EMPLOYMENT AGREEMENT



     THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of November 11,

2004 (the "Effective Date"), by and between Martha Stewart Living

Omnimedia, Inc., a Delaware corporation (the "Company"), and Susan Lyne

(the "Executive").



     WHEREAS, the Executive is currently a member of the Board of Directors

of the Company (the "Board"); and



     WHEREAS, the Company desires that the Executive serve as its President

and Chief Executive Officer following the Effective Date, and the Executive

is willing to be so employed, in each case on the terms and conditions set

forth herein;



     NOW, THEREFORE, in consideration of the mutual covenants contained

herein, the sufficiency of which is hereby acknowledged, and intending to

be legally bound hereby, the parties hereto agree as follows:



     1.   Employment Term. Subject to the provisions of Section 7 of this

Agreement, the Company hereby agrees to employ the Executive hereunder, and

the Executive hereby agrees to be employed by the Company hereunder, in

each case subject to the terms and conditions of this Agreement, for the

period commencing on the Effective Date and ending on December 31, 2007

(such period, as it may be extended in accordance with the terms of the

following sentence, the "Employment Term"). Unless the Company or the

Executive has theretofore provided notice in writing to the other party of

its intention not to extend the Employment Term, on June 30, 2007 and on

each succeeding June 30, this Agreement shall automatically be extended for

an additional 12 months from the then scheduled expiration date.



     2.   Duties.

          ------



          (a) During the Employment Term, the Executive shall serve as the

President and Chief Executive Officer of the Company and shall be a member

of the Board. The Executive shall be the senior-most executive officer of

the Company and shall have the duties and responsibilities customarily

exercised by an individual serving in those positions in a corporation of

the size and nature of the Company. In her capacity as President and Chief

Executive Officer, the Executive shall use her best energies and abilities

in the performance of her duties, services and responsibilities for the

Company. In performing such duties, services and responsibilities, the

Executive will report directly to the Board, and no other Company employee

(other than Martha Stewart) shall have a direct reporting relationship to

the Board.



          (b) During the Employment Term, the Executive shall devote

substantially all of her business time and attention to the businesses of

the Company and its subsidiaries and affiliates and shall not engage in any

activity inconsistent with the foregoing, whether or not such activity

shall be engaged in for pecuniary profit, unless approved by the Board;

provided, however, that, to the extent such activities do not violate, or

substantially interfere with her performance of her duties, services and

responsibilities under, this Agreement, the Executive shall be permitted to

manage her personal, financial and legal affairs and serve on civic or

charitable boards and committees of such boards, it being agreed that the

Executive may continue to serve on corporate, civic and charitable boards

on which she sits as of the date of this Agreement. During the Employment

Term, the Executive's principal location of employment shall be at the

Company's executive offices in New York City, New York, except for

customary business travel on behalf of the Company and its subsidiaries and

affiliates.



          (c) Upon any termination of the Executive's employment with the

Company, the Executive shall be deemed to have resigned from all other

positions she then holds as an employee or director or other independent

contractor of the Company or any of its subsidiaries or affiliates, unless

otherwise agreed by the Company and the Executive.



     3.   Base Salary; Bonus.

          ------------------



          (a) During the Employment Term, in consideration of the

performance by the Executive of the Executive's obligations during the

Employment Term (including any service in any position with any subsidiary

or affiliate of the Company), the Company shall pay the Executive a base

salary (the "Base Salary") at an annual rate of $900,000, subject to

increase but not decrease in the discretion of the Board, payable in

accordance with the normal payroll practices of the Company in effect from

time to time.



          (b) During the Employment Term, in addition to the payments of

the Base Salary set forth above, the Executive shall be eligible to

receive, in respect of each calendar year during which the Employment Term

is in effect (pro rata for 2004 and any other partial calendar year), a

performance-based cash bonus of 100% of Base Salary at target and 150% of

Base Salary at maximum based on achievement of goals established with

respect to each calendar year by the Compensation Committee of the Board

after reasonable consultation with the Executive.

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