EXHIBIT 10.7



                      THE READER'S DIGEST ASSOCIATION, INC.

                           EXECUTIVE CASH BALANCE PLAN

                        (Effective as of October 1, 1999)





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                                TABLE OF CONTENTS




ITEM                                                  ARTICLE          PAGE
----                                                  -------          ----
DEFINITIONS                                              1              2
ELIGIBILITY AND PARTICIPATION                            2              8
EXECUTIVE CASH BALANCE PLAN BENEFIT                      3              10
VESTING                                                  4              11
DISTRIBUTION OF EXECUTIVE CASH BALANCE PLAN
  BENEFIT; SUBSEQUENT RE-EMPLOYMENT                      5              12
DEATH BENEFITS                                           6              14
MEDICAL BENEFITS                                         7              16
TOTAL DISABILITY                                         8              17
GENERAL PROVISIONS                                       9              18




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                      The Reader's Digest Association, Inc.

                           Executive Cash Balance Plan



                                    PREAMBLE

      The Reader's  Digest  Association,  Inc. (the  "Company")  has adopted the
Reader's Digest  Executive Cash Balance Plan (the "Plan")  effective  October 1,
1999,  to  provide  participants  with  a  defined  contribution  plan  that  is
complementary to the cash balance provisions of The Reader's Digest Association,
Inc.  Retirement  Plan (the "Cash  Balance  Plan") made  effective as of July 1,
1999. The Plan provides benefits to a designated group of executives,  which are
supplemental  to the benefits  provided under The Reader's  Digest  Association,
Inc.  Retirement Plan and The Reader's Digest  Association,  Inc. Excess Benefit
Retirement Plan.



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      Effective  as of October 1,  1999,  The  Reader's  Digest  Executive  Cash
Balance Plan has been  adopted by the Board of Directors of The Reader's  Digest
Association, Inc. to read as follows:



                                    ARTICLE 1

                                   Definitions

      The  following  words and phrases as used herein shall have the  following
meanings,  unless a different  meaning is plainly  required by the context.  All
terms with  initial  capital  letters  not  defined  herein  shall have the same
meanings as set forth in the Cash Balance Plan or 401(k) Plan.

APPLICABLE INTEREST RATE:

The average of the annual rates of interest on 30-year  Treasury  securities for
the fourth and fifth months  preceding  the month in which the  distribution  is
made.

BENEFICIARY:

The person or persons  (including a trust or estate) who are entitled to receive
any benefits under the Plan by reason of the death of a Participant.

BOARD:

The Board of Directors of The Reader's Digest Association, Inc.

CASH BALANCE PLAN:

The Reader's Digest  Association,  Inc.  Retirement Plan, restated as of July 1,
1999 and as such plan may be amended and restated  from time to time and as such
plan applies to participants with an Cash Balance Account.

COMPANY:

The Reader's Digest Association, Inc. or any successor corporation by merger,
purchase, consolidation or otherwise.

COMPENSATION:

Base Pay earned, plus any Management Incentive Bonus earned, for a Year.

COMPENSATION COMMITTEE:

The compensation committee appointed by the Board.

CONTRIBUTION CREDITS:

Annual  Adjustments to a Participant's  Executive Cash Balance Plan Benefit made
as of  September  30 in  an  amount  equal  to  (i)  20%  of  the  Participant's
Compensation for the previous Year, less (ii) pay credits that have been or will
be allocated to his Cash Balance Account in the Cash Balance Plan and the Excess
Plan for such Year,  and amounts  allocated to his account in the Excess  Profit
Sharing Plan for such Year.  Contribution Credits shall be made only to accounts
of Participants who are employed on the date the Contribution  Credit is made or
who died, had a Total Disability, or had a Termination of Employment on or after
his Early  Retirement  Date since the  previous  September  30. No  Contribution
Credits shall be made with respect to any period of severance.

EARLY RETIREMENT DATE:

The date  coincident  with or  subsequent to a  Participant's  attainment of age
fifty-five (55) upon which his Periods of Service for Credited  Service plus his
attained age equal or exceed sixty-five (65) years.

EMPLOYER:

The Company and any  subsidiary of the Company  which,  with the approval of the
Board and subject to such conditions as the Board may impose,  adopts this Plan,
and any  successor or  successors  of any of them.  For purposes of this Plan, a
subsidiary shall include any corporation at least fifty-one percent (51%) of the
voting stock of which is owned by the Company or its  stockholders  or by one or
more corporations  fifty-one percent (51%) of the voting stock of which is owned
by the Company or its stockholders.

EXCESS PLAN:

The Reader's Digest Association, Inc. Excess Benefit Retirement Plan, as amended
and  restated  as of July 1, 1994 and as such plan may be amended  and  restated
from time to time.

EXCESS PROFIT SHARING PLAN:

The Profit-Sharing Benefit Restoration Plan of The Reader's Digest
Association, Inc., effective as of July 1, 1994, as such plan may be amended
from time to time.

EXECUTIVE CASH BALANCE PLAN BENEFIT :

The  Participant's  Opening  Balance,  if any, as  adjusted by any  Contribution
Credits and Investment Adjustments.

EXECUTIVE RETIREMENT PLAN:

The Reader's Digest Association,  Inc. Executive  Retirement Plan, as amended as
of November 1, 1997 and as such plan may be further  amended and  restated  from
time to time.

401(k) PLAN:

The Employee  Ownership Plan and the 401(k)  Partnership of The Reader's  Digest
Association,  Inc.,  as  restated  as of July 1,  1997  and as such  plan may be
amended and restated from time to time.

INVESTMENT ADJUSTMENTS:

Adjustments to a Participant's  Executive Cash Balance Plan Benefit in an amount
equal to the  investment  return deemed  earned based on the deemed  investments
elected under Section 3.2.  Investment  Adjustments  shall be made at the end of
the last business day of each month.

MANAGEMENT INCENTIVE BONUS:

Any compensation award under The Reader's Digest Association, Inc. Senior
Management Incentive Compensation Plan, The Reader's Digest Association, Inc.
Management Incentive Compensation Plan or any similar or equivalent plan.

NORMAL RETIREMENT DATE:

The first day of the month  coincident  with or next  following a  Participant's
65th birthday.

OPENING BALANCE :

The present lump sum  Equivalent  Actuarial  Value of the  Participant's  Normal
Retirement  Benefit  as defined  under the  Executive  Retirement  Plan based on
Service through  September 30, 1999 and Retirement  Salary as of June 30, 1999 ,
the interest rate of 5.55%, and the prevailing commissioners' standard mortality
table described in Section 807(d)(5)(A) of the Code, provided, however, that the
Opening  Balance of a  Participant  who has attained age 39 but not age 55 as of
September 30, 1999, shall be increased by the following percentage:


       Age as of September 30, 1999            Percentage Increase
       ----------------------------            -------------------

                     54                               40.0
                     53                               37.5
                     52                               35.0
                     51                               32.5
                     50                               30.0
                     49                               27.5
                     48                               25.0
                     47                               22.5
                     46                               20.0
                     45                               17.5
                     44                               15.0
                     43                               12.5
                     42                               10.0
                     41                                7.5
                     40                                5.0
                     39                                2.5

In the case of an Employee who was not a Participant in the Executive Retirement
Plan, his Opening  Balance will be equal to zero. In the case of an Employee who
has a Termination  of Employment  after October 1, 1999 and who is a Participant
in the  Executive  Retirement  Plan  as of his  Date of  Termination  and who is
subsequently rehired by the Employer, his Opening Balance will be equal to zero.

If a Participant who has received a distribution of his entire vested  Executive
Cash Balance Plan Benefit upon a Termination of Employment returns to the employ
of an Employer,  he shall have upon his return to employment an Opening  Balance
of zero.  If a  Participant  who has not received a  distribution  of his entire
vested  Executive  Cash Balance Plan Benefit upon a  Termination  of  Employment
returns  to the  employ  of an  Employer,  he  shall  have  upon his  return  to
employment an Executive Cash Balance Plan Benefit equal to his remaining  vested
Executive Cash Balance Plan Benefit.

Notwithstanding  the foregoing,  the Board, in its  discretion,  may augment any
Participant's  Opening  Balance  and  may  provide  an  Opening  Balance  for  a
Participant who would otherwise have an Opening Balance of zero

PARTICIPANT:

An eligible  Employee  designated to participate in the Plan in accordance  with
the terms herein.

PLAN:

The Reader's Digest  Association,  Inc.  Executive Cash Balance Plan,  effective
October 1, 1999 and as such plan may be amended and restated from time to time.

RETIREE HEALTH PLAN:

The Reader's Digest Association, Inc. Medical and Dental Expense Plan for
Retirees and Disabled Individuals.

RETIREMENT SALARY:

The average  annual  regular or basic  salary of a  Participant  and  Management
Incentive Bonus  including all amounts  contributed by the Employer on behalf of
the Participant as an Employee Tax Deferred  Contribution  under the 401(k) Plan
or to a cafeteria  plan as described in Section 125 of the Code,  but  excluding
severance pay, bonuses which are not Management Incentive Bonuses, contributions
made under any other  deferred  compensation  plan on behalf of a Participant or
other extra  compensation,  during the three  consecutive  years in the last ten
years of employment which are counted under the Cash Balance Plan as of June 30,
1999 (or fewer, if applicable) which provides the highest average.  For purposes
of this  definition,  the  Management  Incentive  Bonus shall be  determined  by
reference  to amounts  payable  with  respect  to the same  period for which the
annual regular or basic salary is determined.

SPOUSE:

The spouse of a Participant  who is legally  married to the  Participant  on the
date of the Participant's death.

TERMINATION OF EMPLOYMENT:

The date on which an Employee quits, retires, terminates employment due to Total
Disability or is discharged other than by a Termination of Employment for Cause.

TERMINATION OF EMPLOYMENT FOR CAUSE:

The  discharge  of an  Employee  for  (i) the  intentional  failure  to  perform
reasonably  assigned  duties,  (ii)  dishonesty  or  willful  misconduct  in the
performance of duties, (iii) involvement in a transaction in connection with the
performance  of  duties  to  the  Company  or  any  of  its  Subsidiaries  which
transaction  is  adverse  to  the  interests  of  the  Company  or  any  of  its
Subsidiaries  and  which is  engaged  in for  personal  profit  or (iv)  willful
violation of any law, rule or regulation in connection  with the  performance of
duties (other than traffic violations or similar  offenses),  moral turpitude or
other misconduct of any kind.

TOTAL DISABILITY:

The period during which an individual  has a total  disability as provided under
The Reader's Digest Association, Inc. Long Term Disability Plan.

YEAR

The twelve month period beginning on July 1.




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                                    ARTICLE 2

                          Eligibility and Participation

      Section 2.1 Unless  otherwise  determined by the Board or the Compensation
Committee,  eligibility  of an  Employee  to  participate  in the Plan  upon his
employment,  promotion or re-employment shall be determined from time to time by
the Senior  Vice  President,  Human  Resources,  with the  approval of the Chief
Executive Officer, in their discretion, but shall be limited to senior officers,
senior  management  and  other key  Employees  of an  Employer  who are hired or
promoted to Grade 21 or higher and who execute an agreement in a form designated
by the Compensation Committee to be covered by this Plan.

      Section 2.2 Notwithstanding  the provisions of the preceding Section,  any
eligible  Employee  who was hired  and/or  promoted  to Grade 21 or higher on or
before  October 1, 1999,  and who is a participant  in the Executive  Retirement
Plan,  shall continue to participate in the Executive  Retirement Plan and shall
not be eligible to participate in this Plan if (i) he meets the early retirement
criteria  set forth  under  such  plan,  or (ii) if he does not meet such  early
retirement  criteria,  and prior to November 1, 1999  executes an agreement in a
form  designated  by the  Compensation  Committee to be covered by the Executive
Retirement Plan. Failure of an eligible Employee to make a timely election under
Subsection (ii) will result in continued coverage under the Executive Retirement
Plan in lieu of eligibility for participation under this Plan. This Section does
not apply to an Employee who has a Termination  of  Employment  after October 1,
1999  and then is  subsequently  rehired  by an  Employer.  In such a case,  the
re-employed  executive is only eligible to  participate in this Plan pursuant to
the preceding Section.

      Section 2.3 Unless  otherwise  provided  herein,  each  Participant  shall
commence participation on the date of his designation as a Participant.  When an
Employee  first becomes a Participant  in the Plan,  the Senior Vice  President,
Human  Resources  shall  notify  him  promptly  of that  fact and of his  rights
hereunder.

      Section 2.4 A  Participant  who has a Termination  of Employment  shall be
entitled to a  distribution  of the vested portion of his Executive Cash Balance
Plan Benefit at the time and in the manner  specified in Article 5. In addition,
to the extent that  benefits are payable by reason of death,  the  Participant's
Beneficiary  shall be entitled to benefits in accordance  with Article 6. To the
extent that benefits are payable by reason of Total Disability,  the Participant
shall be entitled to additional benefits in accordance with Article 8.

      Section 2.5 A Participant  who has a Termination  of Employment  for Cause
shall not be eligible for any benefit under this Plan  regardless of whether the
benefits are vested under this Plan.



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                                    ARTICLE 3

                       Executive Cash Balance Plan Benefit

      Section 3.1 A  Participant's  Executive Cash Balance Plan Benefit shall be
equal  to the sum of his  Opening  Balance,  if any,  plus  annual  Contribution
Credits,  as defined herein, as adjusted by Investment  Adjustments on a monthly
basis as determined below.

      Section 3.2 (i) Fifty  percent (50%) of each  Contribution  Credit and the
Opening   Balance  (if  any)  shall  be  deemed  invested  as  directed  by  the
Participant,  subject to the approval of the Board,  among the Investment  Funds
available under the 401(k) Plan in the percentages (in whole numbers) elected by
the Participant. If a Participant fails to specify the Investment Funds to which
this portion of his Opening Balance,  if any, or Contribution  Credits are to be
allocated  under this Plan,  this portion of the  Participant's  Executive  Cash
Balance  Plan  Benefit  shall be credited  with  interest as provided in Section
4.2(d) (iii) of the Cash Balance Plan. A  Participant  or Recipient may elect at
any time, in the form the  Compensation  Committee  specifies and subject to the
approval of the Board,  a new  allocation in which this portion of his Executive
Cash Balance Plan Benefit will be deemed  invested among the  Investment  Funds.
Any new  allocation  among  Investment  Funds must be requested by the second to
last business day of the month to be deemed effective as of the first day of the
following month and must be in percentages in whole numbers.

      (ii) The remaining fifty percent (50%) of each annual  Contribution Credit
and fifty percent (50%) of the Opening Balance (if any) shall be deemed invested
in Class A non-voting common stock issued by the Company.



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                                    ARTICLE 4

                                     Vesting

      Section  4.1 A  Participant  shall  become  vested in his  Executive  Cash
Balance Plan Benefit under this Plan in accordance with the following schedule.

Total Completed Years of Participation                 Percentage
 in Plan and Executive Retirement Plan                   Vested

              Less than 5                                   0
                   5                                       50
                   6                                       60
                   7                                       70
                   8                                       80
                   9                                       90
                  10                                      100

      Upon the  Termination of Employment of a Participant on or after his Early
Retirement  Date, the Board may determine that the Participant is 100% vested in
the Executive Cash Balance Plan Benefit.

      Section  4.2  Notwithstanding  any  provision  herein to the  contrary,  a
Participant  shall not be entitled to, and shall forfeit,  all benefits  accrued
under this Plan (whether  vested or not) if he has a  Termination  of Employment
for Cause.



<PAGE>


                                    ARTICLE 5

             Distribution of Executive Cash Balance Plan Benefit;
                            Subsequent Re-Employment


Section 5.1 If a Participant is entitled to a distribution of his Executive Cash
Balance Plan Benefit  hereunder,  the Participant shall receive his distribution
in ten annual installments;  provided,  however, that the Compensation Committee
may, in its sole discretion,  select an alternative form of distribution and may
accelerate  payment of any remaining  unpaid portion of a  Participant's  vested
Executive  Cash Balance Plan Benefit.  If the  Compensation  Committee  does not
select an  alternative  form of  distribution,  payments  will  commence  in the
January following a Termination of Employment.  Each payment shall be a fraction
of the vested value of the  Participant's  Executive Cash Balance  Account as of
the preceding December 31 made in accordance with the following schedule:

                   Payment    Payment Fraction

                      1             1/10
                      2             1/9
                      3             1/8
                      4             1/7
                      5             1/6
                      6             1/5
                      7             1/4
                      8             1/3
                      9             1/2
                     10       Balance remaining



      Section 5.2 The  Compensation  Committee  may  approve an annuity  form of
equivalent value to the vested Executive Cash Balance Plan Benefit.  The annuity
options  available and the  Applicable  Interest Rate and mortality  assumptions
used for determining actuarial equivalence, shall be the same as those which are
available and used under the Cash Balance Plan.

      Section  5.3 If a  Participant  who is  receiving  a  distribution  of his
Executive Cash Balance Plan Benefit or Executive Retirement Plan Benefit returns
to the employ of the Employer as an Employee,  the  distribution  of the benefit
shall cease for as long as the Participant continues to be so employed.  Subject
to the approval of the Board,  the Participant will participate in the Plan upon
his  re-employment  and  the  Employer  shall  make  Contribution   Credits  and
Investment Adjustments.

                  (i) Upon a subsequent  Termination  of  Employment,  the total
vested  Executive  Cash Balance  Plan  Benefit of such  Employee as of that date
shall be payable in a form described  herein. In the case of an Employee who was
receiving  a benefit  from the  Executive  Retirement  Plan,  upon a  subsequent
Termination of Employment,  the  distribution  of the Executive  Retirement Plan
Benefit earned prior to his  re-employment  date shall recommence and the vested
Executive  Cash Balance Plan Benefit of such employee  earned  subsequent to his
re-employment date shall be payable in a form described herein.

                  (ii) Upon a subsequent  Termination  of Employment  for Cause,
the Participant will forfeit his benefits earned subsequent to his re-employment
date;  provided,  however,  distribution  of the  benefits  earned  prior to his
re-employment  date shall  recommence  the  January  following  the later of the
subsequent  Termination of Employment or the end of the severance  period (a) in
the same form in which the  benefits  were  previously  distributed,  and (b) if
payable in the form of 10 annual payments, pursuant to the previously determined
payment schedule beginning with the amount which would have been next payable if
the Participant had never returned to the employ of the Employer.



<PAGE>


                                    ARTICLE 6

                                 Death Benefits

      Section 6.1 In the event of a Participant's death after benefits under the
Plan have commenced,  his Beneficiary  shall receive any amounts  provided under
the form of payment under which the  Participant  was receiving such benefits at
the time of his death. Notwithstanding the foregoing, the Compensation Committee
may, in its sole  discretion,  accelerate  any remaining  unpaid portion of such
payments into one or more payments.

      Section 6.2 In the event of a  Participant's  death while in the employ of
the  Employer  prior to his  benefit  commencement  date  under  the  Plan,  his
Beneficiary  shall receive the value of the Executive  Cash Balance Plan Benefit
without regard to vesting payable in a form to be determined by the Compensation
Committee.

      Section  6.3  A   Participant   may  designate   primary  and   contingent
Beneficiaries on a form designated by the Compensation  Committee.  A contingent
Beneficiary shall receive benefits only if no primary  Beneficiary is alive upon
the Participant's  death. If a Participant does not properly name a Beneficiary,
or if no Beneficiary is alive upon the Participant's death, the benefit shall be
paid to the  Participant's  surviving  Spouse,  or, if none,  the  Participant's
estate.   If  a   Participant   designates   multiple   primary  or   contingent
Beneficiaries,  percentages of the benefit may be allocated equally or unequally
as the Participant designates.  The Executive Cash Balance Plan Benefit shall be
divided (i) among all primary Beneficiaries who are alive upon the Participant's
death,  or (ii)  among  all  contingent  Beneficiaries  who are  alive  upon the
Participant's  death,  if no primary  Beneficiaries  are  alive.  The share of a
Beneficiary who is not alive upon the Participant's death shall be divided among
the remaining Beneficiaries in that Beneficiary group (primary or contingent) in
the proportion that their shares bear to one another.

      Section  6.4  The  Employer  shall  pay  to  each   Participant   who  had
participated  in the  Executive  Retirement  Plan cash,  on the same terms as he
receives his regular compensation, in an amount sufficient to purchase term life
insurance equal to three times the  Participant's  Base Pay,  reduced by (i) the
greater  of the  amount  of  insurance  provided  to the  Participant  under the
Employer's  Group Life  Insurance  Policy or the amount of group life  insurance
provided to the  Participant  as of June 30,  1998,  (ii) the amount of benefits
payable  upon  the   Participant's   death  as  provided  in  the  Participant's
Supplemental  Executive  Retirement  Benefit  Agreements  (if  any)  reduced  by
Employee  contributions  under such agreements  accumulated at 8% to the date of
death,  and (iii) the value of the  Participant's  Executive  Cash  Balance Plan
Benefit as of the preceding  October 1. Such amount shall be  recalculated  each
October 1 based on the  Employee's  age, base salary and the then current annual
rates under the Employer's Group Universal Life Insurance Policy.



<PAGE>


                                    ARTICLE 7

                                Medical Benefits

      Section 7.1 If any Participant has a Termination of Employment on or after
his Early  Retirement  Date, such Participant and his Spouse with the consent of
the  Compensation  Committee shall be eligible to receive the benefits  provided
under the Retiree  Health  Plan as if the  Participant  had met the  eligibility
requirements under such plan,  provided that the Participant or Spouse makes the
contributions required under such plan.

      Section  7.2 If a  married  Participant  dies  while in the  employ of the
Employer prior to his benefit  commencement  date under the Plan after attaining
age fifty-five (55) and the completion of a five-year Period of Service (without
regard to any  break-in-service  rules  applicable under the Cash Balance Plan),
his Spouse shall be eligible to receive the benefits  provided under the Retiree
Health  Plan  as if the  Participant  had  retired  prior  to his  death  having
satisfied the eligibility  requirements of such plan,  provided that such Spouse
makes the contributions required under such plan.

      Section 7.3 If a married  Participant  dies  following  the  Participant's
retirement  from the Employer  after  attaining his Early  Retirement  Date, his
Spouse  shall be  eligible to receive the  benefits  provided  under the Retiree
Health  Plan  as if the  Participant  had  retired  prior  to his  death  having
satisfied the eligibility  requirements of such plan,  provided that such Spouse
makes the contributions required under such plan.



<PAGE>


                                    ARTICLE 8

                                Total Disability

      Section 8.1 If a Participant  has a Termination of Employment by reason of
a Total Disability, he shall be entitled to an annual disability benefit payable
in monthly  installments.  The annual disability  benefit shall equal 60% of the
average of the Management Incentive Bonus earned with respect to the three Years
prior to the Year in which he had a Total  Disability up to a maximum benefit of
$24,000 per month.  The  disability  benefit  will be paid until the earliest to
occur of (i)  lapse  of five (5)  years  from  the date of such  Termination  of
Employment, (ii) attainment of age 65, or (iii) termination of Total Disability.
This benefit shall be in addition to any benefit paid under The Reader's  Digest
Long-Term Disability Plan. If the Participant has a Termination of Employment by
reason of Total Disability,  all Contribution  Credits shall cease. The value of
the  Executive  Cash  Balance  Plan  Benefit  earned  prior to Total  Disability
(without  regard to vesting)  shall be payable in a form to be determined by the
Compensation  Committee following the earliest to occur of (1) attainment of age
65 or (ii) termination of Total  Disability,  or, if the Participant  returns to
the employ of an Employer, following the subsequent Termination of Employment.

      Section 8.2 If a  Participant  dies during the period  when  payments  are
being made under this Article,  disability payments shall cease. The Beneficiary
shall be entitled to receive any  undistributed  portion of the  Executive  Cash
Balance Plan Benefit.



<PAGE>


                                    ARTICLE 9

                               General Provisions

      Section 9.1 The Employer shall only have a contractual  obligation to make
payments to the  Participant or Beneficiary,  as applicable,  referred to herein
when due,  and the amounts of such  payments  shall not be held in trust for the
Participant or  Beneficiary,  as applicable,  but shall be paid from the general
assets of the Employer. This Plan is intended to constitute an unfunded plan and
no assets  shall be  segregated  or  earmarked  in  respect  of any  amount  due
hereunder.

      Section  9.2  Nothing  contained  herein  shall  confer  any  right  on  a
Participant to be continued in the employ of the Company or any other  Employer,
or as a  limitation  of the right of the Company or Employer  to  discharge  any
Participant with or without cause, nor shall anything herein affect the right of
the  Participant to participate in and receive  benefits under and in accordance
with any pension,  profit sharing,  incentive compensation or other benefit plan
or program of any Employer.  Nothing  herein shall be construed as a contract of
employment between the Employer and any Participant.

      Section 9.3 This Plan shall be binding upon any  successor to or purchaser
of  substantially  all the assets of the Company or an Employer  with respect to
such  Employer's  Employees.  The Board  reserves the right at any time and from
time to time to modify, amend or terminate in whole or in part any or all of the
provisions of the Plan. Upon any such  termination of this Plan, the Company may
in its sole discretion accelerate payment of all benefits that are in pay status
on the date of termination  and benefits to which a Participant or  Beneficiary,
as  applicable,  would be  entitled  under  the terms of the Plan then in effect
based on events which occur prior to the date of  termination of the Plan. In no
event,  however,  shall any  modification,  amendment or plan termination by the
Board deprive any Participant or Beneficiary, as applicable, of any amount which
is  payable  to such  person  under  the  Plan by  reason  of the  Participant's
attainment  of age 65 or  death  prior  to  such  modification,  termination  or
amendment.

      Section 9.4 No right or  interest  of a  Participant  or  Beneficiary,  as
applicable,  under  this Plan  shall be  subject  to  voluntary  or  involuntary
alienation, assignment or transfer of any kind.

      Section  9.5 The  administration  of  this  Plan  and  the  interpretation
thereof,  including the authority to decide all questions that arise thereunder,
shall be the  responsibility of the Compensation  Committee or such other person
or entity as the Company shall designate.  The decisions and  interpretations of
such  administrator  of the Plan shall be final and binding  upon each  Employer
that shall have adopted this Plan, Employees of such Employers, each Participant
and his Beneficiary, and other interested parties.

      Section 9.6 The Company shall have the right to deduct from any payment to
be made pursuant to this Plan any federal,  state, local or other taxes required
by law to be withheld.

      Section  9.7 If any  payment  to be made  under this Plan is to be made on
account of a Participant who was employed by an Employer that shall have adopted
this Plan,  other than the Company,  the cost of such benefit  payment  shall be
borne by the Employer of the Employee.

      Section 9.8 This Plan shall be construed,  regulated and  administered for
all  purposes  according  to the laws of the  State  of New York and the  United
States.

      Section  9.9 No  member of the  Board,  no  Employee  and no member of the
Compensation  Committee (nor the Compensation  Committee itself) shall be liable
for any act or action  hereunder,  including acts of omission or commission,  by
any other member or Employee or by any agent to whom duties in  connection  with
the  administration  of the Plan have been delegated or, except in circumstances
involving bad faith,  gross negligence or fraud, for anything done or omitted to
be done by himself.

      Section  9.10  Wherever  any words are used in this Plan in the  masculine
gender they shall be  construed  as though  they were also used in the  feminine
gender in all cases where they would so apply,  and  wherever any words are used
herein in the  singular  form they shall be  construed  as though they were also
used in the plural form in all cases where they would so apply.

      Section 9.11 In the event any provision of this Plan, if challenged, would
be declared invalid, illegal or unenforceable, such provision shall be construed
and  enforced  as if it had been more  narrowly  drawn so as not to be  illegal,
invalid or unenforceable  and the validity,  legality and  enforceability of the
remaining provisions shall not be affected or impaired thereby.