Document:

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                                                                    EXHIBIT 10.3

                                 AMENDMENT NO. 1
                                       TO
                              EMPLOYMENT AGREEMENT

     This Amendment No. 1 to Employment Agreement ("Amendment No. 1") is made as
of May 17, 2002 by and between Ribapharm Inc., a Delaware corporation (the
"Company") and Roger D. Loomis, Jr., (the "Employee"), with reference to that
certain Employment Agreement entered into as of April 11, 2002 between the
Company and Employee ("Contract").

     In consideration of the mutual agreements contained herein and for other
consideration, the value, sufficiency, and receipt of which is hereby
acknowledged, the Company and Employee agree as follows.

     1.   Section 1(a) of the Contract is amended by adding the following
          sentence to the end of such section: "If Employee is removed in whole
          or part from such named position without Cause (as defined in Section
          8(a)(3), below) and if the Company has not installed Employee in such
          other senior executive capacity within forty-five (45) days after such
          removal, Employee's employment will be deemed terminated on the
          forty-sixth (46) day and the provisions of Section 9(b) will apply."

     2.   Section 8(a) of the Contract is amended to add thereto a new paragraph
          (6) to read as follows:

               "(6) Voluntary Termination. Employee may voluntarily terminate
                    ---------------------
               his employment hereunder at any time. If Employee voluntarily
               terminates his employment for any reason or without reason during
               the 60-day period which commences on the date which is six (6)
               months following the date of a Change in Control, it will be
               referred to as a "Limited Period Termination"."

     3.   Section 8(d)(2) of the Contract is amended to read as follows:

                    "(2) if Employee's employment is terminated for Good Reason,
               without Cause, or is a Limited Period Termination, the date
               specified in the Notice of Termination shall not be more than
               sixty (60) days, and shall not be less than thirty (30) days,
               from the date the Notice of Termination is given by the Company."

     4.   Section 9(a) of the Contract is amended by changing the first
          parenthetical clause in the first sentence thereof to read as follows:

               "...(other than for Good Reason or a Limited Period
               Termination)..."

     5.   Section 9(b) of the Contract is amended by changing the first clause
          thereof to read as follows:

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                    "(b) Without Cause, Good Reason or Limited Period
                         --------------------------------------------
               Termination. If Employee's employment by the Company shall be
               -----------
               terminated by the Company other than for Cause, death or
               Disability, or by Employee for Good Reason or as a Limited Period
               Termination, then Employee shall be entitled to the benefits
               provided below:"

     6.   Section 10 is amended to read in its entirety as follows:

               10. Section 4999 of the Internal Revenue Code. In the event that
                   -----------------------------------------
          any amount or benefit paid or distributed to Employee pursuant to this
          Agreement, taken together with any amounts or benefits otherwise paid
          or distributed to Employee by the Company or any affiliated company,
          including ICN (collectively, the "Covered Payments"), including,
          without limitation any profit realized in respect of stock options and
          similar events, are or become subject to the tax (the "Excise Tax")
          imposed under Section 4999 of the Internal Revenue Code of 1986, as
          amended (the "Code") or any similar tax that may hereafter be imposed,
          the Company shall pay to Employee at the time specified below an
          additional amount (the "Tax Reimbursement Payment") such that the net
          amount retained by Employee with respect to such Covered Payments,
          after deduction of any Excise Tax the Covered Payments and any
          Federal, state and local income tax and Excise Tax on the Tax
          Reimbursement Payment provided for by this Section 10, but before
          deduction for any Federal, state or local income or employment tax
          withholding on such Covered Payments, shall be equal to the amount of
          the Covered Payments.

               For purposes of determining whether any of the Covered Payments
          will be subject to the Excise Tax and the amount of such Excise Tax,

     (i)  such Covered Payments will be treated as "parachute payments" within
          the meaning of Section 280G of the Code, and all "parachute payments"
          in excess of the "base amount" (as defined under Section 280G(b)(3) of
          the Code) shall be treated as subject to the Excise Tax, unless, and
          except to the extent that, in the good faith judgment of the Company's
          independent certified public accountants appointed prior to the date
          of this Agreement or tax counsel selected by such Accountants (the
          "Accountants"), the Company has a reasonable basis to conclude that
          such Covered Payments (in whole or in part) either do not constitute
          "parachute payments" or represent reasonable compensation for personal
          services actually rendered (within the meaning of Section
          280G(b)(4)(B) of the Code) in excess of the "base amount," or such
          "parachute payments" are otherwise not subject to such Excise Tax, and

     (ii) the value of any non-cash benefits or any deferred payment or benefits
          shall be determined by the Accountants in accordance with the
          principles of Section 280G of the Code.

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               For purposes of determining the amount of the Tax Reimbursement
          Payment, the Employee shall be deemed to pay:

    (iii) Federal income taxes at the highest applicable marginal rate of
          Federal income taxation for the calendar year in which the Tax
          Reimbursement Payment is to be made, and

     (iv) any applicable state and local income taxes at the highest applicable
          marginal rate of taxation for the calendar year in which the Tax
          Reimbursement Payment is to be made, net of the maximum reduction in
          Federal incomes taxes which could be obtained from the deduction of
          such state or local taxes if paid in such year.

               In the event that the Excise Tax is subsequently determined by
          the Accountants or pursuant to any proceeding or negotiations with the
          Internal Revenue Service to be less than the amount taken into account
          hereunder in calculating the Tax Reimbursement Payment made, Employee
          shall repay to the Company, at the time that the amount of such
          reduction in the Excise Tax is finally determined, the portion of such
          prior Tax Reimbursement Payment that would not have been paid if such
          Excise Tax had been applied in initially calculating such Tax
          Reimbursement Payment, plus interest on the amount of such repayment
          at the rate provided in Section 1274(b)(2)(B) of the Code.
          Notwithstanding the foregoing, in the event any portion of the Tax
          Reimbursement Payment to be refunded to the Company has been paid to
          any Federal, state or local tax authority, repayment thereof shall not
          be required until actual refund or credit of such portion has been
          made to Employee, and interest payable to the Company shall not exceed
          interest received or credited to Employee by such tax authority for
          the period it held such portion. Employee and the Company shall
          mutually agree upon the course of action to be pursued (and the method
          of allocating the expenses thereof) if Employee's good faith claim for
          refund or credit is denied.

               In the event that the Excise Tax is later determined by the
          Accountants or pursuant to any proceeding or negotiations with the
          Internal Revenue Service to exceed the amount taken into account
          hereunder at the time the Tax Reimbursement Payment is made
          (including, but not limited to, by reason of any payment the existence
          or amount of which cannot be determined at the time of the Tax
          Reimbursement Payment), the Company shall make an additional Tax
          Reimbursement Payment in respect of such excess (plus any interest or
          penalty payable with respect to such excess) at the time that the
          amount of such excess if finally determined.

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               The Tax Reimbursement Payment (or portion thereof) provided for
          in this Section 10 shall be paid to Employee not later than 10
          business days following the payment of the Covered Payments; provided,
          however, that if the amount of such Tax Reimbursement Payment (or
          portion thereof) cannot be finally determined on or before the date on
          which payment is due, the Company shall pay to Employee by such date
          an amount estimated in good faith by the Accountants to be the minimum
          amount of such Tax Reimbursement Payment and shall pay the remainder
          of such Tax Reimbursement Payment (together with interest at the rate
          provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
          thereof can be determined, but in no event later than 45 calendar days
          after payment of the related Covered Payment. In the event that the
          amount of the estimated Tax Reimbursement Payment exceeds the amount
          subsequently determined to have been due, such excess shall constitute
          a loan by the Company to Employee, payable on the fifth business day
          after written demand by the Company for payment (together with
          interest at the rate provided in Section 1274(b)(2)(B) of the Code).

     7.   All terms and conditions of the Contract, as amended hereby, are
          hereby ratified and confirmed by the Company and Employee as the
          agreement of the parties.

     IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
No. 1 as of this 17th day of May, 2002.

                                       COMPANY:
                                       -------

                                       RIBAPHARM INC.

                                          /s/ THOMAS STANKOVICH
                                       -----------------------------------------
                                       Name:  Thomas Stankovich
                                       Title: Senior Vice President and
                                              Chief Financial Officer

                                       EMPLOYEE:
                                       --------

                                          /s/ ROGER D. LOOMIS, JR.
                                       -----------------------------------------
                                       Roger D. Loomis, Jr.

                                                                               4Exhibit 10(a)
                                  -------------

                                 1999 STOCK PLAN

                               THE 1999 STOCK PLAN

APPROVED AND ADOPTED BY THE BOARD OF DIRECTORS ON MARCH 15, 1999 AND AMENDED AS
       OF MARCH 20, 2000, MARCH 30, 2001 AND APRIL 8, 2002

         SECTION 1.  PURPOSE. The purpose of the Steven Madden, Ltd. 1999 Stock
Plan (the "Plan") is to provide a means whereby directors and selected
employees, officers, agents, consultants, and independent contractors of Steven
Madden, Ltd., a Delaware corporation (the "Company"), or of any parent or
subsidiary (as defined in subsection 5.7 hereof and referred to hereinafter as
"Affiliates") thereof, may be granted incentive stock options and/or
nonqualified stock options to purchase shares of common stock, $.0001 par value
("Common Stock") in order to attract and retain the services or advice of such
directors, employees, officers, agents, consultants, and independent contractors
and to provide additional incentive for such persons to exert maximum efforts
for the success of the Company and its Affiliates by encouraging stock ownership
in the Company.

         SECTION 2.  ADMINISTRATION. Subject to Section 2.3 hereof, the Plan
shall be administered by the Board of Directors of the Company (the "Board") or,
in the event the Board shall appoint and/or authorize a committee of two or more
members of the Board to administer the Plan, by such committee. The
administrator of the Plan shall hereinafter be referred to as the "Plan
Administrator".

         The foregoing notwithstanding, with respect to grants to be made to
directors: (a) the Plan Administrator shall be constituted so as to meet the
requirements of Section 16(b) of the Exchange Act and Rule 16b-3 thereunder,
each as amended from time to time, or (b) if the Plan Administrator cannot be so
constituted, no options shall be granted under the Plan to any directors.

               2.1   PROCEDURES. The Board shall designate one of the members of
the Plan Administrator as chairman. The Plan Administrator may hold meetings at
such times and places as it shall determine. The acts of a majority of the
members of the Plan Administrator present at meetings at which a quorum exists,
or acts approved in writing by all Plan Administrator members, shall be valid
acts of the Plan Administrator.

               2.2   RESPONSIBILITIES. Except for the terms and conditions
explicitly set forth herein, the Plan Administrator shall have the authority, in
its discretion, to determine all matters relating to the options to be granted
under the Plan, including, without limitation, selection of whether an option
will be an incentive stock option or a nonqualified stock option, selection of
the individuals to be granted options, the number of shares to be subject to
each option, the exercise price per share, the timing of grants and all other
terms and conditions of the options. Grants under the Plan need not be identical
in any respect, even when made simultaneously. The Plan Administrator may also
establish, amend, and revoke rules and regulations for the administration of the
Plan. The interpretation and construction by the Plan Administrator of any terms
or provisions of the Plan or any option issued hereunder, or of any rule or
regulation promulgated in connection herewith, shall be conclusive and binding

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on all interested parties, so long as such interpretation and construction with
respect to incentive stock options corresponds to the requirements of Internal
Revenue Code of 1986, as amended (the "Code"). Section 422, the regulations
thereunder, and any amendments thereto. The Plan Administrator shall not be
personally liable for any action made in good faith with respect to the Plan or
any option granted thereunder.

               2.3   RULE 16b-3 AND SECTION 16(b) COMPLIANCE; BIFURCATION OF
PLAN. It is the intention of the Company that the Plan comply in all respects
with Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act")
to the extent applicable, and in all events the Plan shall be construed in favor
of its meeting the requirements of Rule 16b-3. If any Plan provision is later
found not to be in compliance with such Rule, such provision shall be deemed
null and void. The Board of Directors may act under the Plan only if all members
thereof are "disinterested persons" as defined in Rule 16b-3 and further
described in Section 4 hereof; and no director or officer or other Company
"insider" subject to Section 16 of the Exchange Act may sell shares received
upon the exercise of an option during the six month period immediately following
the grant of the option without complying with the terms of Section 16 of the
Exchange Act.

         Notwithstanding anything in the Plan to the contrary, the Board, in its
absolute discretion, may bifurcate the Plan so as to restrict, limit, or
condition the use of any provision of the Plan to participants who are officers
and directors or other persons subject to Section 16(b) of the Exchange Act
without so restricting, limiting, or conditioning the Plan with respect to other
participants.

         SECTION 3.  STOCK SUBJECT TO THE PLAN. The stock subject to this Plan
shall be the Common Stock, presently authorized but unissued or subsequently
acquired by the Company. Subject to adjustment as provided in Section 7 hereof,
the aggregate amount of Common Stock to be delivered upon the exercise of all
options granted under the Plan shall not exceed in the aggregate 400,000 shares
as such Common Stock was constituted on the effective date of the Plan. If any
option granted under the Plan shall expire, be surrendered, exchanged for
another option, canceled, or terminated for any reason without having been
exercised in full, the unpurchased shares subject thereto shall thereupon again
be available for purposes of the Plan, including for replacement options which
may be granted in exchange for such surrendered, canceled, or terminated
options.

         SECTION 4.  ELIGIBILITY. An incentive stock option may be granted only
to any individual who, at the time the option is granted, is a director,
employee, officer, agent, consultant, or independent contractor of the Company
or any Affiliate thereof. A nonqualified stock option may be granted to any
director, employee, officer, agent, consultant, or independent contractor of the
Company or any Affiliate thereof, whether an individual or an entity. Any party
to whom an option is granted under the Plan shall be referred to hereinafter as
an "Optionee".

         A director shall in no event be eligible for the benefits of the Plan
unless at the time discretion is exercised in the selection of a director as a
person to whom options may be granted, or in the determination of the number of
shares which may be covered by options granted to the director, the Plan
complies with the requirements of Rule 16b-3 under the Exchange Act.

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         SECTION 5.  TERMS AND CONDITIONS OF OPTIONS. Options granted under the
Plan shall be evidenced by written agreements which shall contain such terms,
conditions, limitations, and restrictions as the Plan Administrator shall deem
advisable and which are not inconsistent with the Plan.

               5.2   TERM AND MATURITY. Subject to the restrictions contained in
Section 6 hereof with respect to granting stock options to greater than ten
percent stockholders, the term of each stock option shall be as established by
the Plan Administrator and, if not so established, shall be ten years from the
date of its grant, but in no event shall the term of any incentive stock option
exceed a ten year period.

               5.3   EXERCISE. Each option may be exercised in whole or in part;
provided, that only whole shares may be issued pursuant to the exercise of any
option. Subject to any other terms and conditions herein, the Plan Administrator
may provide that an option may not be exercised in whole or in part for a stated
period or periods of time during which such option is outstanding; provided,
that the Plan Administrator may rescind, modify, or waive any such limitation
(including by the acceleration of the vesting schedule upon a change in control
of the Company) at any time and from time to time after the grant date thereof.
During an Optionee's lifetime, any incentive stock options granted under the
Plan are personal to such Optionee and are exercisable solely by such Optionee.
Options shall be exercised by delivery to the Company of notice of the number of
shares with respect to which the option is exercised, together with payment of
the exercise price in accordance with Section 5.4 hereof.

               5.4   PAYMENT OF EXERCISE PRICE. Except as set forth below,
payment of the option exercise price shall be made in full at the time the
notice of exercise of the option is delivered to the Company and shall be in
cash, bank certified or cashier's check, or personal check (unless at the time
of exercise the Plan Administrator in a particular case determines not to accept
a personal check) for shares of Common Stock being purchased.

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

               (a)   delivery of shares of Common Stock of the Company held by
an Optionee having a fair market value equal to the exercise price, such fair
market value to be determined in good faith by the Plan Administrator;

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

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

               5.5   WITHHOLDING TAX REQUIREMENT. The Company or any Affiliate
thereof shall have the right to retain and withhold from any payment of cash or
Common Stock under the Plan the amount of taxes required by any government to be
withheld or otherwise deducted and paid with respect to such payment. No option
may be exercised unless and until arrangements satisfactory to the Company, in
its sole discretion, to pay such withholding taxes are made. At its discretion,
the Company may require an Optionee to reimburse the Company for any such taxes
required to be withheld by the Company and withhold any distribution in whole or
in part until the Company is so reimbursed. In lieu thereof, the Company shall
have the right to withhold from any other cash amounts due or to become due from
the Company to the Optionee an amount equal to such taxes or retain and withhold
a number of shares having a market value not less than the amount of such taxes
required to be withheld by the Company to reimburse the Company for any such
taxes and cancel (in whole or in part) any such shares of Common Stock so
withheld. If required by Section 16(b) of the Exchange Act, the election to pay
withholding taxes by delivery of shares of Common Stock held by any person who
at the time of exercise is subject to Section 16(b) of the Exchange Act shall be
made either six months prior to the date the option exercise becomes taxable or
at such other times as the Company may determine as necessary to comply with
Section 16(b) of the Exchange Act. Although the Company may, in its discretion,
accept Common Stock as payment of withholding taxes, the Company shall not be
obligated to do so.

               5.6   NONTRANSFERABILITY.

                     5.6.1   OPTION. Options granted under the Plan and the
rights and privileges conferred hereby may not be transferred, assigned,
pledged, or hypothecated in any manner (whether by operation of law or
otherwise) other than by will or by the applicable laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
Section 414(p) of the Code, or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder, and shall not be
subject to execution, attachment, or similar process. Any attempt to transfer,
assign, pledge, hypothecate, or otherwise dispose of any option under the Plan
or of any right or privilege conferred hereby, contrary to the Code or to the
provisions of the Plan, or the sale or levy or any attachment or similar process
upon the rights and privileges conferred hereby shall be null and void ab
initio. The designation by an Optionee of a beneficiary does not, in and of
itself, constitute an impermissible transfer under this subsection 5.6.1.

                     5.6.2   STOCK. The Plan Administrator may provide in the
agreement granting the option that (a) the Optionee may not transfer or
otherwise dispose of shares acquired upon exercise of an option without first

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offering such shares to the Company for purchase on the same terms and
conditions as those offered to the proposed transferee or (b) upon termination
of employment of an Optionee, the Company shall have a six month right of
repurchase as to the shares acquired upon exercise, which right of repurchase
shall allow for a maximum purchase price equal to the fair market value of the
shares on the termination date. The foregoing rights of the Company shall be
assignable by the Company upon reasonable written notice to the Optionee.

               5.7   TERMINATION OF RELATIONSHIP. If the Optionee's relationship
with the Company or any Affiliate thereof ceases for any reason other than
termination for cause, death, or total disability, and unless by its terms the
option sooner terminates or expires, then the Optionee may exercise, for a three
month period, that portion of the Optionee's option which is exercisable at the
time of such cessation, but the Optionee's option shall terminate at the end of
the three month period following such cessation as to all shares for which it
has not theretofore been exercised, unless, in the case of a nonqualified stock
option, such provision is waived in the agreement evidencing the option or by
resolution adopted by the Plan Administrator within 90 days of such cessation.
If, in the case of an incentive stock option, an Optionee's relationship with
the Company or Affiliate thereof changes from employee to nonemployee (i.e.,
from employee to a position such as a consultant), such change shall constitute
a termination of an Optionee's employment with the Company or Affiliate and the
Optionee's incentive stock option shall terminate in accordance with this
subsection 5.7.

         If an Optionee is terminated for cause, any option granted hereunder
shall automatically terminate as of the first discovery by the Company of any
reason for termination for cause, and such Optionee shall thereupon have no
right to purchase any shares pursuant to such option. "Termination for cause"
shall mean dismissal for dishonesty, conviction or confession of a crime
punishable by law (except minor violations), fraud, misconduct, or disclosure of
confidential information. If an Optionee's relationship with the Company or any
Affiliate thereof is suspended pending an investigation of whether or not the
Optionee shall be terminated for cause, all Optionee's rights under any option
granted hereunder likewise shall be suspended during the period of
investigation.

         If an Optionee's relationship with the Company or any Affiliate thereof
ceases because of a total disability, the Optionee's option shall not terminate
or, in the case of an incentive stock option, cease to be treated as an
incentive stock option until the end of the 12 month period following such
cessation (unless by its terms it sooner terminates and expires). As used in the
Plan, the term "total disability" refers to a mental or physical impairment of
the Optionee which is expected to result in death or which has lasted or is, in
the opinion of the Company and two independent physicians, expected to last for
a continuous period of 12 months or more and which causes or is, in such
opinion, expected to cause the Optionee to be unable to perform his or her
duties for the Company and to be engaged in any substantial gainful activity.
Total disability shall be deemed to have occurred on the first day after the
Company and the two independent physicians have furnished their opinion of total
disability to the Plan Administrator.

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         For purposes of this subsection 5.7, a transfer of relationship between
or among the Company and/or any Affiliate thereof shall not be deemed to
constitute a cessation of relationship with the Company or any of its
Affiliates. For purposes of this subsection 5.7, with respect to incentive stock
options, employment shall be deemed to continue while the Optionee is on
military leave, sick leave, or other bona fide leave of absence (as determined
by the Plan Administrator). The foregoing notwithstanding, employment shall not
be deemed to continue beyond the first 90 days of such leave, unless the
Optionee's reemployment rights are guaranteed by statute or by contract.

         As used herein, the term "Affiliate" shall be defined as follows: (a)
when referring to a subsidiary corporation, "Affiliate" shall mean any
corporation (other than the Company) in an unbroken chain of corporations ending
with the Company if, at the time of the granting of the option, the stock
possessing 50% or more of the total combined voting power of all classes of
stock of each of the corporations other than the Company is owned by one of the
other corporations in such chain; and (b) when referring to a parent
corporation, "Affiliate" shall mean any corporation in an unbroken chain of
corporations ending with the Company if, at the time of the granting of the
option, each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

               5.8   DEATH OF OPTIONEE. If an Optionee dies while he or she has
a relationship with the Company or any Affiliate thereof or within the three
month period (or 12 month period in the case of totally disabled Optionees)
following cessation of such relationship, any option held by such Optionee, to
the extent that the Optionee would have been entitled to exercise such option,
may be exercised within one year after his or her death by the personal
representative of his or her estate or by the person or persons to whom the
Optionee's rights under the option shall pass by will or by the applicable laws
of descent and distribution.

               5.9   STATUS OF STOCKHOLDER. Neither the Optionee nor any party
to which the Optionee's rights and privileges under the option may pass shall
be, or have any of the rights or privileges of, a stockholder of the Company
with respect to any of the shares issuable upon the exercise of any option
granted under the Plan unless and until such option has been exercised.

               5.10  CONTINUATION OF EMPLOYMENT. Nothing in the Plan or in any
option granted pursuant to the Plan shall confer upon any Optionee any right to
continue in the employ of the Company or of an Affiliate thereof, or to
interfere in any way with the right of the Company or of any such Affiliate to
terminate his or her employment or other relationship with the Company at any
time.

               5.11  MODIFICATION AND AMENDMENT OF OPTION. Subject to the
requirements of Section 422 of the Code with respect to incentive stock options
and to the terms and conditions and within the limitations of the Plan,
including, without limitation, Section 9.1 hereof, the Plan Administrator may
modify or amend outstanding options granted under the Plan. The modification or

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amendment of an outstanding option shall not, without the consent of the
Optionee, impair or diminish any of his or her rights or any of the obligations
of the Company under such option. Except as otherwise provided herein, no
outstanding option shall be terminated without the consent of the Optionee.
Unless the Optionee agrees otherwise, any changes or adjustments made to
outstanding incentive stock options granted under the Plan shall be made in such
a manner so as not to constitute a "modification" as defined in Section 424(h)
of the Code and so as not to cause any incentive stock option issued hereunder
to fail to continue to qualify as an incentive stock option as defined in
Section 422(b) of the Code.

               5.12  LIMITATION ON VALUE FOR INCENTIVE STOCK OPTIONS. As to all
incentive stock options granted under the terms of the Plan, to the extent that
the aggregate fair market value (determined at the time of the grant of the
incentive stock option) of the shares of Common Stock with respect to which
incentive stock options are exercisable for the first time by the Optionee
during any calendar year (under the Plan and all other incentive stock option
plans of the Company, an Affiliate thereof or a predecessor corporation) exceeds
$100,000, such options shall be treated as nonqualified stock options. The
foregoing sentence shall not apply, and the limitation shall be that provided by
the Code or the Internal Revenue Service, as the case may be, if such annual
limit is changed or eliminated by (a) amendment of the Code or (b) issuance by
the Internal Revenue Service of (i) a Revenue ruling, (ii) a Private Letter
ruling to any of the Company, any Optionee, or any legatee, personal
representative, or distributee of any Optionee, or (iii) regulations.

               5.13  VALUATION OF COMMON STOCK RECEIVED UPON EXERCISE.

                     5.13.1  EXERCISE OF OPTIONS UNDER SECTIONS 5.4(A) AND (C).
The value of Common Stock received by the Optionee from an exercise under
Sections 5.4(a) and 5.4(c) hereof shall be the fair market value as determined
by the Plan Administrator, provided, that if the Common Stock is traded in a
public market, such valuation shall be the average of the high and low trading
prices or bid and asked prices, as applicable, of the Common Stock for the date
of receipt by the Company of the Optionee's delivery of shares under Section
5.4(a) hereof or delivery of the Notice of Exercise under Section 5.4(c) hereof,
determined as of the trading day immediately preceding such date (or, if no sale
of shares is reported for such trading day, on the next preceding day on which
any sale shall have been reported).

                     5.13.2  EXERCISE OF OPTION UNDER SECTION 5.4(B). The value
of Common Stock received by the Optionee from an exercise under Section 5.4(b)
hereof shall equal the sales price received for such shares.

         SECTION 6.  GREATER THAN TEN PERCENT STOCKHOLDERS.

               6.1   EXERCISE PRICE AND TERM OF INCENTIVE STOCK OPTIONS. If
incentive stock options are granted under the Plan to employees who, at the time
of such grant, own greater than ten percent of the total combined voting power
of all classes of stock of the Company or any Affiliate thereof, the term of
such incentive stock options shall not exceed five years and the exercise price

                                      A-7
<PAGE>

shall be not less than 110% of the fair market value of the Common Stock at the
time of grant of the incentive stock option. This provision shall control
notwithstanding any contrary terms contained in an option agreement or any other
document. The term and exercise price limitations of this provision shall be
amended to conform to any change required by a change in the Code or by ruling
or pronouncement of the Internal Revenue Service.

               6.2   ATTRIBUTION RULE. For purposes of subsection 6.1, in
determining stock ownership, an employee shall be deemed to own the stock owned,
directly or indirectly, by or for his or her brothers, sisters, spouse,
ancestors, and lineal descendants. Stock owned, directly or indirectly, by or
for a corporation, partnership estate, or trust shall be deemed to be owned
proportionately by or for its stockholders, partners, or beneficiaries. If an
employee or a person related to the employee owns an unexercised option or
warrant to purchase stock of the Company, the stock subject to that portion of
the option or warrant which is unexercised shall not be counted in determining
stock ownership. For purposes of this Section 6, stock owned by an employee
shall include all stock owned by him or her which is actually issued and
outstanding immediately before the grant of the incentive stock option to the
employee.

         SECTION 7.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The aggregate
number and class of shares for which options may be granted under the Plan, the
number and class of shares covered by each outstanding option, and the exercise
price per share thereof (but not the total price), and each such option, shall
all be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock of the Company resulting from a split or
consolidation of shares or any like capital adjustment, or the payment of any
stock dividend.

               7.1.  EFFECT OF LIQUIDATION, REORGANIZATION, OR CHANGE IN
CONTROL.

                     7.1.1   CASH, STOCK, OR OTHER PROPERTY FOR STOCK. Except as
provided in subsection 7.1.2 hereof, upon a merger (other than a merger of the
Company in which the holders of Common Stock immediately prior to the merger
have the same proportionate ownership of common stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than mere reincorporation
or creation of a holding company), or liquidation of the Company (each, an
"event"), as a result of which the stockholders of the Company receive cash,
stock, or other property in exchange for, or in connection with, their shares of
Common Stock, any option granted hereunder shall terminate, but the time during
which such options may be exercised shall be accelerated as follows: the
Optionee shall have the right immediately prior to any such event to exercise
such Optionee's option in whole or in part whether or not the vesting
requirements set forth in the option agreement have been satisfied.

                     7.1.2   CONVERSION OF OPTIONS ON STOCK FOR EXCHANGE STOCK.
If the stockholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same

                                      A-8
<PAGE>

proportionate ownership of common stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation,
or reorganization (other than mere reincorporation or creation of a holding
company), all options granted hereunder shall be converted into options to
purchase shares of Exchange Stock unless the Company and corporation issuing the
Exchange Stock, in their sole discretion, determine that any or all such options
granted hereunder shall not be converted into options to purchase shares of
Exchange Stock but instead shall terminate in accordance with the provisions of
subsection 7.1.1 hereof. The amount and price of converted options shall be
determined by adjusting the amount and price of the options granted hereunder in
the same proportion as used for determining the number of shares of Exchange
Stock the holders of the Common Stock receive in such merger, consolidation,
acquisition, separation, or reorganization. Unless the Board determines
otherwise, the converted options shall be fully vested whether or not the
vesting requirements set forth in the option agreement have been satisfied.

               7.2   FRACTIONAL SHARES. In the event of any adjustment in the
number of shares covered by an option, any fractional shares resulting from such
adjustment shall be disregarded and each such option shall cover only the number
of full shares resulting from such adjustment.

               7.3   DETERMINATION OF BOARD TO BE FINAL. Except as otherwise
required for the Plan to qualify for the exemption afforded by Rule 16b-3 under
the Exchange Act, all adjustments under this Section 7 shall be made by the
Board, and its determination as to what adjustments shall be made, and the
extent thereof, shall be final, binding, and conclusive. Unless an Optionee
agrees otherwise, any change or adjustment to an incentive stock option shall be
made in such a manner so as not to constitute a "modification" as defined in
Section 424(h) of the Code and so as not to cause the incentive stock option
issued hereunder to fail to continue to qualify as an incentive stock option as
defined in Section 422(b) of the Code.

         SECTION 8.  SECURITIES LAW COMPLIANCE. Shares shall not be issued with
respect to an option granted under the Plan unless the exercise of such option
and the issuance and delivery of such shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, any applicable
state securities laws, the Securities Act of 1933, as amended (the "Act"), the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance, including, without limitation, the availability of an
exemption from registration for the issuance and sale of any shares hereunder.
Inability of the Company to obtain from any regulatory body having jurisdiction,
the authority deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any shares hereunder or the unavailability of an exemption
from registration for the issuance and sale of any shares hereunder shall
relieve the Company of any liability in respect of the nonissuance or sale of
such shares as to which such requisite authority shall not have been obtained.

         As a condition to the exercise of an option, if, in the opinion of
counsel for the Company, assurances are required by any relevant provision of
the aforementioned laws, the Company may require the Optionee to give written

                                      A-9
<PAGE>

assurances satisfactory to the Company at the time of any such exercise (a) as
to the Optionee's knowledge and experience in financial and business matters
(and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters)
and that such Optionee is capable of evaluating, either alone or with the
purchaser representative, the merits and risks of exercising the option or (b)
that the shares are being purchased only for investment and without any present
intention to sell or distribute such shares. The foregoing requirements shall be
inoperative if the issuance of the shares upon the exercise of the option has
been registered under a then currently effective registration statement under
the Act.

         At the option of the Company, a stop-transfer order against any shares
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold, or otherwise
transferred unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Plan Administrator may also require such
other action or agreement by the Optionees as may from time to time be necessary
to comply with the federal and state securities laws. NONE OF THE ABOVE SHALL BE
CONSTRUED TO IMPLY AN OBLIGATION ON THE PART OF THE COMPANY TO UNDERTAKE
REGISTRATION OF THE OPTIONS OR STOCK HEREUNDER.

         Should any of the Company's capital stock of the same class as the
stock subject to options granted hereunder be listed on a national securities
exchange or on the Nasdaq National Market, all stock issued hereunder if not
previously listed on such exchange or market shall, if required by the rules of
such exchange or market, be authorized by that exchange or market for listing
thereon prior to the issuance thereof.

         SECTION 9.  USE OF PROCEEDS. The proceeds received by the Company from
the sale of shares pursuant to the exercise of options granted hereunder shall
constitute general funds of the Company.

         SECTION 10. AMENDMENT AND TERMINATION.

               10.1  BOARD ACTION. The Board may at any time suspend, amend, or
terminate the Plan, provided, that no amendment shall be made without
stockholder approval within 12 months before or after adoption of the Plan if
such approval is necessary to comply with any applicable tax or regulatory
requirement, including any such approval as may be necessary to satisfy the
requirements for exemptive relief under Rule 16b-3 of the Exchange Act or any
successor provision. Rights and obligations under any option granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan unless the Company requests the consent of the person to whom the option
was granted and such person consents in writing thereto.

               10.2  AUTOMATIC TERMINATION. Unless sooner terminated by the
Board, the Plan shall terminate ten years from the earlier of (a) the date on
which the Plan is adopted by the Board or (b) the date on which the Plan is

                                      A-10
<PAGE>

approved by the stockholders of the Company. No option may be granted after such
termination or during any suspension of the Plan. The amendment or termination
of the Plan shall not, without the consent of the option holder, alter or impair
any rights or obligations under any option theretofore granted under the Plan.

         SECTION 11. EFFECTIVENESS OF THE PLAN. The Plan shall become effective
upon adoption by the Board so long as it is approved by the holders of a
majority of the Company's shares of voting capital stock cast with respect to
the proposal to adopt the Plan at any time within 12 months before or after the
adoption of the Plan by the Board.

                                      A-11
<PAGE>

                               STEVEN MADDEN, LTD.
                     AMENDMENT NO. 1 TO THE 1999 STOCK PLAN

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

         1.  Section 3 of the 1999 Plan is amended to read as follows:

         SECTION 3.  STOCK SUBJECT TO THE PLAN. The stock subject to this Plan
shall be the Common Stock, presently authorized but unissued or subsequently
acquired by the Company. Subject to adjustment as provided in Section 7 hereof,
the aggregate amount of Common Stock to be delivered upon the exercise of all
options granted under the Plan shall not exceed in the aggregate 975,000 shares
as such Common Stock was constituted on the effective date of the Plan. If any
option granted under the Plan shall expire, be surrendered, exchanged for
another option, canceled, or terminated for any reason without having been
exercised in full, the unpurchased shares subject thereto shall thereupon again
be available for purposes of the Plan, including for replacement options which
may be granted in exchange for such surrendered, canceled, or terminated
options.

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

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

                                       Adopted by the Board of Directors
                                       this 20th day of March, 2000

                                       Approved by the Stockholders
                                       this 12th day of May, 2000

                                      A-12
<PAGE>

                               STEVEN MADDEN, LTD.
                     AMENDMENT NO. 2 TO THE 1999 STOCK PLAN

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

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

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

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

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

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

                                       Approved by the Stockholders
                                       this 10 day of July, 2001

                                      A-13
<PAGE>

                               STEVEN MADDEN, LTD.
                     AMENDMENT NO. 3 TO THE 1999 STOCK PLAN

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

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

         SECTION 3.        STOCK SUBJECT TO THE PLAN. The stock subject to this
Plan shall be the Common Stock, presently authorized but unissued or
subsequently acquired by the Company. Subject to adjustment as provided in
Section 7 hereof, the aggregate amount of Common Stock to be delivered upon the
exercise of all options granted under the Plan shall not exceed in the aggregate
2,280,000 shares as such Common Stock was constituted on the effective date of
the Plan. If any option granted under the Plan shall expire, be surrendered,
exchanged for another option, canceled, or terminated for any reason without
having been exercised in full, the unpurchased shares subject thereto shall
thereupon again be available for purposes of the Plan, including for replacement
options which may be granted in exchange for such surrendered, canceled, or
terminated options.

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

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

                                     Adopted by the Board of Directors
                                     as of the 8th day of April, 2002

                                     Approved by the Stockholders
                                     this 17th day of May, 2002

                                      A-14

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