EXHIBIT 10.37



                       TERMS AND CONDITIONS

                   DIRECTOR COMPENSATION PROGRAM

                       DEFERRED STOCK AWARD



       This award is subject to the provisions of The Reader's
Digest Association, Inc. Director Compensation Program (the
"Plan") and the Terms and Conditions detailed below.

       1.  Deferred Stock Award Subject to Conditions.  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, par value $0.01 per
share, 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 delivery date referred to in Paragraph 2 below.

       2.  Delivery Date of Deferred Stock.  The shares of
Deferred Stock shall be delivered to you as of the first trading
day of the calendar year after termination of your service as a
Director on the Board of Directors of the Company.

       Notwithstanding the foregoing, the Committee may, in its
sole discretion at any time after the grant of the Deferred Stock
Award, accelerate the delivery date as to all or any part of the
Deferred Stock Award.

       4.  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 pursuant to the terms of the Plan, 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.

       5.  Tax Withholding.  You are responsible for satisfying
any tax withholding obligation that is applicable to you,
including any U.S., non-U.S. or social insurance tax withholding
obligation.

       6.  Miscellaneous

           (a)  The Deferred Stock Award is subject to the
detailed provisions of the Plan, a copy of which may be obtained
from the Human Resources Department of Reader's Digest.

           (b)  The Deferred Stock Award, does not give you any
rights as a holder of Common Stock prior to the delivery date
under Paragraph 2.  You will not receive regular quarterly cash
dividends or dividend equivalents with respect to the Deferred
Stock Award.

           (c)  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.

           (d)  This statement of Terms and Conditions is subject
to and qualified by the provisions of the Plan.

           (e)  The Plan, and the Grant Letter and the Terms and
Conditions relating to the Deferred Stock Award 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.