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DEFERRED STOCK AWARD (FISCAL 2006)

Deferred Unit Award Agreement

DEFERRED STOCK AWARD (FISCAL 2006) | Document Parties: The Reader's Digest Association, Inc. You are currently viewing:
This Deferred Unit Award Agreement involves

The Reader's Digest Association, Inc.

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Title: DEFERRED STOCK AWARD (FISCAL 2006)
Governing Law: New York     Date: 8/18/2005
Industry: Printing and Publishing     Sector: Services

DEFERRED STOCK AWARD (FISCAL 2006), Parties: the reader's digest association  inc.
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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 satis


 
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