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
