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Sample Business Contracts

Restricted Stock Award Agreement - Martha Stewart Living Omnimedia Inc. and Susan Lyne

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                         1999 STOCK INCENTIVE PLAN
                      RESTRICTED STOCK AWARD AGREEMENT
                      --------------------------------

     This RESTRICTED STOCK AWARD AGREEMENT (this "Agreement"), made and
entered into as of the 11th day of November, 2004 (the "Grant Date"), by
and between Susan Lyne (the "Participant") and Martha Stewart Living
Omnimedia, Inc., a Delaware corporation (the "Company"), sets forth the
terms and conditions of a Restricted Stock Award issued pursuant to the
Company's Amended and Restated 1999 Stock Incentive Plan (the "Plan") and
this Agreement. Any capitalized terms used but not defined herein shall
have the meaning prescribed in the Plan.

     1.   Grant and Vesting of Restricted Stock.
          -------------------------------------

          (a) Subject to the provisions of this Agreement and to the
          provisions of the Plan, the Company hereby grants to the
          Participant 200,000 shares of restricted Common Stock (the
          "Restricted Stock"). The period during which the Restricted Stock
          is not vested and is subject to Transfer Restrictions is referred
          to herein as the "Restriction Period." The Restricted Stock is
          granted as of the Grant Date pursuant to, and subject to the
          terms and conditions of, the Plan and the Employment Agreement
          dated, November 11, 2004, by and between the Participant and the
          Company (the "Employment Agreement").

          (b) Subject to the terms and conditions of this Agreement, the
          Restricted Stock shall vest and no longer be subject to any
          Transfer Restrictions hereunder on the following dates, so long
          as the Participant has remained continuously employed by the
          Company from the Grant Date through such dates:

               (i)    as to 50,000 shares on the first anniversary of the
                      Grant Date;

               (ii)   as to an additional 50,000 shares on the second
                      anniversary of the Grant Date;

               (iii)  as to an additional 50,000 shares on the third
                      anniversary of the Grant Date; and

               (iv)   as to an additional 50,000 shares on the seventh
                      anniversary of the Grant Date, provided that:

                      (1)  25,000 of such shares shall immediately vest and
                           no longer be subject to Transfer Restrictions
                           hereunder on any date prior to the seventh
                           anniversary of the Grant Date if the Fair Market
                           Value of the Common Stock has been at least
                           $22.50 on each of the immediately preceding 20
                           consecutive trading days; and

                      (2)  25,000 of such shares shall immediately vest and
                           no longer be subject to Transfer Restrictions
                           hereunder on any date prior to the seventh
                           anniversary of the Grant Date if the Fair Market
                           Value of the Common Stock has been at least
                           $25.00 on each of the immediately preceding 20
                           consecutive trading days.

          (c) In the event of the Participant's Termination of Employment
          by the Company without Cause (as defined in the Employment
          Agreement), by the Participant for Good Reason (as defined in the
          Employment Agreement), or by reason of the Participant's death or
          Disability (as defined in the Employment Agreement), any portion
          of the Restricted Stock that has not vested as of the date of the
          Participant's Termination of Employment shall immediately vest
          and no longer be subject to any Transfer Restrictions hereunder.

          (d) In the event of the Participant's Termination of Employment
          by the Company for Cause (as defined in the Employment Agreement)
          or by the Participant without Good Reason (as defined in the
          Employment Agreement), any portion of the Restricted Stock that
          has not vested as of the date of the Participant's Termination of
          Employment shall immediately be forfeited.

          (e) In the event of a Change in Control (as defined in the
          Employment Agreement), any unvested and outstanding portion of
          the Restricted Stock shall immediately and fully vest and no
          longer be subject to any Transfer Restrictions hereunder.

          (f) For purposes of this Agreement, employment with the Company
          shall include employment with the Company's affiliates and its
          successors. Nothing in this Agreement or the Plan shall confer
          upon the Participant any right to continue in the employ of the
          Company or any of its affiliates or interfere in any way with the
          right of the Company or any such affiliates to terminate the
          Participant's employment at any time.

     2.   Issuance of Shares.
          ------------------

     Certificates representing the shares of Restricted Stock shall be
issued and held by the Company in escrow and shall remain in the custody of
the Company until their delivery to the Participant or the Participant's
estate pursuant to this Agreement and the Plan. Subject to Section 8
(pertaining to the withholding of taxes), as soon as practicable after the
restrictions on the Restricted Stock expire (provided there has been no
prior forfeiture of the Restricted Stock pursuant to the terms of this
Agreement and the Plan), the Company shall issue (or cause to be delivered)
to the Participant one or more unlegended stock certificates in respect of
the Restricted Stock. The shares of Common Stock issued pursuant to this
Agreement shall be registered on a Registration Statement on Form S-8 (or
other available form).

     3.   Nontransferability of the Restricted Stock.
          ------------------------------------------

     Prior to the vesting date thereof, the Restricted Stock shall not be
transferable by the Participant, directly or indirectly, by means of sale,
assignment, exchange, hypothecation, encumbrance, pledge or otherwise (such
restrictions, the "Transfer Restrictions").

     4.   Rights as a Stockholder.
          -----------------------

     Except as otherwise specifically provided in this Agreement and the
Plan, during the Restriction Period the Participant shall have all the
rights of a stockholder with respect to the Restricted Stock, including
without limitation the right to vote the Restricted Stock and the right to
receive any dividends with respect thereto.

     5.   Adjustments.
          -----------

     In the event of a change in corporate capitalization (including,
without limitation, a change in the number of shares of Common Stock
outstanding), such as a stock split or a corporate transaction such as a
merger, consolidation, separation, spin-off (or other distribution of stock
or property of the Company), any reorganization or any partial or complete
liquidation of the Company, the shares of Restricted Stock granted hereby
shall be treated in the same manner as other shares of Common Stock and the
trading targets set forth in Section 1(b)(iv) shall be equitably adjusted
by the Committee so as to prevent enlargement or diminution of the
Executive's rights hereunder.

     6.   Payment of Transfer Taxes, Fees and Other Expenses.
          --------------------------------------------------

     The Company agrees to pay any and all original issue taxes and stock
transfer taxes that may be imposed on the issuance of shares received by
the Participant in connection with the Restricted Stock, together with any
and all other fees and expenses necessarily incurred by the Company in
connection therewith.

     7.   Validity of Share Issuance.
          --------------------------

     The shares of Restricted Stock have been duly authorized by all
necessary corporate action of the Company and are validly issued, fully
paid and non-assessable.

     8.   Taxes and Withholding.
          ---------------------

     No later than the date as of which an amount first becomes includible
in the gross income of the Participant for federal income tax purposes with
respect to any Restricted Stock, the Participant shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of,
all federal, state, local and foreign taxes that are required by applicable
laws and regulations to be withheld with respect to such amount.
Notwithstanding anything to the contrary contained herein, the Executive
may discharge this withholding obligation by directing the Company to
withhold shares of Restricted Stock with a value on a vesting date equal to
the minimum withholding obligation in connection with such vesting. The
Company shall, to the extent permitted by law, have the right to deduct any
such taxes from the delivery of the Restricted Stock that gives rise to the
withholding requirement.

     9.   Notices.
          -------

     All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or overnight
courier, or registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

          (a)  if to the Participant, to the address last provided by the
               Participant to the Company's Human Resources Department;

          (b)  if to the Company:

                    Martha Stewart Living Omnimedia, Inc.
                    11 West 42nd Street
                    New York, New York 10036
                    Attention: General Counsel &
                    Director of Human Resources

     10.  Laws Applicable to Construction.
          -------------------------------

     The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Delaware without reference to
principles of conflict of laws, as applied to contracts executed in and
performed wholly within the State of Delaware.

     11.  Successors, Assigns and Transferees.
          -----------------------------------

     This Agreement shall be binding upon, and inure to the benefit of, the
parties hereto and each of their respective successors and assigns
(including, upon the death of the Participant, the Participant's estate).

     12.  Administration.
          --------------

     The authority to manage and control the operation and administration
of this Agreement shall be vested in the Committee, and the Committee shall
have all powers with respect to this Agreement as it has with respect to
the Plan; provided that nothing herein or in the Plan shall prevent the
Participant from contesting any interpretation or determination made by the
Committee; and provided, further, that notwithstanding the stated authority
of the Committee under the Plan, the terms "Cause," "Good Reason,"
"Disability" and "Change in Control" shall be determined pursuant to the
Employment Agreement and not pursuant to this Agreement, and the
interpretation of such terms pursuant to the Employment Agreement shall be
final, binding and conclusive for purposes of this Agreement.

     13.  Incorporation of Plan.
          ---------------------

     Subject to the limitations contained in Section 12 of this Agreement,
all terms and conditions of the Plan are incorporated herein and made part
hereof as if stated herein. The Participant may obtain a copy of the Plan
from the office of the Director of Human Resources of the Company.

     14.  Not an Employment Contract.
          --------------------------

     Neither this Agreement nor the issuance of any Restricted Stock shall
confer on the Participant any right with respect to continuance of
employment or other service with the Company or any Subsidiary, nor shall
they interfere in any way with any right the Company or any Subsidiary
would otherwise have to terminate or modify the terms of the Participant's
employment or other service at any time.

     15.  Integration.
          -----------

     This Agreement and the other documents referred to herein, including
without limitation the Plan and the Employment Agreement, or delivered
pursuant hereto, which form a part hereof contain the entire understanding
of the parties with respect to their subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants
or undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement, including without limitation
the Plan, supersedes all prior agreements and understandings between the
parties with respect to its subject matter.

     16.  Counterparts.
          ------------

     This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but which together constitute one and
the same instrument. Notwithstanding the foregoing, any duly authorized
officer of the Company may execute this Agreement by providing an
appropriate facsimile signature, and any counterpart or amendment hereto
containing such facsimile signature shall for all purposes be deemed an
original instrument duly executed by the Company.

     17.  Modification; Waiver.
          --------------------

     No provision of this Agreement may be amended, modified, or waived
unless such amendment or modification is agreed to in writing and signed by
the Participant and by a duly authorized officer of the Company, and such
waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.

<PAGE>

     IN WITNESS WHEREOF, the Participant has executed this Agreement on the
Participant's own behalf, thereby representing that the Participant has
carefully read and understands this Agreement and the Plan as of the day
and year first written above, and the Company has caused this Agreement to
be executed in its name and on its behalf, all as of the date first written
above.

                                   By:  /s/ Susan Lyne
                                   Name: Susan Lyne

                                   MARTHA STEWART LIVING
                                   OMNIMEDIA, INC.


                                   By:  Jay L. Dubiner
                                   Name:  Jay L. Dubiner
                                   Title: Executive Vice President, Corporate
                                   Development & General Counsel