Exhibit 10.25

                 SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT

Peter Davenport of Mt. Kisco, NY (hereinafter referred to as the "Employee") and
The  Reader's  Digest  Association,   Inc.,  a  Delaware  corporation  with  its
headquarters at New Castle, New York (hereinafter  referred to as the "Company")
hereby agree as follows:

      1. Subject to  fulfillment  of the terms and  conditions set forth in this
Agreement, the Company shall pay the Employee, a supplemental retirement benefit
of $60,000 per year for 15 years commencing at his normal retirement date. If he
retires  early,  the  Employee  may elect to commence  benefit  payments at that
earlier  date which in no event shall be prior to  attainment  of age 55. In the
event  of  such  election  for  earlier  payment,  the  Employee's  supplemental
retirement  benefit will be reduced at the rate of 3% for each year by which the
payment commencement date precedes his normal retirement age.

      2. The Employee agrees to fund his supplemental retirement benefit through
the voluntary and  irrevocable  reduction in future  earned  compensation  or by
other  payment in the  amount of $16,943 to be made in five or, if the  employee
elects, fewer annual installments commuted to be of equivalent value.

      In the  event  that  the  Employee  has  elected  to fund his  benefit  by
reduction  of  future  bonus  payments  and any  such  bonus  is not  paid or is
insufficient  to  meet  that  year's  payment  schedule   contemplated  by  this
Agreement,  the  Employee  shall be  permitted  to make or  complete  his annual
payment amount by entering into a salary reduction agreement with the Company or
by  otherwise  contributing  the  necessary  funds to the Company not later than
December  31 of that  year or by such  other  date as the  Company  in its  sole
discretion  shall  determine.  The method of funding his benefit is reflected on
Schedule A attached to this Agreement and made a part hereof.

      3. Upon the completion of all installments described in paragraph 2 above,
and provided the Employee is not in violation of the  provisions  of paragraph 4
below,  or has not been  discharged  for cause as provided in paragraph 5 below,
the Employee shall be fully vested in his supplemental retirement benefit.

      4.  The  Employee  agrees  that he will at no time  disclose  directly  or
indirectly  any secret or other  confidential  information of the Company to any
competitor or to any person not  expressly  authorized by the Company to receive
such information.

      5.  If  the  Employee's  employment  with  the  Company  is  involuntarily
terminated  for cause,  or if the Employee is in  violation of the  provision of
paragraph 4 above,  the  Employee  shall  forfeit all the rights and benefits of
this Agreement and shall receive within 90 days of the event  constituting  such
forfeiture,  the total amount deferred or paid theretofore  under this Agreement
with interest compounded annually at the rate of 8%.

      For the  purposes of this  Agreement,  cause  shall mean a discharge  from
employment   occurring  by  reason  of  the  Employee's   embezzlement,   proven
dishonesty,  fraud,  conviction  of felonious or other  charge  involving  moral
turpitude,  improper  communication of confidential  information obtained in the
course of employment with the Company, willful failure or refusal to perform the
Employee's duties and responsibilities, or conspiracy against the Company.

      6. If the Employee shall die after having commenced the payments  required
in  paragraph  2 above  but  before  he has  received  any  installments  of his
supplemental  income  benefit under  paragraph 1 above,  his  beneficiary  shall
become  immediately  vested in a  survivor's  income  benefit  as  described  in
Schedule  A  attached  hereto  and the  Company  shall  pay the  benefit  to his
beneficiary in such manner as the beneficiary, with the Company's consent, shall
elect.

      7. If the  Employee  fails to complete all payment  installments  required
under paragraph 2 above,  whether because of his disability,  departure from the
Company or for any other reason,  excluding  only death in active  service,  the
Company shall pay him, not later than March 31 of the year following the year in
which such failure to complete payment  occurred,  the total amounts deferred or
paid theretofore under this Agreement with interest compounded annually at 8%.

      8. If the Employee  shall die after the benefits  described in paragraph 1
have  commenced but before all annual  installments  have been made,  the unpaid
balance shall be paid to his beneficiary in such manner as the beneficiary, with
the Company's consent, may elect.

      9. Upon application by the Employee to the  Compensation  Committee of the
Company's Board of Directors,  and provided the Employee is then fully vested in
his supplemental  retirement benefit, the Committee may, in its sole discretion,
allow  distribution  to the Employee of all or part of the benefit,  which shall
not in any event exceed the then  projected  value of the benefit,  prior to the
agreed upon  commencement  date for benefits under paragraph 1 above. Any amount
so  distributed  shall be  limited  to that which is  necessary  to relieve  the
hardship or meet the financial  emergency which triggered the  application.  Any
distribution  made under this  paragraph  shall cause a reduction in  equivalent
value to the benefits  thereafter  payable  under this  Agreement  and a revised
Schedule A shall be prepared and attached hereto.

      10. The Company may own a policy or policies of permanent  cash value life
insurance on the life of the  Employee,  and the Company shall be the sole owner
and beneficiary of any such policies.  The Employee agrees to cooperate with the
Company in the application process for any such insurance.  If the Company shall
acquire an insurance policy or any other asset in connection with its obligation
under this  Agreement,  it is expressly  understood  and agreed that neither the
Employee nor any  beneficiary or successor to the interest of the Employee shall
have any right to, or claim against,  such policy or other asset. Such policy or
asset  shall  not be deemed to be held  under any trust for the  benefit  of the
Employee, his beneficiaries,  successors or assigns, or to be held in any pay as
collateral  security for the fulfillment of the obligations of the Company under
this  Agreement  but  shall be and  remain  a  general,  unpledged  asset of the
Company.

      11.  The  Employee  shall  have the  right to  designate  in  writing  his
beneficiary or beneficiaries under this Agreement. Such designation shall not be
effective  unless filed with the Company.  The Employee  shall have the right to
change his beneficiary and to name  successive or contingent  beneficiaries.  If
there is no effective  designation  of a beneficiary  on file at the time of the
Employee's  death,  any death  benefit  payable  hereunder  shall be paid to the
Employee's  spouse,  if any,  and if none,  to his  children,  if any,  in equal
shares, and if none, to his personal  representatives.  For all purposes of this
Agreement, such person shall be treated as the beneficiary hereunder.

      12. It is expressly agreed that nothing  contained in this Agreement shall
be construed as giving an Employee the right to be retained in the employ of the
Company, or as restricting the right of the Company or the Employee to terminate
the employment relationship for any reason.

      13. This Agreement shall bind and run to the benefit of the successors and
assigns of the  Company,  including  any  corporation  or other form of business
organization with which it may merge or consolidate, or to which it may transfer
substantially all of its assets.

      14.  The  rights  of  the  Employee  under  this  Agreement  shall  not be
anticipated,  alienated, assigned, hypothecated, or otherwise transferred in any
manner.

      15. The validity, construction,  interpretation and administration of this
Agreement shall be determined solely in accordance with the laws of the State of
New York.


<PAGE>


      IN WITNESS  WHEREOF,  said  Employee has hereunto  signed his name and the
Company has caused this  instrument to be executed in its name and on its behalf
by its duly authorized officer as of the 25 day of August, 1988.

Witnesseth:

/S/DOROTHY M. CRAFT                       /S/ PETER DAVENPORT
-------------------                       -------------------
                                          Employee

/S/VIRGINA BREEN                          /S/JOSEPH M. GRECKY
----------------                          ------------------------------
                                          For The Reader's Digest
                                          Association, Inc.


<PAGE>




                     SUPPLEMENTAL EMPLOYEE'S RETIREMENT PLAN
                              PAYMENT ELECTION FORM

1. I elect  to fund  the  supplemental  retirement  benefit  by  agreeing  to an
irrevocable  reduction of future  incentive  bonus  payments  and/or base salary
based upon the following schedule:

      Year                                Amount

      1988                                16,943
                                          ------
      1989                                16,943
                                          ------
      1990                                16,943
                                          ------
      1991                                16,943
                                          ------
      1992                                16,943
                                          ------

            Total                       $ 84,715
                                         -------

CHECK ONE:

1a. If the incentive  bonus is  insufficient  in any year to complete the annual
payment, I elect to fund the remaining balance by a salary reduction  commencing
on the first pay period in October and continuing in equal  installments for the
remainder of the Fiscal Year.

1b. [X] If the  incentive  bonus is  insufficient  in any year to  complete  the
annual  payment,  I elect to pay the  remaining  balance  by check no later than
December 31 of each year.

                                       OR

2.   I elect to fund the supplemental retirement benefit by
forwarding checks payable to The Reader's Digest Association, Inc. no
later than December 31, of each year:

      Year                                Amount

      1989                                ____________
      1990                                ____________
      1991                                ____________
      1992                                ____________
      1993                                ____________

            Total                         $___________

                                          /S/ PETER DAVENPORT
                                          ------------------------------
                                                            Signature

                                          August 24, 1988
                                          ------------------------------
                                                            Date


<PAGE>


                          Beneficiary Designation Form

      Pursuant to paragraph 11 of the Supplemental Retirement Agreement dated as
of 8/25/88 between Peter Davenport and The Reader's Digest  Association,  Inc. I
hereby  designate the following to be my designated  beneficiary(ies)  under the
Agreement.

A)    Primary Beneficiary(ies):

      The Estate of Peter Davenport
      -----------------------------             ------------------------
        name           relationship             Social Security #


      ---------------------------------         ------------------------
        name           relationship             Social Security #


      ---------------------------------         ------------------------
        name           relationship             Social Security #


      (for additional beneficiaries, please see reverse)

B) Contingent  Beneficiary(ies)  in the event that no one  designated as primary
beneficiary under (A) above is living at the date of my death:

      ---------------------------------         ------------------------
        name           relationship             Social Security #


      ---------------------------------         ------------------------
        name           relationship             Social Security #


      ---------------------------------         ------------------------
        name           relationship             Social Security #


      (for additional beneficiaries, please see reverse)

      I reserve the right to revoke or change my  beneficiaries  by filing a new
form with the Company.
                                          /S/ PETER DAVENPORT
                                          ------------------------------
                                            Employee Signature

                                          3/10/90
                                           ------------------------------
                                            Date