Exhibit 10.7


 


The Reader’s Digest Association, Inc.
Executive Severance Plan


 


ARTICLE I - INTRODUCTION


The Reader’s Digest
Association, Inc. Executive Severance Plan (the “Plan”) is established by
The Reader’s Digest Association, Inc. (the “Company”), effective April 20,
2010 (the “Effective Date”), to provide enhanced severance benefits to Eligible
Executives (as defined below) whose employment is terminated under
circumstances described herein, and subject to the terms and conditions of the
Plan, including the restrictive covenants set forth in Article VI.


 


With respect to Eligible
Executives, the Plan replaces and supersedes any individual agreement(s) between
any member of the Company Group and the Eligible Executive relating to
severance benefits.


 


The Plan is intended to
constitute an “employee welfare benefit plan” under Section 3(1) of
the Employee Retirement Income Security Act of 1974, as amended.  No employee or representative of the Company
may change the terms of the Plan, other than through a formal amendment under
the terms set forth herein.


 


To the extent that any of
the payments or benefits provided under the Plan are determined to be subject
to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
it is the intention of the Company that such payments or benefits shall comply
in all respects with Section 409A of the Code and the final regulations
issued thereunder and shall, to the fullest extent possible, be construed
consistently with such intention.


 


ARTICLE II - DEFINITIONS


 


1.  Cause. 
An Eligible Executive’s:


 


(i)        willful misconduct or gross negligence in the
performance of his or her duties to an Employer that has or could reasonably be
expected to have an adverse effect on the Company or any member of the Company Group;


 


(ii)       willful failure to perform his or her duties to an
Employer or to follow the lawful directions of the Company’s Board of Directors
or any executive to which the Eligible Executive reports (other than as a
result of death or Disability);


 


(iii)      indictment for, conviction of, or pleading guilty or nolo
contendere to, a felony or any crime involving moral turpitude;


 


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(iv)      failure to cooperate in any audit or investigation of
the business or financial practices of the Company or any of its subsidiaries;


 


(v)       performance of any material act of theft,
embezzlement, fraud, malfeasance, dishonesty or misappropriation of the
property of the Company Group; or


 


(vi)      breach of any agreement with an Employer or a
violation of the Company’s code of conduct or other written policy;


 


provided, that no such determination may be made until
the Eligible Executive has been given written notice detailing the specific
Cause event and a period of twenty (20) days following receipt of such notice
to cure such event (if susceptible to cure) to the satisfaction of the Company.


 


2.  Company. 
The Reader’s Digest Association, Inc. and its successors and
assigns.


 


3.  Company Group.  The Company and its subsidiaries and affiliates.


 


4.  Disability. 
An Eligible Executive’s inability to perform the material duties of his
or her employment due to a physical or mental injury, infirmity or incapacity
for one hundred eighty (180) days (including weekends and holidays) in any
265-day period as determined by the Plan Administrator in its reasonable
discretion.


 


5.  Effective Date.  The Effective Date of the Plan is April 20,
2010.


 


6.  Eligible Executive.  An individual who:  (i) is employed by an Employer and (ii) has
been named by the Compensation Committee of the Company’s Board of Directors as
eligible under the Plan.


 


7.  Employer. 
Any member of the Company Group that is the employer of an Eligible
Executive.


 


8. Good Reason.  The occurrence of any of the following
events, without the Eligible Executive’s express written consent, unless the
event is corrected by the Company within thirty (30) days following written
notification by the Eligible Executive to the Company of the event’s occurrence
(such 30-day period, the “Cure Period”):


 


(i)        a material diminution in the Eligible Executive’s
annual rate of base salary or in the percentage of annual base salary
representing the Eligible Executive’s target bonus opportunity under the
Company’s annual bonus plan then in effect;


 


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(ii)       a material diminution in the Eligible Executive’s
duties, authority or responsibilities (other than temporarily while physically
or mentally incapacitated or as required by applicable law); or


(iii)      a relocation of the Eligible Executive’s primary work
location by more than fifty (50) miles from its then-current location;


 


provided, that in order to constitute Good Reason, the
Eligible Executive shall provide the Company with written notice detailing the
specific circumstances alleged to constitute Good Reason within thirty (30)
days after the first occurrence of such circumstances, and shall actually
terminate employment within thirty (30) days after the expiration of the Cure
Period; otherwise, any claim of such circumstances as “Good Reason” shall be
irrevocably waived by the Eligible Executive.


 


9.  Participant. 
An Eligible Executive who meets the requirements to receive severance
benefits under the Plan, as set forth in Article III of the Plan.


 


10.  Plan Administrator.  The Plan Administrator shall be the Chief
Human Resources Officer of the Company (or his or her designee), provided that
for purposes of any determinations relating specifically to the Chief Human
Resources Officer’s participation in the Plan, the Plan Administrator shall be
the Chief Executive Officer of the Company.


 


11. Severance Period.  The period of time during which a Participant
is receiving severance pay pursuant to Articles IV and V of the Plan.


 


12. Termination of
Employment.  The termination of an
Eligible Executive’s employment with his or her Employer (and all members of
the Company Group) under either of the following circumstances:


 


(i)            termination by the Employer, other than for
Cause (as defined above) or due to the Eligible Executive’s death or
Disability;


 


(ii)           termination by the Eligible Executive for Good
Reason;


 


provided, that:


 


(I)            the determination as to whether a termination of
employment qualifies as a Termination of Employment for purposes of the Plan
shall be made by the Plan Administrator, in its sole and absolute discretion
and any such determination shall be final and binding on the affected Eligible
Executive(s);


 


(II)           a Termination of Employment shall not occur
unless and until the Eligible Executive experiences a “separation from service”
within the meaning of Section 409A of the Code, and the effective date of 


 


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such Termination of
Employment will be the last day for which he or she receives pay from his or her
Employer; and


 


(III)         unless a separate basis exists that satisfies
the definition of “Good Reason,” a Termination of Employment shall not occur
upon the sale or divestiture of the Eligible Executive’s unit, where he or she
is offered a position of at least comparable salary by the successor or by any
member of the Company Group, as determined by the Plan Administrator, in its
sole and absolute discretion.


 


12. Waiver.  A General Waiver and Release of Claims in a
form prescribed by the Company which, among other things, releases and
discharges the Company Group from all claims and liabilities relating to the
Eligible Executive’s employment with the Employer and the termination of the
Eligible Executive’s employment, including without limitation, claims under the
Age Discrimination in Employment Act and the Older Workers Benefit Protection
Act, where applicable.


 


ARTICLE III - ELIGIBILITY FOR SEVERANCE


 


In order to become a
Participant, an Eligible Executive must:


 


(i)            incur a Termination of Employment;


 


(ii)           within 60 days following Termination of
Employment, repay to his or her Employer any outstanding money or property owed
to the Employer, including, but not limited to, advances of salary, travel
expenses, or vacation pay; and


 


(iii)          execute, deliver and not revoke a Waiver, that
is effective and no longer subject to revocation, within sixty (60) days
following the Termination of Employment.


 


ARTICLE IV - THE AMOUNT OF BENEFITS


 


(a) Severance Pay


 


The amount of severance pay
payable to a Participant under this Plan shall be an amount equal to:


 


(i)            the Participant’s annual base salary, at the
rate in effect immediately prior to Termination of Employment, as reflected on
the Employer’s payroll records; plus


 


(ii)           the Participant’s target bonus under the Company’s
Variable Compensation Plan (or any successor plan) for the year in which
Termination of Employment occurs, multiplied by:  one (1) plus a fraction, the numerator
of which is the number of full months 


 


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worked during such year and
the denominator of which is twelve (12);


 


provided, that in the event of Good Reason due to a
material diminution in base salary and/or target bonus, the amount in effect
immediately prior to such diminution shall be used.  For purposes of clause (i), base salary does
not include any bonuses, overtime pay, commissions, incentive or deferred
compensation or additional compensation, but shall include salary reduction
contributions made on the Participant’s behalf to any plan of the Employer or
under Section 125 or Section 401(k) of the Code.


 


(b) Health Benefits


 


When a Participant’s
medical, dental and vision coverage terminate upon a Termination of Employment,
the Participant (or where applicable, his or her dependents) will have the
right to elect to continue coverage under the Employer’s medical, dental and
vision plans pursuant to COBRA.  If the
Participant elects to continue coverage, the Employer will pay for a portion of
the monthly COBRA premiums for the first twelve (12) months of coverage
following Termination of Employment such that the Participant’s monthly premium
will be the same as that of an active employee of the Employer.  The portion paid by the Employer will be
reported as taxable income to the Participant. 
(For more information on COBRA, please refer to the Employer’s
healthcare plan documents.)


 


(c) Offset


 


If a Participant receives
any benefits under the Plan, such Participant shall not be entitled to receive
any other severance, separation or termination payments on account of his or
her employment with the Employer under any other plan, policy, program or
agreement, other than accrued benefits under any applicable tax-qualified
retirement plans, provided that if a Participant is credited with an
additional benefit under such a retirement plan, the severance pay payable to
the Participant under paragraph (a) of this Section IV shall be
reduced by the immediate, lump-sum amount of such additional benefit (less any
portion thereof intended to compensate for the penalty tax on early
distribution from the retirement plan, in the determination of the Plan
Administrator).  If, for any reason, a
Participant becomes entitled to or receives any other severance, separation or
termination payments on account of his or her employment or Termination of
Employment with the Employer, including, for example, any payments required to
be paid to the Participant under any Federal, State or local law (including,
but not limited to, the Workers Adjustment and Retraining Notification Act) or
pursuant to any employment or other agreement to which he or she is a party
(except unemployment benefits payable in accordance with state law and payment
for accrued but unused vacation), his or her severance pay under the Plan will
be reduced by the amount of such other payments paid or payable. A Participant
must notify the Plan Administrator if he or she receives or 


 


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is claiming to be entitled
to receive any such payment(s). Additionally, severance pay will be offset by
any amounts which are owed to the Employer.


 


(d) Forfeiture of
Severance Benefits


 


Notwithstanding any
provision contained herein to the contrary, the Company may cease providing
severance benefits to a Participant, and may recover previous severance
benefits provided to a Participant who, as the Plan Administrator determines in
its sole and absolute discretion, during his or her employment or during the
Severance Period following his or her Termination Employment: (i) engages in
any conduct that would constitute Cause under the Plan; or (ii) violates
any provision of the restrictive covenants set forth in Article VI of the
Plan.


 


Notwithstanding anything
herein to the contrary, a Participant’s entitlement to severance benefits under
this Plan will cease if the Participant is rehired by any member of the Company
Group during the Severance Period.


 


ARTICLE V - HOW AND WHEN SEVERANCE WILL BE
PAID


 


Any severance pay payable
to a Participant under Article IV will be paid in periodic installments,
consistent with the Employer’s normal payroll practices (or as such payroll
practices may be revised by the Employer from time to time), for a period of 12
months following Termination of Employment, provided that payment shall
commence on the first such payroll date following the date the Waiver is
executed and no longer subject to revocation, with the first payment being an
amount equal to the total amount to which the Participant otherwise would have
been entitled during the period between Termination of Employment and such
date, and provided further that in no event shall the Participant be
able to designate the taxable year in which payments begin.


 


In addition, the following rules shall
apply:


 


(i)        For purposes of applying the exception to Code Section 409A
for short-term deferrals, each installment payment under the Plan shall be
treated as a separate “payment” for purposes of Section 409A.  Accordingly, any severance payments paid
within 2-1⁄2 months of the end of the Employer’s taxable year containing the date
of the Participant’s Termination of Employment or within 2-1⁄2 months at the end
of the Participant’s taxable year containing the date of the Participant’s
Termination of Employment (the “Short-Term Deferral Period”) shall be exempt from
Section 409A and the delayed payment provisions below and shall be paid in
the normal course according to the Employer’s payroll schedule.


 


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(ii)       Any severance payments payable to the Participant
after Short-Term Deferral Period which are equal to or less than the lesser of
the amounts described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and
(2) shall also be exempt from Section 409A and the delayed payment
provision below and shall be paid in the normal course according to the
Employer’s payroll schedule.


 


(iii)      If, on the date of a Participant’s Termination of
Employment, the Participant is a “specified employee” (as defined in Section 409A
of the Code and the regulations thereunder), then, to the extent any portion of
the Participant’s severance pay benefit is not exempt from Code Section 409A
under either subsections V(i) or (ii) above, the remaining portion of
the severance pay benefit that would otherwise be payable in the first 6 months
following the date of the Participant’s Termination of Employment (the “Deferred
Severance Payment”) will not be paid to the Participant until the first payroll
date of the 7th month following the Participant’s Termination of
Employment.  The Deferred Severance
Payment will be paid in a lump sum and will be adjusted for interest calculated
at the prime rate as reported in the Wall
Street Journal.  Thereafter,
the remainder of the Participant’s severance pay benefit shall be payable in
installments according to the Employer’s payroll schedule.


 


In the event that a
Participant dies before his or her severance pay has been paid in full, the
remaining severance pay will be paid in lump sum to a beneficiary named by the
Participant. If no beneficiary is designated by the Participant, then unpaid
severance pay will be paid to the appointed administrator or executor of the
Participant’s estate.


 


ARTICLE VI - RESTRICTIVE COVENANTS


 


(a)  Confidentiality


 


During an Eligible
Executive’s employment with an Employer, and at all times after such employment
terminates for any reason (including voluntary resignation), the Eligible
Executive shall not, directly or indirectly, use, make available, sell,
disclose or otherwise communicate to any person, other than in the course of
his or her assigned duties and for the benefit of the Company, any business and
technical information or trade secrets, nonpublic, proprietary or confidential
information, knowledge or data relating to the Company Group.


 


(b)  Nondisparagement


 


During an Eligible
Executive’s employment with an Employer, and for a period of twelve (12) months
after such employment terminates for any reason (including resignation), the
Eligible Executive shall not publicly or privately make negative comments or
otherwise disparage any member of the Company Group or its  


 


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officers, directors,
employees, shareholders, agents or products, in any manner likely to be harmful
to them or their business, business reputation or personal reputation.


 


(c)  Noncompetition


 


During an Eligible
Executive’s employment with an Employer, and during any applicable Severance
Period following a Termination of Employment, the Eligible Executive shall not,
without the prior written consent of the Chief Executive Officer of the Company
(after consultation with the Plan Administrator), directly or indirectly,
whether or not for compensation, engage in any activity or business on behalf
of any individual or entity that is in competition with the Company and/or a
portion of the Company Group’s business from which the Company derives at least
fifteen percent (15%) of its revenues (based on the Company’s fiscal year prior
to the earlier of the activity or the Termination of Employment), including,
without limitation, selling goods or services of the type sold by the Company.


 


(d)  Nonsolicitation;
Noninterference


 


During an Eligible
Executive’s employment with an Employer, and during any applicable Severance
Period following a Termination of Employment, the Eligible Executive (or
Participant, as the case may be) shall not, directly or indirectly, solicit any
employee of the Company Group to cease such employment or to seek employment
elsewhere.


 


(e)  Inventions


 


Each Eligible Executive
acknowledges and agrees that all ideas, methods, inventions, discoveries,
improvements, work products, developments or works of authorship (“Inventions”),
whether or not patentable, (i) related to his or her work with the
Company, made or conceived by the Eligible Executive (solely or jointly with
others) during his or her employment, or (ii) suggested by any work that
the Eligible Executive performs in connection with the Employer, either while
performing his or her duties with the Employer or on his or her own time, but
only insofar as the Inventions are related to the Eligible Executive’s work as
an employee or other service provider to the Employer, shall belong exclusively
to the Company (or its designee), whether or not patent applications are filed
thereon.  In addition, the Inventions
will be deemed “Work for Hire” (as such term is defined under the copyright
laws of the United States) on behalf of the Company and the Eligible Executive
agrees that the Company will be the sole owner of the Inventions, and all
underlying rights therein, in all media now known or hereinafter devised,
throughout the universe and in perpetuity, without any further obligations to
the Eligible Executive.


 


(f)  Reformation


 


If it is determined by a
court of competent jurisdiction that any restriction in this Article VI is
excessive in duration or scope or is unreasonable or unenforceable 


 


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under applicable law, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the laws
of that state.


 


(g)  Remedies


 


In addition to the
forfeiture of severance benefits under Section 4(d) of the Plan, The
Company shall be entitled to seek certain equitable relief if an Eligible
Executive violates the provisions of this Article VI.  The Eligible Executive acknowledges and
agrees that the Company’s remedies at law for a breach or threatened breach of
any of the provisions of this Agreement would be inadequate and, in recognition
of this fact, agrees that, in the event of such a breach or threatened, in
addition to any remedies at law, the Company shall be entitled to obtain
equitable relief in the for, of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available, without the necessity of showing actual money damages or
the posting of a bond or other security.


 


ARTICLE VII - MISCELLANEOUS PROVISIONS


 


(a)  Amendment and
Termination


 


The Company reserves the
right, in its sole and absolute discretion, to terminate, amend or modify the
Plan, in whole or in part, at any time and for any reason without prior notice
by resolution of its Board of Directors, by resolution of a duly authorized
committee of its Board of Directors, or by a person or persons authorized by
resolutions of its Board of Directors or such committee.  If the Company decides to terminate the Plan,
any benefits that are already in pay status shall continue to be paid in
accordance with the terms of the Plan, and no further severance benefits shall
be granted after Plan termination.


 


(b) 
No Additional Rights Created


 


Neither the establishment
of this Plan, nor any modification thereof, nor the payment of any benefits
hereunder, shall be construed as giving to any Participant, Eligible Executive
(or any beneficiary of either), or other person any legal or equitable right
against any member of the Company Group or any officer, director or employee
thereof; and in no event shall any Eligible Executive’s terms and conditions of
employment be modified or in any way affected by this Plan.


 


(c) 
Records


 


The records of the Employer
with respect to employment history, compensation and all other relevant matters
shall be conclusive for all purposes of this Plan.


 


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(d) 
Construction


 


The respective terms and
provisions of the Plan shall be construed, whenever possible, to be in
conformity with the requirements of ERISA and any subsequent laws or amendments
thereto.  To the extent not in conflict
with the preceding sentence or another provision in the Plan, the construction
and administration of the Plan shall be in accordance with the laws of the
State of New York applicable to contracts made and to be performed within the
State of New York (without reference to its conflicts of law provisions).


 


(e) 
Severability


 


Should any provisions of
the Plan be deemed or held to be unlawful or invalid for any reason, such fact
shall not adversely affect the other provisions of the Plan unless such
determination shall render impossible or impracticable the functioning of the
Plan, and in such case, an appropriate provision or provisions shall be adopted
so that the Plan may continue to function properly.


 


(f) 
Incompetency


 


In the event that the Plan
Administrator finds that a Participant (or designated beneficiary) is unable to
care for his or her affairs because of illness or accident, then benefits
payable hereunder, unless claim has been made therefore by a duly appointed
guardian, committee, or other legal representative, may be paid in such manner
as the Plan Administrator shall determine, and the application thereof shall be
a complete discharge of all liability for any payments or benefits to which
such Participant (or designated beneficiary) was or would have been otherwise
entitled under this Plan.


 


(g) 
Payments to a Minor


 


Any payments to a minor
from this Plan may be paid by the Plan Administrator in its sole and absolute
discretion (i) directly to such minor; (ii) to the legal or natural
guardian of such minor; or (iii) to any other person, whether or not
appointed guardian of the minor, who shall have the care and custody of such
minor.  The receipt by such individual
shall be a complete discharge of all liability under the Plan therefore.


 


(h) 
Plan Not a Contract of Employment


 


Nothing contained in this
Plan shall be held or construed to create any liability upon the Employer or
any member of the Company Group to retain any Eligible Executive in its
service.  All Eligible Executives shall
remain subject to termination to the same extent as if the Plan had not been
put into effect.  All Eligible Executives
of the Employer are at-will, and the Employer reserves the right to terminate an
Eligible Executive at any time, with or without cause, with or without notice.


 


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(i) 
Financing


 


The benefits payable under
this Plan shall be paid out of the general assets of the Company.  No Participant or any other person shall have
any interest whatsoever in any specific asset of the Company or any member of
the Company Group.  To the extent that
any person acquires a right to receive payments under this Plan, such right
shall not be secured by any assets of the Company or any member of the Company
Group.


 


(j) 
Nontransferability


 


In no event shall the
Company make any payment under this Plan to any assignee or creditor of a
Participant, except as otherwise required by law.  Prior to the time of a payment hereunder, a
Participant shall have no rights by way of anticipation or otherwise to assign
or otherwise dispose of any interest under this Plan, nor shall rights be
assigned or transferred by operation of law.


 


ARTICLE VIII - ERISA INFORMATION


 


Claim
Procedure


An Eligible Executive or
his or her beneficiary (if applicable) may file a written claim with the Plan
Administrator with respect to a benefit determination under the Plan. The
claimant will be informed of the decision of the Plan Administrator with
respect to the claim within 90 days after it is filed.  Under special circumstances, the Plan
Administrator may require an additional period of not more than 90 days to
review a claim.  If this occurs, the
claimant will be notified in writing as to the length of the extension, the
reason for the extension, and any other information needed in order to process
the claim.  If a claimant is not notified
within the 90-day (or 180-day, if so extended) period, he or she may consider
the claim to be denied.


 


If a claim is denied, in
whole or in part, the claimant will be notified in writing of the specific
reason(s) for the denial, the exact plan provision(s) on which the
decision was based, what additional material or information is relevant to his
or her case, and what procedure the claimant should follow to get the claim
reviewed again.  The claimant then has
sixty (60) days to appeal the decision to the Plan Administrator.


 


The appeal must be
submitted in writing to the Plan Administrator. 
A claimant may request to review pertinent documents, and may submit a
written statement of issues and comments.


 


A decision as to a claimant’s
appeal will be made within sixty (60) days after the appeal is received.  Under special circumstances, the Plan
Administrator may require an additional period of not more than 60 days to
review an appeal. If this occurs, the claimant will be notified in writing as
to the length of the extension, 


 


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not to exceed 120 days from
the day on which the appeal was received.


 


If the claimant appeal is
denied, in whole or in part, he or she will be notified in writing of the
specific reason(s) for the denial and the exact plan provision(s) on
which the decision was based.  The
decision on an appeal of the Plan Administrator will be final and binding on
all parties and persons affected thereby. 
If a claimant is not notified within the 60-day (or 120-day, if so
extended) period, he or she may consider the appeal as denied.


 


Plan
Interpretation and Benefit Determination


 


The Plan Administrator
and/or its duly authorized designee(s) has the exclusive right, power, and
authority, in its sole and absolute discretion, to administer, apply and
interpret the plan, including any plan documents, and to decide all matters
arising in connection with the operation or administration of the Plan. Without
limiting the generality of the foregoing, the Plan Administrator and/or its
duly authorized designee(s) shall have the sole and absolute discretionary
authority to:


 


·      Take all actions and make all decisions with respect
to the eligibility for, and the amount, continuation and cessation of, benefits
payable under the plan;


·      Formulate, interpret and apply rules, regulations and
policies necessary to administer the plan in accordance with the terms of the
plan;


·      Decide questions, including legal or factual
questions, relating to the calculation and payment of benefits under the plan;


·      Resolve and/or clarify any ambiguities,
inconsistencies and omissions arising under the plan documents;


·      Process and approve or deny benefit claims; and


·      Determine the standard of proof required in any case.


 


All determinations and
interpretations made by the Plan Administrator and/or its duly authorized
designee(s) shall be final and binding upon all Participants,
beneficiaries and any other individuals claiming benefits under the plan.


 


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Rights
Under ERISA


 


Eligible Executives are
entitled to certain rights and protections under the Employee Retirement Income
Security Act of 1974 (ERISA) with respect to the Plan.  ERISA provides that all Plan participants
shall be entitled to:


 


Examine, without charge, at
the Plan Administrator’s office, all Plan documents, and copies of all
documents filed by the Plan with the U.S. Department of Labor, such as detailed
annual reports.


 


Obtain copies of Plan
documents and other Plan information upon written request to the Plan
Administrator.  The Plan Administrator
may make a reasonable charge for the copies.


 


Receive a summary of the
Plan’s annual financial report if the Plan covers 100 or more people.  The Plan Administrator is required by law to
furnish each Participant with a copy of this summary annual report.


 


In addition to creating
rights for Plan participants, ERISA imposes duties upon the people who are
responsible for the operation of the Plan. The people who operate the Plan,
called “fiduciaries” of the Plan, have a duty to do so prudently and in the
interest of Plan participants and beneficiaries.  No one, including your employer or any other
person, may fire you or otherwise discriminate against you in any way to
prevent you from obtaining a welfare benefit or exercising your rights under
ERISA.  If your claim for a benefit is
denied in whole or in part, you must receive a written explanation of the
reason for the denial.  You have the
right to have the Plan Administrator review and reconsider your claim.  Under ERISA, there are steps you can take to
enforce the above rights.


 


For instance, if you
request materials from the Plan and do not receive them within 30 days, you may
file suit in a federal court.  In such a
case, the court may require the Plan Administrator to provide the materials and
pay you up to $110 a day until you receive the materials, unless the materials
were not sent because of reasons beyond the control of the Plan Administrator.


 


If you have a claim for
benefits which is denied or ignored, in whole or in part, you may file suit in
a state or federal court.  If you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a federal court.  The court will decide who should pay court
costs and legal fees. If you are successful, the court may order the person you
have sued to pay these costs and fees. 
If you lose, the court may order you to pay these costs and fees, for
example, if it finds your claim is frivolous. 
If you have any questions about the Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest office of the Employee
Benefits Security Administration, U.S. Department of Labor, listed in your
telephone directory or the Division of Technical Assistance and Inquires,
Employee Benefits 


 


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Security Administration,
U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.


 


Plan
Document


 


This document shall
constitute both the plan document and summary plan description and shall be
distributed to all Eligible Executives in this form.


 


Other
Important Facts


 


	
  OFFICIAL NAME OF THE
  PLAN:

  	
   

  	
  The Reader’s Digest
  Association, Inc. Executive Severance Plan

  
	
  SPONSOR:

  	
   

  	
  The Reader’s Digest Association, Inc.

  Reader’s Digest Road

  Pleasantville, NY
  10570-7000

  (914) 238-1000

  
	
  EMPLOYER IDENTIFICATION
  NUMBER (EIN):

  	
   

  	
  13-1726769

  
	
  PLAN NUMBER:

  	
   

  	
   

  
	
  TYPE OF PLAN:

  	
   

  	
  Employee Welfare
  Severance Benefit Plan

  
	
  END OF PLAN YEAR:

  	
   

  	
  December 31

  
	
  TYPE OF ADMINISTRATION:

  	
   

  	
  Employer Administered

  
	
  PLAN ADMINISTRATOR:

  	
   

  	
  Chief Human Resources
  Officer

  The Reader’s Digest
  Association, Inc.

  Reader’s Digest Road

  Pleasantville, NY
  10570-7000

  (914) 238-1000

  



 


The Plan Administrator
keeps records of the Plan and is responsible for the administration of the
Plan.  The Plan Administrator will also
answer any questions you may have about the Plan.


 


Service of legal process
may be made upon the Plan Administrator or the General Counsel of the Company,
at the address listed above.


 


No individual may, in any
case, become entitled to additional benefits or other rights under this Plan
after the Plan is terminated. Under no circumstances, will any benefit under
this Plan ever vest or become nonforfeitable.


 


Severance pay is subject to
Federal and state income and Social Security tax withholdings and any other
withholdings mandated by law.


 


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