8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report: July 25, 2006

Date of earliest event reported: July 24, 2006

MARTHA STEWART LIVING OMNIMEDIA, INC.

(Exact Name of Registrant as Specified in Charter)

DELAWARE	005-15395	52-2187059
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

11 WEST 42ND STREET NEW YORK, NY	10036
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 827-8000

NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a- 12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On July 24, 2006, Martha Stewart Living Omnimedia, Inc. entered into an employment letter agreement, which is filed as an exhibit to this Form 8-K, with Holly Brown, its President of Internet. The agreement provides for a base salary of $360,000 per annum and an annual target bonus of 70% of the base salary. Ms. Brown had been employed by the Company as a consultant prior to this appointment, and had been granted 10,000 shares of restricted stock under the Company’s Amended and Restated 1999 Stock Incentive Plan, subject to certain vesting restrictions. In addition, Ms. Brown may become a designated participant in the Company’s 2005 Executive Severance Pay Plan, subject to terms approved by the Company’s Compensation Committee.

Item 1.01. Entry into a Material Definitive Agreement.

On July 24, 2006, Martha Stewart Living Omnimedia, Inc. entered into an employment letter agreement, which is filed as an exhibit to this Form 8-K, with Howard Hochhauser, its Chief Financial Officer. The agreement provides for a base salary of $350,000 per annum and an annual target bonus of 70% of the base salary. In connection with his new employment letter, Mr. Hochhauser has been granted 20,000 shares of restricted stock under the Company’s Amended and Restated 1999 Stock Incentive Plan, subject to certain vesting restrictions. In addition, Mr. Hochhauser, who had been the Company’s Acting Chief Financial Officer since March 7, 2006, has become a designated participant in the Company’s 2005 Executive Severance Pay Plan.

Item 5.02(c). Appointment of Principal Officer.

On July 25, 2006, the Company announced that Howard Hochhauser has officially become Chief Financial Officer of the Company. Mr. Hochhauser had been Acting Chief Financial Officer of the Company since March 7, 2006.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

EXHIBIT	DESCRIPTION
10.1	Employment Letter Agreement between Martha Stewart Living Omnimedia, Inc. and Holly Brown.
10.2	Employment Letter Agreement between Martha Stewart Living Omnimedia, Inc. and Howard Hochhauser.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MARTHA STEWART LIVING OMNIMEDIA, INC.
	(Registrant)
		By:	/s/ John R. Cuti
Date: July 25, 2006			John R. Cuti
			General Counsel

EX-10.1

EXHIBIT 10.1

July 24, 2006

Ms. Holly Brown

Dear Holly:

        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 as an MSO employee with the title of President, Internet, subject to review on an annual basis.

2) TERM: You shall begin work in this position on Monday, July 24, 2006, and your employment shall continue until terminated by either you or MSO (the “Term”).

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, or other position(s) as MSO deems appropriate. 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 $360,000, payable as earned, in 26 equal payments of $13,846.15 in accordance with MSO’s standard payroll practices for salaried employees. Your MSO compensation level is Grade 39. 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 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 President, Internet, as well as the performance of MSO against certain financial goals and targets as determined by the company.

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.

7) VACATION: You will be entitled to four (4) weeks vacation annually in accordance with company policy for Executives.

8) 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 directly 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, i.e., a lifestyle media website. 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 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 two-month anniversary of such date, unless you receive severance pursuant to paragraph 12 below, in which case the 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.

9) CONFIDENTIALITY: You agree to sign the MSO confidentiality agreement upon hire.

10) 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.

11) 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 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.

12) SEVERANCE: Subject to a determination by the Compensation Committee, you will be a Participant in the 2005 Executive Severance Pay Plan, on terms approved by that committee.

     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.

Very truly yours,

/s/ John R. Cuti 

John R. Cuti

General Counsel

Martha Stewart Living Omnimedia, Inc.

ACCEPTED AND AGREED:

/s/ Holly Brown
Holly Brown
Date:	July 25, 2006

EX-10.2

EXHIBIT 10.2

July 24, 2006

Mr. Howard Hochhauser

Dear Howard:

       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 as an MSLO employee and have the title of Chief Financial Officer, subject to review on an annual basis.

2) TERM: Your service as CFO shall begin on July 24, 2006, and your employment shall continue until terminated by either you or MSO (the “Term”).

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, or other position(s) as MSO deems appropriate. 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 $350,000, payable as earned, in 26 equal payments of $13,461.54 in accordance with MSO’s standard payroll practices for salaried employees. Your MSO compensation level is Grade 39. 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 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 Chief Financial Officer, as well as the performance of MSO against certain financial goals and targets as determined by the company.

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.

7) LONG-TERM INCENTIVE PLANS: As of your start date, you will be granted 20,000 shares of restricted stock (the “Award”) under the 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 your first anniversary, thirty-three percent (33%) vesting on your second anniversary, and the remaining thirty-four percent (34%) vesting on your third anniversary. You must be employed by MSO on the respective vesting date in order to receive that portion of the Award.

8) VACATION: You will be entitled to four (4) weeks vacation annually in accordance with company policy for Executives.

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 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 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

13) SEVERANCE: You will be a Participant in the 2005 Executive Severance Pay 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.

Very truly yours,

/s/ Susan Lyne 

Susan Lyne

President and Chief Executive Officer

Martha Stewart Living Omnimedia, Inc.

ACCEPTED AND AGREED:

/s/ Howard Hochhauser
Howard Hochhauser
Date:	July 25, 2006