Chief Operating Officer Employment Agreement

EXHIBIT 10.07


EMPLOYMENT AGREEMENT OF RICHARD OLICKER


EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT, dated as of January 3, 2001, by and between Steven Madden, Ltd., a Delaware corporation (the "Company"), and RICHARD OLICKER, an individual residing at 351 East 84th Street, Apt. 18D, New York, NY 10028 (the "Executive").


W I T N E S S E T H :
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WHEREAS, the Company desires to secure the services of the Executive upon the terms and conditions hereinafter set forth; and


WHEREAS, the Executive desires to render services to the Company upon the terms and conditions hereinafter set forth.


NOW, THEREFORE, the parties mutually agree as follows:


SECTION 1. EMPLOYMENT. The Company hereby employs Executive and the Executive hereby accepts such employment, as the Company's Executive Vice President and Chief Operating Officer, subject to the terms and conditions set forth in this Agreement.


SECTION 2. DUTIES; EXCLUSIVE SERVICES; BEST EFFORTS. The Executive shall perform all duties incident to the position of Executive Vice President and Chief Operating Officer as well as any other duties as may from time to time be assigned by the President of the Company or her designee, and agrees to abide by all By-laws, policies, practices, procedures or rules of the Company. The Executive agrees to devote his best efforts, energies and skill to the discharge of the duties and responsibilities attributable to his position, and to this end, he will devote his full business time and attention exclusively to the business and affairs of the Company. The Executive also agrees that he


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shall not take personal advantage of any business opportunities which arise during his employment and which may benefit the Company. All material facts regarding such opportunities must be promptly reported to the President for consideration by the Company. Notwithstanding the foregoing, the Executive may donate his time and efforts to charitable causes so long as such endeavors do not effect his ability to perform his duties under this Agreement.


SECTION 3. TERM OF EMPLOYMENT; VACATION.


(a) Unless extended in writing by both the Company and the Executive, the term of the Executive's employment shall be for a period of twenty four (24) months commencing on the date hereof, subject to earlier termination by the parties pursuant to Sections 5 and 6 hereof (the "Term").


(b) The Executive shall be entitled to three (3) weeks vacation during each year of the Term.


SECTION 4. COMPENSATION OF EXECUTIVE.


4.1 SALARY. The Company shall pay to Executive a base salary of Two Hundred Twenty Five Thousand ($225,000) dollars per annum, subject to increases in accordance with the terms of the last sentence of this Section 4.1 (the "Base Salary"), less such deductions as shall be required to be withheld by applicable law and regulations. The Base Salary payable to Executive shall be paid at such regular weekly, biweekly or semi-monthly time or times as the Company makes payment of its regular payroll in the regular course of business. Commencing on the first anniversary of the date hereof, and on each anniversary thereafter during the Term, the Base Salary shall be increased by 5% of the then Base Salary.


4.2 SIGNING BONUS. On the date hereof and upon the execution of this Agreement by the parties, the Executive shall receive non-qualified stock options (or in lieu thereof, at Executive's option, and to the extent available, incentive stock options) exercisable for an aggregate of 75,000 shares at an exercise price equal to the closing price of the Company's common


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stock on January 2, 2001 as reported by The Nasdaq Stock Market. The option shall vest in four equal installments on the last day of each fiscal quarter commencing on March 31, 2001.


4.3 PERFORMANCE BONUSES.


(a) During the term of this Agreement, the Executive shall be entitled to receive a cash performance bonus based upon the Company's net earnings before the payment of interest expenses and taxes and deductions for depreciation ("EBIT-D") as reflected on the Company's annual report on Form 10-K (or its annual financial statements in the event that the Company no longer prepares annual reports on Form 10-K). By April 15, 2002 and 2003, the Company shall pay to the Executive a cash bonus equal to two percent (2%) of the amount by which the aggregate EBIT-D for the fiscal year ending on the most recent December 31st exceeds EBIT-D for the fiscal year ending on the preceding December 31st (the "Annual Cash Bonus"). For example, if EBIT-D for the year ending December 31, 2001 equals $20,000,000, and EBIT-D for the year ending December 31, 2000 was $15,000,000, the Executive would be entitled to receive an Annual Cash Bonus equal to $100,000 ($20,000,000 - $15,000,000 = $5,000,000 x .02 = $100,000). Notwithstanding the foregoing, under no circumstances will the Executive be entitled to receive an Annual Cash Bonus in excess of one hundred fifty percent (150%) the then applicable Base Salary.


(b) In addition to the Annual Cash Bonus, the Executive shall be shall be entitled to receive a one-time cash bonus of $125,000 in the event that the aggregate EBIT-D for any four (4) consecutive fiscal quarters during the Term equals or exceeds $40,000,000. Such bonus shall be paid within sixty (60) days following the end of the last applicable fiscal quarter.


(c) On each June 30th during the Term the Executive shall be entitled to receive non-qualified stock options (the "Option Bonus") to purchase a number of shares of Common Stock equal to thirty percent (30%) of the dollar amount of the Annual Cash Bonus due for the fiscal year ending on the preceding December


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31st (i.e. if the Cash Bonus equals $100,000, then the Executive shall receive options to purchase 30,000 shares of Common Stock). The options comprising the Option Bonus shall vest quarterly over a one (1) year period commencing on the September 30th following the date of grant and be exercisable at a price equal to the closing bid price of the Company's shares of Common Stock on the date of grant as reported by The Nasdaq Stock Market.


4.4 EXPENSES. During the Term, the Company shall promptly reimburse the Executive for all reasonable and necessary travel expenses and other disbursements incurred by the Executive on behalf of the Company, in performance of the Executive's duties hereunder, assuming Executive has received prior approval for such travel expenses and disbursements by the Company to the extent possible consistent with corporate practices with respect to the reimbursement of expenses incurred by the Company's senior executives. In addition, the Company shall secure $120,000 of long term disability insurance coverage for the Executive. The premium for such policy shall be paid 75% by the Company and 25% by the Executive. The Company also agrees to pay (i) reasonable expenses incurred by the Executive in connection with his operation of a cellular telephone, and (ii) $500 per month for expenses incurred by the Executive in connection with his ownership and operation of an automobile.


4.5 BENEFITS. The Executive shall be permitted during the Term to participate in any hospitalization or disability insurance plans, health programs, pension plans, bonus plans or similar benefits that may be available to other executives of the Company (including coverage under any officers and directors liability insurance policy), subject to such eligibility rules as are applied to senior managers generally.


5. DEATH OR DISABILITY OF THE EXECUTIVE. If the Executive (i) dies or (ii) is incapacitated or disabled by accident, sickness or otherwise so as to render the Executive mentally or physically incapable of performing the services required to be performed under this Agreement for a period of 90 consecutive days or 120 days in any period of 360 consecutive days (a


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"Disability"), the Company may, at the time or during the period of such Disability, at its option, terminate the employment of the Executive under this Agreement immediately upon giving the Executive written notice to that effect.


6. TERMINATION.


(a) The Company may terminate the employment of the Executive and all of the Company's obligations under this Agreement at any time for Cause (as hereinafter defined) by giving the Executive notice of such termination, with reasonable specificity of the details thereof. "Cause" shall include, without limitation, the following: (i) failure or neglect, by the Executive to perform the duties of the Executive's position; (ii) failure of the Executive to obey orders given by the Company or his supervisors; (iii) misconduct by the Executive in connection with the performance of any of his duties, including, without limitation, misappropriation of funds or property of the Company, securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of the Company, misrepresentation to the Company, or any violation of law or regulations on Company premises or to which the Company is subject; (iv) commission by the Executive of an act involving moral turpitude, dishonesty, theft or unethical business conduct, or conduct which impairs or injures the reputation of, or harms, the Company; (v) disloyalty by the Executive, including without limitation, aiding a competitor; (vi) failure by the Executive to devote his full business time and best efforts to the Company's business and affairs; (vii) failure by the Executive to work exclusively for the Company; (viii) failure to fully cooperate in any investigation by the Company; (ix) any material breach of this Agreement or Company rules; (x) any other act of misconduct by the Executive; or (xi) the Executive's abuse of alcohol or other drugs or controlled substances. A termination pursuant to this Section 6(a) shall take effect 20 days after the giving of written notice to the Executive unless the Executive shall, during such 20-day ...