SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 10, 2006
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STEVEN MADDEN, LTD.
(Exact name of registrant as specified in its charter)
Delaware 000-23702 13-3588231
(State or other jurisdiction of (Commission file number) (I.R.S. employer
incorporation or organization) identification no.)
52-16 Barnett Avenue
Long Island City, New York 11104
(Address of principal executive (Zip code)
offices)
Registrant's telephone number, including area code: (718) 446-1800
Not Applicable
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
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[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Modification of Earn-Out Agreement
On April 10, 2006, Steven Madden, Ltd. (the "Company") entered into an Amendment
to Earn-Out Agreement (the "Amendment") with Daniel M. Friedman ("Friedman"),
amending the Earn-Out Agreement, dated February 7, 2006 (the "Earn-Out
Agreement"), among the Company, Friedman, Daniel M. Friedman & Associates, Inc.
("DMF") and DMF International, Ltd. ("DMFI," and together with DMF, the "DMF
Companies"). The Earn-Out Agreement, which was entered into in connection with
the Company's purchase of all of the issued and outstanding shares of capital
stock of the DMF Companies from Friedman, governs the eligibility for and
payment of certain purchase price payments to Friedman in fiscal years 2008,
2009 and 2010 based on the DMF Companies' financial performance for those years.
The Amendment amends the definition of "EBITDA" contained in the Earn-Out
Agreement to include in the calculation of EBITDA certain amounts which
previously were subtracted from net sales. The foregoing does not purport to be
complete and is qualified in its entirety by reference to the complete
Amendment, a copy of which is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Description
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No.
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10.1 Amendment to Earn-Out Agreement, dated as of April 10, 2006,
between the Company and Daniel M. Friedman.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STEVEN MADDEN, LTD.
By: /s/ JAMIESON A. KARSON
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Name: Jamieson A. Karson
Title: Chief Executive Officer
Date: April 12, 2006
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Exhibit 10.1
AMENDMENT TO EARN-OUT AGREEMENT
This AMENDMENT TO EARN-OUT AGREEMENT (this "Amendment"), dated
as of April 10, 2006, is by and between Steven Madden, Ltd., a Delaware
corporation ("Madden"), and Daniel M. Friedman ("Friedman").
RECITALS
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WHEREAS, the parties hereto are party to that certain Earn-Out
Agreement, dated as of February 7, 2006 (the "Earn-Out Agreement"), by and among
Madden, Friedman, Daniel M. Friedman & Associates, Inc. and DMF International,
Ltd.; and
WHEREAS, pursuant to Section 10 of the Earn-Out Agreement, the
parties hereto wish to amend the Earn-Out Agreement to make certain changes as
set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. The definition of "EBITDA" set forth in Section 1
(Definitions) of the Earn-Out Agreement is hereby deleted in its entirely and
replaced with the following:
""EBITDA" shall mean the Companies' (a) net sales, less,
without duplication, the sum of (i) cost of sales (including, without
limitation, any amounts which, absent the transactions contemplated by the Stock
Purchase Agreement, would have been payable by Daniel M. Friedman & Associates,
Inc. to the Purchaser pursuant to the terms of the License Agreement (as
hereinafter defined) as if, with respect to such amounts, such License Agreement
is coterminous with this Agreement, but excluding any such amounts which would
have been payable in respect of products sold under the `Steven by Steve Madden'
brand), (ii) selling and distribution expenses, (iii) design and production
expenses and (iv) general administrative expenses (for the avoidance of doubt,
including in each of the foregoing clauses the net amount payable under the
Services Agreement), plus (b) to the extent included in expenses in clause (a)
of this definition, the sum of (i) interest expense, (ii) fees and expenses
(including prepayment penalties) in connection with financings, (iii) income tax
expense (including payments in respect of any tax sharing or other similar
agreement) other than international VAT or other similar tax, (iv) depreciation
and amortization expense, (v) expenses resulting from FAS 142 or FAS 144, (vi)
amortized expenses related to the closing of the transactions contemplated by
the Stock Purchase Agreement and the 338(h)(10) Election (as defined in the
Stock Purchase Agreement), (vii) any allocation of corporate overhead from
Affiliates of either Company or allocation of profit, loss or expenses from
Affiliates of either Company, other than those allocations specified in the
Services Agreement, (viii) any Losses (as defined in the Stock Purchase
Agreement) of either of the Companies which give rise to an indemnity obligation
pursuant to the indemnification provisions of the Stock Purchase Agreement, to
the extent, and only to the extent, that such indemnity obligations have been
honored, and (ix) any amounts recovered or recoverable by either Company from
insurance, to the extent, and only to the extent, the Loss attributable to such
insurance arose in the same period, plus (c) the amount set forth on Schedule A
attached hereto for the applicable fiscal year; provided that for purposes of
the foregoing, all products of Purchaser sold by the Companies to retail stores
of Purchaser shall be sold at cost. Each figure in clause (a) and clause (b) of
this definition shall be determined on a consolidated basis in accordance with
GAAP consistently applied from the Closing Date."
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2. Except as specifically amended hereby, the Earn-Out
Agreement is hereby ratified and confirmed in all respects and shall remain in
full force and effect.
3. To the extent of any inconsistency between the terms
of the Earn-Out Agreement and this Amendment, the terms of this Amendment will
control.
4. This Amendment shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York including,
without limitation, Sections 5-1401 of the New York General Obligations Law and
New York Civil Practice Laws and Rules 327.
5. For the convenience of the parties, any number of
counterparts hereof may be executed, each such executed counterpart shall be
deemed an original and all such counterparts together shall constitute one and
the same instrument. Facsimile transmission of any signed original counterpart
and/or retransmission of any signed facsimile transmission shall be deemed the
same as the delivery of an original.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
STEVEN MADDEN, LTD.
By: /s/ JAMIESON A. KARSON
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Name: Jamieson A. Karson
Title: Chairman and Chief Executive Officer
/s/ DANIEL M. FRIEDMAN
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DANIEL M. FRIEDMAN
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