STEVEN MADDEN. LTD.
                              52-16 BARNETT AVENUE
                           LONG ISLAND CITY, NY 11104
                                T (718) 308-2292
                                F (718) 308-8992

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                                                      April 2, 2002

Mr. Robert Schmertz

Dear Robert:

Below are the terms of your employment with Steven Madden, Ltd.:

1.    Term of Employment: 04/01/2002 to 06/30/2005
      ------------------

      Your position with the company is President of Steven Madden Wholesale
      Womens Division and Brand Manager for the Steve Madden brand or any
      position assigned by Corporate President or Chief Executive Officer.

2.    Salary: $375,000.00 effective 4/1/02 thru 6/30/03
      ------  $412,500.00 effective 7/1/03 thru 6/30/04
              $453,750.00 effective 7/1/04 thru 6/30/05

      Less such deductions as shall be required to be withheld by applicable law
      and regulations.

3.    Options:
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      (A)   100,000 options of common stock with a grant price based on the fair
            market value on the date of the 2002 Annual Shareholders Meeting,
            subject to shareholders approval. These options shall vest quarterly
            beginning with 25,000 options vesting on 09/30/2002 and 25,000
            options vesting on the last day of each quarter thereafter, and
            vesting fully on June 30th, 2003.

      (B)   100,000 options of common stock for calendar year 2002 performance,
            with a grant price based on the fair market value on the date of the
            2003 Annual Shareholders Meeting, subject to shareholders approval.
            These options shall vest quarterly beginning with 25,000 options
            vesting on 9/30/2003 and 25,000 options vesting on the last day of
            each quarter thereafter and vesting fully on June 30th, 2004.

      (C)   100,000 options of common stock for calendar year 2003 performance,
            with a grant price based on the fair market value on the date of the
            2004 Annual Shareholders Meeting, subject to shareholders approval.
<PAGE>

            These options shall vest quarterly beginning with 25,000 options
            vesting on 9/30/2004 and 25,000 options vesting on the last day of
            each quarter thereafter and vesting fully on June 30th, 2005.

      (D)   in addition to the above, subject to shareholder approval and
            subject to your continuous employment by the Company from the
            commencement date of this agreement through June 30, 2005, you shall
            be entitled to receive 50,000 shares ("Cliff Vested Shares").

4.    Change of Control: In the event there is a change of control, all unvested
      options and common stock will accelerate and will immediately vest on the
      date of the change of control, priced as of the date of transfer.

5.    Key Man: In the event that Steven Madden is no longer employed by the
      Company, you shall have the option of terminating this Agreement by
      delivery of notice to the Company within ten (10) days following such
      event.

6.    Covenant Not to Compete: Executive recognizes that the services to be
      performed by him hereunder are special and unique. In consideration of the
      compensation granted herein, the Executive agrees that, in the event he
      either terminates his employment of his own accord or is terminated by the
      Company for cause prior to the expiration of this agreement, for a period
      of 12 months following such termination, he shall not engage in or accept
      employment with any competitive business for his special and unique
      services.

7.    Expenses: All reasonable and necessary business related expenses including
      a cellular phone are to be paid by Employer.

8.    Automobile: Employer shall pay to Employee $500.00 per month as a car
      allowance.

9.    Vacations: Vacations, sick days and personal days in accordance with
      executive policy.

10.   Miscellaneous: In the event the Executive breaches this agreement all
      unearned and unvested options shall become null and void and executive
      shall forfeit all rights to the "Cliff Vested Shares".

11.   Signing Bonus: Executive shall receive a signing bonus of $150,000.00 upon
      the execution of this Agreement.


                                         Steven Madden, Ltd.



/s/ Robert Schmertz                      /s/ Jamieson A. Karson
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Robert Schmertz                          By: Jamieson A. Karson, CEO