| 1. | Termination                    of Employment |
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| 1.1 | The                    Company may terminate your employment at any time, with or without                    stated                    reason. You shall receive the benefits provided hereunder upon                    one of the                    following terminations (each, a “Qualifying Termination”): (a) the                    termination of your employment by you for Good Reason (as defined                    in                    Section 1.2), or (b) the termination of your employment by the                    Company,                    unless such termination is for Cause (as defined in Section 2.4)                    or as a                    result of Total Disability (as defined in the Company’s Long-Term                    Disability Plan) or death. Any termination by you shall be communicated                    by                    written notice indicating the termination provision in this Agreement                    relied upon, if any, and the date of termination; provided                    that the date of termination shall in no event be earlier than                    ten (10)                    business days after the date on which such notice of termination                    is                    effective pursuant to Section 14.1 hereof (the “Date of                    Termination”). |
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| 1.2 | For                    purposes of this Agreement, “Good Reason” shall mean the occurrence of                    either of the following without your express written                    consent: |
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|   | (a) | a                    reduction by the Company in your annual base salary or your annual                    target                    bonus opportunity under the Company’s** **Management                    Incentive Compensation Plan or the Company’s Senior Management Incentive                    Plan, as applicable (each, as applicable, the “Annual Incentive Plan”),                    each as in effect on the date of this Agreement or as each may                    be                    increased from time to time, unless such reduction is part of                    and                    consistent with a management-wide or Company-wide cost cutting                    program,                    and then only if the percentage of your reduction is no greater                    than that                    of the other management personnel;                    or |
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|   | (b) | a                    relocation to an office located anywhere other than within seventy-five                    (75) miles of your current primary office, except for required                    travel on                    Company business to an extent substantially consistent with your                    then                    current business travel                    obligations. |
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| 1.3 | Any                    termination of your employment by you for Good Reason shall be                    made within                    ninety (90) days after your knowledge of the occurrence of the                    event                    constituting Good Reason. |
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| 2. | Compensation                    Upon Termination |
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| 2.1 | If                    your employment shall be terminated pursuant to a Qualifying                    Termination,                    you shall receive the following payments and benefits for the                    one-year                    period following the Date of Termination, if your grade level                    is 19 or 20                    (or the equivalent) as of your Date of Termination, and for the                    two-year                    period following the Date of Termination, if your grade level                    is 21 or                    above (or the equivalent) as of your Date of Termination (in                    each case,                    such period, as applicable, shall be referred to as the “Severance                    Period”): |
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|   | (a) | your                    highest annual base salary in effect at any time during the 12-month                    period immediately prior to the Date of Termination,                    plus |
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|   | (b) | the                    higher of the following: |
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|   | (i) | the                    highest amount paid to you under the Annual Incentive Plan, during                    the                    three (3) plan years most recently ended prior to the Date of                    Termination;                    or |
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|   | (ii) | your                    annual target bonus award, if any, under the Annual Incentive                    Plan for the                    fiscal year in which the Date of Termination                    occurs. |
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| 2.2 | If                    your employment shall be terminated pursuant to a Qualifying                    Termination,                    the Company shall maintain in full force and effect, for your                    continued                    benefit for the Severance Period, all medical, dental and group                    life                    insurance plans in which you participated immediately prior to                    the Date of                    Termination, provided that your continued participation is permissible                    under the general terms and conditions of such welfare plans,                    and that you                    continue to make all required employee contributions under each                    such plan;                    provided,                    that any amendment or termination of such plans during the Severance                    Period with respect to the active employees may, in the Company’s                    discretion, modify your continued benefit under such plans. In                    the event                    that your participation in any such welfare plan is barred or                    in the event                    that your participation in any such plan would have adverse consequences                    for you, the Company shall provide you with benefits substantially                    similar                    to those which you would have been entitled to receive under                    such welfare                    plans had your participation not been barred or had you not potentially                    suffered such adverse consequences. The continued coverage under                    this                    Section 2.2 shall apply to each of your eligible dependents who                    are                    participating in such welfare plans as of the Date of Termination,                    unless                    such dependents cease to remain eligible. Benefits under this                    Section 2.2                    shall cease if and to the extent, by virtue of your employment                    with                    another employer, you become eligible under another employer’s plan or                    plans for medical, dental or group life insurance benefits, as                    the case                    may be. Your eligibility for “COBRA” continuation coverage under                    Section 4980B of the Internal Revenue Code of 1986, as amended (the                    “Code”) shall commence immediately following the end of the Severance                    Period or upon the cessation of your medical benefits from the                    Company                    pursuant to the preceding sentence, as                    applicable. |
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| 2.3 | If                    your employment shall be terminated pursuant to a Qualifying                    Termination,                    then you shall receive a lump sum payment within ten (10) business                    days                    following the Date of Termination equal to the product of (a) your                    annual target bonus for the fiscal year in which your Date of                    Termination                    occurs and (b) a fraction, the numerator of which is the number of                    days in the fiscal year in which the Date of Termination occurs                    through                    the Date of Termination and the denominator of which is                    365. |
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| 2.4 | If                    your employment shall be terminated for Cause, the Company shall                    pay you                    your base salary earned through the Date of Termination, and                    the Company                    shall have no further obligations to you under this Agreement.                    In                    addition, if your employment shall be terminated for Cause and                    you are a                    participant in The Reader’s Digest Association, Inc. Executive Cash                    Balance Plan (the “Executive Cash Balance Plan”) immediately prior to your                    Date of Termination, you will not be entitled to and will forfeit                    any                    benefits under Executive Cash Balance Plan. For purposes of this                    Agreement, “Cause” shall mean termination of your employment occurring by                    reason of your: |
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|   | (a) | embezzlement; |
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|   | (b) | chronic                    unexcused absence; |
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|   | (c) | proven                    dishonesty; |
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|   | (d) | fraud; |
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|   | (e) | conviction                    of, or plea of guilty or nolo contendere                    to, a felony or another charge involving moral turpitude; |
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|   | (f) | improper                    communication of confidential information obtained in the course                    of                    employment; or |
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|   | (g) | material                    violation of Company rules, including but not limited to a material                    violation of the Company’s Proprietary and Confidential Information Policy                    or a material violation of the Company’s Ethical, Legal and Business                    Conduct Policies or an action that would have constituted a material                    violation of such Policy or Ethical, Legal and Business Conduct                    Policies                    if you had continued to be employed by the                    Company. |
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| 3. | Long-Term                    Incentive Plan Benefits |
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| 3.1 | If                    your employment shall be terminated pursuant to a Qualifying                    Termination,                    you shall have the right to exercise your outstanding stock options                    and                    stock appreciation rights under the Company’s 1989 and 1994 Key Employee                    Long Term Incentive Plans or any successor plans (the “Long Term Incentive                    Plans”) to the extent they are exercisable as of the Date of Termination.                    Such stock options and stock appreciation rights shall remain                    exercisable                    following the Date of Termination pursuant to the terms of the                    applicable                    Long Term Incentive Plan and award                    agreement. |
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| 3.2 | If                    your employment shall be terminated pursuant to a Qualifying                    Termination,                    your outstanding awards (other than stock options and stock appreciation                    rights) under the Long Term Incentive Plans shall vest or be                    forfeited                    (and be payable, if not forfeited) upon or following the Date                    of                    Termination in accordance with the terms of the applicable Long                    Term                    Incentive Plan and award agreement. |
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| 4. | Pension                    Benefits and Retiree Medical                    Benefits |
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| 4.1 | The                    provisions of this Section 4 shall govern your benefits under                    any of the                    Nonqualified Plans (as defined in the next sentence) in which                    you are a                    participant immediately before a Qualifying Termination of your                    employment, notwithstanding any provision to the contrary in                    the                    Nonqualified Plans. The “Nonqualified Plans” means The Readers Digest                    Association, Inc. Executive Retirement Plan (the “Executive Retirement                    Plan”), The Reader’s Digest Association, Inc. Executive Cash Balance Plan                    (the “Executive Cash Balance Plan”) and the Excess Benefit Retirement Plan                    of The Reader’s Digest Association, Inc. (the “Excess Cash Balance                    Plan”). |
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| 4.2 | If                    your employment shall be terminated pursuant to a Qualifying                    Termination                    and you are a participant in the Executive Retirement Plan immediately                    before the Qualifying Termination, you shall be treated, for                    purposes of                    eligibility for and vesting of benefits (but not for purposes                    of benefit                    accrual) under the Executive Retirement Plan, as if you had remained                    an                    active employee during the Severance Period; however, if you                    meet the                    early retirement conditions under Section 4.2 of the Executive                    Retirement                    Plan, but do not receive the consent of the Compensation Committee                    of the                    Board, your accrued Normal Retirement Benefit (as defined in                    the Executive                    Retirement Plan) shall vest in                    full. |
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| 4.3 | If                    your employment shall be terminated pursuant to a Qualifying                    Termination                    and you are a participant in the Excess Cash Balance Plan immediately                    before the Qualifying Termination, your benefit under the Excess                    Cash                    Balance Plan shall be adjusted so that your combined benefits                    under the                    Excess Cash Balance Plan and The Reader's Digest Association,                    Inc.                    Retirement Plan (the “Qualified Retirement Plan”) are equal to the                    benefits to which you would have been entitled if, for purposes                    of                    eligibility for and vesting of benefits (but not for purposes                    of benefit                    accrual), you were treated as if you had remained an active employee                    of                    the Company during the Severance                    Period. |
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| 4.4 | Notwithstanding                    the foregoing, if your employment shall be terminated pursuant                    to a                    Qualifying Termination and you are then entitled to any retirement                    benefits under any of the Nonqualified Plans, the Company shall                    have the                    right, in its sole discretion, to pay you such benefits in a                    single lump                    sum cash payment within ten (10) days after the end of your Severance                    Period, such** **lump                    sum amount to be calculated using the actuarial assumptions specified                    in                    the second paragraph of the definition of “Equivalent Actuarial Value”                    under the Qualified Retirement Plan, as in effect at the time                    of the                    calculation. |
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| 4.5 | Except                    as specifically provided above, the time and form of payment                    of any                    retirement benefits to which you may be entitled under any Nonqualified                    Plan shall be as provided in such Nonqualified Plan; *provided*                    that if your employment shall be terminated pursuant to a Qualifying                    Termination, in no event shall any such benefits be payable to                    you during                    the Severance Period. |
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| 4.6 | If                    your employment shall be terminated pursuant to a Qualifying                    Termination                    and you are a participant in the Executive Retirement Plan immediately                    before the Qualifying Termination you shall be treated, for purposes                    of                    eligibility for any retiree medical benefits under the Executive                    Retirement Plan, as if you had remained an active employee of                    the Company                    during the Severance Period. In the event that your participation                    in such                    retiree medical plan is barred, or if your participation in such                    plan                    would have adverse consequences for you, the Company shall provide                    you                    with benefits substantially similar to those which you would                    have been                    entitled to receive under such retiree medical plan had your                    participation                    not been barred or had you not suffered such adverse                    consequences. |
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| 5. | If                    your employment shall be terminated pursuant to a Qualifying                    Termination,                    you shall be entitled to outplacement counseling services at                    the Company’s                    sole expense commensurate with your position as customarily provided                    by                    the Company. |
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| 6. | Other                    Severance Arrangements |
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| 6.1 | This                    Agreement constitutes the entire contract between the parties                    relating to                    the subject matter hereof and supersedes any and all prior agreements                    or                    understandings, written or oral, regarding the subject matter                    hereof. |
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| 6.2 | Severance                    payments and benefits hereunder shall be in lieu of other severance                    or                    termination payments and benefits under any other severance plan,                    policy,                    agreement or arrangement of the Company or its affiliates or                    under any                    individual agreement, other than the 2001 Income Continuation                    Plan or                    Income Continuation Plan, in each case, if applicable. Any severance                    payments and benefits under this Agreement shall be reduced by                    the amount                    of any payments and benefits payable to you under the Income                    Continuation                    Plan**.** |
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| 7. | The                    payment of any amounts or benefits under this Agreement are expressly                    conditioned on the receipt by the Company from you of a duly executed                    General Waiver and Release of Claims in the form satisfactory                    to the                    Company, the repayment by you of any outstanding advances or                    loans due the                    Company and the return by you of all Company                    property. |
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| 8. | Any                    reference to a specific policy, plan or program in this Agreement                    shall be                    deemed to include any similar policy, plan or program of the                    Company then                    in effect that is the predecessor of, the successor to, or the                    replacement                    for, such specific policy, plan or                    program. |
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| 9. | The                    Company may withhold from any benefits payable under this Agreement                    all                    federal, state, local or other applicable taxes as shall be required                    pursuant to any law or governmental regulation or                    ruling. |
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| 10. | In                    the event of your death while any amounts are still payable to                    you under                    this Agreement, the Company shall pay all such unpaid amounts                    to your                    designated beneficiary or, if none has been designated, to your                    estate. |
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| 11. | You                    acknowledge that (a) prior to executing this Agreement, you had                    an                    opportunity to consult with an attorney of your choosing and                    review this                    Agreement with such counsel, (b) you are executing this Agreement                    knowingly and voluntarily and (c) you understand all of the terms                    set                    forth herein. |
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| 12. | In                    the event the Company terminates your employment for Cause and                    you dispute                    the Company’s right to do so or you claim that you are entitled to                    terminate your employment for Good Reason and the Company disputes                    your                    right to do so, a mediator acceptable to you and the Company                    will be                    appointed within ten (10) days to assist in reaching a mutually                    satisfactory resolution, but will have no authority to issue                    a binding                    decision. Such mediation must be concluded within sixty (60)                    days of the                    Date of Termination or claim to termination for Good Reason.                    You agree                    that you will not institute any legal proceeding relating to                    the matter                    until the conclusion of such                    mediation. |
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| 13. | Acts                    Detrimental to the Company |
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| 13.1 | You                    agree that you will not engage in any Detrimental Activity during                    the                    Severance Period. |
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|   | (a) | For                    purposes of this Agreement, Detrimental Activity shall mean:                    (i) the                    disclosure to anyone outside the Company or its affiliates, or                    the use in                    other than the Company’s or its affiliate’s business, without written                    authorization from the Company, of any confidential information                    or                    proprietary information, relating to the business of the Company                    or its                    affiliates, acquired by you during employment with the Company                    or its                    affiliates; (ii) activity while employed that results, or if                    known could                    result, in termination of your employment that is classified                    by the                    Company as a termination for Cause as provided in Section 2.4                    above; (iii)                    any attempt, directly or indirectly, to solicit, induce or hire                    (or the                    identification for solicitation, inducement or hire) any non-clerical                    employee of the Company or its affiliates to be employed by,                    or to perform                    services for, you or any person or entity with which you are                    associated                    (including, but not limited to, due to your employment by, consultancy                    for, equity interest in, or creditor relationship with such person                    or                    entity) or any person or entity from which you receive direct                    or indirect                    compensation or fees as a result of such solicitation, inducement                    or hire                    (or the identification for solicitation, inducement or hire)                    without, in                    all cases, written authorization from the Company; (iv) any attempt,                    directly or indirectly, to solicit in a competitive manner any                    current or                    prospective customer (other than the ultimate consumer) or advertiser                    of                    the Company or its affiliates without, in all cases, written                    authorization                    from the Company; (v) your Disparagement (as defined below),                    or inducement                    of others to do so, of the Company or its affiliates or their                    past and                    present officers, directors, employees or products; (vi) without                    written                    authorization from the Company, the rendering of services for                    any                    organization, or engaging, directly or indirectly, in any business,                    which                    is competitive with the Company or its affiliates, or which organization                    or business, or the rendering of services to such organization                    or                    business, is otherwise prejudicial to or in conflict with the                    interests of                    the Company or its affiliates, provided,                    however,                    that the only organizations and businesses which shall be covered                    by this                    subsection (vi) shall be those set forth on Exhibit A hereto                    (which list                    may be changed or expanded by the Company at any time on 90 days’ written                    notice to you which notice shall become effective 90 days after                    the giving                    of such notice, if you are then employed by the Company or any                    Designated                    Subsidiaries (as defined below)); or (vii) any other conduct                    or act                    determined by the Committee in its sole discretion, to be injurious,                    detrimental or prejudicial to any interest of the Company or                    its                    affiliates. For purposes of subparagraphs (i), (iii), (iv) and                    (vi) above,                    the Chief Executive Officer, the most senior Human Resources                    officer and                    the most senior legal officer of the Company shall each have                    authority to                    provide you with written authorization to engage in the activities                    contemplated thereby and no other person shall have authority                    to provide                    you with such authorization. |
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|   | (b) | “Disparagement”                    includes, without limitation, comments or statements to the press,                    the                    Company’s or its affiliates’ employees or any individual or entity with                    whom the Company or its affiliates has a business relationship                    which would                    adversely affect in any manner: (i) the conduct of the business                    of the                    Company or its affiliates (including, without limitation, any                    products or                    business plans or prospects), or (ii) the business reputation                    of the                    Company or its affiliates, or any of their products, or their                    past or                    present officers, directors or                    employees. |
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|   | (c) | “Designated                    Subsidiary” shall mean one of such subsidiaries of the Company, 80 percent                    or more of the voting capital stock of which is owned, directly                    or                    indirectly, by the Company, which are designated from time to                    time by the                    Board. |
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| 13.2 | In                    the event you engage in a Detrimental Activity prior to, or during                    the one                    (1) year period following the payment of any amount hereunder,                    the Company                    shall be entitled to (a) not make any such payment otherwise                    required to                    be made hereunder following the Company's knowledge of your Detrimental                    Activity and (b) recover from you at any time within two (2)                    years after                    any payment made hereunder prior to the Company's knowledge of                    your                    Detrimental Activity, and you shall pay over to the Company,                    the full                    amount of any such payment made, and the Company shall be entitled                    to                    set-off against the amount of any such payment any amount owed                    to you by                    the Company or its affiliates. Furthermore, if you do not pay                    over to the                    Company within twenty (20) days of demand any payment hereunder,                    such                    amount shall thereafter bear interest at the maximum rate permitted                    by law                    and you shall be liable for all of the Company's costs of collection,                    including but not limited to, reasonable legal                    fees. |
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| 13.3 | In                    addition, you agree that any breach or threatened breach of Section                    13.1                    shall entitle the Company to apply for and to obtain injunctive                    relief,                    which shall be in addition to any and all other rights and remedies                    available to the Company at law or in                    equity. |
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| 13.4 | All                    of your rights and benefits under this Agreement shall cease                    upon any                    breach by you of Section 13.1 of this                    Agreement. |
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| 14. | Miscellaneous |
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| 14.1 | Notices                    and other communications provided for herein shall be in writing                    and shall                    be effective upon delivery addressed as                    follows: |
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| 14.2 | This                    Agreement shall be binding upon and shall inure to the benefit                    of the                    parties hereto and their respective successors and assigns; provided,                    however,                    that this Agreement may not be assigned by either party without                    the                    consent of the other party. |
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| 14.3 | Any                    provision of this Agreement that is prohibited or unenforceable                    in any                    jurisdiction shall, as to such jurisdiction, be ineffective to                    the extent                    of such prohibition or unenforceability without invalidating                    the remaining                    provisions of this Agreement or affecting the validity or enforceability                    of such provision in any other                    jurisdiction. |
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| 14.4 | This                    Agreement may be amended or modified only by a written agreement                    duly                    executed by both of the parties                    hereto. |
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| 14.5 | This                    Agreement shall be governed by and interpreted in accordance                    with the laws                    of the State of New York applicable to contracts executed in                    and to be                    wholly performed within that                    State. The parties hereby agree and consent to exclusive jurisdiction                    of                    any dispute under this Agreement in the federal or state courts                    of                    Westchester County in New York State. |
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|                                                                                                                                                                                                                                                                                                                               | Very                  truly yours,                                                                                                                                                                                                                                                                                               |   |
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|                                                                                                                                                                                                                                                                                                                               | The                  Reader’s Digest Association, Inc.                                                                                                                                                                                                                                                                     |   |
|                                                                                                                                                                                                                                                                                                                               | By: /s/                  Gary S Rich          Name:                   Gary S. Rich      Title:                      Senior Vice President,                           Human Resources |   |
| Agreed                  to and accepted as of May 14, 2001                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                  |   |
| By:                   /s/ Albert L. Perruzza                          Name:  Albert L. Perruzza      Title:                     Senior Vice President,                         Global Operations |                                                                                                                                                                                                                                                                                                                                  |   |

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