EXHIBIT 10.41
Employment Agreement
MARTHA STEWART LIVING OMNIMEDIA, INC.
11 West 42nd Street
New York, New York 10036
October 1, 2007
Mr. Gregory Barton
Dear Greg:
     We are very pleased and excited to extend an offer to you to join Martha
Stewart Living Omnimedia, Inc. (“MSO”) as described below:

1)   POSITION: You will serve in a full-time capacity as an MSO employee with
the title of General Counsel and Secretary.   2)   TERM: You shall begin work no
later than Monday, November 5, 2007 (but targeting October 29, 2007), and your
employment shall continue until terminated by either you or MSO (the “Term”),
subject to the terms of paragraph 13 entitled “Severance.”   3)   DUTIES: During
the Term, you will devote your full business time, attention and energies to the
performance of duties included in your job description and such other duties as
may be reasonably assigned to you and which are consistent with your titles. In
performing your duties you will report directly to the President and Chief
Executive Officer and such other senior officer, such as a Chief Operating
Officer, as MSO may designate. It will be your responsibility to keep that
office informed on a timely basis and as directed on your progress with respect
to your duties hereunder.   4)   COMPENSATION: You will be paid a salary at the
annual rate of not less than $400,000, payable as earned, in 26 equal payments
of $15,384.61 in accordance with MSO’s standard payroll practices for salaried
employees. Your MSO compensation level is Grade 39, which as of the date hereof
is not exceeded by any employee of MSO other than any of MSO’s named executive
officers (as defined in applicable federal securities regulations) and Martha
Stewart. In a manner consistent with other MSO senior executives, you will be
eligible for salary increases based upon your performance and the performance of
MSO as the then-current policies of MSO provide for executives at your level.  
5)   BONUS: Provided you continue to be employed by MSO at the time annual
bonuses are paid, you will be eligible for an annual target bonus of seventy
percent (70%) of your base salary, pursuant to company policies. In general,
your bonus will be determined based upon MSO’s customary practices in effect
from time to time with respect to bonus determination for executives of
comparable level, and is based upon an evaluation of your performance as General
Counsel, as well as the performance of MSO against certain financial goals and
targets as determined by the company. Notwithstanding anything herein to the
contrary, you shall be paid on the date that MSO pays bonuses in respect of 2007
to executives of a comparable level (but in no event later than March 15, 2008),
a bonus in respect of 2007 in an amount not less than $210,000. You shall be
eligible to participate in any bonus conversion policy in effect from time to
time.   6)   BENEFITS: You will be eligible for all employment benefits provided
by MSO subject to the terms and conditions of any relevant benefits plan
document and MSO’s then-current policy (which may be changed by MSO from time to
time), which presently entitles you to coverage as of your first day of work. In
the event that you elect under COBRA to maintain any benefits in which you (and
your dependents as applicable) participated with your former employer (“Former
Employer”), MSO shall promptly reimburse you upon your written request for the
following portion of the premiums you pay with respect such benefits: the lesser
of (a) the amount by which the premiums you pay with respect to such benefits
(including the COBRA 2% administrative charge) exceed the amount of the premiums
for such benefits that were deducted from your payroll when you were an employee
of your Former Employer and (b) the amount of the premiums that MSO would have
paid for similar benefits for you (and your dependents as applicable) under
MSO’s benefits plans had you elected (on behalf of yourself and your dependents
as applicable) to participate in such MSO benefits plans.

 

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7)   LONG-TERM INCENTIVE PLANS: As of your start date, you will be granted
twenty-five thousand (25,000) shares of restricted stock (the “Award”) under
MSO’s Amended and Restated 1999 Stock Incentive Plan (the “Plan”). The Award
represents the right to receive shares of MSO Class A common stock on the
respective vesting dates. The Award will vest over three years, with
thirty-three percent (33%) vesting on the first anniversary of your start date,
thirty-three percent (33%) vesting on the second anniversary of your start date,
and the remaining thirty-four percent (34%) vesting on the third anniversary of
your start date. Except as may otherwise be provided in the Plan or in the
Severance Plan (as defined below) in which you are participating at a given
time, you must be employed by MSO on the respective vesting date in order to
receive that portion of the Award. You shall be eligible to receive additional
awards of restricted stock or other long-term incentives in accordance with
MSO’s standard practices with respect to executives of comparable level; without
limiting the foregoing, MSO’s current practice is to annually, in approximately
February, make additional grants of restricted stock to executives of comparable
level (provided that the amount, if any, of such annual grant for any particular
executive may be contingent upon MSO’s determination of such executive’s
entitlement to receive a grant based upon MSO’s determination of such
executive’s performance) and you shall be eligible to receive an additional
grant of restricted stock in February 2008 (subject to MSO’s determination of
your performance since your start date).   8)   VACATION: You will be entitled
to four (4) weeks paid vacation annually in accordance with company policy for
executives of comparable level.   9)   NON-COMPETITION: You hereby agree that
during your employment with MSO and during any Tail Period (as defined below),
you shall not engage in or become associated with a Competitive Activity (as
defined below). A “Competitive Activity” shall mean any business which is
competitive with any business of MSO and its affiliates with respect to which
you performed any duties during your employment with MSO and its affiliates and
their predecessors. You shall be deemed to be “engaged in or associated with a
Competitive Activity” if you become an owner, employee, officer, director,
independent contractor, agent, partner, advisor, or render personal services in
any other capacity, with or for any individual, partnership, corporation or
other organization (collectively, an “Enterprise”) that is engaged in a
Competitive Activity, provided, however, that notwithstanding anything to the
contrary, you shall not be prohibited from (a) owning less than five percent of
the stock in any publicly traded Enterprise engaging in a Competitive Activity,
or (b) being an employee, independent contractor or otherwise providing services
to an Enterprise that is engaged in a Competitive Activity so long as your
services relate to an aspect or endeavor of such Enterprise that is distinct
from, and unrelated to, and you have no influence or control over, such
Enterprise’s pursuit of a Competitive Activity. “Tail Period” shall mean the
period, if any, commencing on the date that your employment with MSO terminates,
and ending on the twelve-month anniversary of such date. If, at any time, the
provisions of this paragraph shall be determined to be invalid or unenforceable,
by reason of being vague or unreasonable as to area, duration or scope of
activity, this paragraph shall be considered divisible and shall become and be
immediately amended to only such area, duration and scope of activity as shall
be determined to be reasonable and enforceable by the court or other body having
jurisdiction over the matter; and you agree that this paragraph as so amended
shall be valid and binding as though any invalid or unenforceable provision had
not been included herein. You agree that the remedies at law for any breach or
threat of breach by you of this paragraph will be inadequate, and that, in
addition to any other remedy to which MSO may be entitled at law or in equity,
MSO will be entitled to seek a temporary or permanent injunction or injunctions
or temporary restraining order or orders to prevent breaches thereof. Your such
agreement shall not be deemed to prohibit you from opposing such relief on the
basis of a dispute of facts related to any such application.   10)  
CONFIDENTIALITY: You agree to sign the MSO confidentiality agreement upon hire.
  11)   AT WILL STATUS: You specifically understand and agree that your
employment hereunder shall be at all times on an “at will” basis, meaning that
either you or MSO can terminate your employment at any time and for any reason,
with or without cause or notice, and nothing contained herein shall be construed
as establishing any other relationship between you and MSO.   12)   WORK FOR
HIRE: As an MSO employee, you will be part of a team of highly talented
individuals, whose creative contributions are an integral part of MSO’s success
as a company. Accordingly, you acknowledge and agree that MSO has specially
ordered and commissioned any and all results and proceeds of your services
hereunder (the “Works”) as works-made-for-hire under the United States Copyright
Act and all similar laws throughout the world (the “Act”), and that MSO shall be
deemed the sole author and owner of all right, title and interest in the Works
in any an all languages, formats and media, whether now known or hereafter
created, throughout the world in perpetuity (the “Rights”). If the Works or any
part of the Works are not deemed works-made-for-hire under the Act, you hereby
irrevocably grant and assign the Rights exclusively to MSO. You hereby waive any
so-called moral rights of authors and other similar rights in connection with
the Works. You

 

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    acknowledge and agree that MSO is not under any obligation to use the Works,
and may exploit, reproduce, distribute, make derivative works of, alter or edit
the Works or combine the Works with other materials, in any media whether now
known or hereafter created throughout the world, in MSO’s sole discretion, free
of any obligation to you whatsoever, financial or otherwise. You hereby waive
the right to seek or obtain any injunctive or other equitable relief in
connection with MSO’s exploitation of the Works and any Rights therein. You
agree that upon any termination of your employment, you will immediately turn
over any and all of the Works in your possession to MSO. You irrevocably grant
to MSO the perpetual right to use and authorize others to use your name,
biographical information, photograph, and likeness (in each case in a form
approved by you) in connection with any use of the Works and/or in connection
with your employment with MSO. You represent and warrant that you have the right
to perform your services for MSO and to grant the Rights in the Works to MSO,
and that, to the best of your knowledge, the Works will be original with you,
and neither the Works, nor MSO’s exercise of any of the Rights, shall violate or
otherwise conflict with the rights of any person or entity.       13)  
SEVERANCE: You will be a participant in MSO’s 2005 Executive Severance Pay Plan
(the “2005 Plan”), the terms and conditions of which are incorporated by
reference as if fully set forth herein, except that as incorporated herein the
2005 Plan shall be deemed to have no expiration date. In the event that
subsequent to September 28, 2007 MSO adopts a severance plan in which senior
executives of MSO are eligible to participate (a “New Plan”) and you give
written notice to MSO that you desire to participate in such New Plan, (a) MSO
shall designate you as a participant in such plan promptly (and in no event more
than three business days) after you give such notice to MSO; (b) upon such
designation, you shall cease to be a participant in the 2005 Plan as
incorporated by reference herein; and (c) your employment with MSO shall not be
deemed to be terminated prior to your designation by MSO as a participant in
such New Plan. The 2005 Plan and the New Plan are each a “Severance Plan.”

     We hope that you find the foregoing terms acceptable. You may indicate your
agreement with these terms and accept this offer by signing this letter as well
as the confidentiality agreement and returning them to me.
     Greg, all of us are very excited at the prospect of having you on the
Martha Stewart Living Omnimedia team. We think that you will enjoy our highly
creative and collaborative atmosphere, and we know that we will enjoy having you
here.

            Very truly yours,
      /s/ Susan Lyne       Susan Lyne       President and Chief Executive
Officer
Martha Stewart Living Omnimedia, Inc.     

ACCEPTED AND AGREED:

     
/s/ Gregory Barton
 
   
Gregory Barton
   

Date: October 1, 2007