UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
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| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On December 21, 2022, Steven Madden, Ltd. (the “Company”) entered into a new employment agreement with Amelia Newton Varela (the “Varela Employment Agreement”) pursuant to which Ms. Varela will continue to serve as the President of the Company. The Varela Employment Agreement, the full text of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference, replaces Ms. Varela’s prior employment agreement, which expires by its terms on December 31, 2022.
The term of the Varela Employment Agreement commences on January 1, 2023 and will continue for a term of three years through December 31, 2025, unless sooner terminated in accordance with the terms thereof. Pursuant to the terms of the Varela Employment Agreement, Ms. Varela will receive an annual base salary during the term of $775,000 for the calendar year 2023, $800,000 for the calendar year 2024, and $825,000 for the calendar year 2025 and a monthly automobile allowance of $1,250 during each month of the term. In addition, the Varela Employment Agreement provides that on January 3, 2023, the Company will grant Ms. Varela the number of restricted shares of the Company’s common stock, with a par value of $0.0001 per share, determined by dividing $1,100,000 by the closing price of the Company’s common stock on January 3, 2023. The shares of restricted common stock will vest 25% per year commencing on January 3, 2024.
In addition, the terms of the Varela Employment Agreement entitle Ms. Varela to an annual performance-based cash bonus based on the Company’s total earnings before interest and taxes (“EBIT”) for each of the fiscal years ended December 31, 2023, 2024 and 2025 based on the following schedule:
| EBIT | Bonus as % of Salary | |
| Maximum (130% of Plan) | 80% | |
| Target (100% of Plan) | 50% | |
| Threshold (90% of Plan) | 30% |
For EBIT amounts between the Threshold and Target amounts or between the Target and Maximum amounts, the bonus payable shall be calculated based on a straight-line interpolation between the respective amounts.
Pursuant to the terms of the Varela Employment Agreement, the Company may terminate Ms. Varela’s employment for Cause (as defined in the Varela Employment Agreement), in which event Ms. Varela would be entitled to receive only her accrued and unpaid base salary through the date of termination. In the event Ms. Varela’s employment is terminated by the Company without Cause, Ms. Varela would be entitled to receive payment of her annual base salary, payable at regular payroll intervals, from the date of termination of employment through the remainder of the term plus any performance-based cash bonus that has accrued but not yet been paid. In addition, if Ms. Varela’s employment is terminated by the Company without Cause during the period commencing 30 days prior to a Change of Control (as defined in the Varela Employment Agreement) and ending 180 days after such Change of Control, Ms. Varela would be entitled to receive a cash payment in an amount equal to the lesser of (A) two and one-half times (i) the annual base salary to which she was entitled as of the date of termination of employment plus (ii) the average cash bonus that she received for the preceding three years ending on the last previous December 31 or (B) the maximum amount that is deductible to the Company under Section 280G of the Internal Revenue Code.
The foregoing description of the Varela Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Varela Employment Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated herein by reference.
On December 21, 2022, the Company and Awadhesh Sinha entered into Amendment No. 2 to Employment Agreement (the “Second Sinha Amendment”) to Mr. Sinha’s Employment Agreement with the Company, dated as of December 27, 2019 (the “Sinha Original Agreement”), as amended by Amendment No. 1 to Employment Agreement, dated February 25, 2021 (the “First Sinha Amendment,” and together with the Sinha Original Agreement, the “Preexisting Sinha Agreement”).
Under the Second Sinha Amendment, effective January 1, 2023, Mr. Sinha will become Executive Vice President of Operations for the Company and will be required to devote not more than three days per week to such executive-level duties as are reasonably assigned to him by our Chief Executive Officer. The Second Sinha Amendment provides that (i) Mr. Sinha’s base compensation will be $400,000 for calendar year 2023 and (ii) he will be eligible to receive a discretionary annual performance bonus based on the Company’s financial performance in 2023. All of the other terms and provisions of the Preexisting Sinha Agreement remain in full force and effect.
The foregoing description of the Second Sinha Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Second Sinha Amendment filed as Exhibit 10.2 to this Current Report on Form 8-K, which is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits: |
| Exhibit | Description | |
| 10.1 | Employment Agreement, dated as of December 21, 2022, between the Company and Amelia Newton Varela. | |
| 10.2 | Amendment No. 2 to Employment Agreement, dated as of December 21, 2022, between the Company and Awadhesh Sinha. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: December 23, 2022
| STEVEN MADDEN, LTD. | ||
| By: | /s/ Edward R. Rosenfeld | |
| Edward R. Rosenfeld | ||
| Chief Executive Officer | ||