In addition, an upgrade in the Company's
communication platform resulted in an increase of payments to third-party
service providers. Loss from operations for the Retail Division was $1,434 in
the third quarter of this year compared to income from operations of $1,804 for
the same period in 2006.
First Cost Division:
- --------------------
The First Cost Division generated net commission income and design fees of
$3,564 for the three-month period ended September 30, 2007, compared to $3,117
for the comparable period of 2006. The increase was the result of the recent
expansion of the Company's international business as well as the continued
growth in private label business.
18
Nine Months Ended September 30, 2007 vs. Nine Months Ended September 30, 2006
Consolidated:
- -------------
Total net sales for the nine-month period ended September 30, 2007 decreased by
9% to $328,305 from $361,055 for the comparable period of 2006. Net sales in the
Retail Division decreased by 10% and net sales in the Wholesale Division
decreased by 9%. Overall gross profit margin decreased to 41% in the first nine
months of 2007 from 42% in the first nine months of 2006. A decrease in the
Wholesale gross profit margin to 36% in the first nine months of this year
compared to 39% in the same period last year was partially offset by an increase
in the Retail gross profit margin to 57% in the first nine months of this year
from 52% in the same period last year. Operating expenses increased in the first
nine months of this year to $103,922 or 32% of net sales from $100,654 or 28% of
net sales in the same period last year. Commission and licensing fee income was
$15,450 in the first nine months of 2007 compared to $10,437 in the first nine
months of 2006. Excluding the one-time charge for prior years customs duties,
operating income was $47,168. Including the one-time charge, income from
operations was $45,960 in the first nine months of this year compared to $61,644
in the same period last year. The Company's effective tax rate decreased to 36%
in the nine months ended September 30, 2007 compared to 43% in same period of
last year due to a reduction in the effective tax rate to 40% and a one-time tax
benefit related to prior periods, all connected to the Company's election to
file combined tax returns for both New York State and New York City. Exclusive
of the above mentioned one-time gain of $2,692 resulting from tax savings and
the one-time charge of $1,208 related to custom duties, net income was $29,651.
Including the one-time charges, net income decreased to $30,990 in the first
nine months of this year compared to $36,203 in the same period last year. The
decrease in income was primarily due to the decrease in net sales and an
increase in operating expenses.
Wholesale Division:
- -------------------
Net sales from the Wholesale Division accounted for $246,913 or 75%, and
$270,927 or 75% of total Company net sales for the first nine months of 2007 and
2006, respectively. The decrease in sales was concentrated primarily in three of
the Company's wholesale brands. In the Steve Madden Womens Division, the
decrease in sales was due to disappointing sell-throughs on boots earlier in the
year and the absence of a significant trend right product such as the peep toe
trend that drove sales last year. The continued weakness in the sport casual
business resulted in disappointing sales in Steve Madden Mens Division while in
the Steven Division, the poor performance of dress shoes combined with the
absence of fashion trends in the marketplace and the nonexistence of a big item
resulted in lower sales. In addition, net sales for the nine-month period ended
September 30, 2006 include approximately $14,700 in net sales from Rule, l.e.i.
and Jump, three brands that were discontinued late in 2006. These decreases were
partially offset by the double-digit net sales increases achieved in both the
Madden Girl and the Stevies Divisions.
Gross profit margin decreased to 36% in the first nine months of this year from
39% in the same period last year, due primarily to a significant increase in
markdowns required to liquidate retail inventories and an increase in
promotional selling across all the Company's wholesale brands. In the first nine
months of 2007, operating expenses remained virtually unchanged at $56,916
compared to $56,980 in the same period of 2006. Income from operations for the
Wholesale Division decreased to $33,765 for the nine-month period ended
September 30, 2007 compared to $50,692 for the nine-month period ended September
30, 2006. Excluding the one-time charge for prior years customs duties, income
from operations was $34,973.
Retail Division:
- ----------------
In the first nine months of 2007, net sales from the Retail Division accounted
for $81,392 or 25% of total Company net sales compared to $90,128 or 25% in the
same period last year. The Company opened five new stores during the twelve
months ended September 30, 2007. As a result, the Company had 100 retail stores
as of September 30, 2007 compared to 95 stores as of September 30, 2006. The 100
stores currently in operation include 94 under the Steve Madden brand, five
under the Steven brand and one e-commerce website. Comparable store sales (sales
of those stores, including the e-commerce website, that were open throughout the
first nine months of 2007 and 2006) decreased 11% in the first nine months of
this year due to the lack of any significant fashion trends, lower than expected
boot sales earlier in the year, and disappointing results during the back to
school selling season. The Company has pursued a number of initiatives to
enhance gross margins such as reducing freight costs, close outs, store to store
transfers and inventory shrinkage combined with better inventory controls. As a
result, the gross margin in the Retail Division has increased to 57% in the
first nine months of 2007 from 52% in the first nine months of 2006. Loss from
operations for the Retail
19
Division was $383 in the first nine months of this year compared to income from
operations of $2,774 for the same period in 2006.
First Cost Division:
- --------------------
The First Cost Division generated net commission income and design fees of
$12,578 for the nine-month period ended September 30, 2007, compared to $8,178
for the comparable period of 2006. The substantial increase was the result of
the recent expansion of the Company's international business as well as the
continued growth in private label business.
LIQUIDITY AND CAPITAL RESOURCES
($ in thousands)
The Company had working capital of $140,605 at September 30, 2007 compared to
$151,711 at December 31, 2006. The decrease was primarily due to the repurchase
of 1,962,409 shares of the Company's common stock at a total cost of $50,094.
The Company has a factoring agreement with GMAC under which the Company is
eligible to borrow against its invoiced receivables at an interest rate equal to
the lower of the prime rate less 0.875% or the 30 day London Interbank Offered
Rate ("LIBOR") plus 1.375%. This agreement, which has no specific expiration
date and can be terminated by either party with 60 days written notice after
June 30, 2009, provides the Company with a $50 million credit facility with a
$25 million sub-limit on the aggregate face amount of Letters of Credit with
some other stipulations.
As of September 30, 2007, the Company held marketable securities valued at
$54,548, consisting primarily of corporate and municipal bonds, U.S. Treasury
notes, government asset-backed securities, certificates of deposits and
equities.
Management believes that based upon its current financial position and available
cash, cash equivalents and marketable securities, the Company will meet all of
its financial commitments and operating needs for at least the next twelve
months.
OPERATING ACTIVITIES
($ in thousands)
During the nine-month period ended September 30, 2007, net cash provided by
operating activities was $23,718. The primary sources of cash were net income of
$30,990 and increases in accounts payable and other accrued expenses of $7,259.
The primary uses of cash were increases in due from factor of $9,257, an
increase in prepaid expenses, prepaid taxes, deposits and other assets of
$8,930, an increase in note receivable of $3,000 and an increase in inventories
of $2,605.
INVESTING ACTIVITIES
($ in thousands)
During the nine-month period ended September 30, 2007, the Company invested
$35,340 in marketable securities and received $70,910 from the maturities and
sales of securities. The Company also invested $8,983 in the acquisition of
Compo. Additionally, the Company made capital expenditures of $7,894,
principally for the four new stores opened in the current period, the
construction of four stores scheduled to open in the fourth quarter, and the
remodeling of eight existing stores.
20
FINANCING ACTIVITIES
($ in thousands)
During the nine-month period ended September 30, 2007, the Company repurchased
1,962,409 shares of the Company's common stock at an average price of $25.53 for
a total cost of $50,094. The Company received $5,154 in cash and realized a tax
benefit of $7,957 in connection with the exercise of stock options.
CONTRACTUAL OBLIGATIONS
($ in thousands)
The Company's contractual obligations as of September 30, 2007 were as follows:
Payment due by period
Remainder of 2012 and
Contractual Obligations Total 2007 2008-2009 2010-2011 after
- --------------------------- ------------ ------------ ------------ ------------ ------------
Operating lease obligations $ 119,814 $ 4,054 $ 31,505 $ 29,499 $ 54,756
Purchase obligations 54,198 54,198 0 0 0
Other long-term liabilities
(future minimum royalty
payments) 810 50 540 220 0
------------ ------------ ------------ ------------ ------------
Total $ 174,822 $ 58,302 $ 32,045 $ 29,719 $ 54,756
============ ============ ============ ============ ============
At September 30, 2007, the Company had un-negotiated open letters of credit for
the purchase of inventory of approximately $2,429.
The Company has an employment agreement with Steven Madden, its Creative and
Design Chief, which provides for an annual base salary of $600 subject to
certain specified adjustments through June 30, 2015. The agreement also provides
for annual bonuses based on EBITDA, revenue of any new business, and royalty
income over $2 million, plus an equity grant and a non-accountable expense
allowance.
On May 16, 2007, the Company acquired all of the equity interest of privately
held Compo. The acquisition was completed for a consideration of $8,983,
including transaction costs. In addition, the purchase agreement includes
certain earn-out provisions based on financial performance through 2012.
On February 7, 2006, the Company acquired all of the equity interest of Daniel
M. Friedman. The acquisition was completed for a consideration of $18,710,
including transaction costs. In addition, the purchase agreement includes
certain earn-out provisions based on financial performance through 2008.
The Company has employment agreements with certain executive officers, which
provide for the payment of compensation aggregating approximately $2,477 in
2007, $2,415 in 2008 and $1,680 in 2009. In addition, some of the employment
agreements provide for a discretionary bonus and some provide for incentive
compensation based on various performance criteria as well as other benefits
including stock options. The Chief Operating Officer of the Company is entitled
to deferred compensation calculated as a percentage of his base salary.
Ninety-nine percent (99%) of the Company's products are produced at overseas
locations, the majority of which are located in China, with a small percentage
located in Brazil, Italy, India and Spain. The Company has not entered into any
long-term manufacturing or supply contracts with any of these foreign companies.
The Company believes that a sufficient number of alternative sources exist
outside of the United States for the manufacture of its products. The Company
currently makes approximately 99% of its purchases in U.S. dollars.
21
INFLATION
The Company does not believe that the relatively low rates of inflation
experienced over the last few years in the United States, where it primarily
competes, have had a significant effect on sales, expenses or profitability.
CRITICAL ACCOUNTING POLICIES AND THE USE OF ESTIMATES
Management's Discussion and Analysis of Financial Condition and Results of
Operations is based upon the Company's consolidated financial statements which
have been prepared in accordance with GAAP. The preparation of these financial
statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, sales and expenses, and related
disclosure of contingent assets and liabilities. Estimates by their nature are
based on judgments and available information. Estimates for the Company are made
based upon historical factors, current circumstances and the experience and
judgment of management. Assumptions and estimates are evaluated on an ongoing
basis and the Company may employ outside experts to assist in evaluations.
Therefore, actual results could materially differ from those estimates under
different assumptions and conditions. Management believes the following critical
accounting estimates are more significantly affected by judgments and estimates
used in the preparation of the Company's condensed consolidated financial
statements: allowance for bad debts, returns, and customer chargebacks;
inventory reserves; valuation of intangible assets; litigation reserves and cost
of sales.
Allowances for bad debts, returns and customer chargebacks. The Company provides
reserves against its trade accounts receivables for future customer chargebacks,
co-op advertising allowances, discounts, returns, bad debts for non-factored
accounts and other miscellaneous deductions that relate to the current period.
The amount of the reserve for bad debts, returns, discounts and compliance
chargebacks are determined by analyzing aged receivables, current economic
conditions, the prevailing retail environment and historical dilution levels for
customers. The Company evaluates anticipated customer markdowns and advertising
chargebacks by reviewing several performance indicators for its major customers.
These performance indicators (which include inventory levels at the retail
floors, sell through rates and gross margin levels) are analyzed by key account
executives and the Vice President of Wholesale Sales to estimate the amount of
the anticipated customer allowance. Failure to correctly estimate the amount of
the reserve could materially impact the Company's results of operations and
financial position.
Inventory reserves. Inventories are stated at lower of cost or market, on a
first-in, first-out basis. The Company reviews inventory on a regular basis for
excess and slow moving inventory. The review is based on an analysis of
inventory on hand, prior sales, and expected net realizable value through future
sales. The analysis includes a review of inventory quantities on hand at
period-end in relation to year-to-date sales and projections for sales in the
foreseeable future as well as subsequent sales. The Company considers quantities
on hand in excess of estimated future sales to be at risk for market impairment.
The net realizable value, or market value, is determined based on the estimate
of sales prices of such inventory through off-price or discount store channels.
The likelihood of any material inventory write-down is dependent primarily on
the expectation of future consumer demand for the Company's product. A
misinterpretation or misunderstanding of future consumer demand for the
Company's product, the economy, or other failure to estimate correctly, in
addition to abnormal weather patterns, could result in inventory valuation
changes, either favorably or unfavorably, compared to the valuation determined
to be appropriate as of the balance sheet date.
Valuation of intangible assets. SFAS No. 142, "Goodwill and Other Intangible
Assets," requires that goodwill and intangible assets with indefinite lives no
longer be amortized, but rather be tested for impairment at least annually. This
pronouncement also requires that intangible assets with finite lives be
amortized over their respective lives to their estimated residual values, and
reviewed for impairment in accordance with SFAS No. 144 "Accounting for
Impairment or Disposal of Long-lived Assets." In accordance with SFAS No. 144,
long-lived assets, such as property, equipment, leasehold improvements and
goodwill subject to amortization, are reviewed for impairment annually or
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to the estimated
undiscounted future cash flows expected to be generated by the asset. If the
carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized in the amount by which the carrying amount of
the asset exceeds the fair value of the asset.
22
Litigation reserves. Estimated amounts for litigation claims that are probable
and can be reasonably estimated are recorded as liabilities in the Company's
consolidated financial statements. The likelihood of a material change in these
estimated reserves would be dependent on new claims as they may arise and the
favorable or unfavorable events of a particular litigation. As additional
information becomes available, management will assess the potential liability
related to the pending litigation and revise their estimates. Such revisions in
management's estimates of a contingent liability could materially impact the
Company's results of operation and financial position.
Cost of sales. All costs incurred to bring finished products to the Company's
distribution center and, in the Retail Division, the costs to bring products to
the Company's stores, are included in the cost of sales line item on the
Company's Consolidated Statement of Operations. These include the cost of
finished products, purchase commissions, letter of credit fees, brokerage fees,
material and labor and related items, sample expenses, custom duty, inbound
freight, royalty payments on licensed products, labels and product packaging.
All warehouse and distribution costs for the Wholesale Division are included in
the operating expenses line item of the Company's Condensed Consolidated
Statements of Operations. The Company classifies shipping costs, if any, to
customers as operating expenses. The Company's gross profit margins may not be
comparable to other companies in the industry because some companies may include
warehouse and distribution as a component of cost of sales, while other
companies report on the same basis as the Company and include them in operating
expenses.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
($ in thousands)
The Company does not engage in the trading of market risk sensitive instruments
in the normal course of business. Financing arrangements for the Company are
subject to variable interest rates primarily based on LIBOR and the prime rate.
An analysis of the Company's credit agreements with GMAC can be found in
Liquidity and Capital Resources section under Part I, Item 2 of this quarterly
report.
As of September 30, 2007, the Company held marketable securities valued at
$54,548, which consist primarily of corporate and municipal bonds, U.S. treasury
notes, certificates of deposit and government asset-backed securities that have
various maturities through December 2010, as well as marketable equity
securities. These securities are subject to interest rate risk and will decrease
in value if interest rates increase. The Company currently has the ability to
hold these securities until maturity. In addition, any decline in interest rates
would be expected to reduce the Company's interest income.
ITEM 4. CONTROLS AND PROCEDURES
As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Company's management, including the Company's Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of its disclosure controls and procedures as of the end of the fiscal quarter
covered by this quarterly report. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that the Company's disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act)
were, as of the end of the fiscal quarter covered by this quarterly report,
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms and is accumulated and communicated to the Company's management, including
the Chief Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosure.
As required by Rule 13a-15(d) under the Exchange Act, the Company's management,
including the Company's Chief Executive Officer and Chief Financial Officer, has
evaluated the Company's internal controls over financial reporting to determine
whether any changes occurred during the quarter covered by this quarterly report
that have materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting. Based on that
evaluation, there has been no such change during the quarter covered by this
report.
23
Part II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
($ in thousands)
Certain legal proceedings in which the Company is involved are discussed in Note
K to the consolidated financial statements and Part I, Item 3 included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2006. The
following discussion is limited to recent developments concerning certain of the
Company's legal proceedings and should be read in conjunction with the Company's
earlier SEC Reports. Unless otherwise indicated, all proceedings discussed in
those earlier reports remain outstanding.
On August 10, 2005, the U.S. Customs Department ("Customs") issued a report that
asserts that certain commissions which the Company treated as "buying agents'
commissions" (which are non-dutiable) should be treated as "selling agents'
commissions" and hence are dutiable. In the report, Customs estimates that the
Company had underpaid duties during the calendar years of 1998 through 2004 in
the amount of $1,051. As of June 30, 2007, based on discussions with legal
counsel, the Company believed that the liability in this case, including
interest, was not likely to exceed $1,500. Accordingly, as of December 31, 2006
the Company recorded a reserve of $1,500. In September of 2007, Customs notified
the Company that it had finalized its assessment of the underpaid duties to be
$1,400. Pursuant to this assessment, the Company, with the advice of legal
counsel, has re-evaluated the liability in the case, including interest and
penalties, and believes that it is not likely to exceed $2,700. The Company
increased its reserve by $1,208 in the third quarter of 2007. Such reserve is
subject to change to reflect the status of this matter.
The Company has been named as a defendant in certain other lawsuits in the
normal course of business. In the opinion of management, after consulting with
legal counsel, the liabilities, if any, resulting from these matters should not
have a material effect on the Company's financial position or results of
operations. It is the policy of management to disclose the amount or range of
reasonably possible losses in excess of recorded amounts.
ITEM 1A. RISK FACTORS
The risk factors included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2006 have not materially changed.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS:
The following table provides information as of September 30, 2007 with respect
to the shares of the Company's Common Stock repurchased by the Company during
the third quarter of 2007:
- --------------------------------------------------------------------------------------------------------------
Total Number of Shares Maximum Dollar Amount of
Total Number Average Purchased as Part of Shares that May Yet Be
of Shares Price Paid Publicly Announced Plans Purchased Under the Plans or
Period Purchased per Share or Programs (1) Programs (1)
- --------------------------------------------------------------------------------------------------------------
07/1/07 - 7/31/07 0 $ 0 0 $38,360,251
- --------------------------------------------------------------------------------------------------------------
8/01/07 - 8/31/07 826,222 $25.34 826,222 $54,420,426
- --------------------------------------------------------------------------------------------------------------
9/1/07 - 9/30/07 426,000 $19.28 426,000 $46,206,993
- --------------------------------------------------------------------------------------------------------------
Total 1,252,222 $23.28 1,252,222 $46,206,993
- --------------------------------------------------------------------------------------------------------------
(1) On August 6, 2007, the Board of Directors authorized the Company to
repurchase up to $37 million of the Company's common stock in addition to
the amount previously authorized. At September 30, 2007, an aggregate of
$46 million remained authorized to repurchase the Company's Common Stock.
24
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
10.1 Secured Promissory Note, dated June 25, 2007, of Steven Madden to the
Company.
10.2 Form of Non-Qualified Stock Option Agreement (Chief Executive Officer)
under the Company's 2006 Stock Incentive Plan, as amended (the "Plan"),
as adopted October 30, 2007.
10.3 Form of Non-Qualified Stock Option Agreement (Employee without
Employment Agreement) under the Plan, as adopted October 30, 2007.
10.4 Form of Non-Qualified Stock Option Agreement (Employee with Employment
Agreement) under the Plan, as adopted October 30, 2007.
10.5 Form of Restricted Stock Agreement (Chief Executive Officer) under the
Plan, as adopted October 30, 2007.
10.6 Form of Restricted Stock Agreement (Employee without Employment
Agreement) under the Plan, as adopted October 30, 2007.
10.7 Form of Restricted Stock Agreement (Employee with Employment Agreement)
under the Plan, as adopted October 30, 2007.
10.8 Form of Restricted Stock Agreement under the Plan used for grants made
to non- employee directors from March 2006 through May 2007, with a
schedule setting forth the name of each of the recipients, the date of
the grant and the number of shares.
10.9 Restricted Stock Agreement, dated March 24, 2006, between Jamieson A.
Karson and the Company.
10.10 Restricted Stock Agreement, dated March 27, 2007, between Jamieson A.
Karson and the Company.
10.11 Amendments to Restricted Stock Agreements, dated as of March 23, 2007,
between Jamieson A. Karson and the Company.
10.12 Restricted Stock Agreement, dated March 24, 2006, between Steven H.
Madden and the Company.
10.13 Restricted Stock Agreement, dated June 9, 2006, between Steven H.
Madden and the Company.
25
10.14 Restricted Stock Agreement, dated March 24, 2006, between Arvind Dharia
and the Company.
10.15 Restricted Stock Agreement, dated March 20, 2006, between Amelia Newton
Varela and the Company.
10.16 Restricted Stock Agreement, dated March 20, 2006, between Robert
Schmertz and the Company.
10.17 Restricted Stock Agreement, dated March 6, 2007, between Arvind Dharia
and the Company.
10.18 Restricted Stock Agreement, dated March 9, 2007, between Robert
Schmertz and the Company.
10.19 Restricted Stock Agreement, dated April 25, 2007, between Awadhesh
Sinha and the Company.
10.20 Non-Qualified Stock Option Agreement, dated May 16, 2007, between
Jeffrey Silverman and the Company.
10.21 Non-Qualified Stock Option Agreement, dated May 16, 2007, between
Jeffrey Silverman and the Company.
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14 or
15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14 or
15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
26
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-Q to be signed on its behalf
by the undersigned thereunto duly authorized.
DATE: November 9, 2007
STEVEN MADDEN, LTD.
/s/ JAMIESON A. KARSON
-----------------------------------------
Jamieson A. Karson
Chairman and Chief Executive Officer
/s/ ARVIND DHARIA
-----------------------------------------
Arvind Dharia
Chief Financial Officer
27
Exhibit No. Description
- ----------- -----------
10.1 Secured Promissory Note, dated June 25, 2007, of Steven Madden
to the Company.
10.2 Form of Non-Qualified Stock Option Agreement (Chief Executive
Officer) under the Company's 2006 Stock Incentive Plan, as
amended (the "Plan"), as adopted October 30, 2007.
10.3 Form of Non-Qualified Stock Option Agreement (Employee without
Employment Agreement) under the Plan, as adopted October 30,
2007.
10.4 Form of Non-Qualified Stock Option Agreement (Employee with
Employment Agreement) under the Plan, as adopted October 30,
2007.
10.5 Form of Restricted Stock Agreement (Chief Executive Officer)
under the Plan, as adopted October 30, 2007.
10.6 Form of Restricted Stock Agreement (Employee without
Employment Agreement) under the Plan, as adopted October 30,
2007.
10.7 Form of Restricted Stock Agreement (Employee with Employment
Agreement) under the Plan, as adopted October 30, 2007.
10.8 Form of Restricted Stock Agreement under the Plan used for
grants made to non- employee directors from March 2006 through
May 2007, with a schedule setting forth the name of each of
the recipients, the date of the grant and the number of
shares.
10.9 Restricted Stock Agreement, dated March 24, 2006, between
Jamieson A. Karson and the Company.
10.10 Restricted Stock Agreement, dated March 27, 2007, between
Jamieson A. Karson and the Company.
10.11 Amendments to Restricted Stock Agreements, dated as of March
23, 2007, between Jamieson A. Karson and the Company.
10.12 Restricted Stock Agreement, dated March 24, 2006, between
Steven H. Madden and the Company.
10.13 Restricted Stock Agreement, dated June 9, 2006, between Steven
H. Madden and the Company.
10.14 Restricted Stock Agreement, dated March 24, 2006, between
Arvind Dharia and the Company.
10.15 Restricted Stock Agreement, dated March 20, 2006, between
Amelia Newton Varela and the Company.
10.16 Restricted Stock Agreement, dated March 20, 2006, between
Robert Schmertz and the Company.
10.17 Restricted Stock Agreement, dated March 6, 2007, between
Arvind Dharia and the Company.
10.18 Restricted Stock Agreement, dated March 9, 2007, between
Robert Schmertz and the Company.
10.19 Restricted Stock Agreement, dated April 25, 2007, between
Awadhesh Sinha and the Company.
10.20 Non-Qualified Stock Option Agreement, dated May 16, 2007,
between Jeffrey Silverman and the Company.
10.21 Non-Qualified Stock Option Agreement, dated May 16, 2007,
between Jeffrey Silverman and the Company.
31.1 Certification of Chief Executive Officer pursuant to Rule
13a-14 or 15d-14 of the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification of Chief Financial Officer pursuant to Rule
13a-14 or 15d-14 of the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 10.1
SECURED PROMISSORY NOTE
$3,000,000 June 25, 2007
FOR VALUE RECEIVED, the undersigned, STEVEN MADDEN, an individual
residing at 175 East 73rd Street, New York, New York 10021 (the "Borrower"),
hereby unconditionally promises to pay to the order of STEVEN MADDEN, LTD., a
Delaware corporation (the "Company"), at the time, place and in the manner
specified below, the principal amount of three million dollars ($3,000,000), and
to pay simple interest on the unpaid principal amount hereof at the rate of
eight percent (8%) per annum (calculated on the basis of a 360-day year),
payable from the date hereof until such principal amount shall be paid in full.
Borrower shall pay the full principal amount of this Note, and all
accrued and unpaid interest thereon, to the Company on the earlier of (i) the
date Borrower ceases to be employed by the Company and (ii) December 31, 2007.
Payment of principal and interest under this Note shall be payable in
lawful money of the United States of America in immediately available funds at
the offices of the Company at 52-16 Barnett Avenue, Long Island City, New York
11104, or at such other place as the Company may designate in writing to the
Borrower.
Borrower may prepay this Note in whole or in part at any time and from
time to time, without penalty. All payments shall be applied first to accrued
and unpaid interest and then to principal.
The Company is hereby authorized by Borrower from time to time to set
off, appropriate and apply any and all amounts due and payable to the Company by
the Borrower under this Note against any and all amounts payable to the Borrower
by the Company pursuant to Section 4.10 of that certain Third Amended Employment
Agreement, dated as of July 15, 2005, by and between Borrower and the Company.
To secure the Borrower's payment and performance of all of Borrower's
obligations hereunder, Borrower hereby pledges to and assigns to the Company,
and grants to the Company a first priority continuing security interest in,
510,000 shares of common stock of the Company, par value $.000067 per share,
owned by Borrower (the "Pledged Shares") and all dividends and distribution in
respect of such Pledged Shares, and proceeds of all of the foregoing
(collectively, the "Collateral"). Simultaneously with the execution of this
Note, the Borrower shall deliver and pledge to the Company any and all
certificates evidencing the Pledged Shares (accompanied by stock powers or
assignments, as applicable, duly executed in blank). If a securities
intermediary, broker or agent is holding the Pledged Shares, Borrower shall,
simultaneously with the execution of this Note, in the Company's sole
discretion: (a) cause such securities intermediary, broker and/or agent to
execute and deliver to the Company a control agreement acknowledging the pledge
granted hereunder and perfecting the Company's security interest in the Pledged
Shares, which agreement shall be in form and substance acceptable to the Company
in its sole discretion, (b) authorize such securities intermediary, broker or
agent to transfer Borrower's securities entitlements with respect to such
Pledged Shares to an account as to which the Company is its customer, or (c)
cause the Pledged Shares to be evidenced by certificates and delivered to the
Company pursuant to the immediately preceding sentence. Until the Borrower's
obligations under this Note are satisfied in full, the Borrower shall not offer,
sell, contract to sell, transfer or otherwise dispose of or encumber the Pledged
Shares without the Company's prior written consent.
From time to time upon request by the Company, the Borrower shall
furnish such further assurances of title with respect to the Collateral, execute
such written agreements, or do such other acts, in each case as may be
reasonably necessary, in the Company's sole discretion, in order to perfect or
continue the first priority lien and security interest of the Company in the
Collateral.
The Borrower hereby authorizes the Company to file one or more UCC
financing statements, and amendments and continuations thereto (or similar
documents required by any laws of any applicable jurisdiction), relating to all
or any part of the Collateral without the signature of the Borrower (to the
extent such signature is required under the laws of any applicable
jurisdiction).
If Borrower fails to make any payment of principal or interest on the
date when such payment is due and payable under this Note and such failure
continues for a period of three (3) days (a "Default"), then, in addition to all
other rights, options and remedies granted or available to the Company under
this Note, the Company may, upon or at any time after the occurrence of a
Default, exercise all rights under the Uniform Commercial Code, as in effect
from time to time, and any other applicable law or in equity.
Borrower waives presentment, notice of dishonor and protest of this
Note. The Company shall not be deemed to have waived any of its rights or
remedies hereunder unless such waiver shall be in writing and signed by the
Company, and no delay or omission by the Company in exercising any of its rights
or remedies hereunder shall operate as a waiver thereof. A waiver of any right
or remedy on one occasion shall not be construed as a waiver of any other right
or remedy then or thereafter existing.
This Note may not be modified or amended without the express written
consent of the Company and the Borrower.
This Note shall be binding upon the Borrower and the Borrower's heirs,
legal representatives, successors and assigns. This Note may be transferred and
assigned by the Company in its sole discretion. This Note may be transferred and
assigned by the Borrower only with the prior written consent of the Company.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without regard to principles of conflicts of law.
In the event of a Default under this Note, Borrower agrees to pay all
costs of collection, including reasonable attorney's fees, incurred in
collection of this Note.
2
IN WITNESS WHEREOF, Borrower has hereunto set his hand as of the day and year
first above written.
/s/ Steven Madden
-------------------------------
Steven Madden
3
Exhibit 10.2
Draft of October 8, 2007
Chief Executive Officer
NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD.
2006 STOCK INCENTIVE PLAN
THIS AGREEMENT, dated as of _________, 200_ (this "Agreement"), between
Steven Madden, Ltd. (the "Company") and _________ (the "Participant").
Preliminary Statement
---------------------
The Compensation Committee of the Board of Directors of the Company
(the "Committee") has authorized this grant of a non-qualified stock option (the
"Option") on _______ __, 200_ (the "Grant Date") to purchase the number of
shares of the Company's common stock, par value $0.0001 per share (the "Common
Stock"), set forth below in Section 2 to the Participant, as an Eligible
Employee of the Company or an Affiliate of the Company. Unless otherwise
indicated, any capitalized term used but not defined herein shall have the
meaning ascribed to such term in the Steven Madden, Ltd. 2006 Stock Incentive
Plan, as amended (as the same may be further amended from time to time, the
"Plan"). A copy of the Plan as in effect on the date hereof has been delivered
to the Participant. By signing and returning this Agreement, the Participant
acknowledges having received and read a copy of the Plan as in effect on the
date hereof and agrees to comply with the Plan, this Agreement and all
applicable laws and regulations.
Accordingly, the parties hereto agree as follows:
1. Tax Matters. No part of the Option granted hereby is intended to
qualify as an "incentive stock option" under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Grant of Option. Subject in all respects to the Plan and the terms and
conditions set forth herein and therein, the Participant is hereby granted an
Option to purchase from the Company ______ shares of Common Stock (the "Option
Shares"), at a price per share of $_____ (the "Option Price").(1)
3. Vesting and Exercise.
--------------------
(a) Except as set forth below, the Option shall vest and become
exercisable in installments as provided below, which shall be cumulative. To the
extent that the Option has become vested and exercisable as provided below, the
Option thereafter may be exercised by the Participant, in whole or in part, at
any time or from time to time prior to the expiration or earlier termination of
the Option as provided herein and in accordance with Section 6.3(d) of the Plan,
including, without limitation, the filing of such written form of exercise
notice, if any, as may be required by the Committee or the Company and the
payment in full of the Option Price multiplied by the number of Option Shares
underlying the portion of the Option exercised. Upon expiration of the Option,
the Option shall be canceled and no longer exercisable. The following table
indicates each date upon which the Participant shall be vested and entitled to
exercise the Option with respect to the percentage of the Option Shares
indicated beside such date, provided that the Participant has not had a
Termination of Employment any time prior to such date (each of the dates set
forth below being herein called a "Vesting Date"):
Percentage
of Option
Vesting Date Shares Vested
----------------- -------------
First Anniversary __%
of Grant Date
Second Anniversary __%
of Grant Date
Third Anniversary __%
of Grant Date
(b) Except as provided in Section 3(c), there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date and
all vesting shall occur only on the appropriate Vesting Date, provided that the
Participant has not had a Termination of Employment at any time prior to such
Vesting Date.
- ---------------------------
(1) Option Price must be no less than the Fair Market Value (as defined in the
Plan) on the Grant Date.
(c) The terms of the employment agreement between the Participant
and the Company shall control the vesting of the Option on any Termination. In
addition, in the event of: (i) any non-renewal of the Participant's employment
agreement with the Company or (ii) a termination of the Participant's employment
by the Company without Cause (as defined in such employment agreement), all
unvested Options shall immediately vest and become exercisable.
(d) The Option will become fully vested on a Change in Control.
4. Option Term. The term of each Option shall be _____ years(2) after the
Grant Date and the Option shall expire at 5:00 p.m. (New York City time) on the
_____ anniversary of the Grant Date, subject to earlier termination in the event
of the Participant's Termination of Employment as specified in Section 5.
5. Termination. Subject to Section 4 and the terms of the Plan, the
Option, to the extent vested at the time of the Participant's Termination of
Employment, shall remain exercisable as provided in Section 12.1(a) of the Plan.
Any portion of the Option that is not vested as of the date of the Participant's
Termination of Employment for any reason shall terminate and expire as of the
date of such Termination of Employment.
6. Restriction on Transfer of Option. No part of the Option shall be
subject to Transfer other than by will or by the laws of descent and
distribution. During the lifetime of the Participant, the Option may be
exercised only by the Participant or the Participant's guardian or legal
representative. The Option shall not be subject to levy by reason of any
execution, attachment or similar process. Upon any attempt to Transfer the
Option or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately and automatically become null and void.
7. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Option Shares unless and until the Participant
has become the holder of record of the Option Shares. No adjustments shall be
made to the Option, the Option Shares or the Option Price for dividends in cash
or other property, distributions or other rights in respect of any Option
Shares, except as otherwise may be specifically provided for in the Plan. No
shares of Common Stock shall be issued unless and until payment therefor has
been made or provided.
8. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference. If and to the
extent that this Agreement conflicts or is inconsistent with the terms,
conditions and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly. This Agreement contains
the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes any prior agreements and understandings
(whether written or oral) between the Company and the Participant with respect
to the subject matter hereof.
9. Notices. Any notice or communication given hereunder (each a "Notice")
shall be in writing and shall be sent by personal delivery, by courier or by
United States mail (registered or certified mail, postage prepaid and return
receipt requested), to the appropriate party at the address set forth below:
If to the Company, to:
Steven Madden, Ltd.
52-16 Barnett Avenue
Long Island City, New York 11104
Attention: Board of Directors
If to the Participant, to the address for the Participant on file
with the Company
- ---------------------------
(2) May not be in excess of 7 years.
; or such other address or to the attention of such other person as a party
shall have specified by prior Notice to the other party. Each Notice will be
deemed given and effective upon actual receipt (or refusal of receipt).
10. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ, retain or continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which any Option is outstanding,
nor does it modify in any respect the Company's or its Affiliates' right to
terminate or modify the Participant's employment or compensation.
11. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
[Remainder of Page Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
STEVEN MADDEN, LTD.
By:______________________________________
Name:
Title:
PARTICIPANT
____________________________________
[Name]
Exhibit 10.3
Draft of October 8, 2007
Employee w/o employment agreement
NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD.
2006 STOCK INCENTIVE PLAN
THIS AGREEMENT, dated as of _________, 200_ (this "Agreement"), between
Steven Madden, Ltd. (the "Company") and _________ (the "Participant").
Preliminary Statement
---------------------
The Compensation Committee of the Board of Directors of the Company
(the "Committee") has authorized this grant of a non-qualified stock option (the
"Option") on _______ __, 200_ (the "Grant Date") to purchase the number of
shares of the Company's common stock, par value $0.0001 per share (the "Common
Stock"), set forth below in Section 2 to the Participant, as an Eligible
Employee of the Company or an Affiliate of the Company. Unless otherwise
indicated, any capitalized term used but not defined herein shall have the
meaning ascribed to such term in the Steven Madden, Ltd. 2006 Stock Incentive
Plan, as amended (as the same may be further amended from time to time, the
"Plan"). A copy of the Plan as in effect on the date hereof has been delivered
to the Participant. By signing and returning this Agreement, the Participant
acknowledges having received and read a copy of the Plan as in effect on the
date hereof and agrees to comply with the Plan, this Agreement and all
applicable laws and regulations.
Accordingly, the parties hereto agree as follows:
1. Tax Matters. No part of the Option granted hereby is intended to
qualify as an "incentive stock option" under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Grant of Option. Subject in all respects to the Plan and the terms and
conditions set forth herein and therein, the Participant is hereby granted an
Option to purchase from the Company ______ shares of Common Stock (the "Option
Shares"), at a price per share of $_____ (the "Option Price").(1)
3. Vesting and Exercise.
--------------------
(a) Except as set forth below, the Option shall vest and become
exercisable in installments as provided below, which shall be cumulative. To the
extent that the Option has become vested and exercisable as provided below, the
Option thereafter may be exercised by the Participant, in whole or in part, at
any time or from time to time prior to the expiration or earlier termination of
the Option as provided herein and in accordance with Section 6.3(d) of the Plan,
including, without limitation, the filing of such written form of exercise
notice, if any, as may be required by the Committee or the Company and the
payment in full of the Option Price multiplied by the number of Option Shares
underlying the portion of the Option exercised. Upon expiration of the Option,
the Option shall be canceled and no longer exercisable. The following table
indicates each date upon which the Participant shall be vested and entitled to
exercise the Option with respect to the percentage of the Option Shares
indicated beside such date, provided that the Participant has not had a
Termination of Employment any time prior to such date (each of the dates set
forth below being herein called a "Vesting Date"):
Percentage
of Option
Vesting Date Shares Vested
----------------- -------------
First Anniversary 331/3%
of Grant Date
Second Anniversary 662/3%
of Grant Date
Third Anniversary 100%
of Grant Date
(b) There shall be no proportionate or partial vesting in the
periods prior to each Vesting Date and all vesting shall occur only on the
appropriate Vesting Date, provided that the Participant has not had a
Termination of Employment at any time prior to such Vesting Date.
(c) The Option [will/will not] become fully vested on a Change in
Control.
- ------------------------
(1) Option Price must be no less than the Fair Market Value (as defined in the
Plan) on the Grant Date.
4. Option Term. The term of each Option shall be _____ years(2) after the
Grant Date and the Option shall expire at 5:00 p.m. (New York City time) on the
_____ anniversary of the Grant Date, subject to earlier termination in the event
of the Participant's Termination of Employment as specified in Section 5.
5. Termination. Subject to Section 4 and the terms of the Plan, the
Option, to the extent vested at the time of the Participant's Termination of
Employment, shall remain exercisable as provided in Section 12.1(a) of the Plan.
Any portion of the Option that is not vested as of the date of the Participant's
Termination of Employment for any reason shall terminate and expire as of the
date of such Termination of Employment.
6. Restriction on Transfer of Option. No part of the Option shall be
subject to Transfer other than by will or by the laws of descent and
distribution. During the lifetime of the Participant, the Option may be
exercised only by the Participant or the Participant's guardian or legal
representative. The Option shall not be subject to levy by reason of any
execution, attachment or similar process. Upon any attempt to Transfer the
Option or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately and automatically become null and void.
7. [Restrictive Covenants].(3)
8. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Option Shares unless and until the Participant
has become the holder of record of the Option Shares. No adjustments shall be
made to the Option, the Option Shares or the Option Price for dividends in cash
or other property, distributions or other rights in respect of any Option
Shares, except as otherwise may be specifically provided for in the Plan. No
shares of Common Stock shall be issued unless and until payment therefor has
been made or provided.
9. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference. If and to the
extent that this Agreement conflicts or is inconsistent with the terms,
conditions and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly. This Agreement contains
the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes any prior agreements and understandings
(whether written or oral) between the Company and the Participant with respect
to the subject matter hereof.
10. Notices. Any notice or communication given hereunder (each a "Notice")
shall be in writing and shall be sent by personal delivery, by courier or by
United States mail (registered or certified mail, postage prepaid and return
receipt requested), to the appropriate party at the address set forth below:
If to the Company, to:
Steven Madden, Ltd.
52-16 Barnett Avenue
Long Island City, New York 11104
Attention: Chief Executive Officer
If to the Participant, to the address for the Participant on file
with the Company
; or such other address or to the attention of such other person as a party
shall have specified by prior Notice to the other party. Each Notice will be
deemed given and effective upon actual receipt (or refusal of receipt).
11. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ, retain or continue to, employ or retain the
- ------------------------
(2) May not be in excess of 7 years.
(3) To be included, if any, in the discretion of the Committee.
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which any Option is outstanding,
nor does it modify in any respect the Company's or its Affiliates' right to
terminate or modify the Participant's employment or compensation.
12. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
[Remainder of Page Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
STEVEN MADDEN, LTD.
By:______________________________________
Name:
Title:
PARTICIPANT
____________________________________
[Name]
Exhibit 10.4
Draft of October 8, 2007
Executive Officer w/employment agreement
NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD.
2006 STOCK INCENTIVE PLAN
THIS AGREEMENT, dated as of _________, 200_ (this "Agreement"), between
Steven Madden, Ltd. (the "Company") and _________ (the "Participant").
Preliminary Statement
---------------------
The Compensation Committee of the Board of Directors of the Company
(the "Committee") has authorized this grant of a non-qualified stock option (the
"Option") on _______ __, 200_ (the "Grant Date") to purchase the number of
shares of the Company's common stock, par value $0.0001 per share (the "Common
Stock"), set forth below in Section 2 to the Participant, as an Eligible
Employee of the Company or an Affiliate of the Company. Unless otherwise
indicated, any capitalized term used but not defined herein shall have the
meaning ascribed to such term in the Steven Madden, Ltd. 2006 Stock Incentive
Plan, as amended (as the same may be further amended from time to time, the
"Plan"). A copy of the Plan as in effect on the date hereof has been delivered
to the Participant. By signing and returning this Agreement, the Participant
acknowledges having received and read a copy of the Plan as in effect on the
date hereof and agrees to comply with the Plan, this Agreement and all
applicable laws and regulations.
Accordingly, the parties hereto agree as follows:
1. Tax Matters. No part of the Option granted hereby is intended to
qualify as an "incentive stock option" under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Grant of Option. Subject in all respects to the Plan and the terms and
conditions set forth herein and therein, the Participant is hereby granted an
Option to purchase from the Company ______ shares of Common Stock (the "Option
Shares"), at a price per share of $_____ (the "Option Price").(1)
3. Vesting and Exercise.
--------------------
(a) Except as set forth below, the Option shall vest and become
exercisable in installments as provided below, which shall be cumulative. To the
extent that the Option has become vested and exercisable as provided below, the
Option thereafter may be exercised by the Participant, in whole or in part, at
any time or from time to time prior to the expiration or earlier termination of
the Option as provided herein and in accordance with Section 6.3(d) of the Plan,
including, without limitation, the filing of such written form of exercise
notice, if any, as may be required by the Committee or the Company and the
payment in full of the Option Price multiplied by the number of Option Shares
underlying the portion of the Option exercised. Upon expiration of the Option,
the Option shall be canceled and no longer exercisable. The following table
indicates each date upon which the Participant shall be vested and entitled to
exercise the Option with respect to the percentage of the Option Shares
indicated beside such date, provided that the Participant has not had a
Termination of Employment any time prior to such date (each of the dates set
forth below being herein called a "Vesting Date"):(2)
Percentage
of Option
Vesting Date Shares Vested
----------------- -------------
First Anniversary __%
of Grant Date
Second Anniversary __%
of Grant Date
Third Anniversary __%
of Grant Date
- ------------------------
(1) Option Price must be no less than the Fair Market Value (as defined in the
Plan) on the Grant Date.
(2) Vesting schedule shall conform to any provisions of a governing employment
agreement that addresses the vesting schedule of stock options.
(b) Except as provided in Section 3(c), there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date and
all vesting shall occur only on the appropriate Vesting Date, provided that the
Participant has not had a Termination of Employment at any time prior to such
Vesting Date.
(c) If a Participant has entered into an employment agreement with
the Company on or prior to the Grant Date that provides for partial or complete
accelerated vesting on any Termination, the terms of such employment agreement
shall control the vesting of the Option on any such Termination.
(d) The Option will become fully vested on a Change in Control.
4. Option Term. The term of each Option shall be _____ years(3) after the
Grant Date and the Option shall expire at 5:00 p.m. (New York City time) on the
_____ anniversary of the Grant Date, subject to earlier termination in the event
of the Participant's Termination of Employment as specified in Section 5.
5. Termination. Subject to Section 4 and the terms of the Plan, the
Option, to the extent vested at the time of the Participant's Termination of
Employment, shall remain exercisable as provided in Section 12.1(a) of the Plan.
Any portion of the Option that is not vested as of the date of the Participant's
Termination of Employment for any reason shall terminate and expire as of the
date of such Termination of Employment.
6. Restriction on Transfer of Option. No part of the Option shall be
subject to Transfer other than by will or by the laws of descent and
distribution. During the lifetime of the Participant, the Option may be
exercised only by the Participant or the Participant's guardian or legal
representative. The Option shall not be subject to levy by reason of any
execution, attachment or similar process. Upon any attempt to Transfer the
Option or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately and automatically become null and void.
7. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Option Shares unless and until the Participant
has become the holder of record of the Option Shares. No adjustments shall be
made to the Option, the Option Shares or the Option Price for dividends in cash
or other property, distributions or other rights in respect of any Option
Shares, except as otherwise may be specifically provided for in the Plan. No
shares of Common Stock shall be issued unless and until payment therefor has
been made or provided.
8. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference. If and to the
extent that this Agreement conflicts or is inconsistent with the terms,
conditions and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly. This Agreement contains
the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes any prior agreements and understandings
(whether written or oral) between the Company and the Participant with respect
to the subject matter hereof.
9. Notices. Any notice or communication given hereunder (each a "Notice")
shall be in writing and shall be sent by personal delivery, by courier or by
United States mail (registered or certified mail, postage prepaid and return
receipt requested), to the appropriate party at the address set forth below:
- ------------------------
(3) May not be in excess of 7 years.
If to the Company, to:
Steven Madden, Ltd.
52-16 Barnett Avenue
Long Island City, New York 11104
Attention: Chief Executive Officer
If to the Participant, to the address for the Participant on file
with the Company
; or such other address or to the attention of such other person as a party
shall have specified by prior Notice to the other party. Each Notice will be
deemed given and effective upon actual receipt (or refusal of receipt).
10. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ, retain or continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which any Option is outstanding,
nor does it modify in any respect the Company's or its Affiliates' right to
terminate or modify the Participant's employment or compensation.
11. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
[Remainder of Page Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
STEVEN MADDEN, LTD.
By:_____________________________________
Name:
Title:
PARTICIPANT
____________________________________
[Name]
Exhibit 10.5
Draft of October 8, 2007
Chief Executive Officer
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: [________________________]
2. Grant Date: [________], 200_
3. Number of Shares granted subject to restriction: [_________].
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% on the first anniversary of the Grant Date, 25% on the second
anniversary of the Grant Date, 25% on the third anniversary of the Grant Date
and 25% on the fourth anniversary of the Grant Date; provided that the
Participant has not had a Termination any time prior to the applicable vesting
date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture.
-----------------------
(i) Except as provided in Section 5(d)(ii), the Participant
shall forfeit to the Company, without compensation, any and all Shares of
Restricted Stock that are not vested (but no vested portion of the Shares) and
RS Property upon the Participant's Termination of Employment for any reason.
(ii) The terms of the employment agreement between the
Participant and the Company shall control the vesting of the Restricted Stock on
any Termination. In addition, in the event of: (A) any non-renewal of the
Participant's employment agreement with the Company or (B) a termination of the
Participant's employment by the Company without Cause (as defined in such
employment agreement), all restrictions on the Shares shall lapse and the
Restricted Stock shall immediately vest and cease to be Restricted Stock (but
shall remain subject to Sections 5(g) and 7 of this Agreement).
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(d) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: _________________________________
Title:_______________________________
PARTICIPANT
__________________________________________
[Name]
Exhibit 10.6
Draft of October 8, 2007
Employee w/o employment agreement
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: [________________________]
2. Grant Date: [________], 200_
3. Number of Shares granted subject to restriction: [_________].
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% on the first anniversary of the Grant Date, 25% on the second
anniversary of the Grant Date, 25% on the third anniversary of the Grant Date
and 25% on the fourth anniversary of the Grant Date; provided that the
Participant has not had a Termination any time prior to the applicable vesting
date.
The Shares of Restricted Stock [will/will not] become fully vested on a
Change in Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture. The Participant shall forfeit to the
Company, without compensation, any and all Shares of Restricted Stock that are
not vested (but no vested portion of the Shares) and RS Property upon the
Participant's Termination of Employment for any reason.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(d) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. Restrictive Covenants.(1)
---------------------
(a) The Participant agrees that while employed and for one year
thereafter, the Participant will not, directly or indirectly, as an officer,
director, stockholder, partner, associate, employee, consultant, owner, agent,
creditor, co-venturer or otherwise, engage in any business or aid to endeavor to
assist any business, which is in competition with the products or services of
the Company currently sold by the Company or sold by the Company at any time
prior to the Participant's Termination anywhere within the world. The
Participant's ownership, directly or indirectly, of nonconvertible debt
obligations of any entity or not more than 1% of any class of the issued and
outstanding equity securities of any entity, the equity securities of which are
regularly traded on a national securities exchange or in the over-the-counter
market, shall not be deemed to be a violation of the provisions of this Section
8(a).
(b) During the Participant's employment and for [one] year
thereafter, the Participant shall not, directly or indirectly solicit, hire, or
induce the termination from employment or engagement with the Company of any
person who was employed or engaged by the Company or any Affiliate on the date
of the Participant's Termination or at any time during the [12] months prior to
the Participant's Termination or induce such person to accept employment other
than with the Company or any Affiliate.
(c) The Participant acknowledges that the Company's agreement to
grant the Restricted Stock hereunder constitutes sufficient consideration for
the restrictive covenants contained in this Section 8.
9. Enforcement of Covenants.
------------------------
(a) In addition to any other right and remedy the Company may
have, at law or in equity, the Company shall be entitled to an injunction
enjoining or restraining the Participant from any violation or threatened
violation of any of the provisions of Section 8. If any of the restrictions
contained in Section 8 shall be deemed to be unreasonable by reason of the
extent, duration or geographical scope thereof or otherwise, then the court
making such determination shall have the right, and is directed by the parties,
to reduce such extent, duration, geographical scope, or other provisions hereof,
and, in its reduced form, Section 8 and shall then be enforceable in the manner
so modified by the court.
(b) If the Participant breaches the provisions of Section 8, any
unvested Shares of Restricted Stock shall be forfeited, the Participant shall
vested Shares held by Participant shall be immediately returned the Company and
the Participant shall promptly pay to the Company any pre-tax profit that the
Participant has made upon the sale of any Shares following the lapse of the
restrictions hereunder, on or after [six](2) months prior to the date of the
Participant's Termination.
(a) [The Participant acknowledges that a material part of the
inducement for the Company to award the Restricted Stock evidenced hereby is the
Participant's covenants herein and that the covenants and obligations of the
Participant relate to special, unique and extraordinary matters and that a
violation of any of the terms of such covenants and obligations will cause the
Company irreparable injury for which adequate remedies are not available at law.
- ------------------------
(1) This is an optional provision that may be excluded as appropriate.
(2) This provision may be shortened or extended as appropriate.
Therefore, the Participant agrees that, if he or she shall breach any of those
covenants or obligations, he or she shall not be entitled to vest in the
Restricted Stock evidenced herein or be entitled to retain any income therefrom
and the Company shall be entitled to an injunction, restraining order or such
other equitable relief (without the requirement to post bond) restraining the
Participant from committing any violation of the covenants and obligations
incorporated herein pursuant to Section 8. The remedies in the preceding
sentence are cumulative and are in addition to any other rights and remedies the
Company may have at law or in equity as a court or arbitrator shall reasonably
determine.](3)
10. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
11. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
12. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
13. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
14. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
15. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
- ------------------------
(3) This is an alternative enforcement provision.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: ____________________________________
Title:__________________________________
PARTICIPANT
__________________________________________
[Name]
Exhibit 10.7
Draft of October 8, 2007
Executive officer w/employment agreement
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: [________________________]
2. Grant Date: [________], 200_
3. Number of Shares granted subject to restriction: [_________].
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting.(1) The Restricted Stock shall become vested and cease
to be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% on the first anniversary of the Grant Date, 25% on the second
- ------------------------
(1) Conform to vesting schedule (if any) under employment agreement.
anniversary of the Grant Date, 25% on the third anniversary of the Grant Date
and 25% on the fourth anniversary of the Grant Date; provided that the
Participant has not had a Termination any time prior to the applicable vesting
date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture.
-----------------------
(i) Except as provided in Section 5(d)(ii), the Participant
shall forfeit to the Company, without compensation, any and all Shares of
Restricted Stock that are not vested (but no vested portion of the Shares) and
RS Property upon the Participant's Termination of Employment for any reason.
(ii) If a Participant has entered into an employment agreement
with the Company on or prior to the Grant Date that provides for partial or
complete accelerated vesting on any Termination, the terms of such employment
agreement shall control the vesting of the Restricted Stock on any such
Termination.(2)
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(d) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
- ------------------------
(2) Conform to termination provisions under employment agreement.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: __________________________________
Title:________________________________
PARTICIPANT
__________________________________________
[Name]
Exhibit 10.8
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: [________________________]
2. Grant Date: [________________________]
3. Number of Shares granted subject to restriction: [_________].
Notwithstanding anything herein, the Participant hereby acknowledges and agrees
that the Shares granted pursuant to this Agreement are subject to, and
conditioned upon, stockholder approval of the Plan at the next scheduled
stockholders' meeting, and the Participant further agrees that if such approval
is not obtained this Agreement shall be null and void ab initio.
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(f) and 7 of this
Agreement) 100% on the [ _____ ]; provided that the Participant has not had a
Termination any time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture. The Participant shall forfeit to the
Company, without compensation, any and all Shares of Restricted Stock that are
not vested (but no vested portion of the Shares) and RS Property upon the
Participant's Termination for any reason.
(e) Section 83(b). If the Participant wishes to include in gross
income for federal income tax purposes in the year of issuance the fair market
value of such Shares of Restricted Stock, an election under Section 83(b) of the
Code must be filed within 30 days after the issuance of the Restricted Stock.
The Participant acknowledges that it is his or her sole responsibility, and not
the Company's, to file timely and properly the election under Section 83(b) of
the Code and any corresponding provisions of state tax laws if he or she elects
to utilize such election.
(f) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Directorship. This Agreement is not an
agreement of directorship. This Agreement does not guarantee that the Company or
its Affiliates will retain, or to continue to, retain the Participant during the
entire, or any portion of the, term of this Agreement, including but not limited
to any period during which the Restricted Stock is outstanding, nor does it
modify in any respect the Company or its Affiliate's right to terminate or
modify the Participant's directorship or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Board and as may be in effect from
time to time. The Plan is incorporated herein by reference and all capitalized
terms in this Agreement that are not otherwise defined shall have the same
meaning as set forth in the Plan. If and to the extent that this Agreement
conflicts or is inconsistent with the terms, conditions and provisions of the
Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes any prior agreements
between the Company and the Participant with respect to the subject matter
hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Board shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: _______________________________
Title:_____________________________
PARTICIPANT
________________________________________
Schedule of Restricted Stock Grants to Non-Employee Directors for the
period from March 2006 through May 2007
- ---------------------------------------------------------------------------------------------------------------
Participant Grant Date Number of Shares Granted Vesting
- ---------------------------------------------------------------------------------------------------------------
Jeff Birnbaum March 20, 2006 500 first anniversary of the
Company's 2006 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
John Madden March 20, 2006 500 first anniversary of the
Company's 2006 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Marc Cooper March 20, 2006 500 first anniversary of the
Company's 2006 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Hal Kahn March 20, 2006 1,000 first anniversary of the
Company's 2006 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Peter Migliorini March 20, 2006 1,000 first anniversary of the
Company's 2006 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Richard Randall May 26, 2006 1,500 first anniversary of the
Company's 2006 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Thomas Schwartz March 20, 2006 1,000 first anniversary of the
Company's 2006 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Walter Yetnikoff March 20, 2006 1,000 first anniversary of the
Company's 2006 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Jeffrey Birnbaum May 25, 2007 750 first anniversary of the
Company's 2007 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
John Madden May 25, 2007 750 first anniversary of the
Company's 2007 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Marc Cooper May 25, 2007 750 first anniversary of the
Company's 2007 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Hal Kahn May 25, 2007 1,500 first anniversary of the
Company's 2007 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Peter Migliorini May 25, 2007 1,500 first anniversary of the
Company's 2007 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Richard Randall May 25, 2007 1,500 first anniversary of the
Company's 2007 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Thomas Schwartz May 25, 2007 1,500 first anniversary of the
Company's 2007 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Walter Yetnikoff May 25, 2007 1,500 first anniversary of the
Company's 2007 annual
stockholder's meeting
- ---------------------------------------------------------------------------------------------------------------
Exhibit 10.9
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Jamieson A. Karson
2. Grant Date: March 24, 2006
3. Number of Shares granted subject to restriction: 20,000
(a) Notwithstanding anything herein, the Participant hereby
acknowledges and agrees that the Shares granted pursuant to this Agreement are
subject to, and conditioned upon, stockholder approval of the Plan at the next
scheduled stockholders' meeting, and the Participant further agrees that if such
approval is not obtained this Agreement shall be null and void ab initio.
(b) The Participant hereby further acknowledges and agrees that
the Shares granted pursuant to this Agreement shall be granted in lieu of the
annual grant of stock options or other equity awards not yet granted by the
Company to the Participant under the Participant's employment agreement with
respect to the 2005 fiscal year and that the execution by the Participant of
this Agreement shall constitute a waiver of any right or entitlement to any
annual equity award grant under such employment agreement with respect to the
2005 fiscal year. If stockholder approval of the Plan is not obtained at the
next scheduled stockholders' meeting, nothing herein shall affect the
Participant's rights under his employment agreement to any annual grants of
stock options, any other equity awards or otherwise.
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% on April 1, 2007, 25% on April 1, 2008, 25% on April 1, 2009 and
25% on April 1, 2010; provided that the Participant has not had a Termination
any time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture.
-----------------------
(i) Except as provided in Section 5(d)(ii), the Participant
shall forfeit to the Company, without compensation, any and all Shares of
Restricted Stock that are not vested (but no vested portion of the Shares) and
RS Property upon the Participant's Termination of Employment for any reason.
(ii) If a Participant has entered into an employment agreement
with the Company on or prior to the Grant Date that provides for partial or
complete accelerated vesting on any Termination, the terms of such employment
agreement shall control the vesting of the Restricted Stock on any such
Termination.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Arvind Dharia
-------------------------------------
Arvind Dharia
Chief Financial Officer and Secretary
PARTICIPANT
/s/ Jamieson A.Karson
- ----------------------------------
Jamieson A. Karson
Exhibit 10.10
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement") evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Jamieson A. Karson
2. Grant Date: March 27, 2007
3. Number of Shares granted subject to restriction: 20,000.
Notwithstanding anything herein, the Participant hereby acknowledges and agrees
that the Shares granted pursuant to this Agreement are subject to, and
conditioned upon, stockholder approval of the Plan at the next scheduled
stockholders' meeting, and the Participant further agrees that if such approval
is not obtained this Agreement shall be null and void ab initio.
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 20% on the first anniversary of the Grant Date, 20% on the second
anniversary of the Grant Date, 20% on the third anniversary of the Grant Date,
20% on the fourth anniversary of the Grant Date and 20% on the fifth anniversary
of the Grant Date; provided that the Participant has not had a Termination any
time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture. The Participant shall forfeit to the
Company, without compensation, any and all Shares of Restricted Stock that are
not vested (but no vested portion of the Shares) and RS Property upon the
Participant's Termination of Employment for any reason.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Peter Migliorini
----------------------------------
Title: Head Compensation Committee
----------------------------------
PARTICIPANT
/s/ Jamieson A. Karson
- ---------------------------------
Jamieson A. Karson
Exhibit 10.11
AMENDMENTS
TO
RESTRICTED STOCK AGREEMENTS
THESE AMENDMENTS (the "Amendments") made as of this 23rd day of March
2007 to the Restricted Stock Agreement dated as of March 24, 2006 (the "2006
Agreement") and the Restricted Stock Agreement dated as of March 27, 2007 (the
"2007 Agreement," together with the 2006 Agreement, the "Agreements") each by
and between Steven Madden, Ltd. (the "Company"), a Delaware corporation and
Jamieson A. Karson (the "Participant").
WHEREAS, the Company and the Participant have previously entered into
the Agreements; and
WHEREAS, on March 23, 2007, the Compensation Committee of the Board of
Directors of the Company authorized the Amendments to the Agreements.
NOW, THEREFORE, effective as of March 23, 2007, the Agreements are
hereby amended as follows:
1. Section 5(d)(ii) of the 2006 Agreement is amended to add the
following sentence at the end thereof:
"In addition, in the event of: (A) any non-renewal of the Participant's
employment agreement with the Company or (B) a termination of the Participant's
employment by the Company without Cause (as defined in such employment
agreement), all restrictions on the Shares shall lapse and the Restricted Stock
shall immediately vest and cease to be Restricted Stock (but shall remain
subject to Sections 5(g) and 7 of this Agreement)."
2. Section 5(d) of the 2007 Agreement is amended in its entirety
to read as follows:
"(i) Except as provided in Section 5(d)(ii), the Participant shall
forfeit to the Company, without compensation, any and all Shares of Restricted
Stock that are not vested (but no vested portion of the Shares) and RS Property
upon the Participant's Termination of Employment for any reason.
(ii) If a Participant has entered into an employment agreement with the
Company on or prior to the Grant Date that provides for partial or complete
accelerated vesting on any Termination, the terms of such employment agreement
shall control the vesting of the Restricted Stock on any such Termination. In
addition, in the event of: (A) any non-renewal of the Participant's employment
agreement with the Company or (B) a termination of the Participant's employment
by the Company without Cause (as defined in such employment agreement), all
restrictions on the Shares shall lapse and the Restricted Stock shall
immediately vest and cease to be Restricted Stock (but shall remain subject to
Sections 5(g) and 7 of this Agreement)."
[Remainder of Page Left Blank]
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be
executed on this 2nd day of August, 2007.
STEVEN MADDEN, LTD.
By: /s/ Arvind Dharia
-----------------------------------
Title: CFO
PARTICIPANT
/s/ Jamieson A. Karson
---------------------------------------
Jamieson A. Karson
2
Exhibit 10.12
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Steven Madden
2. Grant Date: March 24, 2006
3. Number of Shares granted subject to restriction: 20,000
(a) Notwithstanding anything herein, the Participant hereby
acknowledges and agrees that the Shares granted pursuant to this Agreement are
subject to, and conditioned upon, stockholder approval of the Plan at the next
scheduled stockholders' meeting, and the Participant further agrees that if such
approval is not obtained this Agreement shall be null and void ab initio.
(b) The Participant hereby further acknowledges and agrees that
the Shares granted pursuant to this Agreement shall be granted in lieu of the
annual grant of stock options or other equity awards not yet granted by the
Company to the Participant under the Participant's employment agreement with
respect to the period July 1, 2005 to June 30, 2006 and that the execution by
the Participant of this Agreement shall constitute a waiver of any right or
entitlement to any annual equity award grant under such employment agreement
with respect to the period July 1, 2005 to June 30, 2006. If stockholder
approval of the Plan is not obtained at the next scheduled stockholders'
meeting, nothing herein shall affect the Participant's rights under his
employment agreement to any annual grants of stock options, any other equity
awards or otherwise.
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% on April 1, 2007, 25% on April 1, 2008, 25% on April 1, 2009 and
25% on April 1, 2010; provided that the Participant has not had a Termination
any time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture.
-----------------------
(i) Except as provided in Section 5(d)(ii), the Participant
shall forfeit to the Company, without compensation, any and all Shares of
Restricted Stock that are not vested (but no vested portion of the Shares) and
RS Property upon the Participant's Termination of Employment for any reason.
(ii) If a Participant has entered into an employment agreement
with the Company on or prior to the Grant Date that provides for partial or
complete accelerated vesting on any Termination, the terms of such employment
agreement shall control the vesting of the Restricted Stock on any such
Termination.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
-------------------------------------
Jamieson A. Karson
Chief Executive Officer and
Chairman of the Board
PARTICIPANT
/s/ Steven Madden
- -------------------------------------
Steven Madden
Exhibit 10.13
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement") evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Steven Madden
2. Grant Date: June 9, 2006
3. Number of Shares granted subject to restriction: 135,000.
Notwithstanding anything herein, the Participant hereby acknowledges and agrees
that the Shares granted pursuant to this Agreement are subject to, and
conditioned upon, stockholder approval of the Plan at the next scheduled
stockholders' meeting, and the Participant further agrees that if such approval
is not obtained this Agreement shall be null and void ab initio.
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 20% on the first anniversary of the Grant Date, 20% on the second
anniversary of the Grant Date, 20% on the third anniversary of the Grant Date,
20% on the fourth anniversary of the Grant Date and 20% on the fifth anniversary
of the Grant Date; provided that the Participant has not had a Termination any
time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture. The Participant shall forfeit to the
Company, without compensation, any and all Shares of Restricted Stock that are
not vested (but no vested portion of the Shares) and RS Property upon the
Participant's Termination of Employment for any reason.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
------------------------------------
Title: CEO
-----------------------------------
PARTICIPANT
/s/ Steven Madden
- --------------------------------
Steven Madden
Exhibit 10.14
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Arvind Dharia
2. Grant Date: March 24, 2006
3. Number of Shares granted subject to restriction: 8,000
(a) Notwithstanding anything herein, the Participant hereby
acknowledges and agrees that the Shares granted pursuant to this Agreement are
subject to, and conditioned upon, stockholder approval of the Plan at the next
scheduled stockholders' meeting, and the Participant further agrees that if such
approval is not obtained this Agreement shall be null and void ab initio.
(b) The Participant hereby further acknowledges and agrees that
the Shares granted pursuant to this Agreement shall be granted in lieu of the
annual grant of stock options or other equity awards not yet granted by the
Company to the Participant under the Participant's employment agreement with
respect to the 2005 calendar year and that the execution by the Participant of
this Agreement shall constitute a waiver of any right or entitlement to any
annual equity award grant under such employment agreement with respect to the
2005 calendar year. If stockholder approval of the Plan is not obtained at the
next scheduled stockholders' meeting, nothing herein shall affect the
Participant's rights under his employment agreement to any annual grants of
stock options, any other equity awards or otherwise.
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5 . Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% on April 1, 2007, 25% on April 1, 2008, 25% on April 1, 2009 and
25% on April 1, 2010; provided that the Participant has not had a Termination
any time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture.
-----------------------
(i) Except as provided in Section 5(d)(ii), the Participant
shall forfeit to the Company, without compensation, any and all Shares of
Restricted Stock that are not vested (but no vested portion of the Shares) and
RS Property upon the Participant's Termination of Employment for any reason.
(ii) If a Participant has entered into an employment agreement
with the Company on or prior to the Grant Date that provides for partial or
complete accelerated vesting on any Termination, the terms of such employment
agreement shall control the vesting of the Restricted Stock on any such
Termination.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
-------------------------------------
Jamieson A. Karson
Chief Executive Officer and
Chairman of the Board
PARTICIPANT
/s/ Arvind Dharia
- ---------------------------------------
Arvind Dharia
Exhibit 10.15
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement") evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Amelia Newton Varela
2. Grant Date: March 20, 2006
3. Number of Shares granted subject to restriction: 20,000
(a) Notwithstanding anything herein, the Participant hereby
acknowledges and agrees that the Shares granted pursuant to this Agreement are
subject to, and conditioned upon, stockholder approval of the Plan at the next
scheduled stockholders' meeting, and the Participant further agrees that if such
approval is not obtained this Agreement shall be null and void ab initio.
(b) To the extent applicable, the Participant hereby further
acknowledges and agrees that the Shares granted pursuant to this Agreement shall
be granted in lieu of any annual grant of stock options or other equity awards
to be made by the Company to the Participant under the Participant's employment
agreement for 2006 and that the execution by the Participant of this Agreement
shall constitute a waiver of any right or entitlement to any annual equity award
grant under such employment agreement for the 2006 calendar year.
4. Restrictions. The Participant shall not sell, transfer, pledge,
hypothecate, assign or otherwise dispose of the Shares, except as set forth in
the Plan or Agreement. Any attempted sale, transfer, pledge, hypothecation,
assignment or other disposition of the Shares in violation of the Plan or this
Agreement shall be void and of no effect and the Company shall have the right to
disregard the same on its books and records and to issue "stop transfer"
instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% on the first anniversary of the Grant Date, 25% on the second
anniversary of the Grant Date, 25% on the third anniversary of the Grant Date
and 25% on the fourth anniversary of the Grant Date; provided that the
Participant has not had a Termination any time prior to the applicable vesting
date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture.
-----------------------
(i) Except as provided in Section 5(d)(ii), the Participant
shall forfeit to the Company, without compensation, any and all Shares of
Restricted Stock that are not vested (but no vested portion of the Shares) and
RS Property upon the Participant's Termination of Employment for any reason.
(ii) If a Participant has entered into an employment agreement
with the Company on or prior to the Grant Date that provides for partial or
complete accelerated vesting on any Termination, the terms of such employment
agreement shall control the vesting of the Restricted Stock on any such
Termination.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
-------------------------------------
Title: CEO
----------------------------------
PARTICIPANT
/s/ Amelia Newton Varela
- ------------------------------------
Amelia Newton Varela
Exhibit 10.16
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement") evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Robert Schmertz
2. Grant Date: March 20, 2006
3. Number of Shares granted subject to restriction: 20,000
(a) Notwithstanding anything herein, the Participant hereby
acknowledges and agrees that the Shares granted pursuant to this Agreement are
subject to, and conditioned upon, stockholder approval of the Plan at the next
scheduled stockholders' meeting, and the Participant further agrees that if such
approval is not obtained this Agreement shall be null and void ab initio.
(b) To the extent applicable, the Participant hereby further
acknowledges and agrees that the Shares granted pursuant to this Agreement shall
be granted in lieu of any annual grant of stock options or other equity awards
to be made by the Company to the Participant under the Participant's employment
agreement for 2006 and that the execution by the Participant of this Agreement
shall constitute a waiver of any right or entitlement to any annual equity award
grant under such employment agreement for the 2006 calendar year.
4. Restrictions. The Participant shall not sell, transfer, pledge,
hypothecate, assign or otherwise dispose of the Shares, except as set forth in
the Plan or Agreement. Any attempted sale, transfer, pledge, hypothecation,
assignment or other disposition of the Shares in violation of the Plan or this
Agreement shall be void and of no effect and the Company shall have the right to
disregard the same on its books and records and to issue "stop transfer"
instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% the first anniversary of the Grant Date, 25% on the second
anniversary of the Grant Date, 25% on the third anniversary of the Grant Date
and 25% on the fourth anniversary of the Grant Date; provided that the
Participant has not had a Termination any time prior to the applicable vesting
date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture.
-----------------------
(i) Except as provided in Section 5(d)(ii), the Participant
shall forfeit to the Company, without compensation, any and all Shares of
Restricted Stock that are not vested (but no vested portion of the Shares) and
RS Property upon the Participant's Termination of Employment for any reason.
(ii) If a Participant has entered into an employment agreement
with the Company on or prior to the Grant Date that provides for partial or
complete accelerated vesting on any Termination, the terms of such employment
agreement shall control the vesting of the Restricted Stock on any such
Termination.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
-------------------------------------
Title: CEO
----------------------------------
PARTICIPANT
/s/ Robert Schmertz
- ---------------------------------
Robert Schmertz
Exhibit 10.17
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement") evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Arvind Dharia
2. Grant Date: March 6, 2007
3. Number of Shares granted subject to restriction: 20,000
(a) Notwithstanding anything herein, the Participant hereby
acknowledges and agrees that the Shares granted pursuant to this Agreement are
subject to, and conditioned upon, stockholder approval of the Plan at the next
scheduled stockholders' meeting, and the Participant further agrees that if such
approval is not obtained this Agreement shall be null and void ab initio.
(b) To the extent applicable, the Participant hereby further
acknowledges and agrees that the Shares granted pursuant to this Agreement shall
be granted in lieu of any annual grant of stock options or other equity awards
to be made by the Company to the Participant under the Participant's employment
agreement for 2006 and that the execution by the Participant of this Agreement
shall constitute a waiver of any right or entitlement to any annual equity award
grant under such employment agreement for the 2006 calendar year.
4. Restrictions. The Participant shall not sell, transfer, pledge,
hypothecate, assign or otherwise dispose of the Shares, except as set forth in
the Plan or Agreement. Any attempted sale, transfer, pledge, hypothecation,
assignment or other disposition of the Shares in violation of the Plan or this
Agreement shall be void and of no effect and the Company shall have the right to
disregard the same on its books and records and to issue "stop transfer"
instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 20% the first anniversary of the Grant Date, 20% on the second
anniversary of the Grant Date, 20% on the third anniversary of the Grant Date,
20% on the fourth anniversary of the Grant Date and 20% on the fifth anniversary
of the Grant Date; provided that the Participant has not had a Termination any
time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture.
-----------------------
(i) Except as provided in Section 5(d)(ii), the Participant
shall forfeit to the Company, without compensation, any and all Shares of
Restricted Stock that are not vested (but no vested portion of the Shares) and
RS Property upon the Participant's Termination of Employment for any reason.
(ii) If a Participant has entered into an employment agreement
with the Company on or prior to the Grant Date that provides for partial or
complete accelerated vesting on any Termination, the terms of such employment
agreement shall control the vesting of the Restricted Stock on any such
Termination.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(c) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
-------------------------------------
Title: CEO
----------------------------------
PARTICIPANT
/s/ Arvind Dharia
- ------------------------------------
Arvind Dharia
Exhibit 10.18
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: Robert Schmertz
2. Grant Date: 3/9/07
3. Number of Shares granted subject to restriction: 100,000.
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 20% on the first anniversary of the Grant Date, 20% on the second
anniversary of the Grant Date, 20% on the third anniversary of the Grant Date,
20% on the fourth anniversary of the Grant Date and 20% of the fifth anniversary
of the Grant Date; provided that the Participant has not had a Termination any
time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture. The Participant shall forfeit to the
Company, without compensation, any and all Shares of Restricted Stock that are
not vested (but no vested portion of the Shares) and RS Property upon the
Participant's Termination of Employment for any reason.
Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(e) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(f) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(d) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
------------------------------------
Title: CEO
---------------------------------
PARTICIPANT
/s/ Robert Schmertz
- -------------------------------
Robert Schmertz
Exhibit 10.19
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN
This agreement (the "Agreement" ) evidences a grant of shares by Steven
Madden, Ltd. (the "Company") under the Steven Madden, Ltd. 2006 Stock Incentive
Plan (the "Plan") of Company common stock, par value $0.0001 per share ("Common
Stock" or the "Shares"), subject to certain restrictions, (the "Restricted
Stock"), to the Participant named below. Unless otherwise indicated, any
capitalized term used but not defined herein shall have the meaning ascribed to
such term in the Plan.
1. Participant: AWADHESH SINHA
2. Grant Date: April 25, 2007
3. Number of Shares granted subject to restriction: 30,000.
Notwithstanding anything herein, the Participant hereby acknowledges and agrees
that the Shares granted pursuant to this Agreement are subject to, and
conditioned upon, stockholder approval of the Plan at the next scheduled
stockholders' meeting, and the Participant further agrees that if such approval
is not obtained this Agreement shall be null and void ab initio.
4. Restrictions on Transfer. The Participant shall not sell, transfer,
pledge, hypothecate, assign or otherwise dispose of the Shares, except as set
forth in the Plan or Agreement. Any attempted sale, transfer, pledge,
hypothecation, assignment or other disposition of the Shares in violation of the
Plan or this Agreement shall be void and of no effect and the Company shall have
the right to disregard the same on its books and records and to issue "stop
transfer" instructions to its transfer agent.
5. Restricted Stock.
----------------
(a) Retention of Certificates. Promptly after the date of this
Agreement, the Company shall issue stock certificates representing the
Restricted Stock unless, to the extent permitted under applicable law, it elects
to issue the Shares in the form of uncertificated shares and recognize such
ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar
method. The stock certificates shall be registered in the Participant's name and
shall bear any legend required under the Plan or Section 6 of this Agreement.
Unless held in uncertificated book entry form, such stock certificates shall be
held in custody by the Company (or its designated agent) until the restrictions
thereon shall have lapsed. Upon the Company's request, the Participant shall
deliver to the Company a duly signed stock power, endorsed in blank, relating to
the Restricted Stock. If the Participant receives a stock dividend or
extraordinary cash dividend on the Restricted Stock or the Participant receives
any other shares, securities, moneys or property (other than regular cash
dividends on and after the date of this Agreement) representing a distribution
or return of capital upon or in respect of the Restricted Stock pursuant to a
stock split, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Participant in respect of the Restricted Stock (collectively "RS
Property") as long as the Restricted Stock remains "Restricted Stock," such RS
Property shall be subject to the same restrictions as the Restricted Stock with
regard to which they are issued and shall herein be encompassed within the term
"Restricted Stock."
(b) Rights with Regard to Restricted Stock. The Participant will
have the right to vote the Restricted Stock, to receive and retain all dividends
payable to holders of Shares of record on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by applicable law, as additional compensation for tax purposes if paid
on Restricted Stock and stock dividends will be subject to the restrictions
provided in Section 5(c)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set
forth in the Plan, with the exceptions that: (i) the Participant will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the Restriction Period shall have expired; (ii) the
Company (or its designated agent) will retain custody of the stock certificate
or certificates representing the Restricted Stock and the other RS Property
during the Restriction Period; (iii) no RS Property shall bear interest or be
segregated in separate accounts during the Restriction Period; and (iv) the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the Restriction Period.
(c) Vesting. The Restricted Stock shall become vested and cease to
be Restricted Stock (but shall remain subject to Sections 5(g) and 7 of this
Agreement) 25% on September 19,2007, 25% on September 19, 2008, 25% on September
19, 2009 and 25% on September 19, 2010; provided that the Participant has not
had a Termination any time prior to the applicable vesting date.
The Shares of Restricted Stock will become fully vested on a Change in
Control.
Upon vesting, the Company shall promptly issue and deliver, unless the
Company is using book entry, to the Participant a new stock certificate
registered in the name of the Participant for such Shares without the legend set
forth in Section 6 hereof and deliver to the Participant any related other RS
Property, subject to applicable withholding.
(d) Termination; Forfeiture. The Participant shall forfeit to the
Company, without compensation, any and all Shares of Restricted Stock that are
not vested (but no vested portion of the Shares) and RS Property upon the
Participant's Termination of Employment for any reason.
(e) Withholding. Participant shall pay, or make arrangements to
pay, in a manner satisfactory to the Company, an amount equal to the amount of
all applicable federal, state and local or foreign taxes that the Company is
required to withhold at any time. In the absence of such arrangements, the
Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant's normal pay or other amounts payable to the Participant.
In addition, any statutorily required withholding obligation may be satisfied,
in whole or in part, at the Participant's election, in the form and manner
prescribed by the Committee, by delivery of Shares of Common Stock (including
Shares issuable under this Agreement).
(f) Section 83(b). If the Participant properly elects (as required
by Section 83(b) of the Code) within 30 days after the issuance of the
Restricted Stock to include in gross income for federal income tax purposes in
the year of issuance the fair market value of such Shares of Restricted Stock,
the Participant shall pay to the Company or make arrangements satisfactory to
the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to the Restricted Stock. If the
Participant shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock, as well as
the rights set forth in Section 5(e) hereof. The Participant acknowledges that
it is his or her sole responsibility, and not the Company's, to file timely and
properly the election under Section 83(b) of the Code and any corresponding
provisions of state tax laws if he or she elects to utilize such election.
(g) Delivery Delay. The delivery of any certificate representing
the Restricted Stock or other RS Property may be postponed by the Company for
such period as may be required for it to comply with any applicable federal or
state securities law, or any national securities exchange listing requirements
and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of such Shares shall constitute
a violation by the Participant or the Company of any provisions of any law or of
any regulations of any governmental authority or any national securities
exchange.
6. Legend. All certificates representing the Restricted Stock shall have
endorsed thereon the legends (a) required under Section 8.2(d) of the Plan and
(b) any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated
to issue a certificate representing the Restricted Stock prior to the vesting
dates set forth above.
7. Securities Representations. The Shares are being issued to the
Participant and this Agreement is being made by the Company in reliance upon the
following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a) He or she has been advised that he or she may be an
"affiliate" within the meaning of Rule 144 under the Securities Act of 1933, as
amended (the "Act") and in this connection the Company is relying in part on his
or her representations set forth in this section.
(b) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, the Shares must be held indefinitely unless an exemption from
any applicable resale restrictions is available or the Company files an
additional registration statement (or a "re-offer prospectus") with regard to
such Shares and the Company is under no obligation to register the Shares (or to
file a "re-offer prospectus").
(c) If he or she is deemed an affiliate within the meaning of Rule
144 of the Act, he or she understands that the exemption from registration under
Rule 144 will not be available unless (i) a public trading market then exists
for the Common Stock of the Company, (ii) adequate information concerning the
Company is then available to the public, and (iii) other terms and conditions of
Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and
conditions.
8. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ or retain, or to continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding, nor does it modify in any respect the Company or its Affiliate's
right to terminate or modify the Participant's employment or compensation.
9. Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Nevertheless,
the Participant shall, if so requested by the Company, execute and deliver to
the Company all such instruments as may, in the judgment of the Company, be
advisable for the purpose.
10. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any Shares covered by the Restricted Stock unless
and until the Participant has become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the
amendment provisions thereof, and to such rules, regulations and interpretations
relating to the Plan as may be adopted by the Committee and as may be in effect
from time to time. The Plan is incorporated herein by reference and all
capitalized terms in this Agreement that are not otherwise defined shall have
the same meaning as set forth in the Plan. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to be
modified accordingly. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject
matter hereof.
12. Acceptance. As required by Section 8.2(b) of the Plan, the Participant
shall forfeit the Restricted Stock if the Participant does not execute this
Agreement with a period of 60 days from the date the Participant receives this
Agreement (or such other period as the Committee shall provide).
13. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the Grant Date.
STEVEN MADDEN, LTD.
By: /s/ Jamieson S. Karson
------------------------------------
Title: Chief Executive Officer
----------------------------------
PARTICIPANT
/s/ Awadhesh Sinha
- ------------------------------------
Awadhesh Sinha
Exhibit 10.20
EXECUTION VERSION
NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD.
2006 STOCK INCENTIVE PLAN
-------------------------
THIS AGREEMENT, dated as of May 16, 2007 (this "Agreement"), between
Steven Madden, Ltd. (the "Company") and Jeff Silverman (the "Participant").
Preliminary Statement
---------------------
The Compensation Committee of the Board of Directors of the Company
(the "Committee") has authorized this grant of a non-qualified stock option (the
"Option") on May 16, 2007 (the "Grant Date") to purchase the number of shares of
the Company's common stock, par value $0.0001 per share (the "Common Stock"),
set forth below to the Participant, as an Eligible Employee of the Company or an
Affiliate of the Company. Unless otherwise indicated, any capitalized term used
but not defined herein shall have the meaning ascribed to such term in the
Steven Madden, Ltd. 2006 Stock Incentive Plan, as amended (as the same may be
further amended from time to time, the "Plan"). A copy of the Plan as in effect
on the date hereof has been delivered to the Participant. By signing and
returning this Agreement, the Participant acknowledges having received and read
a copy of the Plan as in effect on the date hereof and agrees to comply with the
Plan, this Agreement and all applicable laws and regulations.
Accordingly, the parties hereto agree as follows:
1. Tax Matters. No part of the Option granted hereby is intended
to qualify as an "incentive stock option" under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Grant of Option. Subject in all respects to the Plan and the
terms and conditions set forth herein and therein, the Participant is hereby
granted an Option to purchase from the Company 150,000 shares of Common Stock
(the "Option Shares"), at a price per share of $45.00 (the "Option Price"),
which is not less than Fair Market Value on the Grant Date.
3. Vesting and Exercise.
--------------------
(a) Except as set forth below, the Option shall vest and become
exercisable in installments as provided below, which shall be cumulative. To the
extent that the Option has become vested and exercisable as provided below, the
Option thereafter may be exercised by the Participant, in whole or in part, at
any time or from time to time prior to the expiration or earlier termination of
the Option as provided herein and in accordance with Section 6.3(d) of the Plan,
including, without limitation, the filing of such written form of exercise
notice, if any, as may be required by the Committee or the Company and the
payment in full of the Option Price multiplied by the number of Option Shares
underlying the portion of the Option exercised. Upon expiration of the Option,
the Option shall be canceled and no longer exercisable. The following table
indicates each date upon which the Participant shall be vested and entitled to
exercise the Option with respect to the number of the Option Shares indicated
beside such date, provided that the Participant has not had a Termination of
Employment any time prior to such date (each of the dates set forth below being
herein called a "Vesting Date"):
Number
of Option
Vesting Date Shares Vested
----------------- -------------
First Anniversary of Grant Date 50,000 (1/3 of
the Option Shares)
Second Anniversary of Grant Date 100,000 (2/3 of
the Option Shares)
Third Anniversary of Grant Date 150,000 (100% of
the Option Shares)
(b) There shall be no proportionate or partial vesting in the
periods prior to each Vesting Date and all vesting shall occur only on the
appropriate Vesting Date, provided that the Participant has not had a
Termination of Employment at any time prior to such Vesting Date.
(c) The Option will become fully vested on a Change in Control.
4. Option Term. The term of the Option shall be five (5) years
after the Grant Date and the Option shall expire at 5:00 p.m. (New York City
time) on the fifth anniversary of the Grant Date, subject to earlier termination
in the event of the Participant's Termination of Employment as specified in
Section 5.
5. Termination. Subject to Section 4 and the terms of the Plan,
the Option, to the extent vested at the time of the Participant's Termination of
Employment, shall remain exercisable as provided in Section 12.1(a) of the Plan.
Any portion of the Option that is not vested as of the date of the Participant's
Termination of Employment for any reason shall terminate and expire as of the
date of such Termination of Employment. In addition to the foregoing, if the
Participant breaches any provision of Section 6 of the Employment Agreement by
and between the Participant and the Company dated as of May 16, 2007, the
Participant shall forfeit the Option (whether vested or unvested) effective on
the date of such breach and to the extent that the Participant exercised the
Option (or any portion thereof), the Participant shall pay the Company (and the
Company shall have the right to recover), an amount equal to the entire gain
realized by the Participant upon the exercise of the Option (or any portion
thereof).
6. Restriction on Transfer of Option. No part of the Option shall
be subject to Transfer other than by will or by the laws of descent and
distribution. During the lifetime of the Participant, the Option may be
exercised only by the Participant or the Participant's guardian or legal
representative. The Option shall not be subject to levy by reason of any
execution, attachment or similar process. Upon any attempt to Transfer the
Option or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately and automatically become null and void.
2
7. Rights as a Stockholder. The Participant shall have no rights
as a stockholder with respect to any Option Shares unless and until the
Participant has become the holder of record of the Option Shares. No adjustments
shall be made to the Option, the Option Shares or the Option Price for dividends
in cash or other property, distributions or other rights in respect of any
Option Shares, except as otherwise may be specifically provided for in the Plan.
No shares of Common Stock shall be issued unless and until payment therefor has
been made or provided.
8. Provisions of Plan Control. This Agreement is subject to all
the terms, conditions and provisions of the Plan, including, without limitation,
the amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Plan as may be adopted by the Committee and as
may be in effect from time to time. The Plan is incorporated herein by
reference. If and to the extent that this Agreement conflicts or is inconsistent
with the terms, conditions and provisions of the Plan, the Plan shall control,
and this Agreement shall be deemed to be modified accordingly. This Agreement
contains the entire agreement and understanding of the parties with respect to
the subject matter hereof and supersedes any prior agreements and understandings
(whether written or oral) between the Company and the Participant with respect
to the subject matter hereof.
9. Notices. Any notice or communication given hereunder (each a
"Notice") shall be in writing and shall be sent by personal delivery, by courier
or by United States mail (registered or certified mail, postage prepaid and
return receipt requested), to the appropriate party at the address set forth
below:
If to the Company, to:
Steven Madden, Ltd.
52-16 Barnett Avenue
Long Island City, New York 11104
Attention: Chief Executive Officer.
If to the Participant, to the address for the Participant on file with
the Company
; or such other address or to the attention of such other person as a party
shall have specified by prior Notice to the other party. Each Notice will be
deemed given and effective upon actual receipt (or refusal of receipt).
10. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ, retain or continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which any Option is outstanding,
nor does it modify in any respect the Company's or its Affiliates' right to
terminate or modify the Participant's employment or compensation.
3
11. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
------------------------------------
Name: Jamieson A. Karson
Title: Chairman and Chief Executive
Officer
PARTICIPANT
/s/ Jeff Silverman
- ---------------------------
Jeff Silverman
4
Exhibit 10.21
EXECUTION VERSION
NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
STEVEN MADDEN, LTD.
2006 STOCK INCENTIVE PLAN
-------------------------
THIS AGREEMENT, dated as of May 16, 2007 (this "Agreement"), between
Steven Madden, Ltd. (the "Company") and Jeff Silverman (the "Participant").
Preliminary Statement
---------------------
The Compensation Committee of the Board of Directors of the Company
(the "Committee") has authorized this grant of a non-qualified stock option (the
"Option") on May 16, 2007 (the "Grant Date") to purchase the number of shares of
the Company's common stock, par value $0.0001 per share (the "Common Stock"),
set forth below to the Participant, as an Eligible Employee of the Company or an
Affiliate of the Company. Unless otherwise indicated, any capitalized term used
but not defined herein shall have the meaning ascribed to such term in the
Steven Madden, Ltd. 2006 Stock Incentive Plan, as amended (as the same may be
further amended from time to time, the "Plan"). A copy of the Plan as in effect
on the date hereof has been delivered to the Participant. By signing and
returning this Agreement, the Participant acknowledges having received and read
a copy of the Plan as in effect on the date hereof and agrees to comply with the
Plan, this Agreement and all applicable laws and regulations.
Accordingly, the parties hereto agree as follows:
1. Tax Matters. No part of the Option granted hereby is intended
to qualify as an "incentive stock option" under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Grant of Option. Subject in all respects to the Plan and the
terms and conditions set forth herein and therein, the Participant is hereby
granted an Option to purchase from the Company 150,000 shares of Common Stock
(the "Option Shares"), at a price per share of $50.00 (the "Option Price"),
which is not less than Fair Market Value on the Grant Date.
3. Vesting and Exercise.
--------------------
(a) Except as set forth below, the Option shall vest and become
exercisable in installments as provided below, which shall be cumulative. To the
extent that the Option has become vested and exercisable as provided below, the
Option thereafter may be exercised by the Participant, in whole or in part, at
any time or from time to time prior to the expiration or earlier termination of
the Option as provided herein and in accordance with Section 6.3(d) of the Plan,
including, without limitation, the filing of such written form of exercise
notice, if any, as may be required by the Committee or the Company and the
payment in full of the Option Price multiplied by the number of Option Shares
underlying the portion of the Option exercised. Upon expiration of the Option,
the Option shall be canceled and no longer exercisable. The following table
indicates each date upon which the Participant shall be vested and entitled to
exercise the Option with respect to the number of the Option Shares indicated
beside such date, provided that the Participant has not had a Termination of
Employment any time prior to such date (each of the dates set forth below being
herein called a "Vesting Date"):
Number
of Option
Vesting Date Shares Vested
----------------- -------------
First Anniversary of Grant Date 50,000 (1/3 of
the Option Shares)
Second Anniversary of Grant Date 100,000 (2/3 of
the Option Shares)
Third Anniversary of Grant Date 150,000 (100% of
the Option Shares)
(b) There shall be no proportionate or partial vesting in the
periods prior to each Vesting Date and all vesting shall occur only on the
appropriate Vesting Date, provided that the Participant has not had a
Termination of Employment at any time prior to such Vesting Date.
(c) The Option will become fully vested on a Change in Control.
4. Option Term. The term of the Option shall be five (5) years
after the Grant Date and the Option shall expire at 5:00 p.m. (New York City
time) on the fifth anniversary of the Grant Date, subject to earlier termination
in the event of the Participant's Termination of Employment as specified in
Section 5.
5. Termination. Subject to Section 4 and the terms of the Plan,
the Option, to the extent vested at the time of the Participant's Termination of
Employment, shall remain exercisable as provided in Section 12.1(a) of the Plan.
Any portion of the Option that is not vested as of the date of the Participant's
Termination of Employment for any reason shall terminate and expire as of the
date of such Termination of Employment. In addition to the foregoing, if the
Participant breaches any provision of Section 6 of the Employment Agreement by
and between the Participant and the Company dated as of May 16, 2007, the
Participant shall forfeit the Option (whether vested or unvested) effective on
the date of such breach and to the extent that the Participant exercised the
Option (or any portion thereof), the Participant shall pay the Company (and the
Company shall have the right to recover), an amount equal to the entire gain
realized by the Participant upon the exercise of the Option (or any portion
thereof).
6. Restriction on Transfer of Option. No part of the Option shall
be subject to Transfer other than by will or by the laws of descent and
distribution. During the lifetime of the Participant, the Option may be
exercised only by the Participant or the Participant's guardian or legal
representative. The Option shall not be subject to levy by reason of any
execution, attachment or similar process. Upon any attempt to Transfer the
Option or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately and automatically become null and void.
2
7. Rights as a Stockholder. The Participant shall have no rights
as a stockholder with respect to any Option Shares unless and until the
Participant has become the holder of record of the Option Shares. No adjustments
shall be made to the Option, the Option Shares or the Option Price for dividends
in cash or other property, distributions or other rights in respect of any
Option Shares, except as otherwise may be specifically provided for in the Plan.
No shares of Common Stock shall be issued unless and until payment therefor has
been made or provided.
8. Provisions of Plan Control. This Agreement is subject to all
the terms, conditions and provisions of the Plan, including, without limitation,
the amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Plan as may be adopted by the Committee and as
may be in effect from time to time. The Plan is incorporated herein by
reference. If and to the extent that this Agreement conflicts or is inconsistent
with the terms, conditions and provisions of the Plan, the Plan shall control,
and this Agreement shall be deemed to be modified accordingly. This Agreement
contains the entire agreement and understanding of the parties with respect to
the subject matter hereof and supersedes any prior agreements and understandings
(whether written or oral) between the Company and the Participant with respect
to the subject matter hereof.
9. Notices. Any notice or communication given hereunder (each a
"Notice") shall be in writing and shall be sent by personal delivery, by courier
or by United States mail (registered or certified mail, postage prepaid and
return receipt requested), to the appropriate party at the address set forth
below:
If to the Company, to:
Steven Madden, Ltd.
52-16 Barnett Avenue
Long Island City, New York 11104
Attention: Chief Executive Officer.
If to the Participant, to the address for the Participant on file with
the Company
; or such other address or to the attention of such other person as a party
shall have specified by prior Notice to the other party. Each Notice will be
deemed given and effective upon actual receipt (or refusal of receipt).
10. No Obligation to Continue Employment. This Agreement is not an
agreement of employment. This Agreement does not guarantee that the Company or
its Affiliates will employ, retain or continue to, employ or retain the
Participant during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which any Option is outstanding,
nor does it modify in any respect the Company's or its Affiliates' right to
terminate or modify the Participant's employment or compensation.
3
11. Miscellaneous.
-------------
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) This Agreement shall be governed and construed in accordance
with the laws of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).
(c) This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one contract.
(d) The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
STEVEN MADDEN, LTD.
By: /s/ Jamieson A. Karson
------------------------------------
Name: Jamieson A. Karson
Title: Chairman and Chief Executive
Officer
PARTICIPANT
/s/ Jeff Silverman
- -----------------------------
Jeff Silverman
4
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Jamieson A. Karson, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Steven Madden,
Ltd.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
controls over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
/s/ JAMIESON A. KARSON
- ------------------------------------
Jamieson A. Karson
Chairman and Chief Executive Officer
November 9, 2007
Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Arvind Dharia, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Steven Madden,
Ltd.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
controls over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
/s/ ARVIND DHARIA
- -----------------------
Arvind Dharia
Chief Financial Officer
November 9, 2007
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Steven Madden, Ltd. (the "Company")
on Form 10-Q for the quarter ended September 30, 2007, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Jamieson A. Karson, Chairman and Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
/s/ JAMIESON A. KARSON
- ------------------------------------
Jamieson A. Karson
Chairman and Chief Executive Officer
November 9, 2007
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Steven Madden, Ltd. (the "Company")
on Form 10-Q for the quarter ended September 30, 2007, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Arvind
Dharia, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
/s/ ARVIND DHARIA
- -----------------------
Arvind Dharia
Chief Financial Officer
November 9, 2007