THE READER'S DIGEST ASSOCIATION, INC.



             DEFERRED COMPENSATION PLAN FOR DIRECTORS
            (Amended and Restated as of March 13, 1998)
           (Amended and Restated as of January 1, 2003)



                             ARTICLE I

                              Purpose


           The  purpose  of  the  Deferred  Compensation  Plan  for
Directors  (the "Plan") of The Reader's  Digest  Association,  Inc.
(the "Company") is to offer  non-employee  members of the Company's
Board  of  Directors  (the  "Board"),   the  opportunity  to  defer
receipt of Awards made under the  Company's  Director  Compensation
Program (the  "Program") to which they may become  entitled,  under
terms  advantageous  to both such  Directors  and the Company,  for
the periods provided in the Plan.


                             ARTICLE II

                             Definitions


           For  purposes of this Plan,  the  following  terms shall
have the following meanings:

           "Account"  shall have the meaning  specified  in Section
4.1.

           "Award"  shall  mean (a)  prior to March 13,  1998,  the
annual  retainer  but not meeting fees for  attendance  at Board or
Committee  meetings to which a Participant  may become  entitled as
a  non-employee  Director of the Company,  (b) after March 13, 1998
and  prior to  January  1,  2003,  the  cash  payments  made  under
Sections  3(b),  4(b)(ii)  and  5(b)(ii) of the Program (as then in
effect)  to  which  a   Participant   may  become   entitled  as  a
non-employee  Director of the Company  and (c) after  December  31,
2002,  the Awards made under  Sections  3.1,  3.2,  3.3, and 4.2 of
the Program (as then in effect).

           "Beneficiary"   shall   mean  the   person  or   persons
designated  from  time  to  time  in a  writing  delivered  to  the
Committee  by a  Participant  to receive  payments  under this Plan
after  the death of such  Participant  or,  in the  absence  of any
such  designation  or in the event that such  designated  person or
persons  shall  predecease  such  Participant,   the  Participant's
estate or legal representative.

           "Committee"  shall have the meaning specified in Section
6.1.

           "Deferred  Amount" shall mean at any time the sum of all
of  a  Participant's  Deferred  Compensation  plus  all  Increments
credited  as of such date to the  Account of such  Participant,  as
provided herein.

           "Deferred  Compensation" shall mean that portion of each
Award to which a Participant  is entitled,  the payment of which he
has elected to defer under this Plan.

           "Designated  Deferral  Period"  shall  have the  meaning
specified in Section 3.1.

           "Designated  Pay-Out  Schedule"  shall have the  meaning
specified in Section 3.1.

           "Designated   Percentage"   shall   have   the   meaning
specified in Section 3.1.

           "Election  Date"  shall have the  meaning  specified  in
Section 3.2.

           "Eligible   Director"   shall   mean  any   non-employee
Director  of the  Company.  A  non-employee  Director is any person
who is a member of the Board  and who is not a  full-time  employee
of the Company or any of its subsidiaries.

           "Increments"   shall  have  the  meaning   specified  in
Section 4.2.

           "Measuring  Year"  shall have the meaning  specified  in
Section 3.2.

           "Participant"  shall mean any  Eligible  Director on any
date which is an Election  Date for any Award which,  if thereafter
made or earned,  will be made or earned in respect of the  calendar
year  following  the  calendar  year in  which  the  Election  Date
occurs or such other period as the Committee may designate.

           "Plan  Interest  Rate" shall have the meaning  specified
in Section 4.3.


                             ARTICLE III

                         Deferral of Awards


           3.1  Election.  Each  Participant  may elect to have the
payment of a  Designated  Percentage  of each Award for which he is
eligible deferred  pursuant to this Plan for a Designated  Deferral
Period with a  Designated  Pay-Out  Schedule.  A separate  election
shall  be made  for  each  Award  and  shall  be  delivered  to the
Committee  on or  before  the  Election  Date  for  such  Award  in
accordance with Section 3.2.

           (a)  A   "Designated    Percentage"   shall   mean   the
      percentage  of 50%, 75% or 100%  selected by the  Participant
      for  a  particular  Award,  provided,   however,  that  after
      December 31,  2002 the percentage  shall be 100% with respect
      to Awards under Sections 3.3 and 4.2 of the Program.

           (b)  A  "Designated  Deferral  Period" shall mean one of
      the  following   periods  following  the  date  the  Deferred
      Compensation  would otherwise have been payable,  as selected
      by  the  Participant  for  a  particular   Award:  (i)  until
      January  1  following  the   Participant's   termination   of
      services  as a Director  or (ii) until  January 1 of the year
      following  the  expiration  of a  designated  number of years
      following  the  Participant's  termination  of  services as a
      Director as  specified  in the  election  form filed with the
      Committee,  which year  shall not exceed  five years from the
      January 1 of the year following the date of termination.

           (c)  A "Designated  Pay-Out  Schedule" shall mean one of
      the  following,   as  selected  by  the   Participant  for  a
      particular  Award:  (i) a lump-sum  cash  pay-out  and single
      stock  issuance  in  the  January  following  the  end of the
      Designated  Deferral Period; or (ii) a cash pay-out and stock
      issuance in annual  installments  of from one to ten years in
      the  January  of  each  such  year  following  the end of the
      Designated  Deferral  Period in accordance with the following
      method with respect to each Award:

           INSTALLMENT METHOD WITH RESPECT TO AN AWARD

           For a multi-year  installment election where x
           is the  number  of  years  in  the  Designated
           Deferral Period:

           1st payment is 1/x times the  Deferred  Amount then
           credited  to  such   Participant's   Account   with
           respect to such Award,

           2nd  payment  is 1/x-1  times the  Deferred  Amount
           then  credited to such  Participant's  Account with
           respect to such Award,

           3rd  payment  is 1/x-2  times the  Deferred  Amount
           then  credited to such  Participant's  Account with
           respect to such Award,

           And  so  on,  decreasing  the  denominator  of  the
           fraction  by one for each year until the final year
           for  which  the  payment  is  the  balance  of  the
           Deferred    Amount    then    credited    to   such
           Participant's Account with respect to such Award;

A  numerical  example  of a Pay-Out  Schedule  over  five  years is
attached as Exhibit A.

           3.2  Deferral Election.

           (a)  An election  under  Section 3.1 shall be in writing
      on a  form  prescribed  by  the  Committee  delivered  to the
      person  designated  by the Company on or before the  Election
      Date.

           (b)  The  "Election  Date"  for an  Award  shall  be the
      December  31 prior to the  calendar  year of the  Company  in
      respect of which such Award is earned (the "Measuring  Year")
      even  if  the  Award  would  ordinarily  be  payable  in  the
      calendar  year  following  the  Measuring   Year;   provided,
      however, that the Election Date shall be

                (1)  for  calendar  year  1998,  in which the first
           amended and  restated  Plan is  adopted,  on or prior to
           March  31,  1998,   to  defer  any  Award  earned  under
           Section 5(b)(ii) of the Program as then in effect;

                (2)  for  calendar  year 2003,  in which the second
           amended and  restated  Plan is  adopted,  on or prior to
           March 31,  2003,  to  defer  the  Deferred  Stock  Award
           earned in 2003; and

                (3)  for a person  who first  becomes  an  Eligible
           Director after January 1 of any year,  prior to the last
           day of the month  following  his election as a Director,
           to defer any Award earned on or following  such last day
           of the month.

           (c)  Each   written   election   shall   specify   which
      Designated  Percentage  of the Award  covered by the election
      the   Participant   desires  to  have   deferred   and  which
      Designated  Deferral Period and Designated  Pay-Out  Schedule
      will apply.  An election, once made, shall be irrevocable.


                             ARTICLE IV

                    Treatment of Deferred Amounts

           4.1  Memorandum  Account.  The Company  shall  establish
on  its  books  a  memorandum  account  (the  "Account")  for  each
Participant  who  has  Deferred   Compensation   under  this  Plan.
Immediately  following the date on which any Deferred  Compensation
would  otherwise be payable to a  Participant  as part of an Award,
the  amount of such  Deferred  Compensation  shall be  credited  to
such Participant's Account.

           4.2  Increments.  On  the  last  day  of  each  calendar
quarter,  interest shall be credited to each Participant's  Account
(an  "Increment"),  computed  separately  for each Account,  on the
cash balance (if any ) of such  Account as of such date,  exclusive
of interest  previously  credited  during such fiscal year,  at the
Plan Interest  Rate.  Interest  shall be compounded  annually as of
each  September 30. No Increments  nor dividends  shall be credited
with respect to stock Deferred Amounts.

           4.3  Plan  Interest   Rate.  The  "Plan  Interest  Rate"
shall be  designated  by the  Committee  as of the last day of each
calendar  quarter.  Such  interest  rates may be  designated by the
Committee on any  reasonable  basis and such  designations  made in
good faith shall be final.

           4.4  Assets.   No   assets   shall  be   segregated   or
earmarked  in respect  of any  Deferred  Amount and no  Participant
shall have any right to  assign,  transfer,  pledge or  hypothecate
his  interest,  or any portion  thereof,  in his Account.  The Plan
and the  crediting  of Accounts  hereunder  shall not  constitute a
trust  and  shall  be  merely  for  the  purpose  of  recording  an
unsecured contractual obligation.

           4.5  Reports.  Until the  entire  Deferred  Amount in an
Account  shall have been paid in full,  the Company will furnish to
each  Participant  a  report,  at  least  annually,  setting  forth
transactions in such Account and the status of his Account.


                              ARTICLE V

                     Payment of Deferred Amounts


           5.1  Form of  Payment.  All  payments  of cash  Deferred
Amounts  under this Plan  shall be made in cash.  All  payments  of
stock  Deferred  Amounts  shall be made in stock.  No  fractions of
shares of stock shall be delivered under the Plan.

           5.2  Payment of Deferred  Amount.  The  Deferred  Amount
credited to each  Participant's  Account  with respect to any Award
(including  all  Increments  attributable  to such Award)  shall be
payable to such  Participant,  in  accordance  with the  Designated
Pay-Out Schedule,  commencing the January immediately following the
end of the  Designated  Deferral  Period  elected  with  respect to
such Award.  If a  Participant  dies prior to payment of all or any
portion  of  the  Deferred  Amount,   the  entire  Deferred  Amount
credited  to  such  Participant's  Account  shall  (if  not  sooner
payable)  be  payable to his  Beneficiary  in  accordance  with the
Designated  Pay-Out  Schedule  commencing  the January  immediately
following the  Participant's  death;  provided,  however,  that the
Committee  may, in its sole  discretion,  accelerate the payment of
the  entire  Deferred  Amount  in a lump  sum of cash  or a  single
issuance  of  stock,  as the case may be,  in  January  of the year
immediately following the date of such death.

           5.3  Acceleration  of  Payments.   Notwithstanding   any
other  provision of this Plan to the contrary,  the  Committee,  in
its sole  discretion,  is  empowered to  accelerate  the payment of
Deferred  Amounts to a Participant or to all  Participants,  in the
event of  substantial  hardship  to a  Participant  arising  out of
mental or physical  disability of the  Participant  or an immediate
family  member,  death of an immediate  family member or such other
cause as the Committee  shall in its sole  discretion  determine to
constitute  hardship.  The Committee  shall not have any obligation
to make any such  acceleration  for any such  reason  or any  other
reason.


                             ARTICLE VI

                           Administration

           6.1  Committee.  The  Plan  shall  be  administered  and
interpreted  by a  committee  appointed  from  time  to time by the
Board (the  "Committee")  and consisting of two or more  Directors.
The Committee  shall have full  authority to construe and interpret
the terms and  provisions of the Plan,  to adopt,  alter and repeal
such  administrative  rules,  guidelines  and  practices  governing
this Plan and to perform  all acts,  including  the  delegation  of
its  administrative  responsibilities  as it  shall,  from  time to
time,   deem   advisable,    and   to   otherwise   supervise   the
administration   of  this  Plan.  The  Committee  may  correct  any
defect,  supply any omission or reconcile any  inconsistency in the
Plan,  or in  any  election  hereunder,  in the  manner  and to the
extent it shall  deem  necessary  to carry  the Plan  into  effect.
Any  decision,  interpretation  or  other  action  made or taken in
good faith by or at the  direction  of the Company,  the Board,  or
the  Committee  (or  any  of  its  members)  arising  out  of or in
connection  with the Plan shall be within the  absolute  discretion
of all and each of them,  as the case may be,  and  shall be final,
binding  and  conclusive  on the  Company  and  all  employees  and
Participants    and    their    respective    heirs,     executors,
administrators, successors and assigns.

           6.2  Liability.  No member of the Board,  no employee of
the  Company  and no member  of the  Committee  (nor the  Committee
itself)  shall be liable for any act or action  hereunder,  whether
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 his bad faith,  gross  negligence or fraud,  for anything
done  or  omitted  to be  done  by  himself.  The  Company  or  the
Committee  may consult with legal  counsel,  who may be counsel for
the Company or other  counsel,  with respect to its  obligations or
duties  hereunder,  or with respect to any action or  proceeding or
any  question of law,  and shall not be liable with  respect to any
action  taken  or  omitted  by it in  good  faith  pursuant  to the
advice of such counsel.


                             ARTICLE VII

                            Miscellaneous

           7.1  Amendment  or  Termination.   Notwithstanding   any
other  provision of this Plan,  the Board may at any time, and from
time  to  time,  amend,  in  whole  or in  part,  any or all of the
provisions  of the Plan,  or  suspend  or  terminate  it  entirely,
retroactively  or  otherwise;  provided,  however,  that  any  such
amendment,   suspension  or  termination   may  not,   without  the
Participant's   consent,   adversely  affect  any  Deferred  Amount
credited  to  him  for  any  calendar   year  ended  prior  to  the
effective  date  of  such  amendment,  suspension  or  termination.
Notwithstanding  the foregoing,  upon any termination of this Plan,
the Board may in its sole  discretion  accelerate  the  payment  of
all  Deferred  Amounts  credited as of the date of  termination  of
this  Plan.  The Plan  shall  remain  in  effect  until  terminated
pursuant to this Section.

           7.2  Expenses.   The  Company  will  bear  all  expenses
incurred in administering this Plan.

           7.3  No   Obligation.   Neither   this   Plan   nor  any
elections  hereunder  shall create any obligation on the Company to
continue  any  existing  Award plans or policies or to establish or
continue  any  other  programs,  plans  or  policies  of any  kind.
Neither  this  Plan nor any  election  made  pursuant  to this Plan
shall give any  Participant  any right with respect to  continuance
as a Director by the Company,  nor shall there be a  limitation  in
any way on the right of the  Company to  terminate  the  Director's
service   with  the  Board  in   accordance   with  the   Company's
Certificate of Incorporation and by-laws.

           7.4  No  Assignment.  Except  by  will  or the  laws  of
descent  and  distribution,  no right or interest in any Account or
Deferred   Amount   under   this  Plan  shall  be   assignable   or
transferable,  and no right or interest of any  Participant  in any
Account  hereunder  or to any  Deferred  Amount shall be subject to
any lien, obligation or liability of such Participant.

           7.5  Applicable  Law. This Plan and the  obligations  of
the Company  hereunder  shall be subject to all applicable  federal
and state laws,  rules and  regulations  and to such  approvals  by
any  governmental or regulatory  agency as may from time to time be
required.  The Board may make such  changes  in this Plan as may be
necessary  or  desirable,  in the  opinion of the Board,  to comply
with  the  laws,  rules  and  regulations  of any  governmental  or
regulatory  authority,  or to be eligible  for tax  benefits  under
the Internal  Revenue Code of 1986,  as amended,  or any other laws
or regulations of any Federal, state, local or foreign government.

           7.6  Governing  Law.  This  Plan  and  actions  taken in
connection   herewith   shall  be  governed  by  and  construed  in
accordance  with the laws of the State of New York  (regardless  of
the law that  might  otherwise  govern  under  applicable  New York
principles of conflict of laws).

           7.7  Construction.  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.  The titles to  sections  of this Plan are  intended  solely
as a  convenience  and shall not be used as an aid in  construction
of any provisions thereof.

           7.8  Name.  This Plan,  as amended and  restated,  shall
be  known  as  "The  Reader's  Digest  Association,  Inc.  Deferred
Compensation Plan for Directors".

           7.9  Effective  Date.  The  Plan was  initially  adopted
effective  September  7, 1990.  The Plan was amended  and  restated
effective as of March 13, 1998 and as of January 1, 2003.