Exhibit 10.1

INDEMNIFICATION AGREEMENT

This Indemnification Agreement dated as of (this “Agreement”) is between Martha
Stewart Living Omnimedia, Inc., a Delaware corporation (the “Company”), and
(“Indemnitee”).

WHEREAS, Indemnitee is a member of the Company’s board of directors (the “Board
of Directors”) and/or an officer of the Company and in such capacity, or
capacities, is performing valuable services for the Company; and

WHEREAS, the Company’s certificate of incorporation, as currently in effect, and
the Company’s by-laws, as currently in effect (collectively, the “Governing
Instruments”), contain provisions with respect to the indemnification of the
Company’s directors and officers under Delaware law and related advancement of
expenses; and

WHEREAS, Section 145 of the General Corporation Law of the State of Delaware
(the “DGCL”) specifically provides that it shall not be deemed exclusive of any
other rights to indemnification or advancement of expenses to which directors or
officers may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise; and

WHEREAS, the number of lawsuits and stockholders’ derivative lawsuits against
corporations, their directors and officers has increased in recent years, such
lawsuits frequently are without merit and seek damages in amounts having no
reasonable relationship to the amount of compensation received by the directors
and officers from the corporation, and such lawsuits whether or not meritorious
are expensive and time-consuming to defend; and

WHEREAS, adequate directors and officers liability insurance may not be
available at a reasonable cost; and

WHEREAS, the Company desires that Indemnitee continue to serve as a director
and/or an officer of the Company free from undue concern for unpredictable or
unreasonable claims for damages by reason of Indemnitee’s status as a director
and/or an officer of the Company, by reason of Indemnitee’s decisions or actions
on the Company’s behalf or by reason of Indemnitee’s decisions or actions in
another capacity for the Company while serving as a director and/or an officer
of the Company; and

WHEREAS, the Board of Directors has determined that the Company’s entry into
this Agreement is not only reasonable and prudent but also promotes the best
interests of the Company and its stockholders; and

NOW, THEREFORE, in consideration of Indemnitee’s continued service as a director
and/or an officer of the Company and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

1. Certain Definitions. As used in this Agreement:

(a) “Agreement” is defined in the Preamble.

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(b) “Board of Directors” is defined in the Recitals.

(c) “Business Combination” is defined in the definition of Change of Control.

(d) “Chancery Court” is defined in Section 2(b).

(e) “Change of Control” means:

(i) the acquisition by any person of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of
both (A) 30% or more of either (1) the then outstanding shares of common stock
of the Company (the “Outstanding Company Common Stock”) or (2) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Power”) and (B) more than both the Outstanding Company Common Stock and the
Outstanding Company Voting Power owned or controlled directly or indirectly by
Martha Stewart and/or her controlled affiliates, heirs, estate, legal
representative and/or beneficiaries (collectively, “Stewart”); provided,
however, that for purposes of this clause (i), the following acquisitions shall
not constitute a Change in Control: (1) any acquisition directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
person controlled by the Company or (4) any acquisition by any person pursuant
to a transaction which complies with clauses (1), (2) and (3) of clause (iii) of
this definition;

(ii) individuals who, as of the date of this Agreement, constitute the Board of
Directors (the “Incumbent Board”) cease for any reason not to constitute at
least a majority of the Board; provided, however, that any individual becoming a
director subsequent to the date of this Agreement whose election, or nomination
for election by the Company’s stockholders, was approved by Martha Stewart and
her controlled affiliates (so long as such affiliates are controlled by her) at
a time when such entities controlled at least a majority of the Outstanding
Company Voting Power or by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors;

(iii) consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, following such Business
Combination: (1) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Power immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the

 

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Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries), (2) in the event that Stewart does not own or
control at least 50% of the Outstanding Company Voting Power upon the
consummation of the Business Combination, no person (excluding any employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation (and such
amount exceeds the amount owned or controlled by Stewart) except to the extent
that such person had such ownership of the Outstanding Company Common Stock or
Outstanding Company Voting Power immediately prior to the Business Combination
and (3) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Business Combination; or

(iv) approval by the shareholders of the Company or a complete liquidation or
dissolution of the Company.

(f) “Company” is defined in the Preamble.

(g) “DGCL” is defined in the Recitals.

(h) “Effective Date” is defined in Section 2(f).

(i) “Expenses” means means any and all expenses to the fullest extent permitted
by the DGCL (or any other applicable law), the Governing Instruments in effect
on the date hereof or as such law or Governing Instruments may from time to time
be amended (but, in the case of any such amendment, only to the extent such
amendment broadens the range or amount of expenses that may be paid or
reimbursed relative to the range or amounts permitted before such amendment),
including, without limitation, any and all retainers, court costs, transcript
costs, fees of experts, witness fees, private investigators, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, fax
transmission charges, secretarial services, delivery service fees, attorneys’
fees, and all other costs, disbursements or expenses of the types customarily
incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding or in connection with seeking indemnification
under this Agreement or enforcing this Agreement. Expenses also shall include
the foregoing expenses incurred in connection with any appeal resulting from any
action, suit or proceeding, including, without limitation, the premium, security
for, and other costs relating to any cost bond, supersedeas bond, or other
appeal bond or its equivalent.

(j) “Governing Instruments” is defined in the Recitals.

(k) “Incumbent Board” is defined in the definition of Change of Control.

(l) “Indemnitee” is defined in the Preamble.

 

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(m) “Independent Legal Counsel” means an attorney or firm of attorneys
experienced in matters of corporation law that is not now nor has within the
previous three years been retained to represent Indemnitee, the Company or any
other party to the Proceeding giving rise to the claim for indemnification
hereunder; provided that “independent legal counsel” shall not include any
person who under applicable standards of professional conduct would have a
conflict of interest in representing Indemnitee or the Company in an action to
determine Indemnitee’s rights under this Agreement.

(n) “Liabilities” means any and all obligations, indebtedness and liabilities of
any kind (including, without limitation, any and all claims, judgments,
settlements, fines, ERISA excise taxes, damages, losses, deficiencies, costs,
penalties, interest, expenses, charges, and fees) against which the Company may,
to the fullest extent permitted by the DGCL (or any other applicable law), the
Governing Instruments in effect on the date hereof or as such law or Governing
Instruments may from time to time be amended (but, in the case of any such
amendment, only to the extent such amendment broadens the range or amount of
liabilities that may be paid, reimbursed or indemnified to an Indemnitee
relative to the range or amounts permitted before such amendment), agree to
indemnify an Indemnitee.

(o) “Outstanding Company Common Stock” is defined in the definition of Change of
Control.

(p) “Outstanding Company Voting Power” is defined in the definition of Change of
Control.

(q) “person” shall be read broadly to include any individual or entity.

(r) “Proceeding” means any and all threatened, pending or completed actions,
suits or proceedings, whether civil, criminal, administrative or investigative
and whether formal or informal.

(s) “Stewart” is defined in the definition of Change of Control.

2. Indemnification. The Company hereby agrees (i) to hold harmless and indemnify
Indemnitee, from time to time, against any and all Expenses and Liabilities to
the fullest extent authorized or permitted by the DGCL (or any other applicable
law), the Governing Instruments in effect on the date hereof or as such law or
the Governing Instruments may from time to time be amended (but in the case of
any such amendment, only to the extent such amendment permits the Company to
provide broader indemnification rights than such law or Governing Instruments
permitted the Company to provide prior to such amendment) and (ii) to take all
such action as may reasonably be required or requested to carry out such
indemnification. Notwithstanding the foregoing, the Company shall not be
required to indemnify Indemnitee for any Expenses and/or Liabilities to the
extent that such amounts have been paid directly to or for the account of
Indemnitee pursuant to any directors and officers liability insurance policy
maintained by the Company or any of its subsidiaries or under which the Company
or any of its subsidiaries is a beneficiary. Without limiting the generality of
the foregoing:

(a) Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding, other than a

 

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Proceeding by or in the right of the Company, by reason of the fact that
Indemnitee is or was a director and/or an officer of the Company, or is or was
serving at the request of the Company as a director, officer, employee or other
agent of another corporation, limited liability company, partnership, joint
venture, trust or other enterprise (including, without limitation, service with
respect to any employee benefit plan), whether the basis of such Proceeding is
alleged activities in an official capacity as a director, officer, employee or
other agent or in any other capacity while serving as a director, officer,
employee or other agent, against any and all Expenses and Liabilities actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
with such Proceeding, and any appeal therefrom.

(b) Proceedings By or in the Right of the Company. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any Proceeding by or in the right of the Company by reason of the fact that
Indemnitee is or was a director and/or an officer of the Company, or is or was
serving at the request of the Company as a director, officer, employee or other
agent of another corporation, limited liability company, partnership, joint
venture, trust or other enterprise (including, without limitation, service with
respect to any employee benefit plan), whether the basis of such Proceeding is
alleged activities in an official capacity as a director, officer, employee or
other agent or in any other capacity while serving as a director, officer,
employee or other agent, against any and all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection with the defense
or settlement of such Proceeding, and any appeal therefrom, if Indemnitee acted
in good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, except that no indemnification
shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Company unless and only to the
extent that the Court of Chancery of the State of Delaware (the “Chancery
Court”) or the court in which such Proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such Expenses which the Chancery Court or such other court shall
deem proper.

(c) Successful Defense. To the extent that Indemnitee has been successful on the
merits or otherwise in the defense of any Proceeding referred to in Section 2(a)
or 2(b), or in the defense of any claim, issue or matter therein, the Company
shall indemnify Indemnitee against any and all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
Dismissal of any Proceeding with prejudice, or a settlement not involving any
payment or assumption of liability, shall be deemed a successful defense.

(d) Partial Indemnification. If Indemnitee is entitled to indemnification under
any provision of this Agreement for a portion of the Expenses and/or Liabilities
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in the
investigation, defense, appeal or settlement of any Proceeding, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.

(e) Advancement of Expenses. All Expenses incurred by Indemnitee or on
Indemnitee’s behalf in the investigation, defense or appeal of a Proceeding
referred to in either of Sections 2(a) and 2(b), or in enforcing Indemnitee’s
rights under any provisions of this

 

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Agreement, shall be paid by the Company in advance of the final disposition of
such Proceeding in the manner prescribed by Section 3.

(f) Amendments to Indemnification Rights. The Company shall not adopt any
amendment to its Governing Instruments, the effect of which would be to deny,
diminish or encumber Indemnitee’s rights to indemnity pursuant to the Governing
Instruments, the DGCL or any other applicable law as applied to any act or
failure to act occurring in whole or in part prior to the date (the “Effective
Date”) upon which the amendment was approved by the Board of Directors. In the
event that the Company shall adopt any amendment to its Governing Instruments
the effect of which is to change Indemnitee’s rights to indemnity under such
instruments, such amendment shall apply only to acts or failures to act
occurring entirely after the Effective Date thereof. The Company shall give
written notice to Indemnitee of any proposal with respect to any such amendment
no later than the date such amendment is first presented to the Board of
Directors (or any committee thereof) for consideration, and shall provide a copy
of any such amendment to Indemnitee promptly after its adoption.

(g) Indemnification for Expenses as a Witness. To the extent Indemnitee is, or
reasonably expects to be, by reason of the fact that Indemnitee is or was a
director and/or an officer of the Company (or is or was serving at the Company’s
request in any one or more of the capacities described in Sections 2(a) and
2(b)), a witness in any Proceeding, the Company shall indemnify Indemnitee
against all Expenses in connection therewith.

3. Indemnification Procedures.

(a) Notice to the Company. Promptly after receipt by Indemnitee of notice of the
commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof
is to be made against the Company under this Agreement, notify the Company of
the commencement thereof. Such notice shall set forth in reasonable detail the
events giving rise to such claim and the amount requested, if known. Failure of
Indemnitee to provide such notice shall not relieve the Company of its
obligations under this Agreement except to the extent such failure has a
material and adverse effect on the ability of the Company to meet such
obligations.

(b) Notice to Insurers. If, at the time of receipt of such notice, the Company
has directors and officers liability insurance in effect, the Company shall give
prompt notice of the commencement of such Proceeding to the insurer or insurers
in accordance with the procedures set forth in the respective policy or policies
in favor of Indemnitee. The Company shall thereafter take all necessary or
desirable action to cause such insurer or insurers to pay, on behalf of
Indemnitee, all Expenses and Liabilities payable as a result of such Proceeding
in accordance with the terms of such policy or policies.

(c) Advancement of Expenses. Subject to Sections 3(d) and 3(e), the Expenses
reasonably incurred by Indemnitee or on Indemnitee’s behalf in investigating,
defending or appealing any Proceeding covered by Section 2, or in enforcing
Indemnitee’s rights under any provisions of this Agreement, shall be paid by the
Company within 20 days of Indemnitee’s written request therefor even if there
has been no final disposition of such Proceeding. Indemnitee’s written request
shall state the amount requested and shall be accompanied by copies of the
invoices or other relevant documentation.

 

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(d) Undertaking to Repay Advances. Indemnitee undertakes and agrees, if and to
the extent required by applicable law, that Indemnitee shall reimburse the
Company for all advances of Expenses paid by the Company to or for the account
of Indemnitee under this Agreement with respect to any Proceeding in the event
and only to the extent that it shall ultimately be determined that Indemnitee
was not entitled to be indemnified with respect to such Proceeding. Whenever
applicable law requires such undertaking in connection with advances to
Indemnitee in Indemnitee’s capacity as a director and/or officer of the Company,
such undertaking shall also be required in connection with advances to
Indemnitee in any other capacity referred to in Sections 2(a) and 2(b).

(e) Assumption of Defense by the Company. Except as otherwise provided below,
the Company, jointly with any other indemnifying party similarly notified, will
be entitled to assume the defense of any Proceeding of which it has been
notified by Indemnitee pursuant to Section 3(a), with counsel reasonably
satisfactory to Indemnitee; provided, however that, without the prior written
consent of Indemnitee, the Company shall not settle, compromise or consent to
the entry of any judgment in any such Proceeding if and to the extent the
claimant seeks any non-monetary relief from Indemnitee. After notice from the
Company to Indemnitee of its election to assume the defense thereof, the Company
will not be liable to Indemnitee under this Agreement for any legal or other
Expenses subsequently incurred by Indemnitee; provided, however, that Indemnitee
shall have the right to employ Indemnitee’s own counsel in such Proceeding at
the expense of the Company if, at any time after such notice from the Company,
(i) the employment of counsel by Indemnitee has been authorized by the Company,
(ii) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of such defense, or
(iii) the Company shall not in fact have employed counsel to assume the defense
of such Proceeding, in each of which cases the Expenses of Indemnitee’s counsel
shall be subject to reimbursement in accordance with the terms of this
Agreement. The Company shall not be entitled to assume Indemnitee’s defense of
any Proceeding brought by the Company or as to which Indemnitee shall have made
the conclusion provided for in clause (ii) of the preceding sentence.

(f) Determination of Right to Entitlement.

(i) In the event that Indemnitee incurs liability for any Liabilities (or, to
the extent not previously advanced pursuant to Section 3(c), Expenses), and
indemnification is sought under this Agreement, the Company shall pay (or
provide for payment if so required by the terms of any judgment or settlement)
the amount of such liability within 20 days of Indemnitee’s written request
therefor unless a determination is made within such 20 day period that the
claims giving rise to such request are excluded or indemnification is otherwise
not due under this Agreement. Such determination, and any determination as to
whether Indemnitee has met the standard of conduct required to qualify and
entitle Indemnitee, partially or fully, to indemnification under Section 2,
shall be made, at the Company’s discretion, (x) by the Board of Directors by a
majority vote of the directors who were not parties to such Proceeding even
though less than a quorum, or (y) if such a majority is not obtainable, or even
if obtainable a majority of the disinterested directors so directs, by written
opinion of Independent Legal Counsel selected by the Company and reasonably
satisfactory to Indemnitee, or (z) by the Company’s stockholders; provided,
however, that if a Change of Control has occurred, such

 

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determination shall be made by written opinion of Independent Legal Counsel
selected by Indemnitee or, if requested by Indemnitee, by the Company.

(ii) Notwithstanding the foregoing, Indemnitee may within 60 days after a
determination adverse to Indemnitee has been made as provided above, or if no
determination has been made within 20 days of Indemnitee’s written request for
payment, petition the Chancery Court or any other court of competent
jurisdiction, or may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association, which
award shall be deemed final, unappealable and binding, to determine whether
Indemnitee is entitled to indemnification under this Agreement, and such court
or arbitrator, as the case may be, shall thereupon have the exclusive authority
to make such determination unless and until such court or arbitrator dismisses
or otherwise terminates such action without having made a determination. The
court or arbitrator, as the case may be, shall make an independent determination
of entitlement irrespective of any prior determination made by the Board of
Directors, Independent Legal Counsel or stockholders. In any such action before
the court or arbitrator, Indemnitee shall be presumed to be entitled to
indemnification and the Company shall have the burden of proving that
indemnification is not required under this Agreement. All fees and expenses of
any arbitrator pursuant to this provision shall be paid by the Company.

(g) Enforcement Expenses. In the event that Indemnitee brings suit or takes any
other action to enforce Indemnitee’s rights or to collect monies due under this
Agreement, and if Indemnitee is successful therein, in whole or in part, or if
not successful, Indemnitee nevertheless acted in good faith in bringing such
suit or taking such other action, the Company shall reimburse (to the extent not
previously advanced) Indemnitee for all of Indemnitee’s reasonable Expenses in
any such suit or action.

4. Continuation of Indemnification. The Company’s obligations to indemnify
Indemnitee hereunder shall continue throughout the period Indemnitee is a
director and/or an officer of the Company (or is serving at the Company’s
request in any one or more of the capacities described in Sections 2(a) and 2(b)
above) and thereafter so long as Indemnitee shall be subject to any possible
claim or Proceeding by reason of the fact that Indemnitee was a director and/or
an officer of the Company (or was serving in such other capacities).

5. Successors and Assigns. This Agreement shall be binding upon the Company, its
successors and assigns (including, without limitation, any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law), and shall inure to the benefit of Indemnitee and Indemnitee’s
heirs, personal representatives, executors and administrators and shall be
binding upon Indemnitee and Indemnitee’s successors in interest under this
Agreement.

6. Rights Not Exclusive. The rights provided hereunder shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under any
provision of law, the Governing Instruments, other agreement, vote of
stockholders or of disinterested directors or otherwise.

 

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7. Subrogation. Upon payment of any amount under this Agreement, the Company
shall be subrogated to the extent of such payment to all of Indemnitee’s rights
of recovery therefor and Indemnitee shall take all reasonable actions requested
by the Company to secure such rights, including, without limitation, execution
of all documents necessary to enable the Company to enforce such rights.

8. Severability. In the event that any provision of this Agreement shall be held
by a court of competent jurisdiction to be invalid, illegal or unenforceable for
any reason, such provision shall be limited or modified in its application to
the minimum extent necessary to avoid a violation of law, and, as so limited or
modified, such provision and the balance of this Agreement shall be enforceable
in accordance with their terms.

9. Integration. This Agreement embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings relating to the subject
matter hereof.

10. Modification. No amendment, modification, termination or cancellation of
this Agreement shall be effective unless in writing signed by both parties
hereto.

11. Notices. All notices given under this Agreement shall be in writing and
delivered either (i) personally, (ii) by registered or certified mail (postage
prepaid, return receipt requested), (iii) by recognized overnight courier
service or (iv) by telecopy (if promptly followed by a copy delivered as
provided in clauses (i), (ii) or (iii) above), as follows:

 

If to Indemnitee:   

                                                  

     

c/o Martha Stewart Living Omnimedia, Inc.

601 West 26th Street

New York, NY 10001

If to the Company:    Martha Stewart Living Omnimedia, Inc.   

601 West 26th Street

New York, NY 10001

Attention: General Counsel

Notices hereunder given as provided above shall be deemed to be duly given upon
delivery if delivered personally, three business days after mailing if by
registered or certified mail, one business day after mailing if by overnight
courier service and upon confirmation of transmission if by telecopy.

12. Interpretation. Section references are to this Agreement, unless otherwise
specified. The captions in this Agreement are for convenience only and shall not
in any way affect the meaning or construction of any provisions of this
Agreement.

13. Counterparts. This Agreement may be executed in counterparts, all of which,
taken together, shall be considered one and the same agreement, it being
understood that counterparts may be delivered by facsimile.

 

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14. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware without regard to principles
of conflicts of laws.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the day and year first above written.

 

MARTHA STEWART LIVING
          OMNIMEDIA, INC. By:  

 

  Name:   Title:  

 

 

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