Edgar Filing: STEVEN MADDEN, LTD.

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )

Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12

STEVEN MADDEN, LTD.
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(Name of Registrant as Specified in its Charter)

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(Name of Person(s) Filing Proxy Statement if other than the Registrant

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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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4) Date Filed:

STEVEN MADDEN, LTD.
52-16 BARNETT AVENUE
LONG ISLAND CITY, NY 11104

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 25, 2007

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To the Stockholders of Steven Madden, Ltd.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of the Company will be held on May 25, 2007, at the Company's
showroom located at 1370 Avenue of the Americas, 14th Floor, 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 nine directors to the Board of Directors of
the Company to serve until the next annual meeting of
the Company's stockholders or until their successors
are duly elected and qualified;

2. To approve an amendment to the Company's 2006 Stock
Incentive Plan to increase the maximum number of
shares of Common Stock available for issuance under
such plan from 1,200,000 shares to 1,550,000 shares;

3. To ratify the appointment of Eisner LLP as the
Company's independent registered public accounting
firm for the fiscal year ending December 31, 2007;
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 5, 2007 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 Annual Meeting and for ten days prior to the meeting
for any purpose germane to the meeting, between the hours of 9:00 a.m. and 4:30
p.m., local time, at the Company's principal executive offices at 52-16 Barnett
Avenue, Long Island City, NY 11104, by contacting the Secretary of the Company.

BY ORDER OF THE BOARD OF DIRECTORS

April 30, 2007
/s/ JAMIESON A. KARSON
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Jamieson A. Karson
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.

STEVEN MADDEN, LTD.
52-16 BARNETT AVENUE
LONG ISLAND CITY, NY 11104

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PROXY STATEMENT

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INTRODUCTION

This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders and form of proxy are being furnished to the holders of common
stock of Steven Madden, Ltd., a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company (the "Board of Directors" or the "Board") for use at the 2007 Annual
Meeting of Stockholders of the Company (the "Annual Meeting") to be held at the
Company's showroom located at 1370 Avenue of the Americas, 14th Floor, New York,
New York on Friday, May 25, 2007 at 10:00 a.m., local time, and at any
adjournments thereof. These proxy materials are being sent on or about May 3,
2007 to holders of record of common stock, $.000067 par value, of the Company
(the "Common Stock") at the close of business on April 5, 2007 (the "Record
Date"). The Company's Annual Report for the fiscal year ended December 31, 2006
("2006 Fiscal Year"), including audited financial statements, is being sent to
stockholders together with these proxy materials.

The Annual Meeting has been called to consider and take action on the
following proposals: (i) to elect nine directors to the Board of Directors of
the Company to serve until the next annual meeting of the Company's stockholders
or until their successors are duly elected and qualified, (ii) to approve an
amendment to the Company's 2006 Stock Incentive Plan to increase the maximum
number of shares of Common Stock available for issuance under such plan from
1,200,000 shares to 1,550,000 shares, (iii) to ratify the appointment of Eisner
LLP as the Company's independent registered public accounting firm for the
fiscal year ending December 31, 2007, 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 of the Company at the close of
business on 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.

INFORMATION CONCERNING SOLICITATION AND VOTING

As of the Record Date, there were outstanding 20,453,888 shares of
Common Stock (excluding treasury shares) held by approximately 126 holders of
record and 3,934 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 each matter presented at the meeting
for each share held of record.

The presence, in person or by proxy, of the holders of a majority of
the shares eligible to vote is necessary to constitute a quorum in connection
with the transaction of business at the Annual Meeting. Abstentions and broker
non-votes (i.e., proxies from brokers or nominees indicating that such persons
have not received instructions from the beneficial owner or other persons
eligible to vote shares as to a matter with respect to which the brokers or
nominees do not have discretionary power to vote) are counted as present for
purposes of determining the presence or absence of a quorum for the transaction
of business. If a quorum should not be present, the Annual Meeting may be
adjourned until a quorum is obtained.

Abstentions and broker non-votes will have no effect on the election of
directors (Proposal 1), which is by plurality vote.

Abstentions will, in effect, be votes against the amendment to the
Company's 2006 Stock Incentive Plan (Proposal 2) and against the ratification of
the selection of the independent registered public accounting firm (Proposal 3),
as these items require the affirmative vote of a majority of the shares present
and eligible to vote on such items. Broker non-votes will not be considered
votes cast on Proposals 2 or 3 and the shares represented by broker non-votes
with respect to these proposals will be considered present but not eligible to
vote on these proposals.

Brokers who hold shares in street name may vote in their discretion on
behalf of beneficial owners from whom they have not received instruction with
respect to routine matters. Proposals 1 and 3 should be treated as routine
matters. Proposal 2 is not considered a routine matter and, consequently,
without voting instructions, brokers cannot vote in their discretion on behalf
of beneficial owners from whom they have not received instruction.

The expense of preparing, printing and mailing this Proxy Statement,
the exhibits hereto 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 Common Stock held of record by them and will provide reimbursements
for the cost of forwarding the material in accordance with customary charges.
The Company has entered into an agreement with D.F. King & Co., Inc. to assist
in the solicitation of proxies and provide related advice and informational
support. The total expense of this engagement, including customary
disbursements, is not expected to exceed $10,000 in the aggregate.

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 by an officer or attorney thereof duly authorized, and
deposited either at the principal executive offices 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 prior to the vote upon such matters, and upon either of
such deposits the proxy shall be 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 PERSONS NAMED IN THE PROXY WITH RESPECT TO ANY OTHER BUSINESS
THAT MAY PROPERLY 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 stockholders shares.

MATTERS TO BE CONSIDERED AT ANNUAL MEETING

PROPOSAL ONE - ELECTION OF DIRECTORS

Under the Amended and Restated 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 director. Subject to the foregoing limitation, the number of directors
may be fixed from time to time by action of the directors. The Company's Board
of Directors presently consists of nine directors whose terms expire at the
Annual Meeting.

The Nominating/Corporate Governance Committee of the Board of Directors
and the Board of Directors have nominated and are recommending the election of
each of the nine nominees set forth below to serve as a director of the Company
until the next annual meeting of the Company's stockholders or until his
successor is duly elected and qualified. The names and biographical summaries of
the nine persons who have been nominated by the Nominating/Corporate Governance
Committee of the Board of Directors and the Board of Directors to stand for
election at the Annual Meeting have been provided below for your information.

BIOGRAPHICAL SUMMARIES OF NOMINEES FOR THE BOARD OF DIRECTORS

Jamieson A. Karson has been the Chief Executive Officer of the Company
since July 1, 2001 and Chairman of the Board of Directors since July 22, 2004.
Mr. Karson was the Vice Chairman of the Board of Directors of the Company from
July 1, 2001 until such time that he became the Chairman of the Board of
Directors. Mr. Karson has been a director of the Company since January 2, 2001.
Prior to joining the Company as Chief Executive Officer, Mr. Karson practiced
law for over 17 years. He was a partner in the New York City law firm of
Tannenbaum Helpern Syracuse & Hirshtritt LLP from January 1, 1997 through June
30, 2001, where he served on the firm's three person Finance Committee. He was a
partner at the law firm of Karson McCormick from February 1992 through December
31, 1996. Prior to that, Mr. Karson was an associate attorney at the law firm of
Shea & Gould.

Jeffrey Birnbaum has been a director of the Company since June 2003.
Mr. Birnbaum has been the Product Development Manager of Dolphin Footwear
Company since August 1982. Dolphin is one of the Company's domestic and foreign
suppliers. Mr. Birnbaum graduated from Tulane University in 1982.

Marc S. Cooper has been a director of the Company since July 2001. Mr.
Cooper has served as a Managing Director of Peter J. Solomon Company in its
Mergers and Acquisitions Department since May 1999. Previously, Mr. Cooper
worked at Barington Capital Group from March 1992 to May 1999, where he was a
founding member and Vice Chairman overseeing its investment banking operations.

Harold D. Kahn has been a director of the Company since December 2004.
Mr. Kahn currently heads HDK Associates, a consulting company that advises
financial and investment groups. Mr. Kahn served as the Chief Executive Officer
of Macy's East from January 1994 through March 2004. Currently, Mr. Kahn also
serves as a Director of The Wet Seal, Inc. and Ronco Corporation.

John L. Madden has been a director of the Company since the Company's
inception. From April 1998 through September 2003, Mr. Madden owned a branch
office of Tradeway Securities Group, Inc. in Florida. From May 1996 through
December 1996, Mr. Madden's consulting company, JLM Consultants, Inc., acted as
a branch office of Merit Capital, Inc. 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, Inc. as Managing Director and registered sales
representative. Mr. Madden is the brother of Steven Madden, the Company's
founder and Creative and Design Chief.

Peter Migliorini has been a director of the Company since October 1996.
Mr. Migliorini has served as Sales Manager for Greschlers, Inc., a supply
company located in Brooklyn, New York, since 1994. 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 Meldisco Shoes,
Perry Shoes and Fasco Shoes.

Richard P. Randall has been a director of the Company since April 2006.
Mr. Randall was the Executive Vice President and Chief Financial Officer of
Direct Holdings Worldwide, LLC, the parent company of Lillian Vernon Corp. and
TimeLife, from 2002 until his retirement in June 2005. Previously, Mr. Randall
served as Senior Vice President and Chief Financial Officer of Coach, Inc. and
the Chief Operating Officer and Chief Financial Officer of Lillian Vernon Corp.
from 2000 to 2001 and 1998 to 2000, respectively. Currently, Mr. Randall serves
as a Director of The Burke Rehabilitation Hospital.

Thomas H. Schwartz has been a director of the Company since May 2004.
Since March 2007, Mr. Schwartz has been the Chief Executive Officer and sole
owner of Summer and Forge Investors LLC, a company that invests in real estate
and manages properties in which it has ownership interests. Previously, Mr.
Schwartz was a Managing Director of Helmsley-Spear, Inc. from 1984 to March
2007.

Walter Yetnikoff has been a director of the Company since May 2005. Mr.
Yetnikoff has served as Chief Executive Officer of Commotion Records, a company
he co-founded, since 2003. From 2001 through 2003, Mr. Yetnikoff was
self-employed as a researcher and writer. Mr. Yetnikoff served as President of
CBS Records from 1975 to 1990 and served on the Board of Directors of CBS, Inc.
from 1975 through 1988.

REQUIRED VOTE

Proxies will be voted for the election of the nine nominees as
directors of the Company unless otherwise specified on the proxy. A plurality of
the votes cast by the holders of shares of Common Stock present in person or
represented by proxy at the Annual Meeting will be necessary to elect the
nominees as directors. If, for any reason, 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 whether a quorum is present at the meeting.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Nominating/Corporate Governance Committee of the Board and the
Board unanimously recommend a vote FOR the election of Messrs. Jamieson A.
Karson, Jeffrey Birnbaum, Marc S. Cooper, Harold D. Kahn, John L. Madden, Peter
Migliorini, Richard P. Randall, Thomas H. Schwartz and Walter Yetnikoff. Unless
otherwise instructed or unless authority to vote is withheld, the enclosed proxy
will be voted FOR the election of the above listed nominees and AGAINST any
other nominees.

DIRECTOR INDEPENDENCE

The Board of Directors is currently comprised of nine members. The
Board of Directors has determined that the following director nominees are
"independent" for purposes of the criteria of the Securities and Exchange
Commission ("SEC") and The Nasdaq Global Market listing standards: Messrs. Kahn,
Migliorini, Randall, Schwartz and Yetnikoff. If the nine nominees set forth
above are elected, the Board will be comprised of a majority of independent
directors. The Board of Directors has held regularly scheduled executive
sessions, with Peter Migliorini serving as Presiding Director of such executive
sessions.

DIRECTORS' ATTENDANCE AT ANNUAL MEETINGS

The Company encourages all of its directors to attend annual meetings
of the Company's stockholders. Three directors attended the Company's 2006
annual meeting of stockholders.

COMMUNICATIONS WITH DIRECTORS

The Company has adopted a procedure by which stockholders may send
communications as defined within Item 7(h) of Schedule 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") to one or more members of
the Board of Directors by writing to such director(s) or to the whole Board of
Directors in care of the Corporate Secretary, Steven Madden, Ltd., 52-16 Barnett
Avenue, Long Island City, NY 11104. The Board has instructed the Corporate
Secretary to review all communications so received and to exercise his
discretion not to forward to the Board correspondence that is inappropriate such
as business solicitations, frivolous communications and advertising, routine
business matters (i.e. business inquiries, complaints, or suggestions) and
personal grievances. However, any director may at any time request the Corporate
Secretary to forward any and all communications received by the Corporate
Secretary but not forwarded to the directors.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors met four times during the 2006 Fiscal Year. In
2006, each director attended at least 75% of the aggregate of the number of
Board meetings and the number of meetings held by all committees on which he
then served. The Board of Directors has a standing Audit Committee, Compensation
Committee and Nominating/Corporate Governance Committee.

AUDIT COMMITTEE

The Audit Committee for the year ended 2006 consisted of directors
Richard P. Randall (Chairman), Peter Migliorini and Harold D. Kahn. The Audit
Committee is comprised of directors who are "independent" for purposes of The
Nasdaq Global Market listing standards and who meet the independence
requirements contained in Exchange Act Rule 10A-3(b)(1). The Board has
determined that Richard P. Randall meets the SEC criteria of an "audit committee
financial expert" and he is currently serving as such. The Audit Committee is
primarily responsible for reviewing the services performed by the Company's
independent registered public accountants, evaluating the Company's accounting
policies and its system of internal controls, and reviewing significant finance
transactions. During 2006, the Audit Committee met nine times.

The Audit Committee is responsible for reviewing and helping to ensure
the integrity of the Company's financial statements. Among other matters, the
Audit Committee, with management and independent and internal auditors, reviews
the adequacy of the Company's internal accounting controls that could
significantly affect the Company's financial statements. The Audit Committee is
also directly and solely responsible for the appointment, retention,
compensation, oversight and termination of the Company's independent registered
public accountants. In addition, the Audit Committee also functions as the
Company's Qualified Legal Compliance Committee (the "QLCC"). The purpose of the
QLCC is to receive, retain and investigate reports made directly, or otherwise
made known, of evidence of material violations of any United States federal or
state law, including any breach of fiduciary duty by the Company, its officers,
directors, employees or agents, and if the QLCC believes appropriate, to
recommend courses of action to the Company.

The Audit Committee meets with management periodically to consider the
adequacy of the Company's internal controls and the objectivity of its financial
reporting. The Audit Committee discusses these matters with the Company's
independent registered public accountants and with appropriate Company financial
personnel. Meetings are held with the independent registered public accountants
who have unrestricted access to the Audit Committee. In addition, the Audit
Committee reviews the Company's financing plans and reports recommendations to
the full Board of Directors for approval and to authorize action. The Board has
adopted a written charter setting out the functions the Audit Committee is to
perform. A copy of the Audit Committee Charter is attached as Annex A to the
Company's 2004 Proxy Statement and is available on the Company's website at
www.stevemadden.com.

Management has primary responsibility for the Company's financial
statements and the overall reporting process, including the Company's system of
internal controls. The independent registered public accountants audit the
annual financial statements prepared by management, express an opinion as to
whether those financial statements present fairly the financial position,
results of operations and cash flows of the Company in conformity with
accounting principles generally accepted in the United States of America and
discuss with the Audit Committee any issues they believe should be raised with
the Audit Committee.

AUDIT COMMITTEE REPORT

The Audit Committee reviewed the Company's audited financial statements
for the 2006 Fiscal Year and met with both management and Eisner LLP, the
Company's independent registered public accountants, to discuss such audited
financial statements. Management and the Company's independent registered public
accountants have represented to the Audit Committee that the financial
statements were prepared in accordance with accounting principles generally
accepted in the United States of America. The Audit Committee has received from
and discussed with Eisner LLP the written disclosure and the letter regarding
the independence of Eisner LLP as required by Independence Standards Board
Standard No. 1. The Audit Committee also discussed with Eisner LLP any matters
required to be discussed by Statement on Auditing Standards No. 61. Based on
these reviews and discussions, the Audit Committee recommended to the Board that
the Company's audited financial statements be included in the Company's Annual
Report on Form 10-K for the 2006 Fiscal Year.

Submitted by the Audit Committee of the Company's Board of Directors:

Richard P. Randall (Chairman)
Peter Migliorini
Harold D. Kahn

NOMINATING/CORPORATE GOVERNANCE COMMITTEE

The Nominating/Corporate Governance Committee of the Board of Directors
for the year ended December 31, 2006 consisted of Peter Migliorini and Walter
Yetnikoff. The Nominating/Corporate Governance Committee is comprised of
directors who are "independent" for purposes of The Nasdaq Global Market listing
standards. The Nominating/Corporate Governance Committee considers and makes
recommendations to the Board of Directors with respect to the size and
composition of the Board of

Directors and identifies potential candidates to serve as directors. The
Nominating/Corporate Governance Committee identifies candidates to the Board of
Directors by introductions from management, members of the Board of Directors,
employees or other sources and stockholders that satisfy the Company's policy
regarding stockholder recommended candidates. The Nominating/Corporate
Governance Committee does not evaluate director candidates recommended by
stockholders differently than director candidates recommended by other sources.
A copy of the Nominating/Corporate Governance Committee Charter is attached as
Annex B to the Company's 2004 Proxy Statement and is available on the Company's
website at www.stevemadden.com.

Stockholders wishing to submit recommendations for the 2008 Annual
Meeting should write to the Corporate Secretary, Steven Madden, Ltd., 52-16
Barnett Avenue, Long Island City, NY 11104. Any such stockholder must (x) comply
with the director nomination provisions of the Company's By-Laws, (y) meet and
evidence the minimum eligibility requirements specified in Exchange Act Rule
14a-8 and (z) submit, within the same timeframe for submitting a stockholder
proposal required by Rule 14a-8: (1) evidence in accordance with Rule 14a-8 of
compliance with the stockholder eligibility requirements, (2) the written
consent of the candidate(s) for nomination as a director, (3) a resume or other
written statement of the qualifications of the candidate(s) for nomination as a
director, and (4) all information regarding the candidate(s) and the submitting
stockholder that would be required to be disclosed in a proxy statement filed
with the SEC if the candidate(s) were nominated for election to the Board of
Directors.

In considering Board of Directors candidates, the Nominating/Corporate
Governance Committee takes into consideration the Company's Board Candidate
Guidelines, attached as Annex C to the Company's 2004 Proxy Statement and
available on the Company's website at www.stevemadden.com, the Company's policy
regarding stockholder recommended director candidates, as set forth above, and
all other factors that they deem appropriate, including, but not limited to, the
individual's character, education, experience, knowledge and skills. In
addition, the Nominating/Corporate Governance Committee develops and recommends
corporate governance principles for the Company; makes recommendations to the
Board of Directors in support of such principles; takes a leadership role in the
shaping of the corporate governance of the Company; and oversees the evaluation
of the Board of Directors and management.

During 2006, the Nominating/Corporate Governance Committee met four
times.

COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors for the year ended
December 31, 2006 consisted of directors Peter Migliorini (Chairman) and Thomas
H. Schwartz. The Compensation Committee is comprised of directors who are
"independent" for purposes of The Nasdaq Global Market listing standards and
applicable tax and securities rules. The Compensation Committee is primarily
responsible for approving salaries, bonuses and other compensation for the
Company's Named Executive Officers, reviewing management recommendations
relating to new incentive compensation plans and changes to existing incentive
compensation plans, and administering the Company's stock plans, including
granting options and restricted stock and setting the terms thereof pursuant to
such plans (all subject to approval by the Board of Directors). During 2006, the
Compensation Committee met four times. The Company does not currently have a
Compensation Committee charter.

COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATION OBJECTIVES AND STRATEGY

The Company's executive officer compensation program is designed to
attract and retain the caliber of officers needed to ensure the Company's
continued growth and profitability and to reward them for their performance, the
Company's performance and for creating longer term value for stockholders. The
primary objectives of the program are to:

o align rewards with performance that creates stockholder value;

o support the Company's strong team orientation;

o encourage high-potential team players to build a career at the
Company; and

o provide rewards that are cost-efficient, competitive with other
organizations and fair to employees and stockholders.

The Company's executive compensation programs are approved and
administered by the Compensation Committee of the Board of Directors. Working
with management and outside advisors, the Compensation Committee has developed a
compensation and benefits strategy that rewards performance and reinforces a
culture that the Compensation Committee believes will drive long-term success.

The compensation program rewards team accomplishments while promoting
individual accountability. The executive officer compensation program depends in
significant measure on Company results, but business unit results and individual
accomplishments are also very important factors in determining each executive's
compensation. The Company has a robust planning and goal-setting process that is
fully integrated into the compensation system, enhancing a strong relationship
between individual efforts, Company results, and financial rewards.

A major portion of total compensation is placed at risk through annual
and long-term incentives. As shown in the Summary Compensation Table, in 2006
the sum of restricted stock awards, stock options and bonus represented between
60% and 84% of the Total Compensation for the Named Executive Officers (as
defined herein). The combination of incentives is designed to balance annual
operating objectives and Company earnings performance with longer-term
stockholder value creation.

The Company seeks to provide competitive compensation that is
commensurate with performance. The Company targets compensation at the median of
the market, and calibrate both annual and long-term incentive opportunities to
generate less-than-median awards when goals are not fully achieved and
greater-than-median awards when goals are exceeded.

The Company seeks to promote a long-term commitment to the Company by
its senior executives. The Company believes that there is great value to the
Company in having a team of long-tenure, seasoned managers. The Company's
team-focused culture and management processes are designed to foster this
commitment. In addition, the vesting schedules attached to restricted stock (4-
to 5-year vesting) reinforce this long-term orientation.

ROLE OF THE COMPENSATION COMMITTEE

General

The Compensation Committee provides overall guidance for the Company's
executive compensation policies and determines the amounts and elements of
compensation for the Company's executive officers. The Compensation Committee
currently consists of two members of the Company's Board of Directors, Messrs.
Migliorini and Schwartz, each of whom is an independent director under Nasdaq's
Rule 4200, a "non-employee director" as defined under the SEC's rules and an
"outside director" as defined under Section 162(m) of the Internal Revenue Code
(the "Code").

When considering decisions concerning the compensation of executives,
other than the Chief Executive Officer, the Compensation Committee asks for Mr.
Karson's recommendations, including his detailed evaluation of each executive's
performance. No executive has a role in recommending compensation for outside
directors. With respect to the application of the 2006 Plan to non-employee
directors, the Board of Directors functions as the Compensation Committee.

Use of Outside Advisors

In making its determinations with respect to executive compensation,
the Compensation Committee has historically engaged the services of an
independent compensation consulting firm. In 2006, the Compensation Committee
retained the services of James F. Reda & Associates, LLC to assist with its
review of the compensation package of the Chief Executive Officer and other
executive officers. In addition, James F. Reda & Associates, LLC was retained to
assist the Compensation Committee with several special projects, including
advice on director compensation, advice relating to the 2006 Stock Incentive
Plan including the use of restricted stock under the Company's long term
incentive program, and assistance with the preparation of Proposal 2 of this
Proxy Statement.

The Compensation Committee retains James F. Reda & Associates, LLC
directly, although in carrying out assignments, James F. Reda & Associates, LLC
also interacts with Company management when necessary and appropriate in order
to obtain compensation and performance data for the executives and the Company.
In addition, James F. Reda & Associates, LLC may, in its discretion, seek input
and feedback from management regarding its consulting work product prior to
presentation to the Compensation Committee in order to confirm alignment with
the Company's business strategy, identify data questions or other similar
issues, if any, prior to presentation to the Compensation Committee.

The Compensation Committee has the authority to retain, terminate and
set the terms of the Company's relationship with any outside advisors who assist
the Committee in carrying out its responsibilities.

COMPENSATION STRUCTURE

Pay Elements - Overview

The Company utilizes four main components of compensation:

o Base Salary

o Annual Performance-based Cash Bonuses

o Long-term Equity Incentives (consisting of stock options and
restricted stock)

o Benefits and Perquisites

Pay Elements - Details

Base Salary. The Company pays base salaries to each of the Named
Executive Officers to provide them with fixed pay that takes into account the
Named Executive Officer's role and responsibilities, experience, expertise and
individual performance. As more fully described in "--Employment Arrangements,"
the Company has employment agreements with each of the Named Executive Officers.
You should refer to that section of this Proxy Statement for a full description
of each Named Executive Officer's base salary. The Compensation Committee, as
constituted at the time the parties entered into the employment agreements,
reviewed and approved the salary established in each such agreement. The
Compensation Committee took into account each of the employee's historic salary,
value in the marketplace and performance (including at the Company and previous
employment). Under their respective employment agreements, the base salaries of
Messrs. Karson and Schmertz and Ms. Varela remain constant during the term of
their employment agreements. Under Mr. Dharia's employment agreement, his base
salary increased from $240,000 in 2005 to $425,000 in 2006 and is scheduled to
increase by 2.5% in 2007 and by 5% in each of 2008 and 2009. Under Mr. Sinha's
employment agreement, his base salary is subject to an annual 5% increase and if
the Company's earnings before interest and taxes ("EBIT") for a 12-month period
increases more than 5% over the Company's EBIT for the preceding 12-month
period, then he is entitled to a 10% increase of base salary in lieu of the
annual 5% increase. See "--Summary Compensation Table" and "--Employment
Arrangements." Salary increases for officers are generally consistent with those
of other management employees.

Annual Performance-based Cash Bonus. Each Named Executive Officer's
annual performance-based cash bonus is established in their respective
employment agreement. The Compensation Committee reviewed and approved the bonus
provisions set in each such employment agreement at the time the parties entered
into such agreements and generally provide for variable or discretionary bonuses
designed to reward attainment of business goals. The amount, if any, of the
annual performance-based cash bonuses of Messrs. Karson, Dharia and Schmertz is
entirely within the discretion of the Board of Directors or the Compensation
Committee. The Board of Directors and/or the Compensation Committee consider
various criteria. Mr. Sinha's and Ms. Varela's annual performance-based cash
bonuses are each tied to increases in the Company's EBIT from the preceding
year. Mr. Sinha is entitled to an annual performance-based cash bonus equal to
3% of the increase in the Company's EBIT for such fiscal year over the EBIT of
the immediately prior fiscal year. Ms. Varela is entitled to an annual
performance-based cash bonus for each fiscal year in an amount equal to 2% of
the increase in the Company's wholesale division's EBIT for such fiscal year
over the Company's wholesale division's EBIT for the prior fiscal year. Each of
Mr. Sinha's and Ms. Varela's annual performance-based cash bonus targets were
set to drive the business of their respective divisions. See "--Employment
Arrangements."

Long-term Equity Incentives. Management and the Compensation Committee
believe that equity based awards are an important factor in aligning the
long-term financial interest of the officers and stockholders. The Compensation
Committee continually evaluates the use of equity-based awards and intends to
continue to use such awards in the future as part of designing and administering
the Company's compensation program. Beginning in 2006, the Compensation
Committee replaced its practice of granting equity incentives solely in the form
of stock options with restricted stock awards in order to grant awards that
contain both substantial incentive and retention characteristics. These awards
are designed to provide emphasis on preserving stockholder values generated in
recent years while providing significant incentives for continuing growth in
stockholder value. All grants are issued on the date they are approved by the
Compensation Committee. With respect to stock options, the exercise price is
always the grant date closing market price per share. The restricted stock uses
time-based vesting and vests in four or five equal annual installments beginning
on the first anniversary of the grant date, provided that, with the exception to
grants to Mr. Karson or as may otherwise be indicated in individual grants, no
termination of service has occurred by each applicable vesting date. All shares
of restricted stock granted to Mr. Karson will vest and cease to be restricted
stock if the Company does not renew Mr. Karson's employment agreement or if Mr.
Karson is terminated by the Company without "cause." Any dividends paid on the
restricted stock are held by the Company uninvested and without interest until
delivered to the holder at the end of the restricted period of the underlying
shares of restricted stock that relates to such dividends.

Other Benefits and Perquisites. The Company's executive compensation
program also includes other benefits and perquisites. These benefits include
annual matching contributions to executive officers' 401(k) plan accounts,
company-paid medical benefits, automobile allowances and life insurance
coverage. The Compensation Committee annually reviews these other benefits and
perquisites and makes adjustments as warranted based on competitive practices,
the Company's performance and the individual's responsibilities and performance.
In addition to the executive benefits and perquisites provided to other senior
executives, Mr. Karson is reimbursed for, or the Company directly pays certain
membership dues for social or professional organizations that Mr. Karson chooses
to join. The Compensation Committee has approved these other benefits and
perquisites as a reasonable component of the Company's executive officer
compensation program. (See the "All Other Compensation" column and corresponding
footnotes in the Summary Compensation Table.)

Pay Mix

The Company utilizes the particular elements of compensation described
above because the Company believes that it provides a well-proportioned mix of
secure compensation, retention value and at-risk compensation which produces
short-term and long-term performance incentives and rewards. By following this
approach, the Company provides the executive a measure of security in the
minimum expected level of compensation, while motivating the executive to focus
on business metrics and other variables within their particular sector which
will increase sales and margins and at the same time lower costs so as to
produce a high level of short term and long term performance for the Company and
long-term wealth creation for the executive, as well as reducing the risk of
recruitment of top executive talent by competitors. The mix of metrics used for
the annual performance bonuses and the Company's long-term incentive program
likewise provides an appropriate balance between short-term financial
performance and long-term financial and stock performance.

For Named Executive Officers, the mix of compensation is weighted
heavily toward at-risk pay (annual incentives and long-term incentives).
Maintaining this pay mix results fundamentally in a pay-for-performance
orientation for the Company's executives, which is aligned with the Company's
stated compensation philosophy of providing compensation commensurate with
performance.

Pay Levels and Benchmarking

Pay levels for executives are determined based on a number of factors,
including the individual's roles and responsibilities within the Company, the
individual's experience and expertise, the pay levels for peers within the
Company, pay levels in the marketplace for similar positions and performance of
the individual and the Company as a whole. The Compensation Committee is
responsible for approving pay levels for the Named Executive Officers. In
determining the pay levels, the Compensation Committee considers all forms of
compensation and benefits.

The Compensation Committee assesses "competitive market" compensation
using a number of sources. The primary data source used in setting competitive
market levels for the Named Executive Officers is the information publicly
disclosed by a peer group of the Company, which will be reviewed annually and
may change from year to year. The peer group of companies is Nine West Group
Inc., Kenneth Cole Production, Inc., Guess?, Inc., bebe stores, inc., Brown Shoe
Company, Inc., Genesco Inc., The Stride Rite Corporation and SKECHERS USA, Inc.

After consideration of the data collected on external competitive
levels of compensation and internal needs, the Compensation Committee makes
decisions regarding the Named Executive Officer's target total compensation
opportunities based on the need to attract, motivate and retain an experienced
and effective management team.

Relative to the competitive market data, the Compensation Committee
generally intends that the base salary and target annual incentive compensation
for each Named Executive Officer will be at the median of the competitive
market.

As noted above, notwithstanding the Company's overall pay positioning
objectives, pay opportunities for specific individuals vary based on a number of
factors such as scope of duties, tenure, institutional knowledge and/or
difficulty in recruiting a new executive. Actual total compensation in a given
year will vary above or below the target compensation levels based primarily on
the attainment of operating goals and the creation of stockholder value.

Compensation Committee Discretion

The Compensation Committee retains the discretion to decrease all forms
of incentive payouts based on significant individual or Company performance
shortfalls, with the exception the bonuses paid to Mr. Sinha and Ms. Varela,
which are tied to the Company's EBIT for the preceding year pursuant to their
respective employment agreements. Likewise, the Compensation Committee retains
the discretion to increase payouts and/or consider special awards for
significant achievements, including but not limited to superior asset
management, investment or strategic accomplishments and/or consummation of
acquisitions, divestitures, capital improvements to existing properties, or
sales made by certain of the Company's divisions.

Conclusion

The level and mix of compensation that is finally decided upon is
considered within the context of both the objective data from the Company's
competitive assessment of compensation and performance, as well as discussion of
the subjective factors as outlined above. The Compensation Committee believes
that each of the compensation packages is within the competitive range of
practices when compared to the objective comparative data even where subjective
factors have influenced the compensation decisions.

POST TERMINATION, CHANGE IN CONTROL AND NON-COMPETE/NON-SOLICITATION

The Company's employment agreements with each of the Named Executive
Officers contain provisions governing severance payments and payments made upon
a change-in-control of the Company. You should refer to the section of this
Proxy Statement titled "Employment Arrangements" for a summary description of
the agreements and such provisions. The Company's employment agreements with the
Named Executive Officers generally provide for severance payments to the
executive if the Company terminates the executive's employment without cause or
if the Company gives the executive good reason to terminate employment. These
benefits are described and quantified in the section entitled "Post Termination
and Change in Control Arrangements" under Executive and Director Compensation.

The Company believes that the severance payments and payments made upon
change-in-control provisions in the employment agreements provide appropriate
protection to the Company's executives, comparable to that available at peer
companies, and, with regard to the enhanced severance following a
change-in-control, protects the Company from losing key executives during a
period when a change-in-control may be threatened or pending. These benefits are
described and quantified in the section entitled "Post Termination and Change in
Control Arrangements" under Executive and Director Compensation.

Mr. Karson has agreed in his employment agreement not to compete with
the Company for two years following the termination of employment and not to
hire Company employees during that same period. Mr. Schmertz and Ms. Varela have
agreed to the same restriction for a one-year period. In addition, Mr. Sinha has
agreed to the same restriction for a six month period, unless he is terminated
other than "for cause," death or due to total disability, in which case his
non-compete and non-solicitation period shall last the lesser of six months or
the number of months he is entitled to payment following such termination. Mr.
Dharia does not have a non-compete or non-solicitation provision in his
employment agreement.

IMPACT OF TAX AND ACCOUNTING

As a general matter, the Compensation Committee considers the various
tax and accounting implications of compensation vehicles employed by the
Company.

While the Compensation Committee reviews and considers both the
accounting and tax effects of various components of compensation, these effects
are not a significant factor in the Compensation Committee's allocation of
compensation among the different components. In general, the Company believes
that compensation paid to executive officers should be deductible for U.S. tax
purposes. In certain instances, however, the Compensation Committee also
believes that it is in the Company's best interests, and that of its
shareholders, to have the flexibility to pay compensation that is not deductible
under the limitations of Section 162(m) of the Code in order to provide a
compensation package consistent with the Company's objectives.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the 2006 Fiscal Year, the following directors served on the
Compensation Committee: Peter Migliorini (chairman) and Thomas H. Schwartz.
During the 2006 Fiscal Year:

o none of the members of the Compensation Committee was an officer
(or former officer) or employee of the Company or any of its
subsidiaries;

o none of the members of the Compensation Committee had a direct or
indirect material interest in any transaction in which the Company
was a participant and the amount involved exceeded $120,000;

o none of the Company's executive officers served on the
compensation committee (or another board committee with similar
functions or, if none, the entire board of directors) of another
entity where one of that entity's executive officers served on the
Company's Compensation Committee;

o none of the Company's executive officers was a director of another
entity where one of that entity's executive officers served on the
Company's Compensation Committee; and

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis with management and based on the review and discussions,
the Compensation Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by the Compensation Committee of the Company's Board of Directors:

Peter Migliorini (Chairman)
Thomas H. Schwartz

CODE OF BUSINESS CONDUCT AND ETHICS

All of the Company's employees, officers (including senior executive,
financial and accounting officers) and directors are held accountable for
adherence to the Company's Code of Business Conduct and Ethics (the "Conduct
Code"). The Conduct Code is intended to establish standards necessary to deter
wrongdoing and to promote compliance with applicable governmental laws, rules
and regulations and honest and ethical conduct. The Conduct Code covers all
areas of professional conduct, including conflicts of interest, fair dealing,
financial reporting and disclosure, protection of Company assets and
confidentiality. Employees have an obligation to promptly report any known or
suspected violation of the Conduct Code without fear of retaliation. Waiver of
any provision of the Conduct Code for executive officers and directors may only
be granted by the Board of Directors or one of its committees and any such
waiver or modification of the Conduct Code relating to such individuals will be
disclosed by the Company. A copy of the Conduct Code is attached as Annex D to
the Company's 2004 Proxy Statement, is available on the Company's website at
www.stevemadden.com and may also be obtained by any stockholder without charge
upon request by writing to the Corporate Secretary, Steven Madden, Ltd., 52-16
Barnett Avenue, Long Island City, NY 11104.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires that the Company's directors
and executive officers, and persons who own more than 10% of a registered class
of the Company's equity securities, file with the Securities and Exchange
Commission reports of initial ownership of Common Stock and subsequent changes
in that ownership and furnish the Company with copies of all forms they file
pursuant to Section 16(a). Form 4s were not filed on a timely basis to report
(i) a grant of Common Stock on January 1, 2006 to Arvind Dharia; (ii) a grant of
Common Stock on May 26, 2006 to Harold D. Kahn; (iii) the exercise of stock
options and sale of Common Stock on June 2, 2006 by Peter Migliorini; and (iv)
grants of stock

options to Awadhesh Sinha on May 23, 2003, May 21, 2004, May 27, 2005 and July
6, 2005. Each of these reports has now been filed. In making this disclosure,
the Company has relied solely on copies of the reports that they have filed with
the SEC and written representations received from the Company's directors and
executive officers that no annual Form 5 reports were required to by filed for
the 2006 Fiscal Year.

DIRECTORS AND EXECUTIVE OFFICERS

The directors, executive officers and certain significant employees of
the Company, and their ages and positions as of April 1, 2007, are:

NAME AGE POSITION
----------------------- --- --------------------------------------------------
Jamieson A. Karson..... 49 Chief Executive Officer and Chairman of the Board
Arvind Dharia.......... 57 Chief Financial Officer
Awadhesh Sinha......... 61 Chief Operating Officer
Robert Schmertz........ 43 Brand Director
Amelia Newton Varela... 35 Executive Vice President-Wholesales Sales
Jeffrey Birnbaum....... 46 Director
Marc S. Cooper......... 45 Director
Harold D. Kahn......... 61 Director
John L. Madden......... 59 Director
Peter Migliorini....... 58 Director
Richard P. Randall..... 69 Director
Thomas H. Schwartz..... 59 Director
Walter Yetnikoff....... 73 Director

See "Proposal 1: Election of Directors - Biographical Summaries of
Nominees for the Board of Directors" for the biographies of the Company's
directors.

Arvind Dharia has been the Chief Financial Officer of the Company since
October 1992 and was a director of the Company from December 1993 through May
2004. From December 1988 to September 1992, Mr. Dharia was Assistant Controller
of Millennium III Real Estate Corp.

Awadhesh Sinha became the Chief Operating Officer of the Company in
July 2005. Mr. Sinha had been a director of the Company from October 2002 to
July 2005. Mr. Sinha was the Chief Operating Officer and Chief Financial Officer
of WEAR ME Apparel Inc., a company that designs, manufactures and markets
branded and non-branded children's clothing, from 2003 to July 2005. Prior to
that, Mr. Sinha worked for Salant Corporation, a company that designs,
manufactures and markets men's clothing, for 22 years, and held the position of
Chief Operating Officer and Chief Financial Officer of Salant Corporation from
1998 to 2003.

Robert Schmertz has been the Brand Director since January 2006. Mr.
Schmertz served as President of Steve Madden Womens Wholesale Division and Brand
Manager from September 2001 through January 2006. Additionally, Mr. Schmertz has
been the President of Shoe Biz, Inc., a wholly owned subsidiary of Steve Madden
Retail Inc. since May 1998 and the President of Diva Acquisition Corp. since
January 2001. 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 Francisco, California.

Amelia Newton Varela has been Executive Vice President of Wholesale
Sales since November 2004. Previously, she was Vice President of Sales for the
Steve Madden women's division since January 2000. Prior to that, she was Account
Executive for the women's division since 1998. Before joining the Company, Ms.
Varela was the sales assistant to the Executive Vice President of Sales for
Merrin Financial. She graduated from the FIT in 1995.

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation earned for all services
rendered to us in all capacities in the 2006 Fiscal Year by the Company's Chief
Executive Officer, Chief Financial Officer and the three most highly compensated
executive officers other than the CEO and CFO who were serving at the end of
2006. In this Proxy Statement, the Company refers to this group of five people
as the Company's "Named Executive Officers".

Following the table is a discussion of material factors related to the
information disclosed in the table.

NON-EQUITY
STOCK INCENTIVE PLAN ALL OTHER
SALARY BONUS AWARDS COMPENSATION COMPENSATION TOTAL
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) ($)(1) ($)
------------------------------ ---- --------- --------- --------- -------------- ------------ ----------

Jamieson A. Karson
Chief Executive Officer .... 2006 500,000 450,000 1,081,800 -- 29,585(2) 2,061,385
Arvind Dharia
Chief Financial Officer .... 2006 425,000 350,000 432,720 -- 90,173(3) 1,297,893
Awadhesh Sinha
Chief Operating Officer .... 2006 446,250 -- -- 1,401,840 13,458(4) 1,861,548
Robert Schmertz
Brand Director ............. 2006 488,350 -- 1,056,600 -- 5,769(5) 1,550,719
Amelia Newton Varela
Executive Vice
President-Wholesale
Sales ...................... 2006 300,000 -- 1,056,600 570,166 15,000(6) 1,941,766

----------
(1) The amounts in this column reflect the dollar amount recognized for
financial statement reporting purposes for the fiscal year ended December
31, 2006, in accordance with FAS 123(R). Assumptions used in the
calculation of these amounts are included in footnote 13 to the Company's
audited financial statements for the fiscal year ended December 31, 2006,
included in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 9, 2007.

(2) Includes the following: $6,271 automobile allowance and reimbursement of
$23,314 for membership dues pursuant to Mr. Karson's employment agreement.

(3) Includes the following: $7,196 automobile allowance and $82,977 life
insurance premiums.

(4) Represents $13,458 automobile allowance.

(5) Represents $5,769 automobile allowance.

(6) Represents $15,000 automobile allowance.

EMPLOYMENT ARRANGEMENTS

Jamieson A. Karson. In May 2001, the Company entered into an employment
agreement with Jamieson A. Karson pursuant to which Mr. Karson agreed to serve
as the Company's Chief Executive Officer and Vice Chairman of the Board. On July
22, 2004 at a regularly scheduled meeting of the Board of Directors of the
Company, Mr. Karson was appointed Chairman of the Board of Directors. Mr.
Karson's employment agreement was amended and restated in January 2006. The term
of Mr. Karson's employment under his amended and restated employment agreement
is three years commencing on January 1, 2006 and ending on December 31, 2008.
The term will be automatically extended for successive one-year periods unless
the Company timely notifies Mr. Karson of its intention not to extend the term.
The amended and restated agreement provides that the Company pay Mr. Karson an
annual salary of $500,000. In addition, the agreement provides that Mr. Karson
receive an annual bonus in such amount, if any, and at such time or times, as
the Board of Directors, or a committee thereof, may determine in its absolute
discretion. Subject to availability of shares under the 2006 Stock Incentive
Plan or any other plan designated by the Board of Directors and approved by the
Company's stockholders, Mr. Karson is entitled to awards under such plan as may
be determined by the Board of Directors, or a committee thereof, from time to
time in its absolute discretion. In addition, in the event of Mr. Karson's total
disability or his death, the Company is obligated to continue to pay Mr. Karson
(or Mr. Karson's estate) his base salary for the 12-month period immediately
subsequent to the date of such total disability or death. In the event Mr.
Karson's employment agreement is terminated (or not extended) for any reason
other than "for cause" (as defined in the agreement) or due to his death or his
total disability, the Company is obligated to pay Mr. Karson (i) the amount of
compensation that is accrued and unpaid through the date of termination; plus
(ii) an amount equal to the lesser of (A) the sum of three times Mr. Karson's
highest "total compensation" (as defined in the agreement) in any given fiscal
year of his employment with the Company and (B) $4,000,000. In the event that
there is a "change of control" (as defined in the agreement) transaction, all
unvested options to purchase shares of Common Stock or restricted stock awards
or other equity-related awards under the 1999 Stock Plan and/or the 2006 Stock
Incentive Plan held by Mr. Karson will vest on the date of the change of control
and Mr. Karson will be entitled to receive a lump sum cash payment equal to the
amount described above. Mr. Karson's employment agreement also contains
provisions regarding confidentiality, solicitation and competition.

Arvind Dharia. In January 1998, the Company entered into an employment
agreement with Arvind Dharia, which has been amended from time to time, pursuant
to which Mr. Dharia agreed to serve as the Company's Chief Financial Officer.
The term of Mr. Dharia's employment under his agreement as amended commenced on
January 1, 1998 and ends on December 31, 2009. The term will be automatically
extended for an additional one-year period unless either party timely notifies
the other of its intention not to extend the term. The amended agreement
provides that the Company pay Mr. Dharia an annual salary of $425,000 for the
2006 Fiscal Year, with the following increases thereafter: (i) on January 1,
2007, his base salary shall be increased by 2.5% of the then-current base
salary; (ii) on January 1, 2008, his base salary will be increased by 5% of the
then-current base salary; and (iii) on January 1, 2009, his base salary will be
increased by 5% of the then-current base salary. In addition, the agreement
provides that Mr. Dharia receive an annual bonus in such amount, if any, and at
such time or times, as the Board of Directors may determine in its absolute
discretion. Subject to availability of shares under the 2006 Stock Incentive
Plan or any other plan designated by the Board of Directors and approved by the
Company's stockholders, Mr. Dharia is entitled to awards under such plan as may
be determined by the Board of Directors, or a committee thereof, from time to
time in its absolute discretion. The agreement provides for, in the event of Mr.
Dharia's death, the payment to Mr. Dharia's estate of his base salary for the
12-month period immediately subsequent to the date of Mr. Dharia's death. In the
event Mr. Dharia's employment agreement is terminated due to Mr. Dharia's total
disability (as defined in the agreement) or "for cause" (as defined in the
agreement), the Company is obligated to pay Mr. Dharia the amount of
compensation that is accrued and unpaid through the date of termination. In the
event Mr. Dharia's employment agreement is terminated for any reason (other than
"for cause" or due to his death or total disability), the Company is obligated
to pay Mr. Dharia, in two installments, an amount equal the product of (x) his
base salary on the effective date of such termination plus the bonus paid or
payable, if any, for the fiscal year ended on the December 31st immediately
preceding the termination date, multiplied by (y) the number of years (and
fraction of years)

remaining in the term. If the Company decides not to renew the agreement (other
than "for cause" or due to his total disability), then Mr. Dharia will be
entitled to receive severance compensation in cash in an amount equal to his
then-current base salary for the 90-day period commencing on the expiration of
the term. In the event that there is a "change of control" transaction and Mr.
Dharia's employment has been terminated by the Company other than "for cause" or
by Mr. Dharia "for good reason" (as such terms are defined in the agreement),
Mr. Dharia will receive an amount equal to the lesser of (i) three times the
total compensation he was entitled to receive under the agreement for the
preceding 12-month period ending on the last previous December 31, except that
in lieu of the actual base salary component received during such period, there
shall be substituted the annual base salary to which Mr. Dharia was entitled to
as of the date of termination or (ii) the maximum amount which is tax deductible
to the Company under Section 280G of the Code.

Awadhesh Sinha. In June 2005, the Company entered into an employment
agreement with Awadhesh Sinha, pursuant to which Mr. Sinha agreed to serve as
the Company's Chief Operating Officer. The term of Mr. Sinha's employment under
his employment agreement is three years commencing on July 1, 2005 and ending on
June 30, 2008. The term will be automatically extended for successive one-year
periods unless either party timely notifies the other of its intention not to
extend the term. The agreement provides that the Company pay Mr. Sinha an annual
salary of $425,000, subject to a 5% annual increase or, if the Company's EBIT
for the 12-month period from July 1 to June 30 increases by at least 5% over the
preceding 12-month period, a 10% annual increase in lieu of the annual 5%
increase. Upon entering the agreement, Mr. Sinha received a signing bonus of
$100,000. In addition, Mr. Sinha is entitled to an annual bonus equal to the
greater of (i) $50,000 and (ii) 3% of the increase in the Company's EBIT for
such fiscal year over the EBIT of the immediately prior fiscal year. The
agreement provides for, in the event of Mr. Sinha's death, the payment to Mr.
Sinha's estate of his base salary for the 12-month period immediately subsequent
to the date of Mr. Sinha's death. In the event Mr. Sinha's employment agreement
is terminated due to Mr. Sinha's total disability (as defined in the agreement),
"for cause" (as defined in the agreement) or due to Mr. Sinha's resignation, the
Company is obligated to pay Mr. Sinha the amount of compensation that is accrued
and unpaid through the date of termination. Mr. Sinha shall be required to repay
to the Company the full amount of his signing bonus if he is discharged "for
cause" and a pro rata portion of the signing bonus for the portion of the term
that he did not fulfill if he resigns. In the event Mr. Sinha's employment
agreement is terminated for any reason (other than "for cause" or due to his
death or total disability), the Company is obligated to pay Mr. Sinha an amount
equal to the sum of (x) the base salary that would have been paid by the Company
pursuant to the agreement for the longer of the remainder of the then-current
term or 6 months and (y) the cash bonus payable to Mr. Sinha prorated from the
commencement of the then-current term through the termination date. In the event
that there is a "change of control" transaction, the Company or Mr. Sinha may
terminate the agreement and Mr. Sinha shall be entitled to an amount equal to
the lesser of (i) three times the total compensation received by Mr. Sinha under
the agreement for the preceding 12-month period ending on the last previous
December 31st, except that in lieu of the actual base salary component received
during such period, there shall be substituted the annual base salary to which
Mr. Sinha was entitled to as of the date of his termination or (ii) the maximum
amount which is tax deductible to the Company under Section 280G of the Code.

Robert Schmertz. In April 2002, the Company entered into an employment
agreement with Robert Schmertz pursuant to which Mr. Schmertz agreed to serve as
President of Steve Madden Wholesale Womens Division and Brand Manager for Steven
Madden, Ltd. The agreement was extended in March 2005 and again in March 2007.
The term of Mr. Schmertz's employment under his employment agreement (as
extended) commenced on April 1, 2002 and ends on December 31, 2009. Mr. Schmertz
received a signing bonus of $500,000 upon the execution of the March 2007
extension and 100,000 shares of restricted stock, which shall vest in equal
parts on each of the next five anniversaries of February 27, 2007, pursuant to
the 2006 Stock Incentive Plan. The Company agreed to pay Mr. Schmertz an annual
salary of $600,000. Under the terms of the agreement as extended, the Company
shall pay

Mr. Schmertz a discretionary bonus in an amount determined solely by the
Company's Board of Directors. In the event of a "change of control" and the
termination of Mr. Schmertz thereafter other than "for cause" (as defined in the
agreement), Mr. Schmertz will be entitled to receive an amount equal to the
lesser of (i) the average amount of total compensation actually received by
Mr. Schmertz for the preceding three calendar years multiplied by 3 or (ii) the
maximum amount which is tax deductible to the Company under Section 280G of the
Code.

Amelia Newton Varela. In October 2004, the Company entered into an
employment agreement with Amelia Newton Varela, pursuant to which Ms. Varela
agreed to serve as Executive Vice President of Wholesale Sales. Ms. Varela's
employment under her employment agreement commenced in October 2004. The Company
agreed to pay Ms. Varela an annual salary of $300,000. Under the terms of the
agreement, the Company shall pay Ms. Varela an annual bonus for each fiscal year
in an amount equal to 2% of the increase in the Company's wholesale division's
EBIT for such fiscal year over the Company's wholesale division's EBIT for the
prior fiscal year. In addition, if Ms. Varela is still employed by the Company
on December 31, 2007, she is entitled to a cash payment in the amount of
$225,000.

GRANTS OF PLAN-BASED AWARDS IN THE 2006 FISCAL YEAR

The following table sets forth information concerning awards under the
Company's equity and non-equity incentive plans granted to each of the Named
Executive Officers in the 2006 Fiscal Year, including performance-based awards
and those using time-based vesting.

Following the table is a discussion of material factors related to the
information disclosed in the table.

ALL
OTHER
STOCK ALL OTHER
AWARDS: OPTION
ESTIMATED FUTURE PAYOUTS ESTIMATED FUTURE PAYOUTS NUMBER AWARDS: EXERCISE
UNDER NON-EQUITY INCENTIVE UNDER EQUITY INCENTIVE OF NUMBER OF OR BASE GRANT DATE
PLAN AWARDS PLAN AWARDS SHARES SECURITIES PRICE OF FAIR VALUE
-------------------------- -------------------------- OF STOCK UNDERLYING OPTION OF STOCK
GRANT THRESHOLD TARGET MAXIMUM THRESHOLD TARGET MAXIMUM OR UNITS OPTIONS AWARDS AND OPTION
NAME DATE ($) ($) ($) (#) (#) (#) (#) (#) ($/SH) AWARDS
----------------- -------- --------- ------- ------- --------- ------ ------- -------- ---------- -------- ----------

Jamieson A.
Karson........... 03/24/06 -- -- -- -- -- -- 30,000 -- -- 1,081,800
Arvind Dharia.... 03/24/06 -- -- -- -- -- -- 12,000 -- -- 432,720
Awadhesh Sinha... -- -- 1,401,840(1) -- -- -- -- -- -- -- --
Robert Schmertz.. 03/20/06 -- -- -- -- -- -- 30,000 -- -- 1,056,600
Amelia Newton
Varela........... 03/20/06 -- 570,166(2) -- -- -- -- 30,000 -- -- 1,056,600

-----------------

(1) Represents non-equity incentive payment made pursuant to a bonus formula in
Mr. Sinha's employment agreement. See "-Employment Arrangements." There is
no threshold, target or maximum in such bonus formula, so the amount
contained in the table above is payable as a target for these purposes
only.

(2) Represents non-equity incentive payment made pursuant to a bonus formula in
Ms. Varela's employment agreement. See "-Employment Arrangements." There is
no threshold, target or maximum in such bonus formula, so the amount
contained in the table above is payable as a target for these purposes
only.

Plan-Based Awards

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. Since its adoption, the
1999 Plan has been amended, with stockholder approval, to (i) increase the
number of shares subject to the plan (ii) provide that the exercise price of an
option granted under the 1999 Plan shall be no less than the fair market value
of the Common Stock on the date of grant (except to the extent otherwise
provided in agreements with the Company dated prior to the effective date of the
amendment), and (iii) prohibit the Board from amending the terms of any option
granted pursuant to the 1999 Plan to

reduce the option price. 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. As of April 25,
2007, options to purchase 1,395,985 shares of Common Stock were outstanding. No
additional options will be granted under the 1999 Plan.

2006 Stock Incentive Plan

As of March 10, 2006, the Board of Directors of the Company adopted the
2006 Stock Incentive Plan (the "2006 Plan"), and on May 26, 2006 the Company's
stockholders approved the adoption of the 2006 Plan. The purpose of the 2006
Plan is to enhance the profitability and value of the Company for the benefit of
its stockholders by enabling us to offer eligible employees, consultants and
non-employee directors cash and stock-based incentives in the Company to
attract, retain and reward such individuals and strengthen the mutuality of
interests between such individuals and the Company's stockholders. Currently,
the maximum number of shares of Common Stock available for issuance under the
2006 Plan is 1,200,000 shares. The Company seeks to increase the maximum number
of shares available for issuance under the 2006 Plan to 1,550,000 shares,
subject to stockholder approval and to make certain other changes not subject to
stockholder approval (see "Proposal Two - Proposal for the Approval of Amendment
Number One to the Steven Madden, Ltd. 2006 Stock Incentive Plan"). As of April
25, 2007, 597,200 shares of Common Stock were outstanding and 602,800 shares of
Common Stock remained available for grant under the 2006 Plan.

OUTSTANDING EQUITY AWARDS AT END OF THE 2006 FISCAL YEAR

The following table sets forth information concerning unexercised stock
options, restricted stock that has not vested and stock awards outstanding for
each of the Named Executive Officers as of the end of the 2006 Fiscal Year.

OPTION AWARDS STOCK AWARDS
------------------------------------------------------------- ---------------------------------------------
EQUITY
EQUITY INCENTIVE
INCENTIVE PLAN
PLAN AWARDS:
AWARDS: MARKET
EQUITY NUMBER OR PAYOUT
INCENTIVE OF VALUE OF
PLAN NUMBER MARKET UNEARNED UNEARNED
AWARDS: OF VALUE OF SHARES, SHARES,
NUMBER OF NUMBER OF NUMBER OF SHARES SHARES UNITS OR UNITS OR
SECURITIES SECURITIES SECURITIES OR UNITS OR UNITS OTHER OTHER
UNDERLYING UNDERLYING UNDERLYING OF STOCK OF STOCK RIGHTS RIGHTS
UNEXERCISED UNEXERCISED UNEXERCISED OPTION THAT THAT THAT THAT
OPTIONS OPTIONS UNEARNED EXERCISE OPTION HAVE NOT HAVE NOT HAVE NOT HAVE NOT
(#) (#) OPTIONS PRICE EXPIRATION VESTED VESTED VESTED VESTED
NAME EXERCISABLE UNEXERCISABLE (#) ($) DATE (#) ($) (#) ($)
----------------- ----------- ------------- ----------- -------- ---------- -------- --------- --------- ---------

Jamieson A.
Karson........... 56,200 -- -- 12.6533 05/17/07 30,000(1) 1,052,700 -- --
Arvind Dharia.... 13,242 -- -- 6.3667 09/25/08 12,000(2) 421,080 -- --
60,000 13.9000 09/09/10
60,000 13.0533 07/06/11
60,000 11.8400 05/27/15
Awadhesh Sinha... -- -- -- -- -- -- -- -- --
Robert Schmertz.. 50,000 -- -- 12.6533 05/17/12 30,000(3) 1,052,700 -- --
Amelia Newton
Varela........... -- -- 30,000(4) 1,052,700

----------
(1) Mr. Karson was awarded 30,000 shares of restricted stock on March 24, 2006.
One-fourth of such shares of restricted stock shall vest and cease to be
restricted stock on each of the next four anniversaries of March 24, 2006.

(2) Mr. Dharia was awarded 12,000 shares of restricted stock on March 24, 2006.
One-fourth of such shares of restricted stock shall vest and cease to be
restricted stock on each of the next four anniversaries of March 24, 2006.

(3) Mr. Schmertz was awarded 30,000 shares of restricted stock on March 20,
2006. One-fourth of such shares of restricted stock shall vest and cease to
be restricted stock on each of the next four anniversaries of March 20,
2006.

(4) Ms. Varela was awarded 30,000 shares of restricted stock on March 20, 2006.
One-fourth of such shares of restricted stock shall vest and cease to be
restricted stock on each of the next four anniversaries of March 20, 2006.

OPTION EXERCISES AND STOCK VESTED IN THE 2006 FISCAL YEAR

The following table sets forth information concerning stock options
exercised and restricted stock vested during the 2006 Fiscal Year by each of the
Named Executive Officers. The value realized from exercised options is deemed to
be the market value of the Common Stock on the date of exercise, less the
exercise price of the option, multiplied by the number of shares underlying the
option. The value realized from vested restricted stock is deemed to be the
market value of the Common Stock on the date of vesting multiplied by the number
of shares.

OPTION AWARDS STOCK AWARDS
----------------------------- ------------------------------
NUMBER OF VALUE NUMBER OF VALUE
SHARES ACQUIRED REALIZED ON SHARES ACQUIRED REALIZED ON
ON EXERCISE EXERCISE ON VESTING VESTING
NAME (#) ($) (#) ($)
----------------------- --------------- ----------- --------------- ------------

Jamieson A. Karson .... 11,300 271,501 -- --
Arvind Dharia ......... 40,000 563,367 20,000 584,600
Awadhesh Sinha ........ 41,250 910,325 -- --
Robert Schmertz ....... 70,000 1,723,539 -- --
Amelia Newton Varela... 34,500 924,140 -- --

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

The Company's employment agreements with the Named Executive Officers
provide for payments to such persons upon termination or a change in control of
the Company. See "--Employment Arrangements."

The amounts set forth in the table below shall be paid to the Named
Executive Officers if such Named Executive Officer's employment was terminated
by the Company under the various scenarios set forth below.

CONTINUATION OF
MEDICAL/ WELFARE ACCELERATION AND
BENEFITS (PRESENT CONTINUATION OF TOTAL TERMINATION
CASH PAYMENT VALUE) EQUITY AWARDS BENEFITS
NAME AND PRINCIPAL POSITION ($) ($) ($) ($)
---------------------------------------- ------------ ------------------ ----------------- ------------------

TERMINATION DUE TO DEATH:
Jamieson A. Karson 500,000 -- 500,000
Arvind Dharia 425,000 10,000 435,000
Awadhesh Sinha 467,500 10,000 477,500
Robert Schmertz -- -- --
Amelia Newton Varela(1) -- -- --

TERMINATION DUE TO TOTAL DISABILITY:
Jamieson A. Karson 500,000 500,000
Arvind Dharia 425,000 425,000
Awadhesh Sinha 467,500 467,500
Robert Schmertz -- --
Amelia Newton Varela(1) -- --

TERMINATION FOR CAUSE; RESIGNATION:
Jamieson A. Karson -- --
Arvind Dharia -- --
Awadhesh Sinha(2) -- --
Robert Schmertz -- --
Amelia Newton Varela(1) -- --

TERMINATION OTHER THAN FOR CAUSE,
DEATH OR DUE TO TOTAL DISABILITY:
Jamieson A. Karson 4,000,000 -- 4,000,000
Arvind Dharia 1,275,000(3) 270,000(4) 1,545,000
Awadhesh Sinha 701,250(5) -- 701,250
Robert Schmertz -- -- --
Amelia Newton Varela(1) -- -- --

TERMINATION UPON A CHANGE-OF-CONTROL:
Jamieson A. Karson 4,000,000(6) -- 302,750 4,302,750
Arvind Dharia 2,036,742(7) 270,000(4) 2,306,742
Awadhesh Sinha 1,764,881(8) 40,500(9) 1,805,381
Robert Schmertz 2,531,941(10) -- 2,531,941
Amelia Newton Varela(1) -- -- --

----------
(1) Upon any termination, Ms. Varela shall forfeit and surrender any unpaid
compensation without further liability to the Company.

(2) If Mr. Sinha is terminated for Cause, he will have to repay to the Company
the full amount of his signing bonus and if he resigns for any reason, Mr.
Sinha will be required to repay to the Company a pro rata portion of his
signing bonus.

(3) Consists of three times Mr. Dharia's 2006 base salary ($425,000).

(4) Consists of three times the sum of Mr. Dharia's life insurance payment
($80,000 per year) plus medical benefits ($10,000 per year).

(5) Consists of 1.5x Mr. Sinha's salary at December 31, 2006 ($467,500).

(6) In the event of a termination upon a change of control, Mr. Karson's
employment agreement states that the Company and Mr. Karson will use their
respective best efforts to work together so that Mr. Karson and the Company
will not be subject to adverse tax consequences under Sections 280G and
4999 of the Code, as applicable. The figure in the table does not reflect
any cutback or gross-up of the termination upon a change of control payment
owed to Mr. Karson under his employment agreement.

(7) Consists of three times Mr. Dharia's 2006 salary ($425,000) plus 2005 bonus
($253,914).

(8) Per Mr. Sinha's employment agreement, the termination payment is equal to
the lesser of (A) the amount due based on the calculation described below
and (B) the maximum amount which is tax deductible to the Company under
Section 280G of the Code. The bonus calculation under Mr. Sinha's
employment agreement is three times the sum of Mr. Sinha's (i) salary at
December 31, 2006 ($467,500), (ii) signing bonus ($100,000) and (iii) 2005
bonus ($377,673). This amount would equal $2,834,019, which exceeds the
maximum amount which is tax deductible to the Company under Section 280G of
the Code. The figure in the table reflects the amount that would be paid to
Mr. Sinha, as limited by Section 280G. This amount could be lower if there
is an actual change-in-control, because the estimate above does not reflect
a potential reduction associated with reasonable compensation for
restrictive covenants in Mr. Sinha's employment agreement.

(9) Consists of three times the sum of Mr. Sinha's life insurance payment
($3,500 per year) plus medical benefits ($10,000 per year).

(10) Per Mr. Schmertz's employment agreement, the termination payment is equal
to the lesser of (A) the amount due based on the calculation described
below and (B) the maximum amount which is tax deductible to the Company
under Section 280G of the Code. The bonus calculation under Mr. Schmertz's
employment agreement is three times Mr. Schmertz's 2005 compensation
($1,800,225). This amount would equal $5,400,675, which exceeds the maximum
amount which is tax deductible to the Company under Section 280G of the
Code. The figure in the table reflects the amount that would be paid to Mr.
Schmertz, as limited by Section 280G. This amount could be lower if there
is an actual change-in-control, because the estimate above does not reflect
a potential reduction associated with reasonable compensation for
restrictive covenants in Mr. Schmertz's employment agreement.

COMPENSATION OF DIRECTORS IN THE 2006 FISCAL YEAR

The following table sets forth information concerning the
compensation of the Company's non-employee directors in the 2006 Fiscal Year.

Following the table is a discussion of material factors
related to the information disclosed in the table.

CHANGE IN
PENSION VALUE
FEES AND
EARNED NON-EQUITY NONQUALIFIED
OR PAID STOCK OPTION INCENTIVE PLAN DEFERRED ALL OTHER
IN CASH AWARDS AWARDS COMPENSATION COMPENSATION COMPENSATION TOTAL
NAME ($) ($) ($) ($) EARNINGS ($) ($)
-------------------- ---------- ---------- ---------- --------------- ------------- ------------ ----------

Jeffrey Birnbaum ... 44,167 26,318 -- -- -- 200,000(1) 270,485
Marc S. Cooper ..... 49,167 26,318 -- -- -- 615,000(2) 690,485
Harold D. Kahn ..... 52,917 52,635 -- -- -- 105,552
John L. Madden ..... 44,167 26,318 -- -- -- 904,876(3) 975,361
Peter Migliorini ... 79,167 52,635 -- -- -- 671,050(4) 802,852
Richard P
Randall ............ 36,667 52,635 -- -- -- -- 89,302
Thomas H
Schwartz ........... 57,500 52,635 -- -- -- -- 110,135
Walter Yetnikoff ... 54,167 52,635 -- -- -- -- 106,802

----------
(1) Includes $200,000 of fees paid to Mr. Birnbaum for consulting services with
respect to the designing and manufacture of shoes and general consulting to
the Company. See "--Certain Relationships and Related Transactions."

(2) Includes (a) $412,000 in fees paid to Peter J. Solomon & Company, a
financial advisory firm of which Mr. Cooper is a Managing Director, in
connection with the Company's acquisition of all the capital stock of
Daniel M. Friedman and Associates, Inc. and DMF, International, Ltd. and
(b) $203,000 from the exercise of options and the sale of the shares
underlying such options. See "--Certain Relationships and Related
Transactions."

(3) Includes (a) $478,865 in fees, travel and insurance allowance paid to JLM
Consultants, a company wholly owned by Mr. Madden, in connection with
consulting services for the development of the Company's international
business, (b) $393,817 in income from the exercise of options and the sale
of the shares underlying such options and (c) $32,194 for the use of a
corporate apartment. See "--Certain Relationships and Related
Transactions."

(4) Represents income from the exercise of options and the sale of the shares
underlying such options.

Directors who are also employees of the Company are not paid any fees
or other remuneration for service on the Board or any of its committees. In
2006, each non-employee director received the following compensation: (i) a
grant of (A) 1,000 shares of Common Stock for independent directors or (B) 500
shares for non-independent directors and (ii) $40,000. In 2006, members of the
Audit Committee, Nominating/Corporate Governance Committee and Compensation
Committee each received an additional $10,000 for service on such committees,
except that the audit committee financial expert received $15,000 and the
chairperson of the Compensation Committee received $15,000. The Company
reimburses directors for any out-of-pocket expenses incurred by them in
connection with services provided in such capacity.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In July 2001, the Company entered into a consulting agreement with
Peter J. Solomon & Company, a financial advisory firm of which Marc S. Cooper,
one of the Company's directors, is a managing director. Under this agreement,
the firm provides financial advisory and investment banking services to the
Company. This agreement was amended in March 2004. The amended agreement expired
on March 31, 2005, but pursuant to its terms has been automatically renewed
until such time that the Company terminates it. The Company terminated the
agreement on July 11, 2006. During 2006, the Company retained Peter J. Solomon &
Company as an advisor in connection with the Company's acquisition of all the
capital stock of each of Daniel M. Friedman & Associates, Inc. and DMF
International, Ltd. In February 2006, the Company paid Peter J. Solomon &
Company an advisory fee in the amount equal to $412,000 for services provided
and expenses incurred in connection with such acquisition. No other fees were
paid to Peter J. Solomon & Company in 2006.

In October 2002, the Company entered into an agreement with Jeffrey
Birnbaum, one of the Company's directors. Under this agreement, Mr. Birnbaum
provides consulting services with respect to the designing and manufacturing of
shoes and general consulting services to the Company, pursuant to which, Mr.
Birnbaum received a fee of $200,000 in 2006. Mr. Birnbaum has been a partner and
the Product Development Manager of Dolphin Footwear Company since August 1982.
Dolphin Footwear Company is one of the Company's largest domestic and foreign
suppliers. In 2006, the Company paid Dolphin Footwear Company and Ming Well,
Dolphin's Hong Kong affiliate, approximately $77.7 million for the purchase of
goods.

In January 2004, the Company entered into an agreement with John Madden
and JLM Consultants, a company wholly-owned by John Madden, one of the Company's
directors, which was amended in 2005. Under this agreement, Mr. Madden provided
consulting services with respect to the development of international sales of
the Company. This agreement expired on December 31, 2005 but the parties have
continued the consulting arrangement under the terms of the expired agreement.
Under the agreement, JLM Consultants receives a commission equal to 4% on
International Sales (as defined in the Agreement) up to $6.0 million and 3% on
International Sales in excess of $6.0 million. The agreement provides for a
monthly draw in the amount of $20,000 with recourse against such commissions, as
well as a $1,000 per month travel allowance and $1,700 per month toward health
insurance premiums. Pursuant to this arrangement, JLM Consultants received a
total of $478,865 in 2006.

Effective as of July 1, 2005, the Company amended its employment
agreement with Steven Madden, pursuant to which Mr. Madden agreed to serve as
the Company's Creative and Design Chief. The term of Mr. Madden's employment
under his amended employment agreement commenced July 1, 2005 and ends on June
30, 2015. The agreement provides for an annual salary of $600,000, with a 7%
increase of base salary on a compound basis in each of the third, fifth, seventh
and ninth years of the agreement. The agreement also provides for an annual
bonus in an amount determined by the Board of Directors, which will be at least
2% of the Company's EBITDA (the "Annual Bonus"). Additionally, the Company shall
pay Mr. Madden an annual cash bonus in relation to "new business" (as defined in
the agreement) in an amount to be determined by the Board of Directors, which
will be at least (i) 2.5% of new business gross direct revenues and (ii) 10% of
all license or other fee income above $2,000,000.00 (the "New Business Bonus").
In addition, Mr. Madden is eligible to receive annually an option grant to
purchase shares of Common Stock in an amount equal to not less than 100% of the
largest aggregate amount of options granted to any other continuing full-time
employee of the Company during the annual period; provided, however, a grant in
excess of 150% of the options grant to such other continuing full-time employee
shall require shareholder approval. The agreement provides for, in the event of
Mr. Madden's death, the payment to Mr. Madden's estate of his base salary for
the 12-month period immediately subsequent to the date of Mr. Madden's death. In
the event that Mr. Madden's employment agreement is terminated due to Mr.
Madden's total disability (as defined in the agreement), "for cause" (as defined
in the agreement) or due to Mr. Madden's resignation, the Company is obligated
to pay Mr. Madden the amount of compensation that is accrued and unpaid through
the date of termination. In the event Mr. Madden's employment agreement is
terminated for any reason (other than "for cause" or due to his death or total
disability or due to Mr. Madden's resignation), the Company is obligated to pay
Mr. Madden, in installments, the balance of his base salary that would have been
paid by the Company under the agreement for the full term of the agreement. In
the event that there is a "change of control" (as defined in the agreement)
transaction, all unvested options to purchase shares of Common Stock held by Mr.
Madden will vest on the date of termination and Mr. Madden will be entitled to
receive a lump sum cash payment equal to (1) the amount of compensation that is
accrued and unpaid through the date of termination, (2) an amount equal to the
product of (A) the number of years remaining in the term of the agreement (but
not less than 5) and (B) the sum of (w) the base salary for the 12-month period
ended on the preceding December 31 (or for the 12-month period ending on
December 31, 2002, if greater), (x) the amount of the Annual Bonus earned (paid
or accrued or which should have been paid or accrued) for the 12-month period
ended on the preceding December 31 (or for the 12-month period ended on December
31, 2002, if greater), (y) the non-accountable expense allowance provided for
under the agreement for the 12-month period ended on the preceding December 31,
and (z) the amount of the New Business Bonus earned (paid or accrued or which
should have been paid or accrued) for the 12-month period ended on the preceding
December 31 (or for the 12-month period ending on December 31 during the
agreement in which Mr. Madden received the greatest New Business Bonus, if
greater). Mr. Madden's employment agreement contains other customary provisions,
including provisions regarding expenses reimbursement, confidentiality,
solicitation and competition. For the fiscal year ending December 31, 2006, Mr.
Madden

earned (i) $600,000 in base salary, (ii) $200,000 in non-accountable expense
allowance, (iii) a bonus of $1,700,060 representing 2% of the Company's earnings
before interest, tax, depreciation and amortization (iv) a bonus of $2,526,868
earned based on 2.5% of the Company's new business and (v) a bonus of $92,462
based on 10% of Royalty/Licensing income over $2,000,000. In addition, Mr.
Madden was awarded 30,000 shares of restricted stock with a market value of
$1,081,800 on the date of the award which vests one fourth per year over a four
year period and 135,000 shares of restricted stock with a market value of
$3,800,250 on the date of the award which vests one-fifth per year over a five
year period.

REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS

The Company's Conduct Code and "Employee Handbook" prohibit all
conflicts of interest. Under the Conduct Code, conflicts of interest occur when
private or family interests interfere in any way, or even appear to interfere,
with the interests of the Company. The Company's prohibition on conflicts of
interest under the Conduct Code includes any related person transaction.

Related person transactions must be approved by the Board, or by a
committee of the Board consisting solely of independent directors, who will
approve the transaction only if they determine that it is in the best interests
of the Company. In considering the transaction, the Board or committee will
consider all relevant factors, including as applicable (i) the Company's
business rationale for entering into the transaction; (ii) the alternatives to
entering into a related person transaction; (iii) whether the transaction is on
terms comparable to those available to third parties or, in the case of
employment relationships, to employees generally; (iv) the potential for the
transaction to lead to an actual or apparent conflict of interest and any
safeguards imposed to prevent such actual or apparent conflicts; and (v) the
overall fairness of the transaction to the Company.

The Company has multiple processes for reporting conflicts of
interests, including related person transactions. Under the Conduct Code, all
employees are required to report any actual or apparent conflict of interest, or
potential conflict of interest, to management. The chief financial officer
quarterly distributes a questionnaire to the Company's executive officers and
management personnel and annually distributes a questionnaire to the members of
the Board of Directors requesting certain information regarding, among other
things, their immediate family members, employment and beneficial ownership
interests, which information is then reviewed for any conflicts of interest
under the Conduct Code.

The Audit Committee, Disclosure Committee and Board of Directors
discuss the related party transactions and they are reviewed as part of the
Forms 10-K and 10-Q review process, including related party transaction
disclosures.

If a director is involved in the transaction, he will be recused from
all discussions and decisions about the transaction. The transaction must be
approved in advance whenever practicable, and if not practicable, must be
ratified as promptly as practicable.

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 Common Stock by (i) each person
known by the Company to beneficially own five percent or more of the outstanding
shares; (ii) the directors and the Named Executive Officers; and (iii) the
Company's executive 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 within 60 days. See "Compensation of Directors and Executive Officers."

SHARES BENEFICIAL OWNED
---------------------------------------------
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENTAGE
BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP(2) OF CLASS(2)
------------------------------------------------------------ ------------------------- -------------

Jamieson A. Karson ......................................... 121,200(3) *
Arvind Dharia .............................................. 225,243(4) 1.09
Awadhesh Sinha ............................................. -- --
Robert Schmertz ............................................ 180,000(5) *
Amelia Newton Varela ....................................... 30,000 *
Jeffrey Birnbaum ........................................... 45,750(6) *
Marc S. Cooper ............................................. 750 *
Harold D. Kahn ............................................. 9,000(7) *
John Madden ................................................ 40,750(8) *
Peter Migliorini ........................................... 16,500(9) *
Richard P. Randall ......................................... 1,500 *
Thomas H. Schwartz ......................................... 52,400(10) *
Walter Yetnikoff ........................................... 16,500(11) *
Steven Madden .............................................. 2,271,500(12) 10.72
BOCAP Corp. ................................................ 1,214,000(13) 5.94
Directors and Executive Officers as a Group (13 persons) ... 739,593(14) 3.54

----------
* 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 13d-3 of the Securities Exchange Act, and based upon
20,453,888 shares of Common Stock outstanding (excluding treasury shares)
as of the Record Date.

(3) Includes (i) 56,200 shares of Common Stock issuable upon the exercise of
options held by Mr. Karson and (ii) 15,000 shares of Common Stock held by
Mr. Karson's wife.

(4) Includes 193,243 shares of Common Stock issuable upon the exercise of
options held by Mr. Dharia.

(5) Includes 50,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Schmertz.

(6) Includes 30,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Birnbaum.

(7) Includes 7,500 shares of Common Stock issuable upon the exercise of
options held by Mr. Kahn.

(8) Includes 40,000 shares of Common Stock issuable upon the exercise of
options held by Mr. J. Madden.

(9) Includes 15,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Migliorini.

(10) Includes 30,000 shares of Common Stock issuable upon the exercise of
options held by Mr. Schwartz.

(11) Includes 15,000 shares of Common Stock issuable upon exercise of options
held by Mr. Yetnikoff.

(12) Includes (i) 1,214,000 shares of Common Stock held by BOCAP, a
corporation wholly-owned by Steven Madden, (ii) 322,500 shares of Common
Stock held by Steven Madden and (iii) 735,000 shares of Common Stock
issuable upon the exercise of options held by Steven Madden.

(13) BOCAP is wholly-owned by Steven Madden.

(14) Includes 436,943 shares issuable upon the exercise of options.

PROPOSAL TWO
PROPOSAL FOR THE APPROVAL OF AMENDMENT NUMBER ONE TO THE
STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN

The Company maintains the Steven Madden, Ltd. 2006 Stock Incentive
Plan, for the benefit of eligible employees, consultants and non-employee
directors of the Company. The proposed amendment number one to the 2006 Plan,
which was unanimously adopted by the Board of Directors of the Company by
written consent on April 25, 2007 subject to stockholder approval at the 2007
Annual Meeting, would increase the aggregate number of shares of the Common
Stock issuable under the 2006 Plan by 350,000 shares to a total of 1,550,000
shares, or approximately 7.6% of the currently outstanding shares of Common
Stock and to increase the number of aggregate shares that may be used for awards
that are not "appreciation awards" (including restricted stock, performance
shares or certain other stock-based awards) under this 1,550,000 share limit by
350,000 shares to 980,000 shares. The aggregate number of shares available under
the 2006 Plan reflects the 3-for-2 stock split that became effective May 25,
2006 (the "Stock Split"). The Board believes that it is desirable to increase
the total number of shares available under the 2006 Plan in order to attract,
motivate and retain employees and non-employee directors of, and consultants to,
the Company because the current share reserve under the 2006 Plan is expected to
be fully utilized in the near term.

Currently, the maximum number of shares of Common Stock that may be
issued under the 2006 Plan is 1,200,000 (adjusted to reflect the Stock Split)
shares of Common Stock of which a maximum of 630,000 (adjusted to reflect the
Stock Split) of such shares may be used for awards that are not "appreciation
awards" (including restricted stock, performance shares, stock-settled stock
appreciation rights or certain other stock-based awards). Generally, each award
of restricted stock vests 25% per year beginning on the first anniversary of the
date of grant subject to the participant's continued service with the Company,
provided that such awards are subject to accelerated vesting in the event of
certain terminations of employment or upon a change in control of the Company
(each as provided in the applicable award agreement). Except in these limited
circumstances, awards will not vest during the first year following the date of
grant.

As of April 25, 2007, no stock options had been granted under the 2006
Plan. Pursuant to the Company's 1997 Stock Plan and the Company's 1999 Stock
Plan, as amended (together with the 1997 Stock Plan, the "Prior Plans"),
however, the Company previously granted stock options to certain of its then
directors and employees.

The following table sets forth certain information regarding the
options and shares available for grant and outstanding under the Prior Plans and
2006 Plan, respectively.

As of April 25, 2007
--------------------
Prior Plans:
Options available for grant ......... 0
Options outstanding ................. 1,395,985
Weighted average exercise price ..... $8.75
Weighted average term ............... 4.06 years

2006 Plan:
Shares available for grant .......... 597,200
Shares outstanding .................. 602,800
Unvested ......................... 562,973
Vested ........................... 39,827

In addition, the proposed amendment number one to the 2006 Plan deletes
the net share counting provision of the 2006 Plan with respect to stock-settled
stock appreciation rights, which currently provides that only the number of
shares of Common Stock that are delivered to a participant count against the
share limitations set forth under the 2006 Plan. As a result of the amendment to
the 2006 Plan, the total number of shares subject to an award of stock
appreciation rights will count against share limitations (both aggregate and
individual) set forth under the 2006 Plan. This provision of the proposed
amendment number one does not require stockholder approval.

The Board has also adopted certain other minor clarifying amendments to
the 2006 Plan, which do not require stockholder approval, to reflect
developments in applicable law and equity compensation practices.

In the event that the requisite stockholder approval of amendment
number one to the 2006 Plan is not obtained, the amendment to the 2006 Plan will
not take effect to the extent stockholder approval is required, but the Company
may continue to grant awards under the 2006 Plan in accordance with its terms
and the current share reserve under the 2006 Plan.

The following description of the 2006 Plan, which takes into account
the effect of the amendment, is a summary of its principal provisions and is
qualified in its entirety by reference to the 2006 Plan, a copy of which is
available as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with
the Securities and Exchange Commission on July 3, 2006. A copy of the proposed
amendment number one to the 2006 Plan is appended hereto as Exhibit A.

DESCRIPTION OF THE 2006 STOCK INCENTIVE PLAN

The Board previously approved the 2006 Plan in order to enhance the
profitability and value of the Company for the benefit of its stockholders by
enabling us to offer eligible employees, consultants and non-employee directors
cash and stock-based incentives in the Company to attract, retain and reward
such individuals and strengthen the mutuality of interests between such
individuals and the Company's stockholders. The Board's adoption of the
amendment to the 2006 Plan to increase the aggregate number of shares under the
2006 Plan is subject to the approval of the Company's stockholders.

The affirmative vote of the holders of at least a majority of the
outstanding shares of the Common Stock present or represented by proxy and
entitled to vote at the annual meeting is required to approve the amendment to
the 2006 Plan. The Board recommends that the stockholders vote "for" the
approval of the amendment to the 2006 Plan.

Administration. The 2006 Plan is administered by a committee, which is
intended to consist of two or more non-employee directors, each of whom will be,
to the extent required, a non-employee director as defined in Rule 16b-3 of the
Exchange Act, an outside director as defined under Section 162(m) of the Code
and an independent director as defined under NASD Rule 4200(a)(15) (the
"Committee"); provided that with respect to the application of the 2006 Plan to
non-employee directors, the 2006 Plan will be administered by the Board (and
references to the Committee include the Board for this purpose). Currently, the
compensation committee of the Board serves as the Committee under the 2006 Plan.

The Committee has full authority to administer and interpret the 2006
Plan, to grant discretionary awards under the 2006 Plan, to determine the
persons to whom awards will be granted, to determine the types of awards to be
granted, to determine the terms and conditions of each award, to determine the
number of shares of Common Stock to be covered by each award and to make all
other determinations in connection with the 2006 Plan and the awards thereunder
as the Committee, in its sole discretion, deems necessary or desirable. The
Committee has delegated to the Chief Executive Officer of the Company the
authority to grant awards under the 2006 Plan to eligible employees and
consultants who are not subject to Section 16(b) of the Exchange Act or Section
162(m) of the Code; provided that in no event will the number of shares of
Common Stock that may be granted exceed 1,000 shares to any such individual
during any fiscal year. The terms and conditions of individual awards are set
forth in written agreements that are consistent with the terms of the 2006 Plan.
Awards under the 2006 Plan may not be made on or after March 20, 2016, except
that awards (other than stock options or stock appreciation rights) that are
intended to be "performance-based" under Section 162(m) of the Code will not be
made after the fifth anniversary of the 2006 Plan's initial approval by the
Company's stockholders (i.e., May 26, 2011).

Eligibility and Types of Awards. All of the Company's employees,
consultants and non-employee directors are eligible to be granted nonqualified
stock options, stock appreciation rights, performance shares, restricted stock,
other stock-based awards and performance-based cash awards. In addition, the
Company's employees and employees of the Company's affiliates that qualify as
subsidiaries or parent corporations (as defined under Section 424 of the Code)
are eligible to be granted incentive stock options under the 2006 Plan.

Available Shares. The aggregate number of shares of Common Stock which
may be issued or used for reference purposes under the 2006 Plan, as amended, or
with respect to which awards may be granted may not exceed 1,550,000 shares,
which may be either authorized and unissued Common Stock or Common Stock held in
or acquired for the treasury of the Company; provided, however, that 980,000
shares of this aggregate limit may be used for awards that are not "appreciation
awards" (including restricted stock, performance shares or certain other
stock-based awards). In general, if awards under the 2006 Plan are for any
reason cancelled, or expire or terminate unexercised, the shares covered by such
awards will again be available for the grant of awards under the 2006 Plan.

The maximum number of shares of Common Stock with respect to which any
stock option, stock appreciation right or shares of restricted stock that are
subject to the attainment of specified performance goals and intended to satisfy
Section 162(m) of the Code and may be granted under the 2006 Plan during any
fiscal year to any eligible employee or consultant will be 600,000 shares (per
type of award). The total number of shares of Common Stock with respect to all
awards that may be granted under the 2006 Plan during any fiscal year to any
eligible employee or consultant will be 750,000 shares. There are no annual
limits on the number of shares of Common Stock with respect to an award of
restricted stock that are not subject to the attainment of specified performance
goals to eligible employees or consultants. The maximum number of shares of
Common Stock with respect to any award of performance shares to an eligible
employee or consultant during any fiscal year is 300,000 shares. The maximum
number of shares of Common Stock with respect to which any stock option (other
than incentive stock options), stock appreciation right, performance share or
other stock-based award that may be granted under the 2006 Plan during any
fiscal year to any non-employee director will be 150,000 shares (per type of
award). The total number of shares of Common Stock with respect to all awards
that may be granted under the 2006 Plan during any fiscal year to any
non-employee director will be 300,000 shares. The individual share limits
specified above have been adjusted to reflect the Stock Split. The maximum
payment that may be made to an eligible employee or consultant under any
performance-based cash award during any fiscal year and subject to the
attainment of specified performance goals will be $10,000,000.

As amended, the 2006 Plan requires that the Committee appropriately
adjust the above individual maximum share limitations, the aggregate number of
shares of Common Stock available for the grant of awards and the exercise price
of an award to reflect any change in the Company's capital structure or business
by reason of certain corporate transactions or events.

The Company commits to limit its "burn rate" (i.e., the rate at which
it grants equity awards under the 2006 Plan) to a three year annual average burn
rate limit of 3.09%, which is within industry norms and is intended to be
calculated using Institutional Shareholder Services methodology.

Awards Under the 2006 Plan. The following types of awards are available under
the 2006 Plan:

Stock Options. The Committee may grant nonqualified stock options and
incentive stock options (only to eligible employees) to purchase shares of
Common Stock. The Committee will determine the number of shares of Common Stock
subject to each option, the term of each option (which may not exceed seven
years (or five years in the case of an incentive stock option granted to a 10%
stockholder)), the exercise price, the vesting schedule (if any), and the other
material terms of each option. No incentive stock option or nonqualified stock
option may have an exercise price less than the fair market value of the Common
Stock at the time of grant (or, in the case of an incentive stock option granted
to a 10% stockholder, 110% of fair market value).

Options will be exercisable at such time or times and subject to such
terms and conditions as determined by the Committee at grant and the
exercisability of such options may be accelerated by the Committee in its sole
discretion. Upon the exercise of an option, the participant must make payment of
the full exercise price, either (i) in cash, check, bank draft or money order;
(ii) solely to the extent permitted by law, through the delivery of irrevocable
instructions to a broker reasonably acceptable to the Company to deliver
promptly to the Company an amount equal to the purchase price; or (iii) on such
other terms and condition as a may be acceptable to the Committee.

Stock Appreciation Rights. The Committee may grant stock appreciation
rights ("SARs") either with a stock option which may be exercised only at such
times and to the extent the related option is exercisable ("Tandem SAR") or
independent of a stock option ("Non-Tandem SARs"). A SAR is a right to receive a
payment in Common Stock or cash (as determined by the Committee) equal in value
to the excess of the fair market value of one share of Common Stock on the date
of exercise over the exercise price per share established in connection with the
grant of the SAR. The term of each SAR may not exceed seven years. The exercise
price per share covered by a SAR will be the exercise price per share of the
related option in the case of a Tandem SAR and will be the fair market value of
the Common Stock on the date of grant in the case of a Non-Tandem SAR. The
Committee may also grant "limited SARs," either as Tandem SARs or Non-Tandem
SARs, which may become exercisable only upon the occurrence of a change in
control (as defined in the 2006 Plan) or such other event as the Committee may,
in its sole discretion, designate at the time of grant or thereafter.

Restricted Stock. The Committee may award shares of restricted stock.
Except as otherwise provided by the Committee upon the award of restricted
stock, the recipient generally has the rights of a stockholder with respect to
the shares, including the right to receive dividends, the right to vote the
shares of restricted stock and, conditioned upon full vesting of shares of
restricted stock, the right to tender such shares, subject to the conditions and
restrictions generally applicable to restricted stock or specifically set forth
in the recipient's restricted stock agreement. The Committee may determine at
the time of award, that the payment of dividends, if any, will be deferred until
the expiration of the applicable restriction period.

Recipients of restricted stock are required to enter into a restricted
stock agreement with the Company which states the restrictions to which the
shares are subject, which may include satisfaction of pre-established
performance goals, and the criteria or date or dates on which such restrictions
will lapse.

If the grant of restricted stock or the lapse of the relevant
restrictions is based on the attainment of performance goals, the Committee will
establish for each recipient the applicable performance goals, formulae or
standards and the applicable vesting percentages with reference to the
attainment of such goals or satisfaction of such formulas or standards while the
outcome of the performance goals are substantially uncertain. Such performance
goals may incorporate provisions for disregarding (or adjusting for) changes in
accounting methods, corporate transactions (including, without limitation,
dispositions and acquisitions) and other similar events or circumstances.
Section 162(m) of the Code requires that performance awards be based upon
objective performance measures. The performance goals for performance-based
restricted stock will be based on one or more of the objective criteria set
forth on Exhibit A to the 2006 Plan and discussed in general below.

Performance Shares. The Committee may award performance shares. A
performance share is the equivalent of one share of Common Stock. The recipient
of a grant of performance shares will specify one or more performance criteria
to meet within a specified period determined by the Committee at the time of
grant. The performance goals for performance shares will be based on one or more
of the objective criteria set forth on Exhibit A to the 2006 Plan and discussed
in general below. A minimum level of acceptable achievement will also be
established by the Committee. If, by the end of the performance period, the
recipient has achieved the specified performance goals, he or she will be deemed
to have fully earned the performance shares. To the extent earned, the
performance shares will be paid to the recipient at the time and in the manner
determined by the Committee in cash, shares of Common Stock or any combination
thereof.

Other Stock-Based Awards. The Committee may, subject to limitations
under applicable law, make a grant of such other stock-based awards (including,
without limitation, performance units, dividend equivalent units, stock
equivalent units, restricted stock units and deferred stock units) under the
2006 Plan that are payable in cash or denominated or payable in or valued by
shares of Common Stock or factors that influence the value of such shares. The
Committee shall determine the terms and conditions of any such other awards,
which may include the achievement of certain minimum performance goals for
purposes of compliance with Section 162(m) of the Code and/or a minimum vesting
period. The performance goals for performance-based other stock-based awards
will be based on one or more of the objective criteria set forth on Exhibit A to
the 2006 Plan and discussed in general below.

Performance-Based Cash Awards. The Committee may, subject to
limitations under applicable law, make a grant of individual target awards
either alone or in tandem with stock options, SARs or restricted stock under the
2006 Plan that are contingent upon the satisfaction of certain pre-established
performance goals that are reached within a specified performance period, each
of which, together with any other terms and conditions, shall be determined by
the Committee in its sole discretion at the time of grant. At the time the
performance goals are established, the Committee will prescribe a formula to
determine the percentages (which may be greater than 100%) of the individual
target award which may be payable based upon the degree of attainment of the
performance goals during the calendar year. The Committee may, in its sole
discretion, elect to pay a participant an amount that is less than the
participant's individual target award regardless of the degree of attainment of
the performance goals; provided that no such discretion to reduce a
performance-based cash award earned based on achievement of the applicable
performance goals will be permitted for a calendar year in which a change in
control occurs. The performance goals for performance-based cash awards will be
based on one or more of the objective criteria set forth on Exhibit A to the
2006 Plan and discussed in general below.

Performance Goals. The Committee may grant awards of restricted stock,
performance shares, performance-based cash awards and other stock-based awards
that are intended to qualify as "performance-based compensation" for purposes of
Section 162(m) of the Code. These awards may be granted, vest and be paid based
on attainment of specified performance goals established by the Committee. These
performance goals will be based on the attainment of a certain target level of,
or a specified increase or decrease in, one or more of the following criteria
selected by the Committee:

o earnings per share, earnings before interest and taxes or
earnings before interest, tax, depreciation and amortization;
o gross profit or gross profit return on investment;
o gross margin or gross margin return on investment;
o operating income, net income, cash flow or economic value added;
o revenue growth;

o working capital;
o specified objectives with regard to limiting the level of
increase in all or a portion of, the Company's bank debt or
other long-term or short-term public or private debt or other
similar financial obligations of the Company, which may be
calculated net of cash balances and/or other offsets and
adjustments as may be established by the Committee;
o return on equity, assets or capital;
o total shareholder return;
o fair market value of the shares of the Common Stock;
o market share and/or market segment share;
o the growth in the value of an investment in the Common Stock
assuming the reinvestment of dividends;
o customer satisfaction, customer loyalty, brand recognition
and/or brand acceptance;
o style indexes;
o employee retention;
o number of new patents, new product innovation and/or
introduction;
o product release schedules and/or ship targets; or
o reduction in expenses and/or product cost reduction through
advanced technology.

To the extent permitted by law, the Committee may also exclude the
impact of an event or occurrence which the Committee determines should be
appropriately excluded, including:

o restructurings, discontinued operations, extraordinary items and
other unusual or non-recurring charges;
o an event either not directly related to the operations of the
Company or not within the reasonable control of the Company's
management; or
o a change in accounting standards required by generally accepted
accounting principles.

Performance goals may also be based on individual participant
performance goals, as determined by the Committee, in its sole discretion.

In addition, all performance goals may be based upon the attainment of
specified levels of Company (or subsidiary, division or other operational unit
of the Company) performance under one or more of the measures described above
relative to the performance of other corporations. The Committee may designate
additional business criteria on which the performance goals may be based or
adjust, modify or amend those criteria.

Change in Control. Unless otherwise determined by the Committee at the
time of grant or in a written employment agreement, awards subject to vesting
and/or restrictions will not accelerate and vest or cause the lapse of
restrictions upon a change in control (as defined in the 2006 Plan) of the
Company. Instead, such awards will be, in the discretion of the Committee, (i)
assumed and continued or substituted in accordance with applicable law, (ii)
purchased by the Company for an amount equal to the excess of the price of the
Common Stock paid in a change in control over the exercise price of the
award(s), or (iii) cancelled if the price of the Common Stock paid in a change
in control is less than the exercise price of the award. The Committee may also,
in its sole discretion, provide for accelerated vesting or lapse of restrictions
of an award at any time.

Amendment and Termination. Notwithstanding any other provision of the
2006 Plan, the Board may at any time amend any or all of the provisions of the
2006 Plan, or suspend or terminate it entirely, retroactively or otherwise;
provided, however, that, unless otherwise required by law or specifically
provided in the 2006 Plan, the rights of a participant with respect to awards
granted prior to such

amendment, suspension or termination may not be adversely affected without the
consent of such participant and, provided further that the approval of the
Company's stockholders will be obtained to the extend required by Delaware law,
Sections 162(m) and 422 of the Code, The Nasdaq Global Market or the rules of
such other applicable stock exchange, as specified in the 2006 Plan.

Miscellaneous. Awards granted under the 2006 Plan are generally
nontransferable (other than by will or the laws of descent and distribution),
except that the Committee may provide for the transferability of nonqualified
stock options at the time of grant or thereafter to certain family members.

Certain U.S. Federal Income Tax Consequences. The rules concerning the
federal income tax consequences with respect to options granted and to be
granted pursuant to the 2006 Plan are quite technical. Moreover, the applicable
statutory provisions are subject to change, as are their interpretations and
applications which may vary in individual circumstances. Therefore, the
following is designed to provide a general understanding of the federal income
tax consequences. In addition, the following discussion does not set forth any
gift, estate, social security or state or local tax consequences that may be
applicable and is limited to the U.S. federal income tax consequences to
individuals who are citizens or residents of the U.S., other than those
individuals who are taxed on a residence basis in a foreign country.

Incentive Stock Options. In general, an employee will not realize
taxable income upon either the grant or the exercise of an incentive stock
option and the Company will not realize an income tax deduction at either such
time. In general, however, for purposes of the alternative minimum tax, the
excess of the fair market value of the shares of Common Stock acquired upon
exercise of an incentive stock option (determined at the time of exercise) over
the exercise price of the incentive stock option will be considered income. If
the recipient was continuously employed on the date of grant until the date
three months prior to the date of exercise and such recipient does not sell
Common Stock received pursuant to the exercise of the incentive stock option
within either (i) two years after the date of the grant of the incentive stock
option or (ii) one year after the date of exercise, a subsequent sale of Common
Stock will result in long-term capital gain or loss to the recipient and will
not result in a tax deduction to the Company.

If the recipient is not continuously employed on the date of grant
until the date three months prior to the date of exercise or such recipient
disposes of Common Stock acquired upon exercise of the incentive stock option
within either of the above mentioned time periods, the recipient will generally
realize as ordinary income an amount equal to the lesser of (i) the fair market
value of Common Stock on the date of exercise over the exercise price, or (ii)
the amount realized upon disposition over the exercise price. In such event,
subject to the limitations under Sections 162(m) and 280G of the Code (as
described below), the Company generally will be entitled to an income tax
deduction equal to the amount recognized as ordinary income. Any gain in excess
of such amount realized by the recipient as ordinary income would be taxed at
the rates applicable to short-term or long-term capital gains (depending on the
holding period).

Nonqualified Stock Options. A recipient will not realize any taxable
income upon the grant of a nonqualified stock option and the Company will not
receive a deduction at the time of such grant unless such option has a readily
ascertainable fair market value (as determined under applicable tax law) at the
time of grant. Upon exercise of a nonqualified stock option, the recipient
generally will realize ordinary income in an amount equal to the excess of the
fair market value of Common Stock on the date of exercise over the exercise
price. Upon a subsequent sale of Common Stock by the recipient, the recipient
will recognize short-term or long-term capital gain or loss depending upon his
or her holding period for Common Stock. Subject to the limitations under
Sections 162(m) and 280G of the Code (as described below), the Company will
generally be allowed a deduction equal to the amount recognized by the recipient
as ordinary income.

All Options. With regard to both incentive stock options and
nonqualified stock options, the following also apply: (i) any of the Company's
officers and directors subject to Section 16(b) of the Exchange Act may be
subject to special tax rules regarding the income tax consequences concerning
their stock options, (ii) any entitlement to a tax deduction on the part of the
Company is subject to the applicable tax rules (including, without limitation,
Section 162(m) of the Code regarding the $1,000,000 limitation on deductible
compensation), and (iii) in the event that the exercisability or vesting of any
award is accelerated because of a change in control, payments relating to the
awards (or a portion thereof), either alone or together with certain other
payments, may constitute parachute payments under Section 280G of the Code,
which excess amounts may be subject to excise taxes and may be nondeductible by
the Company.

In general, Section 162(m) of the Code denies a publicly held
corporation a deduction for federal income tax purposes for compensation in
excess of $1,000,000 per year per person to its chief executive officer and four
other executive officers whose compensation is disclosed in its proxy statement,
subject to certain exceptions. Options will generally qualify under one of these
exceptions if they are granted under a plan that states the maximum number of
shares with respect to which options may be granted to any recipient during a
specified period of the plan under which the options are granted is approved by
stockholders and is administered by a committee comprised of outside directors.
The 2006 Plan is intended to satisfy these requirements with respect to options.

The 2006 Plan is not subject to any of the requirements of the Employee
Retirement Income Security Act of 1974, as amended. The 2006 Plan is not, nor is
it intended to be, qualified under Section 401(a) of the Code.

Future Plan Awards. Except as stated below under the section entitled
"New Plan Benefits with Respect to 2007," no new equity-based awards have been
approved at this time to any employee, officer, non-employee director or
consultant. The Company anticipates that other equity-based awards may be
granted to the named individuals as well as to other employees, officers,
non-employee directors and consultants under the 2006 Plan. However, the amount
of shares of Common Stock that may be granted to the named individuals will be
based upon various prospective factors, including, the nature of services to be
rendered by the Company's employees, officers, non-employee directors and
consultants, and their potential contributions to the Company's success.
Accordingly, actual awards cannot be determined at this time.

NEW PLAN BENEFITS WITH RESPECT TO 2007.

The table below presents certain information with respect to new shares
of restricted stock granted under the 2006 Plan with respect to the 2007
calendar year to certain of the Company's Named Executive Officers as follows:

NUMBER OF SHARES
SUBJECT TO
NAME AND POSITION DOLLAR VALUE RESTRICTION
---------------------------------------------- --------------- ----------------

Jamieson A. Karson $ 723,800(1) 20,000
Arvind Dharia $ 645,400(2) 20,000
Awadhesh Sinha $ 1,460,700(3) 30,000
Robert Schmertz $ 3,184,000(4) 100,000
All Executive Officers as a Group $ 6,013,900 170,000
Non-Employee Directors as a Group $ 0 0
Non-Executive Officer Employees as a Group $ 1,574,510(5) 45,000
Total for all Participants under the 2006 Plan $ 7,588,410 215,000

----------
(1) Calculated based upon the closing price of the Company's stock on March 27,
2007, the date of grant.
(2) Calculated based upon the closing price of the Company's stock on March 6,
2007, the date of grant.
(3) Calculated based upon the closing price of the Company's stock on April 25,
2007, the date of the grant.
(4) Calculated based upon the closing price of the Company's stock on March 9,
2007, the date of grant.
(5) Calculated based upon the closing price of the Company's stock on March 9,
2007 for 38,000 shares and the closing price of the Company's stock on
April 24, 2007 for 7,000 shares.

THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF
COMMON STOCK PRESENT OR REPRESENTED BY PROXY AND ENTITLED TO VOTE AT THE ANNUAL
MEETING IS REQUIRED TO APPROVE THE AMENDMENT TO THE 2006 PLAN. THE BOARD OF
DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE APPROVAL OF AMENDMENT
NUMBER ONE TO THE 2006 PLAN.

PROPOSAL THREE

RATIFICATION OF THE APPOINTMENT OF EISNER LLP AS THE COMPANY'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2007

The Audit Committee has appointed Eisner LLP as the Company's
independent registered public accounting firm to conduct the audit of the
Company's books and records for the fiscal year ending December 31, 2007. Eisner
LLP also served as the Company's independent registered public accountants for
the previous fiscal year.

Although ratification by stockholders is not required by the Company's
organizational documents or other applicable law, the Audit Committee has
determined that requesting ratification by stockholders of its appointment of
Eisner LLP as the Company's independent registered public accountants is a
matter of good corporate practice. If stockholders do not ratify the selection,
the Audit Committee will reconsider whether or not to retain Eisner LLP, but may
still retain them. Even if the selection is ratified, the Audit Committee, in
its discretion, may change the appointment at any time during the year if it
determines that such a change would be in the best interest of the Company and
its stockholders.

Representatives of Eisner LLP are expected to be present at the Annual
Meeting to respond to questions and to make a statement should they so desire.

REQUIRED VOTE

The affirmative vote of the holders of a majority of the shares of
Common Stock present or represented by proxy and entitled to vote at the Annual
Meeting is required to ratify the Audit Committee's selection of Eisner LLP.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors unanimously recommends a vote FOR the
ratification of the appointment of Eisner LLP as the Company's independent
registered public accountants for the fiscal year ending December 31, 2007.
Unless marked to the contrary, proxies received from stockholders will be voted
in favor of ratifying the appointment of Eisner LLP as the Company's independent
registered public accountants for the fiscal year ending December 31, 2007.

FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AUDIT FEES

The aggregate fees billed by Eisner LLP for professional services
rendered for the audit of the Company's annual financial statements for the 2006
Fiscal Year, for the reviews of the financial statements included in the
Company's Quarterly Reports on Form 10-Q for the 2006 Fiscal Year, other
statutory and regulatory filings, consents related to registration statements
filed with the SEC and the audit of the Company's internal controls over
financial reporting for the 2006 Fiscal Year were $436,000. The comparative
amount for the fiscal year ended December 31, 2005 (the "2005 Fiscal Year") was
$460,000.

AUDIT-RELATED FEES

In addition to Audit Fees, Eisner LLP has billed the Company $26,000,
in the aggregate, for Audit Related Fees related to assurance and related
services for the 2006 Fiscal Year. These services include, among others, the
audit of the Company's employee benefit plans and other accounting related
consultations. The comparative amount for the 2005 Fiscal Year was $93,000.

TAX FEES

During the 2006 Fiscal Year, Eisner LLP billed the Company $138,000, in
the aggregate, for services rendered to the Company for tax compliance, tax
advice and tax planning. Eisner LLP billed $122,000 for similar services in the
2005 Fiscal Year.

ALL OTHER FEES

There were no fees billed by Eisner LLP for services rendered to the
Company, other than the services described above under Audit Fees, Audit Related
Fees and Tax Fees, for the 2006 Fiscal Year or the 2005 Fiscal Year.

AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES

Consistent with SEC policies regarding auditor independence, the Audit
Committee has responsibility for appointing, setting compensation and overseeing
the work of the independent registered public accountants. In recognition of
this responsibility, the Audit Committee has established a policy to review and
pre-approve all audit and permissible non-audit services provided by the
independent registered public accountants. These services may include audit
services, audit-related services, tax services and other services.

Prior to engagement of the independent auditor for next year's audit,
the Audit Committee will pre-approve all auditing services and all permitted
non-audit services (including the fees and terms thereof), except those excluded
from requiring pre-approval based upon the de minimus exception set forth in
Section 10A(i)(1)(B) of the Exchange Act.

The Audit Committee's pre-approval policies and procedures are as
follows: (a) prior to each fiscal year, the Audit Committee pre-approves a
schedule of estimated fees for proposed non-prohibited audit and non-audit
services and (b) actual amounts paid are monitored by financial management of
the Company and reported to the Audit Committee.

All work performed by Eisner LLP as described above under the captions
Audit Fees, Audit Related Fees, Tax Fees and All Other Fees has been approved or
pre-approved by the Audit Committee pursuant to the provisions of the Audit
Committee's charter. The Audit Committee has considered and concluded that the
provision of non-audit services is compatible with maintaining the independence
of Eisner LLP.

THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF
COMMON STOCK PRESENT OR REPRESENTED BY PROXY AND ENTITLED TO VOTE AT THE ANNUAL
MEETING IS REQUIRED TO RATIFY THE APPOINTMENT OF EISNER LLP AS THE COMPANY'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS. THE BOARD OF DIRECTORS RECOMMENDS
THAT THE STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF EISNER
LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2007.

OTHER MATTERS

At the date of this Proxy Statement, the Company has no knowledge of
any business other than that described above that will be presented at the
Annual Meeting. If any other business should properly come before the Annual
Meeting in connection therewith, it is intended that the persons named in the
enclosed proxy will have discretionary authority to vote the shares which they
represent.

STOCKHOLDER PROPOSALS AND SUBMISSIONS FOR THE COMPANY'S 2008 ANNUAL MEETING

In accordance with rules promulgated by the SEC, any stockholder who
wishes to submit a proposal for inclusion in the proxy material to be
distributed by the Company in connection with the 2008 Annual Meeting must do so
no later than December 30, 2007.

In addition, in accordance with Article I, Section 7(f) of the
Company's By-Laws, in order to be properly brought before the 2008 Annual
Meeting, a matter must be (i) specified in the notice of such meeting given by
or at the direction of the Board of Directors (or any duly authorized committed
thereof), (ii) otherwise properly brought before such meeting by or at the
direction of the Board of Directors (or any duly authorized committed thereof)
or (iii) specified in a written notice given by a stockholder of record on the
date of the giving of the notice and on the record date for such meeting, which
notice conforms to the requirements of Article I, Section 7(f) of the By-Laws
and is delivered to, or mailed and received at, the Company's principal
executive offices not less than 120 days nor more than 150 days prior to the
first anniversary of the date of the Company's 2007 Annual Meeting. Accordingly,
any written notice given by or on behalf of a stockholder pursuant to the
foregoing clause (iii) in connection with the 2008 Annual Meeting must be
received no later than January 26, 2008 and no earlier than December 27, 2007.

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 30, 2007

By: /s/ JAMIESON A. KARSON
------------------------
Jamieson A. Karson
Chief Executive Officer

EXHIBIT A

AMENDMENT NUMBER ONE

TO THE

STEVEN MADDEN, LTD. 2006 STOCK INCENTIVE PLAN

Dated: April 30, 2007

Capitalized terms used herein but not defined shall have the meanings
attributed to such terms under the Steven Madden, Ltd. 2006 Stock Incentive Plan
(the "Plan").

WHEREAS, Steven Madden, Ltd. (the "Company") currently maintains the
Plan for the purpose of awarding cash and stock-based incentives to its Eligible
Employees, Consultants and Non-Employee Directors;

WHEREAS, pursuant to Section 14.1 of the Plan, the Board or the
Committee may amend the Plan at any time, subject to stockholder approval under
certain circumstances; and

WHEREAS, the Committee now wishes to amend the Plan, subject to the
approval of the Company's stockholders at the Company's 2007 Annual Meeting of
Stockholders, to increase the aggregate share reserve under the Plan and to make
certain other administrative modifications (which are not subject to stockholder
approval).

NOW, THEREFORE, the Plan is hereby amended effective as of April 30,
2007, subject to the approval of the Company's stockholders at the Company's
2007 Annual Meeting of Stockholders, except with respect to the FIRST, THIRD,
FOURTH and FIFTH Paragraphs hereof (which are not subject to stockholder
approval). Except as specifically modified herein, the Plan shall continue in
full force and effect in accordance with all of the terms and conditions
thereof.

1. The definition of "Appreciation Award" in Section 2.3 of the Plan
is hereby amended to delete the words "cash-settled," which
immediately precede "Stock Appreciation Right."

2. The first sentence of Section 4.1(a) of the Plan is hereby
deleted in its entirety and replaced with the following sentence
as follows:

"The aggregate number of shares of Common Stock that may be
issued or used for reference purposes or with respect to which
Awards may be granted under this Plan shall not exceed 1,550,000
shares (subject to any increase or decrease pursuant to Section
4.2), which may be either authorized and unissued Common Stock or
Common Stock held in or acquired for the treasury of the Company
or both; provided, however, that only 980,000 shares of the
1,550,000 shares of Common Stock available hereunder may be
issued or used for Awards that are not Appreciation Awards."

3. The second sentence of Section 4.1(a) of the Plan, as follows, is
hereby deleted in its entirety.

"With respect to Stock Appreciation Rights settled in Common
Stock, only the number shares of Common Stock delivered to a
Participant (based on the difference between Fair Market Value of
the shares of Common Stock subject to such Stock Appreciation
Right on the date such Stock Appreciation Right is exercised and
the Fair Market Value of the shares of Common Stock subject to
such Stock Appreciation Right on the date such Stock Appreciation
Right was awarded) shall count against the aggregate and
individual share limitations set forth under Sections 4.1(a) and
(b)."

4. Section 4.2(b) of the Plan is hereby amended in its entirety to
read in full as follows:

"Subject to the provisions of Section 4.2(d), if there shall
occur any such change in the capital structure of the Company by
reason of any stock split, reverse stock split, stock dividend,
subdivision, combination or reclassification of shares that may
be issued under the Plan, any recapitalization, any merger, any
consolidation, any spin off, any reorganization or any partial or
complete liquidation, or any other corporate transaction or event
having an effect similar to any of the foregoing (a "Section 4.2
Event"), then (i) the aggregate number and/or kind of shares that
thereafter may be issued under the Plan, (ii) the number and/or
kind of shares or other property (including cash) to be issued
upon exercise of an outstanding Award or under other Awards
granted under the Plan, (iii) the purchase price thereof, and/or
(iv) the individual Participant limitations set forth in Section
4.1(b) (other than those based on cash limitations) shall be
appropriately adjusted. In addition, subject to Section 4.2(d),
if there shall occur any change in the capital structure or the
business of the Company that is not a Section 4.2 Event (an
"Other Extraordinary Event"), including by reason of any
extraordinary dividend (whether cash or stock), any conversion,
any adjustment, any issuance of any class of securities
convertible or exercisable into, or exercisable for, any class of
stock, or any sale or transfer of all or substantially all the
Company's assets or business, then the Committee, in its sole
discretion, may adjust any Award and make such other adjustments
to the Plan. Any adjustment pursuant to this Section 4.2 shall be
consistent with the applicable Section 4.2 Event or the
applicable Other Extraordinary Event, as the case may be, and in
such manner as the Committee may, in its sole discretion, deem
appropriate and equitable to prevent substantial dilution or
enlargement of the rights granted to, or available for,
Participants under the Plan. Any such adjustment determined by
the Committee shall be final, binding and conclusive on the
Company and all Participants and their respective heirs,
executors, administrators, successors and permitted assigns.
Except as expressly provided in this Section 4.2 or in the
applicable Award agreement, a Participant shall have no rights by
reason of any Section 4.2 Event or any Other Extraordinary
Event."

5. Section 7.4(b) of the Plan is hereby amended to reduce the
maximum term thereunder from ten (10) years to seven (7) years .

IN WITNESS WHEREOF, the Company has caused this amendment to be
executed on the date first written above.

STEVEN MADDEN, LTD.

By: /s/ JAMIESON A. KARSON
------------------------------
Jamieson A. Karson
Chief Executive Officer

PROXY

STEVEN MADDEN, LTD.

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

PLEASE CLEARLY INDICATE A RESPONSE BY CHECKING ONE OF THE BOXES
([FOR] [WITHHOLD AUTHORITY] [AGAINST] OR [ABSTAIN])
NEXT TO EACH OF THE PROPOSALS

The undersigned stockholder of Steven Madden, Ltd. (the "Company")
hereby appoint(s) Jamieson A. Karson and Arvind Dharia, and each of them, as
attorneys and proxies, each with power of substitution and revocation, to
represent the undersigned at the Annual Meeting of Stockholders of the Company
to be held at the Company's showroom located at 1370 Avenue of the Americas,
14th Floor, New York, New York at 10:00 a.m., local time, on May 25, 2007, and
at any adjournments or postponements thereof, with authority to vote all shares
of Common Stock of the Company held or owned by the undersigned on April 5,
2007, in accordance with the directions indicated herein.

(Continued and to be signed on the reverse side.)

ANNUAL MEETING OF STOCKHOLDERS OF

STEVEN MADDEN, LTD.

MAY 25, 2007

Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.

Please detach along perforated line and mail in the envelope provided.

------------------------------------------------------------------------------------------------------------------------------------

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS NO. 1, 2 AND 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
------------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS 2. APPROVAL OF AN AMENDMENT TO THE 2006 STOCK [ ] [ ] [ ]
INCENTIVE PLAN TO INCREASE THE MAXIMUM NUMBER
NOMINEES: OF SHARES OF COMMON STOCK AVAILABLE FOR
[ ] FOR ALL NOMINEES ( ) Jamieson A. Karson ISSUANCE UNDER SUCH PLAN FROM 1,200,000 SHARES
( ) Jeffrey Birnbaum TO 1,550,000 SHARES.
( ) Marc S. Cooper
[ ] WITHHOLD AUTHORITY ( ) Harold D. Kahn
FOR ALL NOMINEES ( ) John L. Madden
( ) Peter Migliorini 3. RATIFICATION OF THE APPOINTMENT OF EISNER LLP [ ] [ ] [ ]
( ) Richard P. Randall AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
[ ] FOR ALL EXCEPT ( ) Thomas H. Schwartz FISCAL YEAR ENDING DECEMBER 31, 2007
(See instructions below) ( ) Richard P. Randall
( ) Walter Yetnikoff In their discretion, the proxies are authorized to vote upon such
other business as may properly be presented at the meeting or any
adjournments or postponements thereof.

THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE; UNLESS OTHERWISE
INDICATED, THIS PROXY WILL BE VOTED (1) FOR THE ELECTION OF THE NINE
INSTRUCTION: To withhold authority to vote for any (9) NOMINEES NAMED IN ITEM 1, (2) FOR THE APPROVAL OF AN AMENDMENT TO
individual nominee(s), mark "FOR ALL EXCEPT" THE 2006 STOCK INCENTIVE PLAN TO INCREASE THE MAXIMUM NUMBER OF SHARES
and fill in the circle next to each nominee OF COMMON STOCK AVAILABLE FOR ISSUANCE UNDER SUCH PLAN FROM 1,200,000
you wish to withhold, as shown here: (.) SHARES TO 1,550,000 SHARES, (3) FOR THE RATIFICATION OF THE
------------------------------------------------------------- APPOINTMENT OF EISNER LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
FISCAL YEAR 2007 IN ITEM 3, AND (4) IN THE DISCRETION OF THE PROXIES
ON ANY OTHER MATTER THAT 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.
To change the address on your account, please check the
box at right and indicate your new address in the
address space above. Please note that changes to the
registered name(s) on the account may not be submitted
via this method. [ ]
-------------------------------------------------------------

Signature of Stockholder _______________________ Date: __________ Signature of Stockholder _______________________ Date: __________

Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer
is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is
a partnership, please sign in partnership name by authorized person.