EXHIBIT 10.34



                     THE READER'S DIGEST ASSOCIATION, INC.
                 [2002] KEY EMPLOYEE LONG TERM INCENTIVE PLAN
                   Annual Non-Qualified Stock Option Grant:

                             TERMS AND CONDITIONS


      This  stock  option  grant  (the  "Option")  from  The  Reader's   Digest
Association,  Inc.  (the  "Company")  to purchase  shares of its Common  Stock,
$.01 par value  (the  "Common  Stock"),  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.    Option Terms.  Except as provided in this  Paragraph 1 and  Paragraphs 2,
3, and 4, this Option may not be exercised  prior to the first  anniversary  of
the Grant  Date,  and may not be  exercised  unless  you have  remained  in the
continuous  employ of the Company,  or any of its subsidiaries as designated by
the  Board  of   Directors   of  the  Company   under  the  Plan   ("Designated
Subsidiaries"),  from the Grant Date until the date of  exercise.  This  Option
may be  exercised  from  time to time  after  the  expiration  of the one  year
period  referred  to above,  provided  that the  aggregate  number of shares of
Common Stock acquired pursuant to exercise of this Option is not in excess of:

[(a)  after one (1) year,  but before the  expiration of two (2) years from the
Grant Date,  25 percent of the total  number of shares  which may be  purchased
pursuant to this Option;

(b)   after two (2) years,  but before the  expiration  of three (3) years from
the  Grant  Date,  50  percent  of the  total  number  of  shares  which may be
purchased pursuant to this Option;

(c)   after three (3) years,  but before the  expiration of four (4) years from
the  Grant  Date,  75  percent  of the  total  number  of  shares  which may be
purchased pursuant to this Option; and

(d)   after  four (4)  years  from the  Grant  Date,  100 percent  of the total
number of shares which may be purchased pursuant to this Option.]

The "Grant  Date" of the Option is the date of the Grant  Letter  with  respect
to the  Option.  This  Option  expires  at the close of  business  on the tenth
anniversary of the Grant Date.

      Notwithstanding  the  foregoing,  the Committee (as defined in the Plan),
in its sole discretion  after the grant, may accelerate the  exercisability  of
all or part of this  Option to a date or dates no earlier  than  within six (6)
months from the Grant Date.

2.    Change  in  Control.  Upon the  occurrence  of a Change  in  Control  (as
defined  in the  Plan),  this  Option  shall  immediately  be fully  vested and
exercisable in its entirety in accordance with the terms of the Plan.

3.    Termination of Employment.

(a)   Retirement.   If  your   employment   by  the  Company  or  a  Designated
Subsidiary  terminates on or after age fifty-five  (55) after at least five (5)
years of  employment  by the Company  and/or a Designated  Subsidiary  and more
than one (1) year from the  Grant  Date,  this  Option,  shall be fully  vested
and,  subject to Paragraph 9, may  thereafter  be exercised by you for a period
of three  (3) years  from the date of such  termination  of employment or until
the expiration of the stated term of this Option, whichever period is shorter.

(b)   Total  Disability.  If your  employment  by the  Company or a  Designated
Subsidiary  terminates  by  reason  of a total  disability  as  defined  in the
Company's  Healthcare  Program (or an  equivalent  plan,  as  determined in the
sole  discretion  of the  Company),  this  Option  shall be fully  vested  and,
subject to  Paragraph  9, may  thereafter  be exercised by you for a period of'
three (3) years from the date of your  termination  of  employment or until the
expiration of the stated term of this Option, whichever period is shorter.

(c)   Death  While  Employed.   If  your  employment  with  the  Company  or  a
Designated  Subsidiary  terminates  by reason of your death,  this Option shall
be fully vested and may  thereafter  be  exercised by the legal  representative
of your  estate  for a period  of one (1) year  from the date of your  death or
until the  expiration  of the stated term of this Option,  whichever  period is
shorter.

(d)   Other  Termination.  If your  employment by the Company or its Designated
Subsidiary   terminates   for  any   reason   other   than  as   specified   in
subparagraph (a),  (b) or (c) above, this Option shall terminate on the date of
your  termination  of  employment,  except  that,  if  you  were  involuntarily
terminated by the Company or a Designated  Subsidiary  without  Cause,  subject
to Paragraph 9,  it may be exercised,  to the extent exercisable on the date of
such  termination,  for the  lesser of three (3)  months or the  balance of the
stated term of this Option.  ("Cause" for this purpose  shall  include,  by way
of  example,  but not limited to,  insubordination,  dishonesty,  incompetence,
moral  turpitude,  other  misconduct  of any kind,  conviction  of (or pleading
guilty or nolo  contendere to) a crime,  or a material  violation of any rules,
policies,  procedures  or  guidelines  of the  Company  or its  affiliates,  or
refusal to perform  normal  duties and  responsibilities  (for any reason other
than illness or incapacity)  which,  in any case,  the Company  classifies as a
termination  for  Cause.) In such case,  however,  the  percentage  limitations
provided in Paragraph 1 shall apply.

4.    Death  During the Three (3) Year  Period  under  Paragraphs  3(a) and (b)
Hereof.  If you die within  either of the three (3) year  periods  mentioned in
Paragraphs 3(a) and (b) hereof, this Option, to the extent  unexercised,  shall
thereafter be  exercisable,  to the extent to which it was  exercisable  at the
time of death,  for a period of twelve  (12) months from the date of your death
or until the  expiration  of the stated term of this Option,  whichever  period
is shorter.

5.    Exercise of Option.  Subject to  whatever  installment  exercise  waiting
periods apply  hereunder,  exercise of this Option,  in whole or in part, shall
be made by  submitting to the Company  written  notice of exercise in a form of
the  exercise  letter  provided by the  Company,  by  specifying  the number of
shares to be purchased or by providing  such  telephonic or other notice as the
Company  shall  specify,  by making an  arrangement  for payment as provided in
the next  sentence and by delivery of the  certification  required by Paragraph
9. The exercise of this Option shall be  effective on the first  business  date
on  which  the  Company  receives  due  notice  of  exercise  at the  principal
corporate   offices  of  the  Company  in   accordance   with  the   procedures
established  by the  Company,  accompanied  by  payment  in cash,  through  the
approved  cashless broker exercise  procedure or in Common Stock as provided in
the next  sentence.  Payment  for the  shares  of  Common  Stock may be made in
cash  and/or  shares of Common  Stock  (accompanied  by a stock power with your
signature  guaranteed)  owned by you for at least six (6)  months and for which
you have good  title,  free and clear of any liens or  encumbrances.  No shares
of Common Stock shall be issued in  connection  with the exercise of the Option
until payment  therefor has been made. All applicable  tax  withholding  either
shall be paid by you  directly to the Company in cash or shall be  collected by
the Company's  reduction of the number of shares otherwise  deliverable to you,
in each case prior to the  issuance  of the Common  Stock to be acquired by you
upon exercise of this Option.

6.    Adjustments.  If there is any change in the capital  stock of the Company
by   reason   of   any   stock   dividend   or   distribution,   stock   split,
recapitalization,  merger, consolidation,  split-up, combination or exchange of
shares,  or any similar  change  affecting  the capital stock of the Company as
provided  under the Plan,  the  Committee may make such  adjustments  as it may
determine   to  be   appropriate   in   accordance   with  the  Plan  and  such
determination shall be final and binding.

7.    Registration  of Shares.  The  obligation  of the Company to issue,  sell
and deliver shares under this Option shall be subject to all  applicable  laws,
rules and  regulations,  and such approvals by governmental  agencies as may be
required,  including,  without limitation,  the effectiveness of a registration
statement  under the  Securities  Act of 1933, as amended,  covering the shares
to be so  issued,  and the  receipt  by the  Company  of an  acknowledgment  of
receipt  of a  prospectus.  Accordingly,  shares  will not be  issued  upon the
exercise  of the Option  unless the Company  has taken the steps  necessary  to
comply with applicable law.

8.    Nontransferable.   This  Option  is  not   transferable   or   assignable
otherwise than by will or by the laws of descent and  distribution,  and may be
exercised  only during  your  lifetime  and only by you,  except as provided in
Paragraphs 3 and 4 hereof with respect to your death.

9.    Cancellation and Recovery.

      (a)  Notwithstanding  anything herein to the contrary,  the Committee may
terminate this Option immediately if you engage in any Detrimental Activity.

      (b)  As a condition of the exercise of this Option,  you shall certify at
the time of exercise  in a manner  acceptable  to the  Company  that you are in
compliance  with the  terms  and  conditions  of the Plan and that you have not
engaged in, and do not intend to engage in, any  Detrimental  Activity.  In the
event  you  engage in a  Detrimental  Activity  prior  to,  or  during  the two
(2)-year  period after,  your  termination  of employment  with the Company and
its  Designated  Subsidiaries,  the Company  shall be entitled to recover  from
you at any time  within two (2) years  after such  termination  of  employment,
and you shall pay over to the  Company,  any gain  realized  as a result of the
exercise  of this  Option  during  the  period of two (2)  years  prior to your
termination  of  employment  and  the  period  of  two  (2)  years  after  your
termination  of  employment  (whether  the  gain  was  realized  at the time of
exercise or  thereafter),  and the Company shall be entitled to set-off against
the  amount  of any such  gain any  amount  owed to you by the  Company  or its
affiliates  and not honor any  exercise of this Option made after you engage in
any Detrimental  Activity.  Furthermore,  if you do not pay over to the Company
within  twenty (20) days of demand any gain to the  Company,  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.

      (c)  Except in the event that a Change in Control has  occurred  and your
employment  with the Company and its  Designated  Subsidiaries  has  terminated
involuntarily  without  Cause (as  defined  in  Paragraph  3(d)),  "Detrimental
Activity" means:

           (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 defined in Paragraph 3(d) 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,  or  inducement  of others to do so, of the
      Company or its affiliates or their past and present officers,  directors,
      employees or products;

           (vi)  if you are at the  time of  exercise  of any  portion  of this
      Option or were at any time prior thereto a U.S.  Grade 18 or higher level
      employee or the  equivalent  (or, if the  grading  system is changed,  an
      equivalent  level  employee),  without  written  authorization  from  the
      Company, the rendering of services,  at any time during the period of one
      (1) year after your  termination  of employment  with the Company and its
      Designated Subsidiaries,  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  subparagraph (vi) shall be those set forth on Exhibit
      A hereto  (which list may be changed or expanded by the  Committee 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); 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.

In the event that a Change in Control has  occurred  and your  employment  with
the  Company  and its  Designated  Subsidiaries  has  terminated  involuntarily
without  Cause (as defined in Paragraph  3(d)),  "Detrimental  Activity"  shall
have the meaning stated in subparagraph 9(c)(i), only.

      For purposes of subparagraphs  9(c)(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.

      (d)  "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.

10.   NOTWITHSTANDING  ANY OTHER PROVISION  CONTAINED HEREIN, THIS OPTION SHALL
NOT BE EXERCISABLE AFTER THE EXPIRATION OF TEN YEARS FROM THE GRANT DATE.

11.   Miscellaneous.

(a)   The   Company   shall   have  no   obligation   to  notify  you  or  your
representative of the expiration of this Option.

(b)   This Option is subject to the detailed  provisions of the Plan, a copy of
which may be obtained from the Company's Human Resources Department.

(c)   Nothing  herein is  intended  to or shall give you any right or status of
any kind as a  stockholder  of the Company in respect of any shares  covered by
this  Option or entitle you to any  dividends  or other  distributions  thereon
unless and until said shares shall have been registered in your name.

(d)   The  granting  of this  Option  does not  confer  upon  you any  right to
continue  in  the  employ  of  the  Company  or  any  of  its  subsidiaries  or
affiliates.  The  granting  of this  Option does not entitle you to any benefit
other than the benefits  specifically  and  expressly  granted  hereunder.  Any
benefits  granted  under the Option are not part of your ordinary  salary,  and
shall not be  considered  as part of such  salary  in the  event of  severance,
redundancy or resignation.

(e)   This Option is not  intended to be an incentive  stock option  within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

(f)   These Terms and  Conditions  are an integral  part of the Grant Letter to
which it is attached and is subject to and  qualified by the  provisions of the
Plan.

(g)   Notwithstanding  any other provision  contained  herein,  this Option may
also be  exercised to the extent  provided in any employee  benefit plan of the
Company.

(h)   The  Plan,  the  Grant  Letter  and the  Terms  and  Conditions  shall be
governed by the laws of the State of New York,  excluding  any conflict of laws
or choice of law rule or principle that might otherwise  refer  construction or
interpretation  of the Plan,  the Grant Letter and the Terms and  Conditions to
the  substantive law of another  jurisdiction.  You are deemed to submit to the
exclusive  jurisdiction  and venue of the federal or state  courts of New York,
County of  Westchester,  to resolve any and all issues that may arise out of or
relate to the Plan, the Grant Letter and the Terms and Conditions.