SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.)
[X] Filed by Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
STEVEN MADDEN, LTD.
(Name of Registrant As Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
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2) Aggregate number of securities to which transaction applies:
N/A
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:(1)
N/A
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4) Proposed maximum aggregate value of transaction:
N/A
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(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and date of its filing.
1) Amount Previously Paid:
N/A
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2) Form, Schedule or Registration Statement No.:
N/A
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3) Filing Party:
N/A
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4) Date Filed:
N/A
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<PAGE>
STEVEN MADDEN, LTD.
52-16 BARNETT AVENUE
LONG ISLAND CITY, NY 11104
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 2000
----------------------------------------
TO THE STOCKHOLDERS OF STEVEN MADDEN, LTD.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Steven Madden, Ltd., a Delaware corporation (the
"Company"), will be held on May 12, 2000, at the Marriott Eastside located at
525 Lexington Avenue, New York, New York at 10:00 a.m., local time, and
thereafter as it may from time to time be adjourned, for the purposes stated
below.
1. To elect eight (8) directors to the Board of the Company for a
one (1) year term;
2. To approve an amendment to the Company's 1999 Stock Plan to increase
the maximum number of shares of the Company's common stock subject
to the plan from 400,000 shares to 975,000 shares;
3. To ratify the appointment of Richard A. Eisner & Company, LLP as
independent auditors of the Company for fiscal year 2000; and
4. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
All Stockholders are cordially invited to attend the Annual Meeting.
Only those Stockholders of record at the close of business on April 3, 2000 are
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. A complete list of stockholders entitled to vote at the Annual Meeting
will be available at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
April 12, 1999 Steven Madden, Chairman of the Board
and Chief Executive Officer
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE AND SIGN THE
ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE TO AMERICAN
STOCK TRANSFER & TRUST COMPANY, 40 WALL STREET, NEW YORK, NEW YORK 10005.
<PAGE>
STEVEN MADDEN, LTD.
52-16 BARNETT AVENUE
LONG ISLAND CITY, NY 11104
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Steven Madden, Ltd., a Delaware
corporation (the "Company"), for use at the annual meeting of the Company's
Stockholders to be held at the Marriott Eastside located at 525 Lexington
Avenue, New York, New York on May 12, 2000 at 10:00 a.m., local time, and at any
adjournments thereof (the "Annual Meeting").
The Annual Meeting has been called to consider and take action on the
following proposals: (i) to elect eight (8) directors to the Board of Directors
of the Company for a one (1) year term, (ii) to approve an amendment to the
Company's 1999 Stock Plan to increase the maximum number of shares of Company's
Common Stock subject to the plan from 400,000 shares to 975,000 shares, (iii) to
ratify the appointment of Richard A. Eisner & Company, LLP as independent
auditors of the Company for fiscal year 1999, and (iv) to transact such other
business as may properly come before the Annual Meeting or any adjournments
thereof. The Board of Directors knows of no other matters to be presented for
action at the Annual Meeting. However, if any other matters properly come before
the Annual Meeting, the persons named in the proxy will vote on such other
matters and/or for other nominees in accordance with their best judgment. THE
COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF
EACH OF THE PROPOSALS. Only holders of record of common stock, $.0001 par value
(the "Common Stock"), of the Company at the close of business on April 3, 2000
(the "Record Date") will be entitled to vote at the Annual Meeting.
The principal executive offices of the Company are located at 52-16
Barnett Avenue, Long Island City, NY 11104 and its telephone number is (718)
446-1800. The approximate date on which this Proxy Statement, the proxy card and
other accompanying materials are first being sent or given to Stockholders is
April 12, 2000. The Company's Annual Report for the fiscal year ended December
31, 1999, including audited financial statements, are being sent to Stockholders
together with this Proxy Statement and are incorporated herein by reference.
INFORMATION CONCERNING SOLICITATION AND VOTING
As of the Record Date, there were outstanding 11,875,909 shares of
Common Stock held by approximately 76 holders of record and 3,700 beneficial
owners. Only holders of shares of Common Stock on the Record Date will be
entitled to vote at the Annual Meeting. The holders of Common Stock are entitled
to one vote on all matters presented at the meeting for each share held of
record. The presence in person or by proxy of holders of record of a majority of
the shares outstanding and entitled to vote as of the Record Date shall be
required for a quorum to transact business at the Annual Meeting. If a quorum
should not be present, the Annual Meeting may be adjourned until a quorum is
obtained. The nominees to be selected as a Director named in Proposal 1 must
<PAGE>
receive a plurality of the eligible votes cast at the Annual Meeting with
respect to such Proposal. The approval of the amendment to the Company's 1999
Stock Plan described in Proposal 2 and the ratification of the appointment of
Richard A. Eisner & Company, LLP as independent auditors of the Company for
fiscal year 2000 described in Proposal 3 must be approved by the affirmative
vote of the holders of a majority of the total votes cast on such proposal in
person or by proxy. Abstentions and broker non-votes will have no effect with
respect to any of the Proposals. Brokers who hold shares in street name may vote
on behalf of beneficial owners with respect to Proposals 1,2 and 3. The approval
of all other matters to be considered at the Annual Meeting requires the
affirmative vote of a majority of the eligible votes cast at the Annual Meeting
on such matters.
The expense of preparing, printing and mailing this Proxy Statement,
exhibits and the proxies solicited hereby will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by officers and
directors and regular employees of the Company, without additional remuneration,
by personal interviews, telephone, telegraph or facsimile transmission. The
Company will also request brokerage firms, nominees, custodians and fiduciaries
to forward proxy materials to the beneficial owners of shares of capital stock
held of record and will provide reimbursements for the cost of forwarding the
material in accordance with customary charges.
Proxies given by Stockholders of record for use at the Annual Meeting
may be revoked at any time prior to the exercise of the powers conferred. In
addition to revocation in any other manner permitted by law, Stockholders of
record giving a proxy may revoke the proxy by an instrument in writing, executed
by the Stockholder or his attorney authorized in writing or, if the Stockholder
is a corporation, under its corporate seal, by an officer or attorney thereof
duly authorized, and deposited either at the corporate headquarters of the
Company at any time up to and including the last business day preceding the day
of the Annual Meeting, or any adjournment thereof, at which the proxy is to be
used, or with the chairman of such Annual Meeting on the day of the Annual
Meeting or adjournment thereof, and upon either of such deposits the proxy is
revoked.
ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
SPECIFIED ON SUCH PROXIES. PROXIES WILL BE VOTED IN FAVOR OF A PROPOSAL IF NO
CONTRARY SPECIFICATION IS MADE. ALL VALID PROXIES OBTAINED WILL BE VOTED AT THE
DISCRETION OF THE BOARD OF DIRECTORS WITH RESPECT TO ANY OTHER BUSINESS THAT MAY
COME BEFORE THE ANNUAL MEETING.
None of the matters to be acted on at the Annual Meeting give rise to
any statutory right of a Stockholder to dissent and obtain the appraisal of or
payment for such Stockholder's shares.
PROPOSAL ONE
TO ELECT EIGHT DIRECTORS TO SERVE FOR ONE YEAR AND UNTIL THEIR
SUCCESSORS HAVE BEEN DULY ELECTED AND QUALIFIED
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Under the By-Laws of the Company (the "By-Laws"), the Board of
Directors of the Company is required to be comprised of a minimum of one (1)
director, subject to which limitation the number of directors may be fixed from
time to time by action of the stockholders or of the directors, with all
directors elected by the stockholders each year at the annual stockholders
meeting. The Company's board presently consists of eight (8) directors whose
terms expire at the Annual Meeting. Officers are elected annually by and serve
at the discretion of the Board of Directors.
The Board has nominated eight (8) candidates to serve as directors all
of whom are currently directors. The names and biographical summaries of the
eight (8) persons who have been nominated by the Board of Directors to stand for
election at the Annual Meeting have been provided below for your information.
The Board of Directors has proposed that these persons be elected at the Annual
Meeting to serve until the next annual meeting of stockholders. The Proxies will
be voted for the election of the eight (8) nominees listed below as directors of
the Company unless otherwise specified on the form provided. The vote of a
majority of the capital stock, present and constituting a quorum at the Annual
Meeting, will be necessary to elect the directors listed below. If, for any
reasons, any of the nominees shall be unable or unwilling to serve, the Proxies
will be voted for a substitute nominee who will be designated by the Board of
Directors at the Annual Meeting. Stockholders may abstain from voting by marking
the appropriate boxes on the enclosed Proxy. Abstentions shall be counted
separately and shall be used for purposes of calculating quorum.
BIOGRAPHICAL SUMMARIES OF NOMINEES FOR THE BOARD OF DIRECTORS
STEVEN MADDEN has been the Chairman of the Board and Chief Executive
Officer since the Company's inception. In February 2000, Mr. Madden relinquished
the position of President which he held since the Company's inception. In 1980,
Mr. Madden joined L.J. Simone, a domestic footwear manufacturer, as an Account
Executive. At that time, L.J. Simone had annual sales of approximately $800,000.
Mr. Madden was promoted to Sales Manager and Director of Product Development and
was instrumental in the company's growth to $28 million in annual sales. After
leaving L.J. Simone in 1988, Mr. Madden joined M.C.M. Footwear, where he
commenced the design, development and marketing of the "Souliers" line of
footwear for women. In 1990, Mr. Madden founded the Company.
RHONDA J. BROWN has been the President of the Company since February
2000, Chief Operating Officer of the Company since July 1996 and a director of
the Company since November 1996. Prior to joining the Company, Ms. Brown served
as President and Chief Executive Officer of Icing, Inc. from May 1995 to
December 1995. Previously, from August 1992 to December 1994, Ms. Brown served
as Merchandise President of Macy's East, a division of R.H. Macy & Co., Inc.
From July 1988 to July 1992. Ms. Brown served as Senior Vice-President and
General Merchandise Manager to Lord & Taylor, a division of the May Company. Ms.
Brown attended the American University, receiving a BS in Marketing and Public
Communications in 1976.
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<PAGE>
ARVIND DHARIA has been the Chief Financial Officer of the Company since
October 1992 and a Director since December 1993. From December 1988 to September
1992, Mr. Dharia was Assistant Controller of Millennium III Real Estate Corp.
JOHN BASILE has been the Director of Operations of the Company since
June 1994 and the Company's Executive Vice President since January 1998. Mr.
Basile has been a director of the Company since November 1996. From 1990 to
1994, Mr. Basile was Executive Vice President of Cougar U.S.A. responsible for
the United States Division of Susan Shoes of Canada. Previously, Mr. Basile was
a Sales Manager at Bellini Imports from 1980 to 1990.
LES WAGNER has been Vice President-Real Estate for Steven Madden
Retail, Inc. since April 1999 and a director of the Company since October 1996.
From 1993 to 1996, Mr. Wagner served as the President of Baker/Leeds Shoe Store,
a Division of Edison Brothers Stores, Inc. Mr. Wagner has served in a number of
other capacities for Baker/Leeds from 1963 to 1993 which included, General
Merchandise Manager from 1989 to 1993; Vice President Real Estate Northeast Area
from 1988 to 1989; and President, Gussini Discount Shoe Division from 1987 to
1988. Mr. Wagner attended Harvard University, completing the Advanced Management
Program (AMP 100).
JOHN L. MADDEN has been a Director of the Company since the Company's
inception. Since April 1998, Mr. Madden has owned and run a Branch office of
Tradeway Securities Group, Inc. in Florida. From May 1996 through December 1996,
Mr. Madden formed JLM Consultants, Inc. which acted as a Branch office for
several broker-dealers. From May 1994 to May 1996, Mr. Madden served as Vice
President of Investments for GKN Securities, Inc. From August 1993 to April
1994, Mr. Madden was employed by Biltmore Securities as Managing Director and
registered sales representative. From April 1992 until August 1993, Mr. Madden
was associated with GKN Securities, Inc. as a Senior Account Executive. Mr.
Madden is the brother of Steven Madden, the Company's Chairman of the Board and
Chief Executive Officer.
PETER MIGLIORINI has been a Director of the Company since October 1996.
From 1994 to present, Mr. Migliorini has served as Sales Manager for Greschlers,
Inc., a major supply company located in Brooklyn, New York. From 1987 to 1994
Mr. Migliorini served as Director of Operations for Mackroyce Group. Mr.
Migliorini has previously served in a number of capacities, ranging from
Assistant Buyer to Chief Planner/Coordinator for several shoe companies
including Meldico Shoes, Perry Shoes, and Fasco Shoes.
CHARLES KOPPELMAN has been a director of the Company since June 1998.
Since February 4, 1998, Mr. Koppelman has been the Chairman and Chief Executive
Officer of CAK Universal Credit Corp., a joint venture created with Prudential
Securities to provide financing to the entertainment, sports and licensing
industries. From 1988 to 1997, Mr. Koppelman served as the Chairman and Chief
Executive Officer of EMI Capital Music, N.A.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION
OF MS. RHONDA BROWN AND MESSRS. STEVEN MADDEN, ARVIND DHARIA, JOHN BASILE,
CHARLES KOPPELMAN, JOHN L. MADDEN, PETER MIGLIORINI AND LES WAGNER. UNLESS
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<PAGE>
OTHERWISE INSTRUCTED OR UNLESS AUTHORITY TO VOTE IS WITHHELD, THE ENCLOSED PROXY
WILL BE VOTED FOR THE ELECTION OF THE ABOVE LISTED NOMINEES.
DIRECTOR COMPENSATION
Directors who are also employees of the Company are not paid any fees
or other remuneration, as such, for service on the Board or any of its
Committees. Each non-employee director receives an annual grant of an option to
purchase 10,000 shares of Common Stock at an exercise price per share equal to
the fair market value of the Common Stock on the date of grant. In addition,
non-employee directors are reimbursed by the Company for all expenses related to
attending meetings.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met two (2) times during the fiscal year ended
December 31, 1999. The Board of Directors has standing Audit, Real Estate and
Compensation Committees.
The Audit Committee of the Board of Directors consists of directors
Charles Koppelman, John L. Madden, Les Wagner, and Peter Migliorini, none of
whom was an employee of the Company during 1998. In April 1999, Mr. Wagner was
hired as the Vice President-Real Estate for the Steven Madden Retail, Inc., the
Company's wholly-owned subsidiary. This Committee is primarily responsible for
reviewing the services performed by the Company's independent auditors,
evaluating the Company's accounting policies and its system of internal
controls, and reviewing significant finance transactions.
The Compensation Committee of the Board of Directors consists of
directors Charles Koppelman, John Madden and Peter Migliorini. The Compensation
Committee is primarily responsible for approving salaries, bonuses and other
compensation for the Company's Chief Executive Officer and named executive
officers, reviewing management recommendations relating to new incentive
compensation plans and changes to existing incentive compensation plans, and for
administering the Company's stock plans, including granting options and setting
the terms thereof pursuant to such plan (all subject to approval by the Board of
Directors).
The Real Estate Committee of the Board of Directors consists of
directors Steven Madden, Rhonda Brown and Les Wagner. This Committee is
primarily responsible for overseeing real estate transactions for the Company.
In light of the Company's aggressive retail store expansion plan, the Real
Estate Committee was formed to consider proposed real estate transactions for
approval.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission ("SEC") initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than
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<PAGE>
ten percent stockholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
Except as set froth below, to the Company's knowledge, based solely on
its review of the copies of such reports furnished to the Company during the
year ended December 31, 1999, all Section 16(a) filing requirements applicable
to its officers, directors and greater than ten percent beneficial owners were
satisfied.
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<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Certain information concerning the Directors and Executive Officers of
the Company is set forth below:
NAME AGE POSITION(S) WITH THE COMPANY
Steven Madden 42 Chairman of the Board and Chief Executive Officer
Rhonda Brown 44 President, Chief Operating Officer and Director
Arvind Dharia 50 Chief Financial Officer, Director and Secretary
John Basile 48 Executive Vice President and Director
Gerald Mongeluzo 59 President of Adesso-Madden, Inc.
Mark Jankowski 39 President of Steven Madden Retail, Inc.
Robert Schmertz 36 President of Shoe Biz, Inc.
Joseph Masella 51 President of l.e.i. Wholesale Division
and Stevies, Inc.
Les Wagner 59 Vice President of Real Estate of Steven
Madden Retail, Inc. and Director
Charles Koppelman 59 Director
John L. Madden 52 Director
Peter Migliorini 51 Director
See "Biographical Summaries of Nominees for the Board of Directors" for
biographical summaries of Ms. R. Brown and Messrs. S. Madden, A. Dharia, J.
Basile, C. Koppelman, J. Madden, P. Migliorini and L. Wagner.
GERALD MONGELUZO has been President of Adesso-Madden, Inc., a wholly
owned subsidiary of the Company, since September 1995. Previously, Mr. Mongeluzo
was the founder and President of Adesso Shoes, Inc., a buying agent of private
label shoes. From 1987 through 1991, Mr. Mongeluzo was the President of the
Prima Barabaro Division of Cells Enterprise, Inc. Mr. Mongeluzo founded Prima
Shoes, Inc., a buying agent of private label shoes, and served as President from
1974 to 1987.
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<PAGE>
MARK JANKOWSKI has been the President of Steve Madden Retail, Inc.
since February 1999. Previously, Mr. Jankowski was the Company's Vice President
of Product Development from 1995 to 1999. From 1980 to 1995, Mr. Jankowski held
several posts at Edison Brothers including Head of Buying.
ROBERT SCHMERTZ has been the President of Shoe Biz, Inc., a subsidiary
of Steve Madden Retail Inc. since May 1998. Before joining the Company, Mr.
Schmertz was President of Daniel Scott Inc. from November 1995 to May 1998.
Previously, Mr. Schmertz was the East Coast Sales Manager for Impo International
from January 1993 through November 1995. From April 1990 to December 1992, Mr.
Schmertz served as a sales representative for Espirit de Corp. based in San
Fransciso, California. In June 1987, Mr. Schmertz entered the R.H. Macy & Co.
Inc. Executive Training Program and became an Associate Buyer for Women's Junior
Footwear in May 1989.
JOSEPH MASELLA has been President of Stevies, Inc. since February 2000
and the l.e.i. Division since July 1998. Previously, he was Vice President-Sales
of Adesso-Madden since October 1995. From 1992 to 1995, Mr. Masella served as
General Manager-Far East Division of US Shoe Co. From 1983 to 1992, Mr. Masella
was the President of T.A. Associates, a buying agent of branded and private
label footwear, which was acquired by US Shoe in 1995.
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<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth for each of the last three fiscal years
ended December 31, 1999, December 31, 1998 and December 31, 1997 the
remuneration paid by the Company to its Chief Executive Officer and the four
other most highly compensated executive officers:
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
LONG-TERM COMPENSATION
ANNUAL COMPENSATION
------------------------------------------------------
NAME AND FISCAL AWARDS OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(1) COMPENSATION
- --------------------------------------------------------------------------------
Steven Madden, President 1999 $275,000 $800,000 -0- $318,641(2)
and Chief Executive 1998 $274,231 $ 0.00 191,189 $315,394(2)
Officer 1997 $232,692 $473,496 540,000 $243,395(2)
Rhonda Brown, Chief 1999 $257,278 $537,920 -0-
Operating Officer 1998 $236,888 $242,493 188,811
1997 $208,342 $ 57,500 176,000
Arvind Dharia, 1999 $140,000 $ 39,367 25,000 $ 88,606(3)
Chief Financial Officer 1998 $140,000 $ 46,561 32,000 $ 86,891(3)
1997 $117,000 $ 0.00 40,000 $ 86,968(3)
John Basile 1999 $299,135 $ 88,299 100,000
Director of Operations 1998 $274,711 $189,000 250,000
1997 $250,000 $ 81,303 40,000
Gerald Mongeluzo 1999 $249,769 $ 50,000 -0-
President, Adesso- 1998 $230,992 $ 35,000 50,000
Madden, Inc. 1997 $215,615 $ 29,336 22,500
- -----------------
(1) Options to purchase shares of Common Stock.
(2) Life insurance premium paid on behalf of Mr. Madden.
(3) Life insurance premium paid on behalf of Mr. Dharia.
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<PAGE>
The following table sets forth certain 1999 information with respect to
options granted during the last fiscal year to the Company's Chief Executive
Officer and the other executive officers named in the above Summary Compensation
Table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Number of Percent of Total
Securities Options/SARS
Underlying Granted to Exercise or
Options/SARS Employees in Fiscal Base Price Expiration
Name Granted (#) Year% ($/Sh) Date
- ---- ----------- ----- ------ ----
Arvind Dharia 25,000 6.25% $11.81 June 4, 2006
John Basile 100,000 25% $10.83 June 4, 2006
The following table sets forth certain information with respect to options
exercised during the last fiscal year by the Company's Chief Executive Officer
and the executive officers named in the Summary Compensation Table, and with
respect to unexercised options held by such persons at the end of the last
fiscal year:
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Shares Value of Unexercised
Acquired Value Number of Securities in the Money
on Realized Underlying Unexercised Options/SARs at
Name Exercise (#) $ Options/SARS at FY-End (#) FY-End ($)(1)
- ---- ------------ -------- -------------------------- --------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven Madden 100,000 $852,655 1,151,189 ---- 18,327,206 ----
Rhonda Brown 60,000 $402,471 282,811 ---- 3,422,128 ----
Arvind Dharia 40,000 $264,980 92,000 ---- 1,077,500 ----
John Basile 75,000 $533,750 515,000 ---- 5,704,688 ----
Gerald Mongeluzo 40,000 $316,875 62,500 ---- 610,154 ----
</TABLE>
- -----------------
(1) Based upon a closing price on December 31, 1999 of $19.06 per share as
reported by The Nasdaq Stock Market.
10
<PAGE>
1999 STOCK PLAN
As of March 15, 1999, the Board of Directors of the Company, adopted
the 1999 Stock Plan (the "1999 Plan"), and on June 4, 1999 the Company's
stockholders approved the adoption of the 1999 Plan. The purpose of the 1999
Plan is to provide a means whereby directors and selected employees, officers,
agents, consultants, and independent contractors of the Company, may be granted
incentive stock options and/or nonqualified stock options to purchase shares of
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 by encouraging stock ownership in the Company.
The 1999 Plan is expected to provide even greater flexibility to the Company's
compensation methods, after giving due consideration to competitive conditions
and the impact of federal tax laws. See Proposal number 2 - Amendment of the
1999 Stock Plan.
OTHER OPTIONS
In March 1995, the Company issued options to purchase 1,000,000
shares of its Common Stock to a company wholly owned by the Company's President,
Chief Executive Officer and a stockholder. The options were subsequently
transferred to the President. The options which are fully exercisable, have an
exercise price of $1.75 and an exercise period of 10 years. Unearned
compensation was recorded in the amount of $575,000, which represents the
difference between the exercise price and the fair value of the stock on the
date of grant, and was classified as a component of stockholders' equity.
Unearned compensation was recorded in the amount of $575,000 which represented
the difference between the exercise price and the fair value of the stock on the
date of grant and was classified as a component of stockholders equity. The
unamortized portion was charged to operations in 1997 in connection with the
President's amended employment agreement.
In October 1998, the Company issued options exercisable for 30,000
shares of common stock at an exercise price of $4.00 per share to a former
consultant to the Company in connection with the settlement of a dispute with
such consultant concerning the payment of compensation. The options expire on
October 31, 2001.
EMPLOYMENT AGREEMENTS
In July 1997, the Company entered into a ten (10) year Employment
Agreement with Steven Madden, the Company's founder, Chief Executive Officer and
Chairman of the Board. In February 2000, the term of the Employment Agreement
with Mr. Madden was extended to December 31, 2009 and Mr. Madden relinquished
his title as President of the Company. The Company agreed to pay Mr. Madden an
annual salary of $275,000 for the two year period commencing January, 1998,
$300,000 for the year commencing January, 2000 and an incremental increase of
ten percent (10%) per annum for each year thereafter. The agreement provided for
payment of a signing bonus of $200,000, and annual non-accountable expense
allowance of $50,000 and use of an automobile having a retail selling price of
no more than $50,000. In addition, in the event of Mr. Madden's total disability
or his death, the Company is
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<PAGE>
obligated to pay to Mr. Madden's estate an amount equal to the appropriate
salary for the twelve (12) month period immediately subsequent to the date of
total disability or his death. In the event Mr. Madden's employment agreement is
terminated for any reason other than "for cause" or due to his "total
disability", the Company is obligated to pay Mr. Madden the balance of his
salary, fifty percent (50%) upon termination and the remaining fifty percent
(50%) in annual installments over the life of the agreement. Further, in the
event of a "change of control" of the Company, Mr. Madden is entitled to
terminate the Employment Agreement and to receive the balance of his salary upon
termination and an amount equal to his bonus (if any) for the preceding calendar
year multiplied by the remaining years left under his Employment Agreement. Mr.
Madden's Employment Agreement contains other customary provisions.
In July 1996, the Company entered into a three (3) year Employment
Agreement with Rhonda Brown pursuant to which Ms. Brown agreed to serve as the
Company's Chief Operating Officer. The Company agreed to pay Ms. Brown an annual
salary of $200,000 plus a 10% annual increase in the base salary. The agreement
provided that Ms. Brown received options to purchase 66,000 shares of the
Company's Common Stock at an exercise price equal to the closing bid price of
the Company's Common Stock on June 28, 1996, as quoted on The Nasdaq Stock
Market. Ms. Brown is entitled to receive a cash bonus equal to four percent (4%)
of the amount by which the aggregate EBIT-D (earnings before the payment of
interest or taxes or a deduction for depreciation) for the four (4) calendar
quarters ending on the most recent June 30th exceed EBIT-D for the four (4)
calendar quarters ending on the preceding June 30th. The agreement also provided
that on each August 30th during the term of the Agreement, Ms. Brown was
entitled to receive options (the "Option Bonus") to purchase a number of shares
of Common Stock equal to the dollar amount of the Cash Bonus. The options
comprising the Option Bonus are exercisable at a price equal to the average
closing bid price of the Company's shares of Common Stock for the five trading
days ending on August 29th. The agreement further provides that if at any time
during the term of the agreement, the Company's EBIT-D aggregated over four (4)
consecutive fiscal quarter equals or exceeds $20,000,000, Ms. Brown shall be
entitled to receive an additional bonus equal to two hundred thousand dollars
($200,000). As of May 1, 1998, the Company and Ms. Brown amended her employment
agreement so that (i) the term of her employment agreement is extended to July
31, 2001 and (ii) her annual base salary increase will be reduced from 10% per
annum to 5% per annum commencing on July 1, 2000. In addition, in the event that
a "change of control" of the Company occurs without Ms. Brown's consent, she is
entitled to receive an amount equal to the greater of (i) the balance of the
Base Salary during the remainder of the Term, and (ii) the Base Salary for two
years and Ms. Brown's most recent annual bonus multiplied by the number of years
remaining under the agreement. As of March 15, 1999, the Company and Ms. Brown
executed a second amendment to her employment agreement. The most recent
amendment accelerates the reduction in her annual base salary increase from July
1, 2000 to July 1, 1999 and reduces by one half (1/2) the number of the options
issuable as an Option Bonus. Ms. Brown's Employment Agreement contains other
customary provisions. In February 2000, Mrs. Brown was appointed as the
President of the Company and retains her title as Chief Operating Officer.
In January 1998, the Company entered into a four (4) year Employment
Agreement, subject to automatic extension for one (1) year unless either party
terminates the agreement with ninety (90) days' prior notice, with Arvind
Dharia, pursuant to which Mr. Dharia
12
<PAGE>
will serve as the Company's Chief Financial Officer. The Company agreed to pay
Mr. Dharia an annual salary of $140,000 subject to annual incremental increases
of ten percent (10%) commencing on the third anniversary of the Employment
Agreement. The agreement provides that Mr. Dharia receive an option to purchase
25,000 shares of the Company's Common Stock on June 30 of each year during the
term of the agreement. The options are to vest quarterly over a period of one
(1) year and are exercisable at an exercise price equal to the closing bid price
of the Company's Common Stock on June 30 of each year, as quoted on The Nasdaq
Stock Market. If the Company does not extend the term of Mr. Dharia's Employment
Agreement (other than "for cause" or "total disability"), Mr. Dharia shall
receive severance pay equal to three months salary on the expiration of the
agreement. In addition, in the event of Mr. Dharia's total disability or death
the Company is obligated to pay Mr. Dharia or his estate an amount equal to the
appropriate salary for the twelve (12) month period immediately subsequent to
the date of his total disability or death. In the event Mr. Dharia's employment
agreement is terminated for any reason other than "for cause" or due to his
"total disability", the Company is obligated to pay Mr. Dharia the balance of
his salary and benefits, fifty percent (50%) on January 1 after the date of
termination and the remaining fifty percent (50%) one year after. Further, in
the event of a "change in control" of the Company, Mr. Dharia is entitled to
terminate the Employment Agreement and to receive the balance of his salary upon
termination and an amount equal to his bonus (if any) for the preceding calendar
year multiplied by the remaining years left under his Employment Agreement plus
$200,000 as severance pay. Mr. Dharia's Employment Agreement contains other
customary provisions.
As of January 1998, the Company entered into a three (3) year
Employment Agreement with John Basile pursuant to which Mr. Basile will serve as
the Company's Executive Vice President-Product Development and Design. The
Company agreed to pay Mr. Basile an annual salary of $275,000 subject to an
annual increase of $25,000 on each anniversary of the Employment Agreement. The
agreement provides that Mr. Basile receive an option to purchase 50,000 shares
of the Company's Common Stock on the date of execution of the Employment
Agreement at an exercise price of $7.50 per share. In addition, the agreement
provided that Mr. Basile receive on the date on which the Company's 1998 Stock
Plan is approved by stockholders (and subject to such approval being received)
(a) an option to purchase 200,000 shares of the Company's Common Stock which
options vested immediately and are exercisable at an exercise price of $7.50 per
share, and (b) an option to purchase 100,000 shares of the Company's Common
Stock which options vested on December 31, 1999 and are exercisable at a price
equal to the average closing bid price of he Company's Common Stock for the five
(5) trading days ending two (2) trading days prior to the date of such
stockholder approval. During the term of the Employment Agreement, Mr. Basile
shall be entitled to receive a cash performance bonus based on the annual
earnings of the Company's wholesale division (for the sale of Steve Madden(R)
and David Aaron(R) footwear brands) before the payment of interest and taxes
("Wholesale EBIT"). By March 30, 1998, 1999, 2000 and 2001, Mr. Basile will be
entitled to receive a cash bonus equal to four percent (4%) of Wholesale EBIT
for the fiscal year ending on the December 31 preceding such date, calculated in
accordance with generally accepted accounting principles. The agreement further
provides that if the Company records Wholesale EBIT of not less than an
aggregate of $10,000,000 during any four (4) consecutive fiscal quarters during
the term of the Employment Agreement, Mr. Basile shall be entitled to receive an
additional cash bonus of $100,000 and an option to purchase 100,000 shares of
the Company's
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<PAGE>
Common Stock (subject to the approval of the Company's stockholders) which
options shall vest over a period of five (5) years from the date of grant and
are exercisable at a price equal to the average closing bid price of the
Company's shares of Common Stock for the five (5) trading days ending two (2)
trading days prior to the date of issuance. In the event Mr. Basile's Employment
Agreement is terminated for any reason other than "for cause" or due to his
"total disability", the Company is obligated to pay Mr. Basile's salary through
the date of termination and severance compensation equal to the salary due to
Mr. Basile for the remainder of the term of his Employment Agreement (as if it
had not been terminated) together with all options due to be granted to him
under the Employment Agreement. Mr. Basile's Employment Agreement contains other
customary provisions.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") is responsible for reviewing and
approving the Company's compensation policies and the compensation paid to its
executive officers, including the Chief Executive Officer and the other named
executive officers. The Compensation Committee is comprised of Charles
Koppelman, Peter Migliorini and John Madden each of whom are non-employee
Directors of the Company.
The Compensation Committee's goal is to develop executive compensation
policies and practices that are consistent with and linked to the Company's long
term goal of maximizing shareholder value. The program is designed to facilitate
the long-term success and growth of the Company through the attraction,
motivation, and retention of outstanding executives.
The objectives of the Company's executive compensation programs are to:
(i) attract and retain the highest quality executives, (ii) inspire and motivate
executive officers to increase Company performance, (iii) align executive
officers' financial interest with those of the Company's long-term investors and
(iv) reward executive officers for exceptional individual contributions to the
achievement of the Company's objectives.
Executive compensation consists of three components: base salary, annual
incentive bonuses and long-term incentive awards (stock options). Each
compensation component is offered to executives in varying combinations,
structured in each case, to meet varying business objectives and to provide a
level of total compensation comparable to similarly situated public companies.
The Company has negotiated employment agreements with respect to base
salary, annual incentive awards and stock option awards for each of the
Company's named executive officers based upon the Company's performance and
individual performance.
Steven Madden, the Company's Chairman of the Board and Chief Executive
Officer, is eligible to participate in the same compensation plans available to
the other executive officers.
The Internal Revenue Code of 1986 prohibits the Company from taking a tax
deduction in any year for compensation paid the persons who would be named
executive officers in that year in
14
<PAGE>
excess of $1 million unless such compensation is "performance-based
compensation." The Company did not pay in 1999 any officer compensation which
will be subject to the $1 million deduction limitation. The Compensation
Committee will take into consideration the $1 million deduction limitation when
structuring future compensation packages for the Company's executive officers
and, if appropriate and in the best interests of the Company, will conform such
packages to permit the Company to take a deduction for the full amount of all
compensation.
COMPENSATION COMMITTEE
Charles Koppelman
John Madden
Peter Migliorini
STOCK PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
cumulative total shareholder return on the Common Stock during the period
beginning on December 10, 1995 (the date on which the Common Stock began trading
on The Nasdaq SmallCap Market) and ending on December 31, 1999 with the
cumulative total return on the Russell 2000 Index and the Standard & Poor's
Footwear Index. The comparison assumes that $100 was invested on December 31,
1995 in the Company's Common Stock and in the foregoing indices and assumes the
reinvestment of dividends.
GRAPH APPEARS HERE
[PLOT POINTS TO COME]
- --------------------------------------------------------------------------------
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- --------------------------------------------------------------------------------
Steven Madden, Ltd. 100 63.08 93.07 104.62 234.61
- --------------------------------------------------------------------------------
Russell 2000 Index 100 114.76 138.31 133.54 159.75
- --------------------------------------------------------------------------------
S&P Footwear Index 100 165.01 110.39 106.93 125.79
- --------------------------------------------------------------------------------
15
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information as of the Record Date
with respect to the beneficial ownership of the outstanding shares of the
Company's Common Stock by (i) each person known by the Company to beneficially
own five percent or more of the outstanding shares; (ii) the Company's officers
and directors; and (iii) the Company's officers and directors as a group. A
person is deemed to be a beneficial owner of any securities of which that person
has the right to acquire beneficial ownership within sixty (60) days. See
"Compensation of Directors and Executive Officers."
Amount and
Nature of Percentage
Name and Address Beneficial (%) of
of Beneficial Owner(1) Ownership(2) Class(2)
---------------------- ------------- --------
Steven Madden(3) 2,341,005(4) 18.0%
BOCAP Corp.(5) 2,341,005(6) 18.0%
John Madden(7) 10,000(8) *
Arvind Dharia(9) 92,000(10) *
John Basile(11) 515,000(12) 4.2%
Les Wagner(13) 20,000(14) *
Rhonda Brown(15) 282,811(16) 2.3%
Gerald Mongeluzo(17) 62,500(18) *
Joseph Masella(19) 80,000(20) *
Mark Jankowski(21) 80,000(22) *
Robert Schmertz(23) 7,500 *
Peter Migliorini(24) 50,000(25) *
Charles Koppelman(26) 123,000(27) 1.0%
J.P. Morgan
& Co. Incorporated(28) 665,150 5.6%
Directors and Officers
as a Group (12 persons) 3,713,816 25.9
- -----------------
* indicates beneficial ownership of less than 1%.
(1) Unless otherwise indicated, the address of each beneficial owner is c/o
Steven Madden, Ltd., 52-16 Barnett Avenue, Long Island City, New York
11104.
(2) Beneficial ownership as reported in the table above has been determined in
accordance with Item 403 of Regulation S-K of the Securities Act of 1933
and Rule 13(d)-3 of the Securities Exchange Act. and based upon 11,875,909
shares of Common Stock outstanding.
(3) Mr. Madden is the Chairman of the Board and Chief Executive Officer of
the Company.
(4) Includes (i) 1,184,816 shares of Common Stock held by BOCAP, a
corporation owned by Mr. Madden, (ii) 1,151,189 shares of Common Stock
issuable upon the exercise of options held by Mr. Madden. See
"Executive Compensation-Employment Agreements."
(5) BOCAP Corp. is a company wholly-owned by Steven Madden, the Chairman of
the Board, Chief Executive Officer and President of the Company.
(6) Includes (i) 1,151,189 shares of Common Stock issuable upon the
exercise of options held by Mr. Madden and (ii) 5,000 shares of Common
Stock held by Mr. Madden.
(7) John Madden, a director of the Company, is the brother of Steven
Madden.
(8) Includes 10,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Madden.
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<PAGE>
(9) Mr. Dharia is a Director and the Chief Financial Officer of the Company.
(10) Includes 92,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Dharia.
(11) Mr. Basile is a director and Executive Vice President of the Company.
(12) Includes 515,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Basile.
(13) Mr. Wagner is a director of the Company and the Vice President-Real
Estate of Steven Madden Retail, Inc.
(14) Includes 20,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Wagner.
(15) Ms. Brown is a Director and the President and Chief Operating Officer
of the Company.
(16) Includes 282,811 shares of Common Stock issuable upon the exercise of
options held by Ms. Brown.
(17) Mr. Mongeluzo is the President of Adesso-Madden, Inc., a subsidiary of
the Company.
(18) Includes 62,500 shares of Common Stock issuable upon the exercise of
options held by Mr. Mongeluzo.
(19) Mr. Masella is the President of l.e.i. wholesale division and Stevies,
Inc., a subsidiary of the Company.
(20) Includes 80,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Masella.
(21) Mr. Jankowski is the President of Steven Madden Retail, Inc., a
subsidiary of the Company.
(22) Includes 80,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Jankowski.
(23) Mr. Schmertz is the President of Shoe Biz, Inc., a subsidiary of the
Company.
(24) Mr. Migliorini is a director of the Company.
(25) Includes 50,000 shares issuable upon the exercise of options held by
Mr. Migliorini.
(26) Mr. Koppelman is a director of the Company.
(27) Includes 110,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Koppelman.
(28) Based upon a Schedule 13G filed with the Securities and Exchange
Commission on February 14, 2000. The address for such stockholder is 60
Wall Street, New York, NY 10260.
CERTAIN TRANSACTIONS
BOCAP Corporation, a company wholly-owned by Steven Madden, the
Company's Chairman of the Board, Chief Executive Officer and President, was a
defendant in a lawsuit which was settled in February 1998. In connection with
the settlement, BOCAP borrowed $2.9 million (the "Loan") from the Company's
factoring company and pledged 899,000 shares of the Company's Common Stock owned
by BOCAP as collateral for the repayment therefor (the "Pledged Shares"). In
addition, the Company guaranteed BOCAP's obligations under the Loan until the
Pledged Shares were registered with the Securities and Exchange Commission for
sale to the public or the Loan was repaid in full, whichever occurred first. A
registration statement covering the sale of the Pledged Shares was declared
effective on March 5, 1998 and the Company was released of its obligations under
the Guaranty shortly thereafter.
17
<PAGE>
PROPOSAL TWO
AMENDMENT OF THE 1999 STOCK PLAN
At the 1999 Annual Meeting of Stockholders, the Company's stockholders
approved the adoption of the Company's 1999 Stock Plan (the "1999 Plan"). The
1999 Plan originally authorized up to 400,000 shares of Company common stock for
grants of non-qualified and incentive stock options. The Board of Directors has
amended the 1999 Plan, subject to stockholder approval, to authorize 575,000
additional shares for future awards (the "1999 Plan Proposal").
Because of the limited number of remaining shares that may be granted
under the 1999 Plan, the Board of Directors believes it is appropriate and
necessary at this time to authorize additional shares for future awards.
Authorization of these additional shares will allow grants to employees,
consultants and directors in furtherance of the Company's goal of continuing to
achieve significant gains in stockholder value and operating results.
The Company intends to continue awarding options 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. The following is a summary of the principal features of the 1999
Plan. The summary is qualified in its entirety be reference to the complete text
of the 1999 Plan, as proposed to be amended. The proposed amendment to the 1999
Plan is set forth as Annex A to this Proxy Statement.
DESCRIPTION OF THE 1999 PLAN
The maximum number of shares of Common Stock with respect to which awards
may be presently granted pursuant to the 1999 Plan is 400,000 shares. The 1999
Plan Proposal would authorize the use of up to an additional 575,000 shares of
the Company's common stock for a total of 975,000 shares being subject of the
1999 Plan. Shares issuable under the 1999 Plan may be either treasury shares or
authorized but unissued shares. The number of shares available for issuance will
be subject to adjustment to prevent dilution in the event of stock splits, stock
dividends or other changes in the capitalization of the Company.
Subject to compliance with Rule 16b-3 of the Securities Exchange Act of
1934, 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, such as the Compensation 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". 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.
18
<PAGE>
Options granted under the 1999 Plan may be "incentive stock options"
("Incentive Options") within the meaning of Section 422 of the Internal Revenue
Code (the "Code") or stock options which are not incentive stock options
("Non-Incentive Options" and, collectively with Incentive Options, hereinafter
referred to as "Options"). 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.
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
(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.
Upon a Change in Control of the Company, any award carrying a right to
exercise that was not previously exercisable shall become fully exercisable, the
restrictions, deferral limitations and forfeiture conditions applicable to any
other award granted shall lapse and any performance conditions imposed with
respect to awards shall be deemed to be fully achieved.
Awards under the 1999 Plan may not be transferred, pledged, mortgaged,
hypothecated or otherwise encumbered other than by will or under the laws of
descent and distribution, except that the Committee may permit transfers of
awards for estate planning purposes if, and to the extent, such transfers do not
cause a participant who is then subject to Section 16 of the Exchange Act to
lose the benefit of the exemption under Rule 16b-3 for such transactions.
19
<PAGE>
The Board may amend, alter, suspend, discontinue or terminate the 1999
Plan at any time, except that any such action shall be subject to stockholder
approval at the annual meeting next following such Board action if such
stockholder approval is required by federal or state law or regulation or the
rules of any exchange or automated quotation system on which the Common Stock
may then be listed or quoted, or if the Board of Directors otherwise determines
to submit such action for stockholder approval. In addition, no amendment,
alteration, suspension, discontinuation or termination to the 1999 Plan may
materially impair the rights of any participant with respect to any award
without such participant's consent. Unless terminated earlier by action of the
Board of Directors, the 1999 Plan shall terminate ten (10) years after adoption
by the shareholders.
RECOMMENDATION OF BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1999 PLAN
PROPOSAL. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED FROM STOCKHOLDERS WILL
BE VOTED IN FAVOR OF THE PROPOSED 1999 PLAN.
PROPOSAL THREE
RATIFICATION OF SELECTION OF THE FIRM OF RICHARD A. EISNER &
COMPANY, LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY
The Board of Directors upon recommendation of the members of the Audit
Committee, concluded that the continued engagement of Richard A. Eisner &
Company, LLP as the Company's independent public accountants for the 2000 fiscal
year was in the best interests of the Company. The Board of Directors recommends
that Stockholders ratify its choice of Richard A. Eisner & Company, LLP.
The Board of Directors unanimously recommends a vote FOR the ratification of the
selection of Richard A. Eisner & Company, LLP as independent public accountants
for the Company. Unless marked to the contrary, proxies received from
Stockholders will be voted in favor of the proposed amendment.
UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED FROM STOCKHOLDERS WILL BE VOTED
IN FAVOR OF THE PROPOSED AMENDMENT.
STOCKHOLDER PROPOSALS AND SUBMISSIONS
If any Stockholder wishes to present a proposal for inclusion in the proxy
materials to be solicited by the Company's Board of Directors with respect to
the 2000 Annual Meeting of Stockholders, that proposal must be presented to the
Company's secretary prior to December 1, 2000.
20
<PAGE>
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. YOUR VOTE IS IMPORTANT. IF YOU ARE A
STOCKHOLDER OF RECORD AND ATTEND THE ANNUAL MEETING AND WISH TO VOTE IN PERSON,
YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE VOTE.
STEVEN MADDEN, LTD.
April 12, 2000 By: /s/ STEVEN MADDEN
--------------------------------
Steven Madden, Chairman of the
Board and Chief Executive Officer
21
<PAGE>
ANNEX A
STEVEN MADDEN, LTD.
1999 STOCK PLAN
This 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 __day of May, 2000
22
<PAGE>
STEVEN MADDEN, LTD. PROXY
STEVEN MADDEN, LTD.
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE CLEARLY INDICATE A RESPONSE BY CHECKING EITHER THE PROXY (THE "PROXY")
[FOR] OR [AGAINST] BOX NEXT TO EACH OF THE THREE (3) PROPOSALS
THE UNDERSIGNED HEREBY APPOINT(S) MR. STEVEN MADDEN WITH THE POWER
OF SUBSTITUTION AND RESUBSTITUTION TO VOTE ANY AND ALL SHARES OF CAPITAL STOCK
OF STEVEN MADDEN, LTD. (THE "COMPANY") WHICH THE UNDERSIGNED WOULD BE ENTITLED
TO VOTE AS FULLY AS THE UNDERSIGNED COULD DO IF PERSONALLY PRESENT AT THE ANNUAL
MEETING OF THE COMPANY, TO BE HELD ON MAY 12, 2000, AT 10:00 A.M. LOCAL TIME,
AND AT ANY ADJOURNMENTS THEREOF, HEREBY REVOKING ANY PRIOR PROXIES TO VOTE SAID
STOCK, UPON THE FOLLOWING ITEMS MORE FULLY DESCRIBED IN THE PROXY STATEMENT FOR
THE ANNUAL MEETING (RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED):
1. ELECTION OF DIRECTORS
[ ] VOTE
[ ] FOR ALL NOMINEES LIST BELOW EXCEPT AS MARKED TO THE
CONTRARY BELOW
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE NOMINEE'S NAME
BELOW.)
[ ] ABSTAIN
STEVEN MADDEN, RHONDA J. BROWN, ARVIND DHARIA, JOHN BASILE, CHARLES
KOPPELMAN, JOHN L. MADDEN, PETER MIGLIORINI, AND LES WAGNER
2. AMENDMENT OF THE 1999 STOCK PLAN
[ ] FOR THE AMENDMENT OF THE 1999 STOCK PLAN
[ ] WITHHOLD AUTHORITY
[ ] ABSTAIN
<PAGE>
3. RATIFICATION OF THE APPOINTMENT OF RICHARD A. EISNER & COMPANY,
LLP. AS INDEPENDENT AUDITORS OF THE COMPANY FOR FISCAL YEAR 2000.
[ ] FOR THE RATIFICATION OF THE APPOINTMENT OF RICHARD A.
EISNER & COMPANY, LLP.
[ ] WITHHOLD AUTHORITY
[ ] ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE; UNLESS OTHERWISE
INDICATED, THIS PROXY WILL BE VOTED FOR ELECTION OF THE EIGHT (8) NOMINEES NAMED
IN ITEM 1, THE AMENDMENT OF THE 1999 STOCK PLAN IN ITEM 2, AND THE RATIFICATION
OF THE APPOINTMENT OF RICHARD A. EISNER & CO., LLP. AS INDEPENDENT AUDITORS OF
THE COMPANY FOR FISCAL YEAR 2000 IN ITEM 3.
IN HIS DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE
ACCOMPANYING POSTAGE PRE-PAID ENVELOPE. THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF STEVEN MADDEN, LTD.
DATED:___________________________________
_________________________________________
SIGNATURE
_________________________________________
SIGNATURE IF JOINTLY OWNED:
_________________________________________
PRINT NAME:
PLEASE SIGN EXACTLY AS THE NAME APPEARS ON YOUR STOCK CERTIFICATE. WHEN SHARES
OF CAPITAL STOCK ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, OR CORPORATE OFFICER,
PLEASE INCLUDE FULL TITLE AS SUCH. IF THE SHARES OF CAPITAL STOCK ARE OWNED BY A
CORPORATION, SIGN IN THE FULL CORPORATE NAME BY AN AUTHORIZED OFFICER. IF THE
SHARES OF CAPITAL STOCK ARE OWNED BY A PARTNERSHIP, SIGN IN THE NAME OF THE
PARTNERSHIP BY AN AUTHORIZED OFFICER.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE
