2003 KEY EXECUTIVE BONUS PLAN



 





Exhibit 10.18




MARTHA STEWART LIVING OMNIMEDIA, INC.

2003 KEY EXECUTIVE BONUS PLAN




SECTION 1. DEFINITIONS



     For purposes of this Plan, the following terms shall have the following
meanings:



     (a) “Committee” shall mean the Compensation and Corporate Governance
Committee of the Board or its designee.



     (b) “Company” shall mean Martha Stewart Living Omnimedia, Inc.



     (c) “Disqualifying Termination” shall mean any termination of a
Participant’s employment other than a Qualifying Termination.



     (d) “Effective Date” shall mean November 1, 2003.



     (e) “Employer” shall mean, as to any Participant, the Company or the
subsidiary or subsidiaries of the Company (whichever are applicable) that
employ the Participant.



     (f) “Good Reason” shall have the meaning set forth in the clauses (a)
through (d) of the definition of “Good Reason” under the Severance Plan.



     (g) “Participant” shall mean each employee of the Company and its
affiliates who has been selected by the Committee to participate in the Plan
and who has executed and delivered a Participation Agreement to the Company.



     (h) “Participation Agreement” shall mean an agreement executed by the
Committee and each Participant in substantially the form attached hereto as
Exhibit A.



     (i) “Person” shall mean any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including, without limitation, a government or political subdivision or an
agency or instrumentality thereof.



     (j) “Plan” shall mean the Martha Stewart Living Omnimedia, Inc. 2003 Key
Executive Bonus Plan.



     (k) “Plan Bonus” shall have the meaning set forth in Section 3 hereof.



     (l) “Qualifying Termination” shall mean termination of the employment of a
Participant (i) by the Employer other than in a Termination for Cause or (ii)
by the Participant for Good Reason.



     (m) “Restriction Period” shall mean, as to each Participant, the period of
the Participant’s employment with the Employer and a one-year period after the
termination thereof for any reason.



     (n) “Severance Plan” shall mean Company’s 2002 Executive Severance Pay
Plan as in effect on the Effective Date.



     (o) “Termination for Cause” shall be deemed to have occurred under this
Plan if a “Termination for Cause” shall have occurred under the Severance Plan.



     (p) “Vesting Date” shall have the meaning set forth in Section 3 hereof.



 









 





SECTION 2. PARTICIPATION



     The Committee shall select key executives of the Company and its
affiliates for participation in the Plan, provided that the Chief Executive
Officer and the Chief Creative Officer of the Company shall not be eligible for
participation. Participation in the Plan shall be evidenced by a properly
executed and delivered Participation Agreement.



SECTION 3. PLAN BONUSES



     Subject to the terms and conditions of the Plan, each Participant shall be
entitled to a bonus (the “Plan Bonus”) in an amount selected by the Committee
and set forth on the Participant’s Participation Agreement. One-half of the
Plan Bonus payable to a Participant shall become due and payable on each of
June 30, 2004 and January 1, 2005 (the “Vesting Dates”), provided the
Participant continues to be employed with an Employer on each Vesting Date, and
each such payment shall be made on the first payroll date on or following the
relevant Vesting Date. Notwithstanding anything to the contrary herein, no
termination of the employment of a Participant for any reason after a Vesting
Date but before the related portion of the Plan Bonus is paid shall affect the
Company’s obligation to pay such portion of the Plan Bonus.



SECTION 4. CERTAIN SEVERANCE ARRANGEMENTS



     Notwithstanding anything to the contrary in Section 3 hereof, the
following shall apply to Participants who also participate in the Severance
Plan:



     (a) In the event of a Qualifying Termination of a Participant, the
Participant shall be entitled to the prompt payment of any portion of the Plan
Bonus which has not been paid to the Participant; and



     (b) The Participant, by participating in this Plan, waives the right to
any severance payment under the Severance Plan that, pursuant to the terms of
the Severance Plan, would be paid in respect of the twelve-month period
beginning on the first anniversary of the date on which Participant’s
employment with the Employer is terminated.



SECTION 5. REGULAR BONUS GUARANTEE



     Each Participant shall be paid a regular year-end bonus for each of 2003
and 2004 which is not less than 100% of such Participant’s bonus target as in
effect at the end of the relevant year so long as, with respect to each such
bonus, the Participant is employed by an Employer on the date established in
advance by the Employer as the necessary date for executives generally for such
bonus eligibility.



SECTION 6. ADMINISTRATION OF THE PLAN



     The Plan shall be administered by the Committee, which shall hold meetings
when it deems necessary and advisable. The Committee shall have all of the
powers necessary and advisable to enable it to carry out its duties under the
Plan properly, including, without limitation, (i) the power and duty to
construe and interpret the Plan and to determine all questions arising under
it, and (ii) the power to delegate to one or more officers of the Company the
execution of the terms of the Plan. The Committee’s interpretations and
determinations under the Plan shall be final, binding and conclusive upon all
persons. The Committee may also establish, from time to time, such
regulations, provisions, procedures and conditions regarding the Plan that in
its opinion may be advisable in administering the Plan.



SECTION 7. EMPLOYEE COVENANTS



     As a condition to participation in the Plan, each Participant hereby
agrees that, during the Restriction Period, the Participant:




     (x) shall not, other than on behalf of the Company and its
affiliates, directly or indirectly contact, induce or solicit (or assist
any Person to contact, induce or solicit) for employment any individual



 









 






who is, or within three months prior to the date of such
solicitation was, an employee of the Company or any of its affiliates;
and




     (y) shall not directly or indirectly contact, induce or solicit (or
assist any Person to contact, induce or solicit) any Person that has a
business relationship with the Company or of any of its affiliates to
terminate, curtail or otherwise limit such business relationship.



SECTION 8. GENERAL TERMS AND CONDITIONS



     (a) Amendment and Termination. The Plan shall automatically terminate
without further required action on the first day immediately following the date
on which all Participants have ceased to participate in the Plan. Prior to
such termination, the Company reserves the right to amend, terminate or
otherwise modify all or any part of the Plan at any time, and from time to
time; provided, that neither the amendment nor the termination of the Plan may
adversely affect the rights of individuals who have become Participants in the
Plan prior to the date of such action.



     (b) Coordination with Other Plans. The Plan Bonuses to be paid to
Participants hereunder shall not be taken into account for any purposes under
any other compensation or employee benefit plan, program, agreement or
arrangement of the Company or any of its affiliates.



     (c) No Right to Continued Employment. No provision of the Plan shall be
construed to constitute a contract of employment or impose upon the Employer
any obligation to (a) retain the employment of any Participant, (b) make any
payments or provide any benefits upon termination of employment to the
Participant (except as otherwise provided herein), (c) change the status of any
Participant’s employment, (d) change any employment policies of the Company or
any of its affiliates or (e) restrict the scope of services to be provided to
the Employer by any Participant.



     (d) Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of New York without regard to its
conflict of law rules or principles.



     (e) Unfunded Obligation. Payments under the Plan shall be unfunded
obligations of the Company and the Employers and shall be payable only from the
Company’s or such Employers’ general assets.



     (f) No Mitigation; Payment Obligations Absolute. A Participant’s
entitlement to payments under the Plan shall not be governed by or subject to
any duty to mitigate damages by seeking further employment nor offset by any
compensation which the Participant may receive from future employment. The
Company’s obligation to pay or cause to be paid to a Participant the payments
under this Plan shall be absolute and unconditional and shall not be affected
by any rights of setoff, counterclaim, recoupment, defense or other right,
which the Company may have against the Participant or anyone else.



     (g) Successors. The terms and conditions of this Plan shall be binding
upon and inure to the benefit of the Participant and the Participant’s estate,
personal representative and heirs, and upon the Company and any successor
organization or organizations which shall succeed to substantially all of the
business and property of the Company, whether by means of merger,
consolidation, acquisition of substantially all of its assets or otherwise.



     (h) Withholding Taxes. The Company may, or may cause one of its
affiliates to, withhold from any payments made under this Plan all federal,
state, city or other taxes required to be withheld pursuant to any law or
governmental regulation or ruling.



     (i) Effective Date. This Plan shall be effective as of the Effective
Date.



 









 





EXHIBIT A — FORM OF PARTICIPATION AGREEMENT




MARTHA STEWART LIVING OMNIMEDIA, INC.

2003 KEY EXECUTIVE BONUS PLAN




PARTICIPATION AGREEMENT



Participant: [Name]



Plan Bonus: $[            ], payable in two installments pursuant to the
terms and conditions of the Martha Stewart Living Omnimedia, Inc. 2003 Key
Executive Bonus Plan (the “Plan”).



The Participant hereby acknowledges and agrees that the Participant shall be
bound by the terms and conditions of the Plan, including, without limitation,
Sections 4(b) and 7 thereof.




	 	 	 	 	 	 	 
	PARTICIPANT	 	MARTHA STEWART LIVING OMNIMEDIA, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	
 	 	
 
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	 
	 	 	 	 	 	 
	Dated:

	 	 	 	Its:	 	 
	

	 	
 
	 	 	 	
 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	Dated: