EXECUTION VERSION



                              EMPLOYMENT AGREEMENT



         THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of January 1,

2006, by and between STEVEN MADDEN, LTD., a Delaware corporation with offices at

52-16 Barnett Avenue, Long Island City, N.Y. 11104 (the "Corporation"), and

JAMIESON A. KARSON, an individual residing at 229 Woodside Drive, Hewlett Bay

Park, New York, 11557 ("Executive").



                                   WITNESSETH:



         WHEREAS, the Corporation and Executive are parties to that certain

Employment Agreement dated as of May 21, 2001, as amended (the "Prior

Agreement");



         WHEREAS, Executive and the Corporation desire to amend and restate the

Prior Agreement to provide for Executive's employment on the terms and

conditions set forth herein;



         WHEREAS, effective as of the date hereof, Executive and the Corporation

hereby agree that the terms of this Agreement shall supersede, in their

entirety, the terms of the Prior Agreement;



         WHEREAS, Executive and the Corporation further agree that this

Agreement shall govern, in all respects, the terms of the employment of

Executive by the Corporation;



         WHEREAS, Executive is currently the Chairman of the Board of Directors

(the "Board of Directors") and Chief Executive Officer of the Corporation;



         WHEREAS, the Corporation agrees to continue to employ Executive and

Executive agrees to continue in the employ of the Corporation, on the terms and

subject to the conditions set forth is this Agreement.



         NOW, THEREFORE, in consideration of the foregoing premises and the

mutual promises, terms, provisions and conditions set forth in this Agreement,

the parties hereby agree as follows:



    Section 1.    EMPLOYMENT. The Corporation hereby employs Executive and

Executive hereby accepts such employment, as an executive of the Corporation,

subject to the terms and conditions set forth in this Agreement.



    Section 2.    DUTIES. Executive shall serve as Chief Executive Officer

and Chairman of the Corporation's Board of Directors (the "Board of Directors")

and shall properly perform such duties as may be assigned to him from time to

time by the Board of Directors. If requested by the Board of Directors,

Executive shall serve on any committee of the Board of Directors without

additional compensation. During the Term of this Agreement, Executive shall

devote substantially all of his business time and efforts to the performance of

his duties hereunder unless otherwise authorized by the Board of Directors.

Executive shall not engage in any other significant business activity that would

detract from his ability to perform services to the Corporation.



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    Section 3.    TERM OF EMPLOYMENT. The term of Executive's employment, unless

sooner terminated as provided herein, shall be for a period of three (3) years

commencing January 1, 2006 and ending on December 31, 2008 (as may be extended

from time to time, the "Term"). The Term shall be automatically extended for

successive one-year periods thereafter on the same terms and conditions

specified herein unless the Corporation notifies Executive in writing of its

intention not to so extend the Term at least three (3) months prior to the end

of the original or any extended Term.



    Section 4.    COMPENSATION OF EXECUTIVE.



            4.1   BASE SALARY. Commencing January 1, 2006, the Corporation shall

pay to Executive an annual base salary ("Base Salary")for his services hereunder

of Five Hundred Thousand Dollars ($500,000), less such deductions as shall be

required to be withheld by applicable law and regulations.



            4.2   TIME OF PAYMENT. The Base Salary shall be paid in

substantially equal installments on a basis consistent with the Corporation's

payroll practices for senior executives.



            4.3   ANNUAL BONUS. The Corporation shall pay Executive 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 the Corporation's ordinary payroll practice.



            4.4   STOCK AWARDS. Subject to the availability of shares under any

new stock incentive plan designated by the Board of Directors and approved by

the stockholders (the "New Equity Incentive Plan"), Executive shall be entitled

to participate in the New Equity Incentive Plan, with any award(s) thereunder as

may be determined by the Board of Directors, or a committee thereof, from time

to time in its absolute discretion.



            4.5   EXPENSES. During the Term, the Corporation shall promptly

reimburse Executive for all reasonable and necessary travel expenses and other

disbursements incurred by Executive on behalf of the Corporation in performance

of Executive's duties hereunder, assuming Executive has received prior approval

for such travel expenses and disbursements by the Corporation to the extent

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