DEFERRED STOCK AWARD (FISCAL 2006)Deferred Unit Award Agreement |
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DEFERRED STOCK AWARD (FISCAL 2006)
August 12, 2005
<<First_plus_Middle>> <<Last>>
Dear <<First>>:
I am pleased to inform you that The Reader's Digest Association, Inc.
(the "Company") hereby grants to you, as of the date of this letter, a Deferred
Stock Award relating to <<Restricted_Shares>> shares of its Common Stock, $.01
par value, subject to the provisions of The Reader's Digest Association, Inc.
2002 Key Employee Long Term Incentive Plan, and the attached statement of Terms
and Conditions.
In consideration of the grant of the Deferred Stock Award to you, you
hereby agree that the Award is governed by, and subject to, the Terms and
Conditions attached (including, without limitation, the conditions regarding
"Cancellation and Recovery") and is also subject to the provisions of the
Company's 2002 Key Employee Long Term Incentive Plan, as amended. You recognize
and acknowledge that the Cancellation and Recovery provisions of the attached
Terms and Conditions are an integral condition of this Award grant and that,
except for your agreement to such provisions, this Award would not be granted to
you. You also agree that such Cancellation and Recovery provisions and any
Exhibit A to the attached Terms and Conditions shall apply to and supersede any
analogous provisions in the Terms and Conditions of each prior equity-based
award of any type made to you from and including 1998 under the Company's 1989,
1994 and 2002 Key Employee Long Term Incentive Plans as if such provisions and
such Exhibit A were incorporated in and attached to the Terms and Conditions of
those prior awards.
Kindly signify your acceptance of this Deferred Stock grant by
signing and dating this letter below and returning it to the address indicated
below within 30 days from the date hereof.
This award is intended to be a one-time grant. It is not the
Company's intention to make this type of award on any regular or periodic basis
or cycle.
If you have any questions, please contact Lisa Cribari.
Very truly yours,
THE READER'S DIGEST ASSOCIATION, INC.
By:____________________________________
Thomas O. Ryder
Chairman and Chief Executive Officer
Accepted:
--------------------------------- ---------------------------
Signature Date
Return signed and dated copy to: Lisa Cribari, Vice President, Global
Compensation and Benefits.
<PAGE>
-5-
The Reader's Digest Association, Inc.
TERMS AND CONDITIONS
DEFERRED STOCK AWARD (Fiscal 2006)
The Deferred Stock Award specified in the Grant Letter to which these Terms and
Conditions are attached is subject to the provisions of The Reader's Digest
Association, Inc. 2002 Key Employee Long Term Incentive Plan (the "Plan") and
the Terms and Conditions detailed below.
1. Deferred Stock Award Subject to Conditions and Restrictions. This award
represents an unfunded promise by The Reader's Digest Association, Inc.
("Reader's Digest") to deliver to you a number of shares of Reader's Digest
Common Stock, $0.01 par value, specified in a Grant Letter, at one or more
future dates (a "Deferred Stock Award"). The shares deliverable pursuant to
the Deferred Stock Award are referred to as "Deferred Stock." The granting
of the Deferred Stock Award does not involve an actual transfer of property
on the date of grant or at any time prior to the lapse of the Restrictions
(referred to below).
2. Restrictions. The Deferred Stock Award is granted to you subject to the
following restrictions (the "Restrictions").
(a) Transfer. You may not anticipate, alienate, attach, sell, assign,
pledge, encumber, charge or otherwise transfer the Deferred Stock
Award without the written consent of Reader's Digest as authorized by
its Board of Directors or the Committee (as defined in the Plan) under
the Plan.
(b) Forfeiture. Upon your Termination of Employment (as defined in the
Plan) with Reader's Digest or any of its Designated Subsidiaries,
then, except as provided in Paragraphs 5(a) and 5(b) hereof, any
portion of the Deferred Stock Award that is still subject to the
Restrictions shall be canceled by Reader's Digest and shall be deemed
to have been forfeited by you.
3. Conditions for Lapse of Restrictions (Vesting) and Delivery of Deferred
Stock. Subject to prior lapse of the Restrictions pursuant to Paragraph 4
or 5 hereof, the Restrictions shall lapse with respect to (a) one-half of
the Deferred Stock Award after two years from the date of grant, and (b)
one-half of the Deferred Stock Award after three years from the date of
grant. Notwithstanding the foregoing, the Committee may, in its sole
discretion at any time after the grant of the Deferred Stock Award,
accelerate the lapse of the Restrictions as to all or any part of the
Deferred Stock Award.
4. Change in Control. The Restrictions applicable to the Deferred Stock Award
shall lapse upon a Change in Control (as defined in the Plan) in accordance
with the terms of the Plan.
5. Termination of Employment.
(a) Total Disability. If your employment by Reader's Digest or a
Designated Subsidiary terminates by reason of a total disability as
defined in Reader's Digest's Healthcare Program (or an equivalent
plan, as determined in the sole discretion of Reader's Digest), the
Restrictions shall lapse upon such Termination of Employment.
(b) Death. If your employment by Reader's Digest or a Designated
Subsidiary terminates by reason of your death, the Restrictions shall
lapse upon your death.
(c) Other Termination. If your employment by Reader's Digest or a
Designated Subsidiary terminates for any reason other than total
disability or death as provided in (a) and (b) above, respectively,
the Deferred Stock Award shall be forfeited pursuant to Paragraph 2(b)
above.
6. Adjustments. If there is any change in the capital stock of Reader's
Digest, the term "Deferred Stock" shall include any securities and other
property that you would have received or become entitled to receive upon
lapse of the Restrictions, and the Committee may make any other adjustments
as it may determine to be appropriate in accordance with the Plan, such
determination to be final and binding.
7. Tax Withholding. You are responsible for satisfying any tax withholding
obligation that is applicable to you, including






