November 14, 1995
                                                                 
Mr. Joseph M. Grecky
13 Pelham Lane
Ridgefield, Connecticut  06877

Dear Joe:

     This letter serves to confirm payments and benefits and the
terms thereof relating to your separation from The Reader's
Digest Association, Inc. (the "Company") which will become
effective June 30, 1996, subject to the terms set forth below.

     1.   You will remain in your position as Senior Vice
President, Human Resources of the Company until such time as the
Company determines, continue to perform your duties in accordance
with the Company's policies and continue to participate in all
Company benefits.  You will remain on the payroll and receive
your bi-weekly salary payment until your separation on June 30,
1996.  Upon the Company's determination, you will be relieved of
your responsibilities as Senior Vice President and will
immediately execute letter of resignations of such offices of the
Company and its affiliates as required by the Company.

     2.   Subject to the terms of The Reader's Digest
Association, Inc. Severance Plan for Senior Management
("Severance Plan"), you are eligible to receive one (1) month's
base salary for each full year of continuous service completed
prior to termination, subject to appropriate deductions, but in
no event less than twelve (12) months base pay - in your case,
twelve (12) months.  You will also be eligible to receive as
severance pay an additional twelve (12) months base salary.  For
purposes of this Agreement, your base salary is $293,000.  The
aggregate amount of severance payable (i.e., twenty-four (24)
months) shall be paid in 52 equal installments on a bi-weekly
basis commencing July 1, 1996 through June 30, 1998 ("Severance
Period").  You will also be eligible to receive, as additional
severance pay during the Severance Period, an amount equivalent
to two (2) years of your Fiscal 1996 Target Award under The
Reader's Digest Association, Inc. Management Incentive Plan - in
your case, an amount totaling $314,000, payable during the
Severance Period; the Company will make one payment of $157,000
no earlier than September 1, 1996 and no later than December 31,
1996 and a second payment of $157,000 between January 1, 1997 and
December 31, 1997.  As you have requested, both of these payments
will be deferred as if they had been made under the terms and
conditions of the Company's Deferred Compensation Plan.  You will
also receive, on or around September 1996, an amount equal to one
hundred percent (100%) of your target bonus ($157,000) for Fiscal
Year 1996 under the Management Incentive Award.

          As a condition to eligibility for all of the payments
set forth in paragraph 2 of this Agreement, you must sign the
General Waiver and Release of Claims Form, repay any outstanding
advances or loans due the Company and return all Company
property.  No payment will be made until at least seven (7) days
have elapsed following the Company's receipt of your signed
General Waiver and Release of Claims Form.  Additional
information regarding the General Waiver and Release of Claims
Form and other severance procedures is attached to this letter.

     3.   Pursuant to the terms of The Reader's Digest
Association, Inc. Key Employee Long Term Incentive Plans ("Key
Employee Plans"), you will receive one hundred percent (100%) of
the value of the Performance Units awarded for Fiscal Years 1994-
96 (150,000 units), for Fiscal Years 1995-97 (160,000 units) and
for Fiscal Years 1996-98 (200,000 units).  Payment will be made
at the time all awards are made under the Key Employee Plans.
Payment of each of these amounts is conditioned upon your
execution of the General Waiver and Release of Claims Form.

     4.   Pursuant to the Severance Plan, provided you execute
the General Waiver and Release of Claims Form, the Company shall
pay to you an amount equal to the difference between your monthly
retirement benefit payable under The Reader's Digest Association,
Inc. Retirement Plan ("RDA Retirement Plan"), the Excess Benefit
Retirement Plan of The Reader's Digest Association, Inc. and
Executive Retirement Plan of The Reader's Digest Association,
Inc. and the amount that would have been payable if your age and
aggregate periods of service under those plans included the
Severance Period and all base salary and deferred payments
described in paragraph 2 of the Agreement.  In addition, the
Severance Period shall be considered to be additional age and
credited service for all purposes (including vesting) under the
Executive Retirement Plan.  Such amount shall be paid by the
Company consistent with the terms of the Severance Plan.

          Commencing 15 years after you commence benefits under
the Executive Retirement Plan, the Company will increase your
annual retirement benefits under the Executive Retirement Plan by
the amount the Executive Retirement Plan payment has been reduced
for the Company's payments under the SRBA, subject to and in
accordance with the Executive Retirement Plan.

     5.   Your medical and/or dental coverage will continue
through June 30, 1996.  Pursuant to the Severance Plan, effective
July 1, 1996, provided you execute the General Waiver and Release
of Claims Form, you will be entitled to continued participation
in the Company's medical, dental and group term insurance plans
for the duration of your severance payments (until June 30,
1998), unless those plans do not so permit.  In such event, the
Company will arrange to provide you with benefits during that
period substantially similar to those you were entitled to
receive under such plans immediately prior to your date of
termination.  For that period, your share of the cost will be
automatically deducted from your severance payments.  You are
eligible for benefits under COBRA (see attached information) for
eighteen (18) months following your termination (commencing July
1, 1996).  You must make your election regarding COBRA within
sixty (60) days of June 30, 1996.  Since you are eligible to
continue to receive medical and/or dental benefits under this
Agreement for the Severance Period, you may choose, of course,
not to receive COBRA benefits.  Pursuant to the terms of the
Severance Plan, effective July 1, 1998, provided you execute the
General Waiver and Release of Claims Form, you will be entitled
to retiree medical and/or dental benefits substantially similar
to those available to retirees under The Reader's Digest
Associaiton, Inc. Retiree Medical and Dental Expense Plan.

     6.   Provided you execute the General Waiver and Release of
Claims Form, pursuant to the Severance Plan, you are eligible for
outplacement counseling services for a period of up to one (1)
year or reimburse you for clerical/secretarial services in an
amount not to exceed $20,000.  Please let me know if you are
desirous of such services, which will be available to you until
the end of the Severance Period.

     7.   Provided you execute the General Waiver and Release of
Claims Form, you will continue to receive financial counseling
services until June 30, 1998, under the identical circumstances
and terms as currently provided to you.

     8.   Provided you execute the General Waiver and Release of
Claims Form, the Company will pay for all regular and usual
membership dues and assessments of the Union League Club until
June 30, 1998.

     9.   Following your separation, you will receive a lump-sum
payment reflecting any earned and unused vacation and floating
personal days for the period ending June 30, 1996.

     10.  You will be eligible for a contribution to The Reader's
Digest Association, Inc. Employees Profit-Sharing Plan ("Profit
Sharing Plan") and the Company's Profit Sharing Benefit
Restoration Plan, both for Plan Year 1996 (based upon your 1996
Plan Year earnings).  Your account will be settled on or around
September, 1996, based on a June 30, 1996 valuation.  All of the
preceding is subject to the precise terms of those plans, as are
requirements regarding repayment of any outstanding loans to the
Profit Sharing Plan.

          Provided you execute the General Waiver and Release of
Claims Form, the Company will make cash payments to you in
amounts that would have been contributed to your account under
the Profit Sharing Plan and the Company's Profit Sharing Benefit
Restoration Plan had you been a participant in these plans
through June 30, 1998, based upon the severance payments (base
salary equivalent only) made to you pursuant to paragraph 2 of
this Agreement.  The payments shall be made promptly after the
contributions, if any, in respect of the Fiscal Years ending June
30, 1997 and 1998 are made to the Profit Sharing Plan.

     11.  Your currently outstanding stock options (a) will
continue to be exercisable and will continue to vest until June
30, 1998 in accordance with all of the other terms of the
applicable stock option grant and the Key Employee Plans, and (b)
will vest on July 1, 1998 and continue to be exercisable
thereafter as if your employment terminated on that date by
reason of Retirement (as defined in the Key Employee Plans).

     12.  You are also eligible to receive benefits under your
Supplemental Retirement Benefit Agreement executed on August 25,
1988 ("SRBA"), subject to and in accordance with the SRBA's
terms.

     13.  Any amounts that you have deferred under The Reader's
Digest Association, Inc. Deferred Compensation Plan will be paid
to you under the terms of that plan; provided, however, the
Severance Period shall be considered as part of your employment
period for purposes of this plan.

     14.  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.

     15.  In case of your death while any amounts are still due
or payable to you under this Agreement or any other applicable
plans, the Company shall pay all such amounts to your designated
beneficiary or, if none has been designated, to your estate.

          Please let me know if you need additional information
regarding your benefits under the Profit Sharing Plan, The
Reader's Digest Employee Stock Purchase Plan, Group Universal
Life Insurance, SRBA, RDA Retirement Plan, Excess Benefit
Retirement Plan and Executive Retirement Plan.

     The Company expects that you will continue to adhere to all
of the Company's policies, practices and procedures, during and
following your separation, including but not limited to the
Company's Proprietary Information Policy, Code of Conduct and
Policy on Insider Trading.  Furthermore, without limitation, you
should be aware that the benefits set forth in the Severance Plan
are subject to all of the terms of the Severance Plan, including
but not limited to Section 4.11, which provides as follows:

            "If, without the prior written consent of
            the Chief Executive Officer, a participant
            receiving payments or benefits under this
            Plan shall become a proprietor, director,
            partner or employee of, or otherwise
            become connected with any business that is
            in competition with the Company (other
            than as a stockholder with a non-
            substantial interest in any such
            business), or if he shall commit any
            criminal act against the Company, or any
            act that would constitute Cause as defined
            herein, or if he shall disclose any
            information likely to be regarded as
            confidential and relating to the Company's
            business, or if he shall solicit clients
            against the interest of the Company or
            solicits the Company's employees to work
            for a competitor of the Company, or if he
            performs any other act which is
            substantially detrimental to the Company
            or its employees, including but not
            limited to disparaging the Company, its
            senior management or its products, all
            payments and benefits and all rights of
            the participant under this Plan shall
            cease as of the initial date of such
            conduct.  The determination of whether
            such conduct has occurred shall be in the
            sole discretion of the Chief Executive
            Officer with the advice of the Senior Vice
            President, Human Resources and the General
            Counsel."
               
     Joe, please indicate your acceptance of these arrangement by
signing and dating the letter below and returning a copy of the
letter and executed General Waiver and Release of Claims Form to
me no later than November 30, 1995.  This letter and the
attachments set forth the entire arrangement between you and the
Company, 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 New York, supersede
all prior and written communications and correspondence between
you and the Company regarding this matter, and may not be changed
except in writing.  In all instances, the precise terms of the
particular benefit plan and this letter shall govern in the event
of an inconsistency between them and the attachments to this
letter.

                                        Very truly yours,


                                        Paul A. Soden



Agreed to and Accepted as of       , 1995


Joseph M. Grecky


Date


Attachments:   SEVERANCE PROCEDURES
               GENERAL WAIVER AND RELEASE OF CLAIMS FORM
               SEVERANCE PLAN FOR SENIOR MANAGEMENT
               COBRA INFORMATION