EMPLOYMENT AGREEMENT



          AGREEMENT, dated as of September 17, 2004 (the "Effective Date"),

by and between Martha Stewart Living Omnimedia, Inc., a Delaware

corporation (the "Company"), and Martha Stewart (the "Founder").



          WHEREAS, the Founder is a party to an employment agreement, dated

June 22, 1999, as amended (the "Prior Employment Agreement"), which the

Company and the Founder entered into at the time of the Company's initial

public offering and which is scheduled to expire on October 22, 2004; and



          WHEREAS, the Company recognizes that the Founder's talents and

abilities are unique and have been integral to the success of the Company;



          WHEREAS, the Company wishes to secure the ongoing services of the

Founder pursuant to the terms and conditions set forth herein, and

therefore the Founder and the Company intend hereby to enter into a new

employment agreement as set forth herein;



          NOW, THEREFORE, in consideration of the premises and the mutual

covenants set forth below, the parties hereby agree as follows:



          1. Employment. From and after the Effective Date, the Company

hereby agrees to employ the Founder as Chief Editorial and Media Director

of the Company, and the Founder hereby accepts such employment, on the

terms and conditions set forth below.



          2. Term. The Founder's employment by the Company hereunder shall

begin on September 17, 2004 (the "Effective Date") and shall end on

September 16, 2009 (the "Employment Period"), but subject to earlier

termination upon termination of the Founder's employment. The Employment

Period may be extended by mutual agreement of the Company and the Founder.



          3. Position and Duties. During the Employment Period, the Founder

shall serve as Founder, Chief Editorial and Media Director of the Company

with the following duties, authority and responsibilities:



               (i) serving as Founding Editorial Director for all

     publications of the Company;



               (ii) serving as an executive producer for television and

     radio productions of the Company; and



               (iii) subject to the oversight of the Board, serving as the

     primary spokesperson for the Company (it being understood, however,

     that the Chief Executive Officer and the Chief Financial Officer of

     the Company shall serve as primary spokespersons to the financial and

     investment community).



The Founder shall report directly to the Board. Unless otherwise authorized

by the Board, the Founder shall devote substantially all of her working

time, attention and energies during normal business hours (other than

absences due to illness or vacation) to the performance of her duties for

the Company. Notwithstanding the above, the Founder shall be permitted, to

the extent such activities do not violate, or substantially interfere with

her performance of her duties and responsibilities under, this Agreement or

any other agreement to which she and the Company are parties, to (i) engage

in motion picture, television, public speaking and publishing activities,

(ii) manage her personal, financial and legal affairs (including writing

her autobiography), (iii) serve on civic or charitable boards or committees

(it being expressly understood and agreed that the Founder's continuing to

serve on any such board and/or committees on which she is serving, or with

which she is otherwise associated, as of the Effective Date, shall be

deemed not to interfere with her performance of her duties and

responsibilities under this Agreement), (iv) serve on boards of other

companies and (v) make personal appearances and lectures, and the Founder

shall be entitled to receive and retain all remuneration received by her

from the items listed in clauses (i) through (v) of this paragraph

(including, without limitation, appearance and speaking fees, book

advances, royalties, residuals and other fees and compensation (including

guild and union payments) payable in connection with any publications,

media appearances, or similar activities).



          4. Place of Performance. During the Employment Period, the

locations of employment of the Founder shall be in New York City, New York,

Bedford, New York and Westport, Connecticut and the Founder shall not be

required to relocate her employment to any other location following her

release from imprisonment and home confinement. During the Employment

Period, the Company shall provide the Founder with the same offices and

staff that she was provided with immediately prior to the Effective Date.

For the portion of the Employment Period during which the Founder is

judicially required to be confined at her home, the Founder may render

services to the Company from her home, and, if during such period the

Founder requires additional staff, the Founder may request the same from

the Board and the Board shall not unreasonably withhold its consent to such

request.



          5. Compensation and Related Matters.



               (a) Base Salary. During the Employment Period, the Company

shall pay the Founder a base salary at the rate of not less than $900,000

per year ("Base Salary"). The Base Salary shall be paid in approximately

equal installments in accordance with the Company's customary payroll

practices. The Base Salary shall be subject to annual review by the Board

and may be increased in the Board's discretion. If the Base Salary is

increased by the Board, such increased Base Salary shall then constitute

the Base Salary for all purposes under this Agreement.



               (b) Annual Bonus. For each full fiscal year of the Company

that begins and ends during the Employment Period, and for the portion of

the fiscal year of the Company that begins in 2004 and the portion of the

fiscal year that begins in 2009 (each a "Partial Year"), the Founder shall

be eligible to earn an annual cash bonus (the "Annual Bonus") in such

amount as shall be determined by the Compensation Committee of the Board

(the "Compensation Committee") based on the achievement of Company and

individual performance goals as established by the Compensation Committee

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