Employment Agreement

Execution Copy

THE READER’S DIGEST ASSOCIATION, INC.

Reader’s Digest Road

Pleasantville, NY 10570-7000

Mr. Tom Williams

c/o The Reader’s Digest Association, Inc.

Reader’s Digest Road

Pleasantville, NY 10570-7000

You, Tom Williams, the Chief Financial Officer of The Reader’s Digest Association, Inc. (the “ Company ”), will receive cash compensation from the Company equal to $68,200 per month, payable pursuant to the Company’s normal payroll procedures, for so long as you remain employed with the Company during the Company’s Chapter 11 proceedings.

1)           If you are not offered continued employment following the effective date of the Acceptable Plan (as such term is defined in the Restructuring Support Agreement made and entered into on August 17, 2009 between the Company and the other parties signatory thereto (the “ RSA ”)) (the “ Effective Date ”), such that your employment with the Company terminates on such date, then the following provisions will apply: (a) that certain Employment Agreement  entered into by and between you and the Company dated November 19, 2008 (the “ Employment Agreement ”) will be rejected under the Acceptable Plan; (b) you will continue to be bound by the non-solicitation covenant of Paragraph 11 of your Employment Agreement (except that you will be permitted to hire, without any delay, any employee of the Company whose employment is terminated by the reorganized Company (whether due to its failure to offer continued employment to such employee through the rejection of his or her employment agreement in the Chapter 11 proceedings or otherwise) and you will be bound by a confidentiality covenant in the same form as contained in Section 7 of the Employment Agreement between the Company and Mary Berner (the “ Berner Agreement ”) and a nondisparagement covenant in the same form as contained in Section 12 of the Berner Agreement (which shall be deemed amended to cover the signatories of the RSA, including their directors, employees and representatives), in each case following your date of termination of employment with the Company for the applicable periods provided for therein; (c) subject to your execution, without revocation, of a Release of Claims in the form (as applicable) attached hereto as Exhibit A-1, you will receive from the Company, in lieu of any other severance payments that may otherwise be due to you, a one-time cash severance payment, in the amount of $1.2 million (plus any accrued but unpaid salary, vacation pay or unreimbursed business expenses) on the 53rd day after your separation from service with the Company (within the meaning of Internal Revenue Code Section 409A); and (d) subject to its receipt of your executed and irrevocable Release of Claims, the Company shall execute and deliver to you a release of claims for your benefit in the form attached to this letter agreement as Exhibit A-2.  For the avoidance of doubt, if your employment is terminated by you or by the Company for any reason (other than at the initiation of the signatories to the RSA) prior to the Effective Date, none of the provisions contained in this Paragraph 1 shall apply, and this letter agreement will become null and void on such date of termination.

2)           If you are provided the opportunity to execute an amended employment agreement with the Company and to have that agreement assumed by the reorganized Company under the Acceptable Plan, to be effective on and after the Effective Date (the “ Amended Employment Agreement ”) and such Amended Employment Agreement: (a) is in the form and upon the terms of your existing Employment Agreement, except for the modifications outlined in this Paragraph 2 and in Paragraph 3 below; (b) provides for a total annual rate of base cash compensation (in lieu of any other base salary, sign-on or other bonus amounts provided under Paragraphs 1 and 2 of your Employment Agreement) payable to you by the Company of no less than $600,000; (c) provides you with the opportunity (in all cases lieu of any other annual or long-term cash incentive opportunities provided under Paragraphs 4 and 6 of your Employment Agreement), to participate in the “Pay for Performance/Variable Comp Plan” and Enterprise Value Maximization Plan (“EVMax Plan”), as described in Exhibits B and C attached hereto, and to earn the level of cash bonus compensation under each such plan as identified in the attached Annex 1, and otherwise to participate in such annual cash bonus plan, and at such level of annual cash bonus compensation, as the Company shall implement in accordance with the provisions of Paragraph 4 below (except that if the Effective Date has not occurred prior to June 15, 2010, the Company and you will negotiate reasonably and in good faith regarding an annual bonus plan, and annual cash bonus compensation opportunity, in respect of the Company’s fiscal year beginning July 1, 2010); and (d) provides you with equity compensation opportunities as provided in Paragraph 4 below, and you decline such opportunity to execute the Amended Employment Agreement, upon any termination of your employment by you or by the Company following such decline, you shall not be entitled to the $1.2 million payment described above (or any other severance payments or benefits, other than any accrued but unpaid salary, vacation pay or unreimbursed business expenses) from the Company, but you shall continue to be bound by the covenants described in Paragraph 1(b), above.

3)           For purposes of confirming the terms of your Amended Employment Agreement, if assumed by the reorganized Company under the Acceptable Plan, in addition to the modifications to your Employment Agreement identified in Paragraph 1, clauses (b), (c) and (d) above (and any provisions in your Employment Agreement that are contrary to these clauses will be amended to be consistent with such clauses), the Amended Employment Agreement will also reflect the following changes to your current Employment Agreement: (1) all references to any obligations of the Company relating to equity-based awards (whether relating to the grant or vesting of any such awards) shall be removed; (2) the severance calculation in Paragraph 10 of the Employment Agreement will equal $1.2 million at all times (unless increased by the board of directors of the reorganized Company (the “ Board ”)); (3) the reference to “annual target bonus opportunity under the Company’s Management Incentive Compensation Plan” (contained in the definition of “Good Reason” under your Employment Agreement)  shall refer to your applicable annual bonus opportunity as set forth in Paragraph 2(c) above, as applicable; and (4) you will be bound by the restrictive covenants described in Paragraph 1(b) above.  By executing this letter agreement, you acknowledge and agree that (x) none of the modifications made to your current Employment Agreement as described anywhere in this letter agreement constitute “Good Reason” as defined in your Employment Agreement (or in the Amended Employment Agreement, as applicable) and (y) upon execution, the Amended Employment Agreement will replace your current Employment Agreement and supersedes any other agreements (oral or written) between you and the Company.

4)           Following any assumption by the reorganized Company of your Amended Employment Agreement and the empanelment of the Board, such Board and the Chief Executive Officer of the Company shall promptly designate a mutually acceptable, nationally recognized compensation consultant.  Such compensation consultant shall analyze companies that are comparable to the reorganized Company and your experience (including your performance with the Company prior to the Effective Date) and market status, and recommend to the Board and you both the annual cash bonus opportunity and structure to be made available to you and an allocation and structure for equity compensation opportunities to be made available to you out of the 7.5% equity pool described in Exhibit A to the RSA.  If you agree with such consultant’s recommendation with respect to, and/or you and the Board reach another agreement as to, your annual cash bonus and equity compensation opportunities with the Company, such opportunities shall be implemented by the Company.

5)           If you do not agree with the compensation consultant’s recommendation, or if you and the Board do not reach another agreement, in either case as described in Paragraph 4 above, you shall be entitled to promptly resign without Good Reason (as defined in your Amended Employment Agreement) from your positions with the Company and be relieved of any obligations under the non-competition covenant of your Amended Employment Agreement and any other non-competition covenants in any other agreement between you and the Company, but (a) you shall not receive the $1.2 million payment (nor the release of claims) from the Company described in Paragraph 1, clauses (c) and (d), above, and (b) you shall continue to be bound by the covenants described in Paragraph 1(b), above, and shall receive any accrued but unpaid salary, vacation pay or unreimbursed business expenses.

Any payments provided for in this letter agreement are intended to be made in compliance with or be exempt from Internal Revenue Code Section 409A and shall be interpreted accordingly.  This letter agreement and any dispute related hereto will be governed by the laws of New York.

If the Acceptable Plan or such other Chapter 11 plan as may be acceptable to the Required Consenting Lenders (as defined in the RSA) is confirmed, then the Debtors (as defined in the RSA) shall assume the Amended Employment Agreement, unless you are not offered continued employment as provided in Paragraph 1 above, in which case the provisions of such Paragraph 1 shall apply.

If the foregoing accurately describes your understanding and agreement with the Company regardin