MARTHA STEWART LIVING OMNIMEDIA, INC.
COMPENSATION COMMITTEE CHARTER
The Board of Directors of Martha Stewart Living Omnimedia, Inc. (the “Corporation”) has established a Compensation Committee (the “Committee”) with the purpose, responsibilities and duties described below.
The primary purpose of the Committee is the following: to assist the Corporation’s Board of Directors (the “Board”) to fulfill its oversight responsibilities in the area of executive compensation and compensation, bonus and equity incentive plans generally.
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The Committee shall consist of no fewer than two members. The members of the Committee shall be appointed by the Board, generally based on the recommendation of the Nominating and Corporate Governance Committee, and shall meet (a) the independence standards set forth in the Corporation’s Corporate Governance Guidelines; (b) the definition of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended; and (c) the requirements of a “non-employee director” under Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Committee members may be removed by the Board. The Board shall designate a Chairperson for the Committee.
The Committee shall meet at least two times annually, or more frequently as circumstances dictate. A majority of the members of the Committee shall constitute a quorum. The Committee may form and delegate authority to subcommittees consisting of one or more members as it deems appropriate or to members of management, provided the delegation is consistent with applicable law and New York Stock Exchange requirements and any applicable compensation or equity incentive plan.
The Committee shall make regular reports to the Board and shall evaluate its performance on an annual basis. The Committee shall also review this charter at least annually and, as appropriate, recommend changes to the Board for approval.
Additionally, the Committee shall have the sole authority, to the extent it deems necessary or appropriate, to retain and terminate outside compensation consultants (including sole authority to approve the consultant’s fees and other retention terms) and to engage, legal and other advisors and shall receive appropriate funding, as determined by the Committee, for payment of compensation to any such advisors.
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RESPONSIBILITIES and DUTIES
To fulfill its purposes relating to compensation, the Committee shall, among its responsibilities and duties:
1. Review the Corporation’s compensation policies and programs at least annually to endeavor to ensure that they best facilitate the Corporation’s objective of maximizing stockholder value and further to assess whether risks from the Corporation’s compensation policies and practices for employees are reasonably likely to have a material adverse effect on the Corporation;
2. Review and approve compensation and employment offers and arrangements, including corporate goals and objectives relevant to bonuses and any incentive compensation, for the Executive Chairman, the Founder, and the Section 16 officers of the Corporation (together, “Senior Officers”);
3. Approve the material terms of all employment, severance and change-of-control agreements for any Senior Officers;
4. Review and approve any special or supplemental compensation and benefits for any Senior Officers or persons who formerly served as Senior Officers;
5. Approve the material terms of any proposed consulting arrangements that are significant to the Corporation’s future operations (including all arrangements with compensation consultants unless the services relate only to broad-based plans), provided in the case of any such arrangement with a director, the Committee shall make a recommendation thereon to the Audit Committee;
6. Approve all bonus pools for executive and non-executive level employees under the Corporation’s bonus plans;
7. Approve the adoption of all new compensation and equity incentive plans, and approve all amendments and modifications to any of the Corporation’s compensation and equity incentive plans, subject in each case to any required stockholder approvals, and any modifications to the Corporation’s benefit plans that will have a material effect on the Corporation’s financial results;
8. Administer all compensation and equity incentive plans of the Corporation and take such other actions as may be required of, and exercise such authority as may be exercised by, the Board or responsible Board committee pursuant to the Corporation’s compensation and equity incentive plans, including, without limitation, the appointment of any fiduciaries for such plans as are subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA Fiduciaries”);
9. Review the performance of any ERISA Fiduciaries at least annually;
10. Approve all equity-based grants under the Corporation’s equity incentive plans for Senior Officers and any other individuals for whom such approval is required under the relevant plans;
11. Annually review the compensation paid to directors for service on the Board and its committees and recommend to the Board proposed changes in such compensation as appropriate;
12. Adopt and monitor compliance by directors and relevant executives with the Corporation’s stock ownership guidelines;
13. Review, discuss with management, and otherwise assist in the preparation of the Corporation’s annual Compensation Discussion and Analysis of executive compensation in accordance with Regulation S-K, and recommend to the Board whether, based on the review and discussion, the Compensation Discussion and Analysis should be included in the Corporation’s annual proxy statement and the Corporation’s Annual Report on Form 10-K; and
14. Prepare the Compensation Committee Report as required by the Commission and authorize the inclusion of the report in the Corporation’s annual proxy statement and the Corporation’s Annual Report on Form 10-K.
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