Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is entered into on December 31,
2012 (the “Effective Date”) by and between Steven Madden, Ltd. (the “Company”)
and Edward R. Rosenfeld (the “Executive”).

 

RECITALS

 

WHEREAS, the Executive has served as the Chief Executive Officer and the
Chairman of the Board of Directors of the Company since August 8, 2008, having
previously served, from March 24, 2008 until August 8, 2008, as Interim Chief
Executive Officer and, from May 2005 until March 24, 2008, as Executive Vice
President of Strategic Planning and Finance; and

 

WHEREAS, since the Executive’s existing employment agreement will expire by its
terms on December 31, 2012, the Company and the Executive desire to enter into
this Agreement, which will set forth the terms and conditions upon which the
Executive shall continue to be employed by the Company and upon which the
Company shall compensate the Executive from and after the Effective Date;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, the parties hereto have agreed, and do hereby agree, as
follows:

 

1.EMPLOYMENT; TERM

 

1.1          The Company shall employ the Executive in its business, and the
Executive shall continue to work for the Company, as its Chief Executive Officer
for a term, subject to earlier termination in accordance with the provisions of
this Agreement (the “Term”), commencing as of the Effective Date and terminating
on December 31, 2015 (the “Expiration Date”).

 

1.2          Upon the expiration of the Term or the earlier termination of the
Executive’s employment with the Company for any reason whatsoever, the Executive
shall be deemed to have resigned all of his positions as an officer and director
of the Company and of each and every subsidiary thereof.

 

2.DUTIES

 

During the Term, the Executive shall serve as the Company’s Chief Executive
Officer and shall have such executive and managerial responsibilities on behalf
of the Company of the type and nature generally associated with his position and
such further duties as shall, from time to time, be delegated or assigned to him
by the Board of Directors of the Company consistent with his position. The
Executive shall also continue to serve as Chairman of the Board of Directors of
the Company.

 

3.DEVOTION OF TIME

 

During the Term, the Executive shall expend all of his working time for the
Company; shall devote his best efforts, energy and skill to the services of the
Company and the promotion of its interests; and shall not take part in
activities detrimental to the best interests of the Company.

 

 

 

 

4.COMPENSATION

 

4.1          For all services to be rendered by the Executive during the Term
and in consideration of the Executive’s representations and covenants set forth
in this Agreement, the Executive shall receive from the Company the following
base salary per annum (“Base Salary”):

 

(i)      For the calendar year 2013, $578,813;

 

(ii)     For the calendar year 2014, $607,754; and

 

(iii)    For the calendar year 2015, $638,142.

 

The Base Salary payable to the Executive shall be paid at such regular weekly or
semi-monthly time or times as the Company makes payment of its regular payroll
in the regular course of business.

 

4.2          During the Term, the Executive shall receive from the Company an
automobile allowance of $1,500 per month.

 

4.3          On January 2, 2013, the Company shall grant to the Executive, as
additional compensation, 100,000 shares of the Company’s common stock, $0.0001
per share, subject to certain restrictions (the “Restricted Common Stock”), such
grant to be made under the Company’s 2006 Stock Incentive Plan, as amended on
May 25, 2012. The Restricted Common Stock shall be subject to a Restricted Stock
Award Agreement and shall vest and cease to be Restricted Common Stock in five
equal installments as follows: 20,000 shares on December 1, 2013; 20,000 shares
on December 1, 2014; 20,000 shares on December 1, 2015; 20,000 shares on
December 1, 2016; and 20,000 shares on December 1, 2017.

 

4.4          During the Term, the Executive shall be eligible for such
additional compensation and bonuses as may be determined from time to time by
the Board of Directors of the Company or a committee thereof in its sole
discretion.

 

5.REIMBURSEMENT OF EXPENSES

 

5.1          The Company shall pay directly, or reimburse the Executive for, all
reasonable and necessary expenses and disbursements incurred by the Executive
for and on behalf of the Company in the performance of his duties during the
Term .

 

5.2          The Executive shall submit to the Company, not less than once in
each calendar month, reports of such expenses and disbursements in form normally
used by the Company and receipts with respect thereto, and the Company’s
obligations under Section. 5.1 hereof shall be subject to compliance therewith.

 

6.VACATION, SICK PAY, AND PERSONAL DAYS

 

The Executive shall be entitled to vacation, sick, and personal days off in
accordance with the Company’s usual policies as set forth in the Company’s
Employee Handbook as in effect on the Effective Date, as the same may be amended
from time to time.

 

7.PARTICIPATION IN EMPLOYEE BENEFIT PLANS

 

The Executive shall be eligible to participate in and receive all fringe
benefits available under all benefit programs normally available to employees of
the Company holding positions similar to that of the Executive, as may be in
effect from time to time, including such pension, profit sharing, stock option,
life insurance, disability insurance, health insurance and dental insurance
plans and any other benefits and plans as may be implemented by the Company from
time to time.

 

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8.SERVICE AS OFFICER AND DIRECTOR

 

During the Term, the Executive shall, if elected or appointed, serve as (a) an
officer of any subsidiaries of the Company and/or entities affiliated with the
Company in existence or hereafter created or acquired and (b) a director of any
such subsidiaries of the Company and/or entities affiliated with the Company in
existence or hereafter created or acquired, in each case without any additional
compensation for such services.

 

9.EARLIER TERMINATION

 

9.1          The Executive’s employment hereunder shall automatically terminate
upon his death; provided, however, that the Company shall continue to pay to the
Executive’s estate the Executive’s Base Salary and all other benefits as set
forth herein for a period of twelve months commencing immediately subsequent to
the date of the Executive’s death.

 

9.2          (a) The Executive’s employment may be terminated (i) by the Company
at any time during the Term upon written notice to the Executive (A) in the
event of the Executive’s Total Disability (as hereinafter defined), (B) for
Cause (as hereinafter defined) or (C) without Cause or (ii) by the Executive at
any time during the Term upon written notice to the Company (A) for Good Reason
and (B) without Good Reason.

 

(b)          As used in this Agreement, “Cause” shall mean: (i) a deliberate and
intentional breach by the Executive of a substantial and material duty and
responsibility under this Agreement that is not remedied, if capable of being
remedied, within 30 days after receipt of written notice by certified mail,
return receipt requested, from the Company specifying such breach; (ii) the
Executive’s conviction of, or pleading guilty or nolo contendere to, any crime
constituting a felony; (iii) the conviction of the Executive of any crime
involving moral turpitude; or (iv) gross negligence or willful misconduct in the
performance of the Executive’s duties or willful refusal or inability to perform
such duties as may be delegated to the Executive, which are consistent with the
Executive’s position as in effect just prior to such delegation, which
negligence, misconduct, refusal or inability is not remedied by the Executive
within 30 days following receipt by the Executive of written notice from the
Board of Directors, such notice to state with specificity the nature of the
breach, negligence, misconduct, refusal or inability related to the Executive’s
employment with the Company.

 

(c)          For purposes of this Agreement, “Total Disability” shall be deemed
to exist if, after the Executive has failed to perform his regular and customary
duties for a period of 90 consecutive days or for any 180 days out of any
360-day period, and before the Executive has become Rehabilitated (as
hereinafter defined), a majority of the members of the Board of Directors of the
Company, exclusive of the Executive, determine that the Executive is mentally or
physically incapable or unable to continue to perform such regular and customary
duties of employment. As used herein, “Rehabilitation” shall mean such time as
the Executive is willing and able and commences to devote his time and energies
to the affairs of the Company to a reasonable extent and in a similar manner to
that which the Executive did prior to his disability.

 

(d)          As used in this Agreement, “Good Reason” shall mean the occurrence
of any of the following:

 

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(i)     the assignment to the Executive, without his consent, of any duties
inconsistent in any substantial and negative respect with his positions, duties,
responsibilities and status with the Company as contemplated hereunder or
diminution of such positions, duties, responsibilities and status, if not
remedied by the Company within 30 days after receipt of written notice thereof
from the Executive;

 

(ii)    any removal of the Executive, without his consent, from any positions or
offices the Executive held as contemplated hereunder, except in connection with
the termination of the Executive’s employment by the Company pursuant to the
requirements of this Agreement, if not remedied by the Company within 30 days
after receipt of written notice thereof from the Executive;

 

(iii)   a reduction by the Company of the Executive’s Base Salary as in effect
as contemplated hereunder, except in connection with the termination of the
Executive’s employment by the Company;

 

(iv)   any termination of the Executive’s employment by the Company during the
Term that is not effected in accordance with the terms of this Agreement;

 

(v)    any material breach by the Company of the terms of this Agreement, which
is not remedied by the Company within 30 days after receipt of written notice
thereof from the Executive;

 

(vi)   the relocation of the Executive’s work location, without the Executive’s
consent, to a place more than 75 miles from the Company’s offices located at
52-16 Barnett Avenue, Long Island City, New York; or

 

(vii)  the failure by any successor to the Company to expressly assume all
obligations of the Company under this Agreement, which failure is not remedied
by the Company within 30 days after receipt of written notice thereof from the
Executive.

 

9.3          In the event that the Executive’s employment with the Company is
terminated by the Company due to the Executive’s Total Disability, then this
Agreement shall be deemed terminated and the Company shall be released from all
obligations to the Executive with respect to this Agreement, except obligations
accrued prior to such termination date and, in addition, the Company shall pay
to the Executive his Base Salary pursuant to this Agreement for a period of
twelve months commencing immediately subsequent to the date of determination of
Total Disability.

 

9.4          In the event that the Executive’s employment with the Company is
terminated by the Company for Cause or by the resignation of the Executive
without Good Reason (i) the Company shall have no further obligations to the
Executive, (ii) the Executive shall be entitled to no further compensation or
benefits from the Company, except for any pro-rata amounts due to the Executive
at such date of termination, as provided for in Section 4 and (iii) the amount
to be paid to the Executive pursuant to this Section 9.4 shall constitute the
sole and exclusive remedy of the Executive. The foregoing shall not be construed
as a limitation of any rights or remedies available to the Company with regard
to any acts or omissions of the Executive that gave rise to the termination for
Cause.

 

9.5          In the event that the Executive’s employment with the Company is
terminated by the Company other than for death, Total Disability or Cause or by
the resignation of the Executive for Good Reason, then such termination shall be
effective 30 days after the Executive’s receipt of notice of termination or the
Company’s receipt of notice of resignation and in either event the Executive
shall receive, as liquidated damages, an amount equal to the Executive’s Base
Salary that would have been paid by the Company pursuant to Section 4 hereof for
the longer of (i) the remainder of the Term and (ii) six months, such amount to
be paid to the Executive by the Company at such regular weekly or semi-monthly
time or times as the Company makes payment of its regular payroll in the regular
course of business.

 

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9.6          a)          In the event that during the period commencing 90 days
prior to a Change of Control (as hereinafter defined) and ending 180 days after
a Change of Control, the Executive’s employment with the Company is terminated
by the Company (other than for death, Total Disability or Cause) or by the
resignation of the Executive for Good Reason, the Executive shall receive in
cash, within ten days of the date of termination or resignation of employment,
an amount equal to three (3) times the average total W-2 compensation received
by the Executive pursuant to Section 4 and Section 7 of this Agreement for the
preceding three-year period ending on the last previous December 31 except that
in lieu of the actual Base Salary component received during such period under
Section 4.1 of this Agreement, there shall be substituted the annual Base Salary
to which the Executive was entitled under Section 4.1 as of the date of
termination or resignation of employment.

 

In the event that any payment (or portion thereof) to you under this Section
9.6(a) is determined to constitute an “excess parachute payment” under Sections
280G and 4999 of the Internal Revenue Code of 1986, as amended, the following
calculations shall be made:

 

(i)     The after-tax value to the Executive of the payments under Section
9.6(a) without any reduction; and

 

(ii)    The after-tax value to the Executive of the payments under Paragraph
9.6(a) as reduced to the maximum amount (the “Maximum Amount”) which may be paid
to the Executive without any portion of the payments constituting an ‘‘excess
parachute payment”.

 

If after applying the agreed upon calculations set forth above, it is determined
that the after-tax value determined under clause (ii) above is greater than the
after-tax value determined under clause (i) above, the payments to you under
Section 9.6(a) shall be reduced to the Maximum Amount.

 

(b)          For purposes of this Agreement, “Change of Control” shall mean:

 

(i)          When any “person” as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Section
13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the
Exchange Act, but excluding the Company or any subsidiary or any affiliate of
the Company or any employee benefit plan sponsored or maintained by the Company
or any subsidiary of the Company (including any trustee of such plan acting as
trustee) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act) of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities; or

 

(ii)         When, during any period of twelve consecutive months, the
individuals who, at the beginning of such period, constitute the Board of
Directors (the “Incumbent Directors”) cease for any reason other than death to
constitute at least a majority thereof; provided, however, that a director who
was not a director at the beginning of such twelve-month period shall be deemed
to have satisfied such twelve-month requirement (and be an Incumbent Director)
if such director was elected by, or on the recommendation of or with the
approval of, at least a majority of the directors who then qualified as
Incumbent Directors either actually (because they were directors at the
beginning of such twelve-month period) or through the operation of this proviso;
or

 

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(iii)        The occurrence of a transaction requiring stockholder approval for
the acquisition of the Company by an entity other than the Company or a
subsidiary or an affiliate of the Company through purchase of assets, or by
merger, or otherwise.

 

9.7          Any amount payable under this Agreement prior to the first date on
which such payment is permitted under Section 409A of the Internal Revenue Code
of 1986, as amended, shall instead be paid at the earliest date on which such
payment made be made in compliance with Section 409A of the Internal Revenue
Code of 1986, as amended.

 

10.COVENANT NOT TO COMPETE

 

10.1        (a) The Executive recognizes that the services to be performed by
him hereunder are special, unique and extraordinary. The parties confirm that it
is reasonably necessary for the protection of the Company that the Executive
agrees and, accordingly, the Executive does hereby agree that, except as
provided in Section 10.3, the Executive shall not, directly or indirectly, at
any time during the Restricted Period (as hereinafter defined) within the
Restricted Area (as hereinafter defined), engage in any Competitive Business (as
hereinafter defined), either on his own behalf or as an officer, director,
stockholder, partner, principal, trustee, investor, consultant, associate,
employee, owner, agent, creditor, independent contractor, co-venturer of any
third party or in any other relationship or capacity.

 

(b)        For purposes of this Agreement, (i) “Restricted Period” shall mean
(A) in the event of a termination of the Executive’s employment by the Company
for Cause or by the resignation of the Executive without Good Reason, the period
of the Executive’s actual employment hereunder plus six months after the date
the Executive is no longer employed by the Company and (B) in the event of a
termination of the Executive’s employment by the Company due to the Executive’s
Total Disability or without Cause (including termination resulting from a Change
of Control) or by the resignation of the Executive for Good Reason, the period
of the Executive’s actual employment hereunder; (ii) “Restricted Area” shall
mean anywhere in the United States; and (iii) “Competitive Business” shall mean
the design, manufacture, sale, marketing or distribution of (A) branded or
designer footwear, apparel, accessories and other products in the categories of
products sold by, or under license from, the Company or any of its affiliates
and (B) other branded products related to fashion or lifestyle.

 

10.2         The Executive hereby agrees that the Executive shall not, directly
or indirectly, for or on behalf of himself or any third party, at any time
during the Restricted Period (i) solicit any customers of the Company or (ii)
solicit, employ or engage, or cause, encourage or authorize, directly or
indirectly, to be employed or engaged, for or on behalf of himself or any third
party, any employee or agent of the Company or any of its subsidiaries.

 

10.3         This Section 10 shall not be construed to prevent the Executive
from owning, directly or indirectly, in the aggregate, an amount not exceeding
one percent (1%) of the issued and outstanding voting securities of any class of
any company whose voting capital stock is traded on a national securities
exchange or in the over-the-counter market.

 

10.4         If any of the restrictions contained in this Section 10 shall be
deemed to be unenforceable by reason of the extent, duration or geographical
scope thereof, or otherwise, then the court making such determination shall have
the right to reduce such extent, duration, geographical scope, or other
provisions hereof, and in its reduced form this Section 10 shall then be
enforceable in the manner contemplated hereby.

 

10.5         The provisions of this Section 10 shall survive the termination of
the Executive’s employment as provided hereunder.

 

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11.DiSCLOSURE OF CONFIDENTIAL INFORMATION

 

The Executive recognizes that he has had and will continue to have access to
secret and confidential information regarding the Company, including, but not
limited to, its customer list, products, know-how and business plans. The
Executive acknowledges that such information is of great value to the Company,
is the sole property of the Company, and has been and will be acquired by him in
confidence. In consideration of the obligations undertaken by the Company
herein, the Executive will not, at any time, during his employment hereunder and
for a period of one year thereafter, reveal, divulge or make known to any
person, any information concerning the Company acquired by the Executive during
the course of his employment that is treated as confidential by the Company;
provided, that such information is not otherwise in the public domain or
information that the Executive could have and did learn separate and apart from
his duties as set forth herein; provided, further, that disclosure of said
information would not be detrimental to the Company.

 

12.INJUNCTIVE RELIEF; REMEDIES

 

12.1        The Executive acknowledges and agrees that, in the event that the
Executive shall violate or threaten to violate any of the restrictions of
Sections 10 or 11 hereof, the Company will be without an adequate remedy at law
and will therefore be entitled to enforce such restrictions by temporary or
permanent injunctive or mandatory relief in any court of competent jurisdiction
without the necessity of proving damages or posting any bond or other security,
and without prejudice to any other remedies that the Company may have at law or
in equity.

 

12.2        The Executive agrees further that the Company shall have the
following additional rights and remedies:

 

(a)        to recover all monies and other consideration derived or received by
the Executive as the result of any transactions constituting a breach of any of
the provisions of Section 10.1, which the Executive hereby agrees to account for
and pay over to the Company; and

 

(b)        to recover reasonable attorneys’ fees incurred in any action or
proceeding in which it seeks to enforce its rights under Sections 10 or 11.

 

12.3        Each of the rights and remedies enumerated above shall be
independent of the other, and shall be severally enforceable, and all of such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or in equity.

 

13.NO RESTRICTIONS

 

The Executive hereby represents that neither the execution of this Agreement nor
his performance hereunder will (i) violate, conflict with or result in a breach
of any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under the terms, conditions
or provisions of any contract, agreement or other instrument or obligation to
which the Executive is a party, or by which he may be bound, or (ii) violate any
order, judgment, writ, injunction or decree applicable to the Executive. In the
event of a breach hereof, in addition to the Company’s right to terminate this
Agreement, the Executive shall indemnify the Company and hold it harmless from
and against any and all claims, losses, liabilities, costs and expenses
(including reasonable attorneys’ fees) incurred or suffered in connection with
or as a result of the Company’s entering into this Agreement or employing the
Executive hereunder.

 

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14.ARBITRATION

 

14.1        Except with regard to any other matters that are not a proper
subject of arbitration, all disputes between the parties hereto concerning the
performance, breach, construction or interpretation of this Agreement or any
portion thereof, or in any manner arising out of this Agreement or the
performance thereof, shall be submitted to binding arbitration, in accordance
with the rules of the American Arbitration Association. The arbitration
proceeding shall take place at a mutually agreeable location in New York County,
New York or such other location as agreed to by the parties.

 

14.2        The award rendered by the arbitrator shall be final, binding and
conclusive, shall be specifically enforceable, and judgment may be entered upon
it in accordance with applicable law in the appropriate court in the State of
New York, with no right of appeal therefrom.

 

14.3        Each party shall pay its or his own expenses of arbitration, and the
expenses of the arbitrator and the arbitration proceeding shall be equally
shared.

 

15.ASSIGNMENT

 

This Agreement, as it relates to the employment of the Executive, is a personal
contract and the rights and interests of the Executive hereunder may not be
sold, transferred, assigned, pledged or hypothecated.

 

16.NOTICES

 

Any notice required or permitted to be given pursuant to this Agreement shall be
in writing and shall be deemed to have been duly given when delivered by hand or
sent by certified or registered mail, return receipt requested and postage
prepaid, overnight mail or courier or telecopier, addressed, if to the Company,
to the Company’s principal offices, Attn: Chief Financial Officer, and if to the
Executive, at the address of the Executive’s personal residence as maintained in
the Company’s records, or at such other address as any party shall designate by
notice to the other party given in accordance with this Section 16.

 

17.GOVERNING LAW

 

This Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York without giving effect to such State’s
conflicts of laws provisions and each of the parties hereto irrevocably consents
to the jurisdiction and venue of the federal and state courts located in the
State of New York, County of New York..

 

18.WAIVER OF BREACH; PARTIAL INVALIDITY

 

The waiver by either party of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach. If any
provision, or part thereof, of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and not in any way affect or render invalid or unenforceable any other
provisions of this Agreement, and this Agreement shall be carried out as if such
invalid or unenforceable provision, or part thereof, had been reformed, and any
court of competent jurisdiction or arbitrators, as the case may be, are
authorized to so reform such invalid or unenforceable provision, or part
thereof, so that it would be valid, legal and enforceable to the fullest extent
permitted by applicable law.

 

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19.ENTIRE AGREEMENT

 

This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and there are no representations, warranties or
commitments except as set forth herein. This Agreement supersedes all prior
agreements, understandings, negotiations and discussions, whether written or
oral, of the parties hereto relating to the subject matter hereof. This
Agreement may be amended, and any provision hereof waived, only by a writing
executed by the party sought to be charged.

 

20.COUNTERPARTS

 

This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, and all of which taken together shall constitute one and
the same instrument.

 

21.FACSIMILE OR ELECTRONIC MAIL SIGNATURES

 

Signatures hereon which are transmitted via facsimile or electronic mail shall
be deemed original signatures.

 

22.REPRESENTATION BY COUNSEL; INTERPRETATION

 

The Executive acknowledges that the Executive has been represented by counsel,
or has been afforded the opportunity to be represented by counsel, in connection
with this Agreement. Accordingly, any rule or law or any legal decision that
would require the interpretation of any claimed ambiguities in this Agreement
against the party that drafted it has no application and is expressly waived by
the Executive. The provisions of this Agreement shall be interpreted in a
reasonable manner to give effect to the intent of the parties hereto.

 

23.HEADINGS

 

The headings and captions under sections and paragraphs of this Agreement are
for convenience of reference only and do not in any way modify, interpret or
construe the intent of the parties or affect any of the provisions of this
Agreement.

 

24.CONSTRUCTION

 

Whenever the word “including” or any variant thereof is used herein, it shall
mean “including without limitation.”

 

[Remainder of page intentionally left blank; signature page follows.]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year above written.

 

  STEVEN MADDEN, LTD.         By: /s/ Awadhesh Sinha     Awadhesh Sinha    
Chief Operating Officer

 

  /s/ Edward R. Rosenfeld   Edward R. Rosenfeld

 

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