{"id":40534,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/severance-letter-martha-stewart-living-omnimedia-llc-and-sharon.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"severance-letter-martha-stewart-living-omnimedia-llc-and-sharon","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/severance-letter-martha-stewart-living-omnimedia-llc-and-sharon.html","title":{"rendered":"Severance Letter &#8211; Martha Stewart Living Omnimedia LLC and Sharon Patrick"},"content":{"rendered":"<pre>\n   \n              [LETTERHEAD OF MARTHA STEWART LIVING OMNIMEDIA LLC]\n    \n\n\n                                                              September 23, 1999\n\n\n\nMs. Sharon Patrick\nMartha Stewart Living Omnimedia LLC\n20 West 43rd Street\nNew York, NY 10036\n\nDear Sharon:\n\n         This letter sets forth the terms of your severance if your employment\nwith Martha Stewart Living Omnimedia LLC or any successor entity ('MSLO')\nterminates under certain circumstances at any time during the period from the\ndate of the Initial Public Offering until the fourth anniversary thereof (the\n'Term').\n\n         1. Severance. In the event that during the Term (a) your employment\nwith MSLO is terminated by MSLO without Cause (as defined in Paragraph 3), or by\nyou for Good Reason (as defined in Paragraph 4), or (b) you terminate your\nemployment within 30 days following a Change in Control (as defined in Paragraph\n5) (a 'Change in Control Termination'), (i) you shall promptly be paid any\naccrued but unpaid salary, accrued but unused vacation time, un-reimbursed\nexpenses which otherwise would be reimbursed in the normal course and vested\nbenefits under any MSLO benefit plan in which you are then a participant, (ii)\nyou shall promptly be paid an annual bonus with respect to the year in which\nyour employment is terminated, pro-rated to your date of termination at a rate\nequal to your target bonus, as well as any bonus previously declared but not yet\npaid with respect to a completed year of service, provided that in the event no\nbonus has yet been declared with respect to a completed year of service as of\nthe date of your termination of employment, you shall promptly receive a bonus\nequal to your target bonus with respect to such completed year, (iii) the\noutstanding options granted to you on or before the date hereof and any other\nunvested MSLO options which may be granted to you after the date hereof that are\nscheduled to vest during the forty-eight months immediately following the date\nof your termination (the 'Options') shall be treated as set forth in Paragraph 2\nhereof, and (iv) you shall promptly be paid twelve months of your base salary\nand an amount equal to your then target bonus. The entitlements set forth in\nclauses (i) through (iv) above are cumulative.\n\n         2. Options. Upon a termination of your employment during the Term by\nMSLO without Cause or by you for Good Reason, or upon the occurrence of a Change\nin Control of MSLO, any portion of any of your Options that is not then vested\nshall become fully vested and exercisable. If you incur a termination of\nemployment other than for Cause during the 24-\n\nmonth period following a Change in Control, any portion of any of your Options\nmay thereafter be exercised by you, to the extent it was vested and exercisable\nat the time of termination, including on such accelerated basis as provided\nabove, for one year from such date of termination or, if earlier, until the\ntenth anniversary of the grant date for the applicable Option.\n\n         3. Cause. 'Cause' shall mean (i) your failure to perform your material\nduties as President of MSLO after written notice and a reasonable opportunity to\ncure, (ii) your willful, intentional misconduct that results in material damage\nto MSLO's business or reputation, (iii) your commission of a type of felony with\nrespect to which incarceration is a typical punishment, (iv) your fraud or\nmisappropriation of MSLO property (other than incidental property), or (v) your\nfailure to comply with MSLO's employment policies and rules after written notice\nand a reasonable opportunity to cure, provided that, pursuant to the standard\npolicies of MSLO in effect at the time (and any disciplinary procedures set\nforth therein) such failure to comply with MSLO's employment policies and rules\nwould otherwise give rise to termination. Any termination for Cause must be\napproved by the Board of Directors.\n\n         4. Good Reason. 'Good Reason' shall mean (i)(A) your title as President\nof MSLO or salary is diminished, (B) your responsibilities are diminished or\nmodified in a manner that is inconsistent in any material respect with your\nposition as President of MSLO, except that this clause shall not apply in the\nevent MSLO creates a new entity (such as a spin-off company or a tracking stock\nbusiness) which it is necessary or appropriate, in view of potential conflicts,\nlegal or other fiduciary matters, to operate as a separate business with a\nseparate management from MSLO, so long as you are offered to be a member of the\nboard of directors of that entity or (C), in the event the Company hires a new\nChief Operating Officer, such person does not report to you in a significant\nrespect, provided that you understand that such executive would also report to\nother members of the Company's executive office, (ii) you give MSLO notice of\nyour intent to exercise your rights under this provision within 10 business days\nafter you become aware of an event described in (i) above, (iii) MSLO fails to\nfully cure such event within 10 business days after receiving such notice, and\n(iv) you terminate your employment with MSLO within 10 business days after\nconclusion of the 10-business-day period afforded to MSLO to fully cure such\nevent.\n\n         5. Change in Control. 'Change in Control' shall mean the happening of\nany of the following events:\n\n                  (i) the acquisition by any individual, entity or group (within\nthe meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a 'Person') of\nbeneficial ownership (within the meaning of Rule 13d-3 promulgated under the\nExchange Act) of both (A) 30% or more of either (1) the then outstanding shares\nof common stock of MSLO (the 'Outstanding Company Common Stock') or (2) the\ncombined voting power of the then outstanding voting securities of MSLO entitled\nto vote generally in the election of directors (the 'Outstanding Company Voting\nPower') and (B) more than both the Outstanding Company Common Stock and the\nOutstanding Company Voting Power owned or controlled directly or indirectly by\nMartha Stewart and\/or her controlled affiliates, heirs, estate, legal\nrepresentative and\/or beneficiaries (collectively, 'Stewart'); provided,\nhowever, that for purposes of this subsection (i), the following\n\n                                      -2-\n\nacquisitions shall not constitute a Change in Control: (1) any acquisition\ndirectly from MSLO, (2) any acquisition by MSLO, (3) any acquisition by any\nemployee benefit plan (or related trust) sponsored or maintained by MSLO or any\ncorporation controlled by MSLO or (4) any acquisition by any corporation\npursuant to a transaction which complies with clauses (1), (2) and (3) of\nsubsection (iii) of this Paragraph 5; or\n\n                  (ii) individuals who, as of the effective date of this\nAgreement, constitute the Board of Directors of MSLO (the 'Incumbent Board')\ncease for any reason not to constitute at least a majority of the Board;\nprovided, however, that any individual becoming a director subsequent to the\neffective date of this Agreement whose election, or nomination for election by\nMSLO's stockholders, was approved by Martha Stewart and her controlled\naffiliates (so long as such affiliates are controlled by her) at a time when\nsuch entities controlled at least a majority of the Outstanding Company Voting\nPower or by a vote of at least a majority of the directors then comprising the\nIncumbent Board shall be considered as though such individual were a member of\nthe Incumbent Board, but excluding, for this purpose, any such individual whose\ninitial assumption of office occurs as a result of an actual or threatened\nelection contest with respect to the election or removal of directors or other\nactual or threatened solicitation of proxies or consents by or on behalf of a\nPerson other than the Board of Directors of MSLO; or\n\n                  (iii) consummation of a reorganization, merger or\nconsolidation or sale or other disposition of all or substantially all of the\nassets of MSLO (a 'Business Combination'), in each case, unless, following such\nBusiness Combination: (1) all or substantially all of the individuals and\nentities who were the beneficial owners, respectively, of the Outstanding\nCompany Common Stock and Outstanding Company Voting Power immediately prior to\nsuch Business Combination beneficially own, directly or indirectly, more than\n50% of, respectively, the then outstanding shares of common stock and the\ncombined voting power of the then outstanding voting securities entitled to vote\ngenerally in the election of directors, as the case may be, of the corporation\nresulting from such Business Combination (including, without limitation, a\ncorporation which as a result of such transaction owns MSLO or all or\nsubstantially all of MSLO's assets either directly or through one or more\nsubsidiaries of MSLO), (2) in the event that Stewart does not own or control at\nleast 50% of the Outstanding Company Voting Power upon the consummation of the\nBusiness Combination, no Person (excluding any employee benefit plan (or related\ntrust) of MSLO or such corporation resulting from such Business Combination)\nbeneficially owns, directly or indirectly, 20% or more of, respectively, the\nthen outstanding shares of common stock of the corporation resulting from such\nBusiness Combination or the combined voting power of the then outstanding voting\nsecurities of such corporation (and such amount exceeds the amount owned or\ncontrolled by Stewart) except to the extent that such person had such ownership\nof the Outstanding Company Common Stock or Outstanding Company Voting Power\nimmediately prior to the Business Combination and (3) at least a majority of the\nmembers of the board of directors of the corporation resulting from such\nBusiness Combination were members of the Incumbent Board at the time of the\nexecution of the initial agreement, or of the action of the Board of Directors\nof MSLO, providing for such Business Combination; provided, that, the conversion\nof MSLO whether by merger, share exchange or otherwise, into a corporation in\nanticipation of an Initial Public Offering shall not be deemed a Change in\nControl; or\n\n                                      -3-\n\n                  (iv) approval by the shareholders of MSLO of a complete\nliquidation or dissolution of MSLO.\n\n         6. Initial Public Offering. 'Initial Public Offering' shall mean the\ncompletion of the initial public sale of shares of the common stock of MSLO\npursuant to an effective registration statement under the Securities Act of\n1933, as amended, following which shares of Class A Common Stock of Martha\nStewart Living Omnimedia, Inc. with a market value of at least $50 million are\npublicly held and freely transferable.\n\n\n                                      -4-\n\n                  If the foregoing accurately sets forth our agreement, please\nsign this letter and return it to me.\n\n                                           Very truly yours,\n\n\n\n                                           MARTHA STEWART LIVING OMNIMEDIA LLC\n\n\n   \n                                           By: \/s\/ Martha Stewart\n                                               _________________________________\n                                               Name:  Martha Stewart\n                                               Title: Chief Executive Officer\n    \n\nACCEPTED AND AGREED:\n\n\n   \n\/s\/ Sharon Patrick\n______________________________\nSharon Patrick\n    \n\n\n   \nDate: September 23, 1999 \n      _______________________\n    \n\n\n                                      -5-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8137],"corporate_contracts_industries":[9464],"corporate_contracts_types":[9539,9551],"class_list":["post-40534","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-martha-stewart-living-omnimedia-inc","corporate_contracts_industries-media__books","corporate_contracts_types-compensation","corporate_contracts_types-compensation__severance"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40534"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40534"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40534"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}