The Reader's Digest Association, Inc.
                  DIRECTOR COMPENSATION PROGRAM
                   (As Adopted March 13, 1998)


     1.   Purpose.

          The purpose of The Reader's Digest Association, Inc.
Director Compensation Program (the "Program") is to attract and
retain qualified individuals to serve as non-employee directors
on the Board of Directors (the "Board") of The Reader's Digest
Association, Inc. (the "Company").  The Program is comprised of
both cash and equity components, with an emphasis on the latter
so as to strengthen the non-employee directors' equity
relationship with the Company and to more completely align their
interests with those of the stockholders generally.

     2.   Administration.

          The Program shall be administered by the Vice
President, Human Resources of the Company.

     3.   Compensation.

          a.   Stock Retainer.
          
               (i)  Annual Grant.  In lieu of an annual cash
retainer, the Company shall grant to each non-employee director
who is a director as of the beginning of the calendar year, on
the first trading day of each calendar year beginning with the
1999 calendar year, a number of shares of the Company's Class A
Nonvoting Common Stock (the "Class A Common Stock") equal to (A)
$32,000 divided by (B) the average per share closing price for
Class A Common Stock over the twenty (20) trading days
immediately preceding the date of grant, such number of shares to
be rounded to the nearest number of fifty (50) shares.

               (ii) Pro-Rated Grant for Directors Beginning
Service Mid-Year.  The Company shall grant to each non-employee
director who becomes a director during the calendar year other
than during the month of December, on the first trading day of
the month following the month during which such director begins
service, a number of shares of Class A Common Stock equal to (A)
the Pro-Rated Stock Retainer divided by (B) the average per share
closing price for Class A Common Stock over the twenty (20)
trading days immediately preceding the date of grant, such number
of shares to be rounded to the nearest number of fifty (50)
shares.  For purposes of this Section 3(a)(ii), "Pro-Rated Stock
Retainer" shall mean $32,000, $24,000, $16,000 or $8,000 based on
whether the grant to the non-employee director is made during the
first, second, third or fourth calendar quarter, respectively.

          b.   Cash Retainer.

               As compensation for attendance at meetings of the
Board or committees thereof, each non-employee director shall
receive quarterly $4,500 in cash.  Each non-employee director who
serves as the Chairperson of a committee of the Company's Board
shall receive quarterly an additional $750 in cash.  All cash
compensation relating to meetings of the Board and committees
thereof shall be payable at the end of each calendar quarter
during which the individual served in whole or in part as a
director or Chairperson, beginning with the April 1, 1998
calendar quarter.
               
     4.   Additional Benefits.
          
          a.   Directors Who Began Service Prior to April 1, 1998
- Retirement Benefit.  Each non-employee director who began
service prior to April 1, 1998 (a "Current Director") and who
serves for at least five (5) years shall remain eligible to
receive a retirement benefit equal to $32,000, payable in four
equal installments at the end of each calendar quarter, under the
non-employee director compensation program in effect immediately
prior to April 1, 1998.

          b.   Directors Who Begin Service After April 1, 1998 -
Equity Compensation.  Each non-employee director who begins
service after April 1, 1998 (a "New Director") shall be entitled
to receive, beginning in 1999 and in lieu of any retirement
benefit, the following:

               (i)  Stock Grant.
               
                    (A)  Annual Stock Grant.  The Company shall
grant to each New Director who is a director as of the beginning
of the calendar year, on the first trading day of each calendar
year, a number of shares of Class A Common Stock equal to (1)
$20,000 divided by (2) the average per share closing price for
Class A Common Stock over the twenty (20) trading days
immediately preceding the date of grant, such number of shares to
be rounded to the nearest number of fifty (50) shares.
                    
                    (B)  Pro-Rated Stock Grant for Directors
Beginning Service Mid-Year.  The Company shall grant to each New
Director who becomes a director during the calendar year other
than during the month of December, on the first trading day of
the month following the month during which such director begins
service, a number of shares of the Class A Common Stock equal to
(A) the Pro-Rated Stock Grant divided by (B) the average per
share closing price for Class A Common Stock over the twenty (20)
trading days immediately preceding the date of grant, such number
of shares to be rounded to the nearest number of fifty (50)
shares.  For purposes of this Section 3(c)(ii)(A), "Pro-Rated
Stock Grant" shall mean $20,000, $15,000, $10,000 or $5,000 based
on whether the grant to New Director is made during the first,
second, third or fourth calendar quarter, respectively; and
               
               (ii) Cash Award.  Each New Director shall receive
quarterly  $3,000 in cash, payable at the end of each calendar
quarter during which the New Director served in whole or in part.

     5.   Transition Provisions Relating to Calendar Year 1998.

          a.   First Quarter 1998.
     
               In respect of the calendar quarter ending March
31, 1998, each Current Director shall receive in cash the
following pro-rated amounts earned under the non-employee
director compensation program existing prior to April 1, 1998:
(i) a retainer of $8,000 and (ii) $1,000 for each Board or
committee meeting attended during such quarter (with an
additional amount of $500 payable to each committee Chairperson
for each committee meeting attended during such quarter).  Such
amounts shall be payable as soon as practicable after March 31,
1998.  Any election made by a Current Director under the Deferred
Compensation Plan for Non-Employee Directors of The Reader's
Digest Association, Inc. (the "Deferred Compensation Plan")
relating to the annual retainer payable in respect of calendar
year 1998 shall be applied to the $8,000 pro-rated retainer
payment.

          b.   Second, Third and Fourth Quarters 1998.

               In respect of the calendar quarters ending June
30, 1998, September 30, 1998 and December 31, 1998, each Current
Director shall receive: (i) on April 1, 1998, in lieu of a cash
retainer, a number of shares of Class A Common Stock equal to (A)
$24,000 divided by (B) the average per share closing price for
Class A Common Stock over the twenty (20) trading days
immediately preceding April 1, 1998, such number of shares to be
rounded to the nearest number of fifty (50) shares; and (ii) in
lieu of meeting and committee fees, at the end of each such
quarter, $4,500 in cash (with an additional amount of $750
payable to each committee Chairperson).

     6.   Expenses.

          The Company shall reimburse each non-employee director
for all  reasonable expenses relating to his or her attendance at
meetings and otherwise in connection with his or her duties as a
director.

     7.   Deferred Compensation.

          Each non-employee director may elect to defer, under
the terms of the Deferred Compensation Plan, 50%, 75% or 100% of
the cash retainer and cash award  described in Section 3(b),
Section 4(b)(ii) and Section 5(b)(ii) hereof for a designated
period following his or her termination from the Board.  Under
the Deferred Compensation Plan, each director may chose to
receive deferred amounts in either a lump sum or in annual
installments.  The Company shall send a deferral election form to
each director before the beginning of each calendar year.

     8.   Amendment and Termination of this Program.

          This Program may be amended, modified, suspended or
terminated by the Board at any time; provided, however, that no
such amendment, modification, suspension or termination shall
adversely effect any benefit or compensation which either is
vested or accrued but unpaid as of the date of such amendment,
modification, suspension or termination.

     9.   Effective Date.

          The effective date of this Program is April 1, 1998.