Exhibit 10.2


    
      

    


    The
      Reader’s Digest Association, Inc.

     

    TERMS
      AND CONDITIONS

     

    PERFORMANCE-BASED

    RESTRICTED
      STOCK UNIT AWARD (Fiscal 2007-2009)

     

    


     

    The
      Restricted Stock Unit Award specified in the Grant Letter to which these Terms
      and Conditions are attached is subject to the provisions of The Reader’s Digest
      Association, Inc. 2005 Key Employee Long Term Incentive Plan (the “Plan”) and
      the Terms and Conditions detailed below.

     

    
      	
              1.

            	
              Restricted
                Stock Unit Award.
                This Restricted Stock Unit Award represents an unfunded promise by
                The
                Reader’s Digest Association, Inc. (“Reader’s Digest”) to deliver to you,
                upon the lapse of the Restrictions (referred to below), an amount
                in cash
                equal to the Vesting Date Value (referred to below) of each Restricted
                Stock Unit. The granting of the Restricted Stock Units does not involve
                an
                actual transfer of property on the date of grant or at any time prior
                to
                the lapse of the Restrictions.

            


    

     

    
      	 	
              (a)

            	
              Performance
                Goals.
                This Restricted Stock Unit Award is subject to the Performance Goals
                stated on Schedule 1.

            


    

     

    
      	 	
              (b)

            	
              Performance
                Periods.
                This Restricted Stock Unit Award relates to the Performance Periods
                stated
                on Schedule 1.

            


    

     

    
      	 	
              (c)

            	
              Grant
                Date Value.
                The Grant Date Value of a Restricted Stock Unit shall be the average
                closing price of a share of Reader’s Digest Common Stock, $0.01 par value
                (“Common Stock”), on the New York Stock Exchange over the last 20 trading
                days before the Performance Period.

            


    

     

    
      	 	
              (d)

            	
              Vesting
                Date Value.
                The Vesting Date Value of a Restricted Stock Unit shall be the average
                closing price of a share of Common Stock on the New York Stock Exchange
                over the last year of the Performance
                Period.

            


    

     

    
      	
              2.

            	
              Restrictions.
                The Restricted Stock Units are granted to you subject to the following
                restrictions (the “Restrictions”).

            


    

     

    
      	 	
              (a)

            	
              Transfer.
                You may not anticipate, alienate, attach, sell, assign, pledge, encumber,
                charge or otherwise transfer the Restricted Stock
                Units.

            


    

     

    
      	 	
              (b)

            	
              Payment.
                Each Restricted Stock Unit shall be paid in cash only after and to
                the
                extent that Reader’s Digest’s Compensation and Nominating Committee (the
                “Committee”) certifies the extent to which the Performance Goals relating
                to that Restricted Stock Unit have been achieved, subject to the
                Maximum
                Payment stated in Paragraph 3(c).

            


    

     


    
      
        
        

      

      
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              (c)

            	
              Forfeiture.
                Any Restricted Stock Units that are still subject to the Restrictions
                shall be canceled by Reader’s Digest and shall be deemed to have been
                forfeited by you except to the extent that Committee certifies that
                the
                Performance Goals relating to those Restricted Stock Units have been
                achieved.

            


    

     

    
      	
              3.

            	
              Conditions
                for Lapse of Restrictions (Vesting) and Payment of Restricted Stock
                Unit
                Award.

            


    

     

    
      	 	
              (a)

            	
              Vesting.
                Promptly after the end of the Performance Period, the Committee shall
                certify the extent to which the Performance Goals relating to the
                Restricted Stock Units have been attained. Subject to prior lapse
                of the
                Restrictions pursuant to Paragraph 4 hereof, the Restrictions shall
                lapse
                with respect to the percentage of Restricted Stock Units awarded
                under the
                Grant Letter upon certification by the Committee that the corresponding
                Performance Goals relating to the Restricted Stock Units have been
                attained, subject to the Maximum Payment described in Paragraph
                3(c).

            


    

     

    
      	 	
              (b)

            	
              Payment;
                Deferral.
                Promptly after the Committee certification described in Paragraph
                3(a),
                the Vesting Date Value of the vested Restricted Stock Units will
                be paid
                to you, provided that the amount payable shall not exceed the Maximum
                Payment described in Paragraph 3(c). If you are notified by the Company
                that you are so eligible, then at any time on or before the date
                specified
                in the election form or other notice provided to you by the Company,
                you
                may elect the percentage, if any, of the Restricted Stock Unit payment
                otherwise due to you that you wish to be deferred. An election form
                for
                this purpose is attached as Schedule 2 for eligible
                employees.

            


    

     

    
      	 	
              (c)

            	
              Maximum
                Payment.
                The maximum payment that you will receive with respect to this Restricted
                Stock Unit Award on the 2008 Vesting Date shall be 200% of the Grant
                Date
                Value of the target number of Restricted Stock Units covered by this
                Restricted Stock Unit Award that are scheduled to vest on the 2008
                Vesting
                Date. The maximum payment that you will receive with respect to this
                Restricted Stock Unit Award on the 2009 Vesting Date shall be 200%
                of the
                Grant Date Value of the target number of Restricted Stock Units covered
                by
                this Restricted Stock Unit Award that are scheduled to vest on the
                2009
                Vesting Date. Any Restricted Stock Units having a value at the end
                of a
                Performance Period in excess of the Maximum Payment shall be deemed
                to
                have been forfeited.

            


    

     

    
      	
              4.

            	
              Change
                in Control.
                Notwithstanding Section 13.1 of the Plan, if a Triggering Event (as
                defined in Paragraph 4(a) shall occur within the two-year period
                beginning
                with a Change in Control (as defined in the Plan), then, effective
                immediately prior to such Triggering Event, 59% of the outstanding
                target
                Restricted Stock Units under this Award shall vest and you will be
                entitled to prompt payment of such Restricted Stock Units either
                (i) as if
                the applicable Performance Goals had been achieved at target (100%),
                with
                the payment prorated for the number of months completed in the Performance
                Period at the time of such Triggering Event or (ii) in such greater
                amount
                as
                the Committee shall determine, if at least half of the Performance
                Period
                will have been completed at the time of such Triggering Event, provided,
                however, that if such Triggering Event involves a Termination of
                Employment and you are a “key employee” as set forth in Section 409A of
                the Internal Revenue Code of 1986, as amended, payment may not be
                made to
                you before six months after the date of your termination (or, if
                earlier,
                the date of your death).

            


    

     


    
      
        
        

      

      
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              (a)

            	
              Triggering
                Event.
                For purposes of this Paragraph 4, a “Triggering Event” shall mean
                (i)
                the Termination of Employment of a Participant by the Company (or
                the
                surviving entity) or a Designated Subsidiary without Cause (as defined
                in
                Paragraph 8(e)), (ii) a Termination of Employment by the Participant
                for
                Good Reason (as defined in Paragraph 4(b)) or (iii) any failure by
                the
                Company (or the surviving entity) to replace this Restricted Stock
                Unit
                Award with a Restricted Stock Unit Award of equivalent value and
                terms and
                conditions as applied immediately prior to the Change of Control
                (except
                for equitable adjustments to reflect changes in the Common Stock
                pursuant
                to Paragraph 6 below) where the shares of the Company (or the surviving
                entity) underlying the replacement stock option or stock appreciation
                right are shares of common stock traded on a national securities
                exchange
                or on the over-the-counter market as reported on
                NASDAQ.

            


    

     

    
      	 	
              (c)

            	
              Good
                Reason.
                For purposes of Paragraph 4(a), Good Reason shall mean (i) Good Reason,
                as
                defined in any change in control program or agreement to which you
                are a
                party or participant, (ii) a reduction by the Company or a Designated
                Subsidiary in your annual base salary or your annual target bonus
                opportunity under the Company’s annual bonus plans for management
                employees as in effect immediately prior to the Change in Control;
                or
                (iii) your relocation by the Company or a Designated Subsidiary to
                an
                office located anywhere other than within 75 miles of your current
                primary
                office, except for required travel on Company (or Designated Subsidiary)
                business to an extent substantially consistent with your business
                travel
                obligations prior to the Change in
                Control.

            


    

     

    
      	 	
              (d)

            	
              Payment.
                Any amount required to be paid under this Paragraph 4 shall be paid
                within
                20 days after the date such amount becomes
                payable.

            


    

     

    
      	 	
              (e)

            	
              Notwithstanding
                any provision to the contrary set forth in any prior contract, agreement,
                plan or policy (including, but not limited to, (a) the provisions
                of The
                Reader’s Digest Association, Inc. 2001 Income Continuation Plan for Senior
                Management and (2) a provision calling for payment by Reader’s Digest of
                the value of any benefits that cannot be paid under the existing
                or
                amended terms of any such contract, agreement, plan or policy), the
                foregoing provisions of this Paragraph 4 shall provide the exclusive
                benefits relating to this Restricted Stock Unit Award relating to
                any
                Change in Control.

            


    

     

    
      	
              5.

            	
              Termination
                of Employment.
                Notwithstanding any provision to the contrary set forth in any prior
                contract, agreement, plan or policy (including, but not limited to,
                (a)
                the provisions of The Reader’s Digest Association, Inc. 2001 Income
                Continuation Plan for Senior Management and (2) a provision calling
                for
                payment by Reader’s Digest of the value of any benefits that cannot be
                paid under the existing or amended terms of any such contract, agreement,
                plan or policy), if your employment with Reader’s Digest and its
                Designated Subsidiaries terminates prior to the end of the Performance
                Period for any reason, all of the Restricted Stock Units subject
                to this
                award that remain outstanding are forfeited and canceled by Reader’s
                Digest, and all such Restricted Stock Units shall be deemed not to
                have
                any value. Transfers within or between Reader’s Digest and its Designated
                Subsidiaries, shall not be considered a termination of employment
                for
                purposes of this Paragraph 5.

            


    

     

    
      	
              6.

            	
              Adjustments.
                If there is any change in the Common Stock of Reader’s Digest, the term
                “Restricted Stock Units” shall include the value (as determined in good
                faith by the Committee) of any securities and other property that
                you
                would have received or become entitled to receive upon lapse of the
                Restrictions had you been a holder of the shares of Common Stock
                to which
                the Restricted Stock Units relate at the effective time of the change,
                and
                the Committee shall make any other adjustments, including the payment
                of
                the Restricted Stock Units as if the Restrictions had lapsed, as
                it may
                determine to be appropriate in accordance with the Plan, such
                determination to be final and
                binding.

            


    

     

    
      	
              7.

            	
              Tax
                Withholding.
                You are responsible for satisfying any tax withholding obligation
                that is
                applicable to you, including any U.S., non-U.S. or social insurance
                tax
                withholding obligation. In order to satisfy any such obligation in
                connection with the lapse of the Restrictions and the vesting of
                the
                Restricted Stock Units, Reader’s Digest is authorized to deduct the amount
                of the tax withholding obligation from the amount payable to you
                upon
                lapse of the Restrictions.

            


    

     

    
      	
              8.

            	
              Cancellation
                and Recovery

            


    

     

    
      	 	
              (a)

            	
              Notwithstanding
                anything herein to the contrary, the Committee may terminate the
                Restricted Stock Unit Award immediately if you engage in any Detrimental
                Activity.

            


    

    


    
      	 	
              (b)

            	
              As
                a condition of the lapse of Restrictions on this Restricted Stock
                Unit
                Award, you shall certify at the time of such vesting, in a manner
                acceptable to Reader’s Digest, that you are in compliance with the terms
                and conditions of the Plan and that you have not engaged in, and
                do not
                intend to engage in, any Detrimental Activity. In the event you engage
                in
                a Detrimental Activity prior to, or during the two (2)-year period
                (one
                (1)-year period in the case of subparagraph 8(c)(v) and (vii)) after,
                your
                termination of employment with Reader’s Digest and its Designated
                Subsidiaries, Reader’s Digest shall be entitled to recover from you at any
                time within two (2) years after such termination of employment, and
                you
                shall pay over to Reader’s Digest, the full amount of any payment to you
                under this Award during the period of two (2) years prior to your
                termination of employment and the period of two (2) years (one (1)
                year in
                the case of paragraph (c)(iv)) after your termination of employment,
                and
                Reader’s Digest shall be entitled to set-off against the amount of any
                such payment any amount owed to you by Reader’s Digest or its affiliates
                and the Restrictions shall be deemed not to have lapsed after you
                engage
                in any Detrimental Activity.  Furthermore,
                if you do not pay over to Reader’s Digest within twenty (20) days of
                demand any payment due under this subparagraph (b), such amount shall
                thereafter bear interest at the maximum rate permitted by law and
                you
                shall be liable for all of Reader’s Digest's costs of collection,
                including but not limited to, reasonable legal
                fees.

            


    

     


    
      
        
        

      

      
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              (c)

            	
              Except
                in the event that a Change in Control has occurred and your employment
                with Reader’s Digest and its Designated Subsidiaries has terminated
                involuntarily without Cause (as defined in Paragraph 8(e) or for
                Good
                Reason (as defined in Paragraph 4(c)), "Detrimental Activity"
                means:

            


    

     

    
      	 	
              (i)

            	
              the
                disclosure to anyone outside Reader’s Digest or its affiliates, or the use
                in other than Reader’s Digest’s or its affiliate’s business, without
                written authorization from Reader’s Digest, of any confidential
                information or proprietary information or trade secrets, relating
                to the
                business of Reader’s Digest or its affiliates, acquired by you during
                employment with Reader’s Digest or its
                affiliates;

            


    

     

    
      	 	
              (ii)

            	
              activity
                while employed that results, or if known could result, in termination
                of
                your employment that is classified by Reader’s Digest as a termination for
                Cause;

            


    

     

    
      	 	
              (iii)

            	
              any
                attempt, directly or indirectly, to solicit, induce or hire (or the
                identification for solicitation, inducement or hire) any non-clerical
                employee of Reader’s Digest or its affiliates to be employed by, or to
                perform services for, you or any person or entity with which you
                are
                associated (including, but not limited to, due to your employment
                by,
                consultancy for, equity interest in, or creditor relationship with
                such
                person or entity) or any person or entity from which you receive
                direct or
                indirect compensation or fees as a result of such solicitation, inducement
                or hire (or the identification for solicitation, inducement or hire)
                without, in all cases, written authorization from Reader’s
                Digest;

            


    

     

    
      	 	
              (iv)

            	
              any
                conduct otherwise violating any non-competition or non-solicitation
                agreement with Reader’s Digest or its
                affiliates;

            


    

     

    
      	 	
              (v)

            	
              for
                employees of Reader’s Digest or its affiliates directly engaged in sales
                activities, soliciting, in direct competition with Reader’s Digest or its
                affiliates, any account or customer previously solicited by you or
                your
                subordinates within the last year of your employment, without written
                authorization from Reader’s Digest;

            


    

     

    
      	 	
              (vi)

            	
              your
                Disparagement, or inducement of others to do so, of Reader’s Digest or its
                affiliates or their past and present officers, directors, employees
                or
                products;

            


    

     


    
      
        
        

      

      
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              (vii)

            	
              without
                written authorization from Reader’s Digest, the rendering of services for
                organizations and businesses set forth on Exhibit A (which list may
                be
                changed or expanded by the Committee at any time on 90 days written
                notice
                to you, which notice shall become effective 90 days after the giving
                of
                such notice, if you are then employed by Reader’s Digest or any Designated
                Subsidiary); provided, however, that this subparagraph (vii) shall
                apply
                only if you are at the time of the vesting of the Restricted Stock
                Units
                or were at any time prior thereto a U.S. Grade 18 or higher level
                employee
                or if you have otherwise received an Exhibit A with these Terms and
                Conditions; or

            


    

     

    
      	 	
              (viii)

            	
              any
                other conduct or act reasonably determined by the Committee to be
                significantly injurious, detrimental or prejudicial to any interest
                of
                Reader’s Digest or its affiliates.

            


    

     

    In
      the
      event that a Change in Control has occurred and your employment with Reader’s
      Digest and its Designated Subsidiaries has terminated involuntarily without
      Cause (as defined in Paragraph 8(e) or for Good Reason (as defined in Paragraph
      4(c)), “Detrimental Activity” shall have the meaning stated in subparagraph
      8(c)(i), only.

     

    For
      purposes of subparagraphs 8(c)(i), (iii), (iv), (v) and (vii) above, the Chief
      Executive Officer, the most senior Human Resources officer and the most senior
      legal officer of Reader’s Digest shall each have authority to provide you with
      written authorization to engage in the activities contemplated thereby and
      no
      other person shall have authority to provide you with such
      authorization.

     

    
      	 	
              (d)

            	
              “Disparagement”
                includes, without limitation, comments or statements to the press,
                Reader’s Digest’s or its affiliates’ employees or any individual or entity
                with whom Reader’s Digest or its affiliates has a business relationship
                which would adversely affect in any manner: (i) the conduct of the
                business of Reader’s Digest or its affiliates (including, without
                limitation, any products or business plans or prospects), or (ii)
                the
                business reputation of Reader’s Digest or its affiliates, or any of their
                products, or their past or present officers, directors or
                employees.

            


    

     

    
      	 	
              (e)

            	
              For
                purposes of this Paragraph, “Cause” shall mean insubordination,
                dishonesty, moral turpitude, other significant misconduct of any
                kind,
                conviction of (or pleading guilty or nolo contendere
                to) a crime, or a significant violation of any rules, policies, procedures
                or guidelines of Reader’s Digest or its affiliates, or refusal to perform
                normal duties and responsibilities (for any reason other than illness
                or
                incapacity) which, in any case, Reader’s Digest reasonably classifies as a
                termination for Cause. The determination of whether “Cause” has occurred
                shall be solely in the discretion of the Chief Executive Officer,
                with the
                advice of the most senior Human Resources officer and the most senior
                legal officer of Reader’s Digest.

            


    

     


    
      
        
        

      

      
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              9.

            	
              Miscellaneous

            


    

     

    
      	 	
              (a)

            	
              The
                Restricted Stock Unit Award is subject to the detailed provisions
                of the
                Plan, a copy of which may be obtained from the Human Resources Department
                of Reader’s Digest.

            


    

     

    
      	 	
              (b)

            	
              The
                Restricted Stock Units do not give you any rights as a holder of
                Common
                Stock. You will not receive regular quarterly cash dividends or dividend
                equivalents with respect to the Restricted Stock
                Units.

            


    

     

    
      	 	
              (c)

            	
              The
                granting of the Restricted Stock Units does not confer upon you any
                right
                to continue in the employ of Reader’s Digest or any of its subsidiaries or
                affiliates.

            


    

     

    
      	 	
              (d)

            	
              The
                Restricted
                Stock Units do
                not entitle you to any benefit other than the benefits specifically
                and
                expressly granted hereunder. The
                Restricted Stock Units are unfunded and are payable from the general
                assets of Reader’s Digest. Any benefits granted under the Restricted Stock
                Units are not part of your ordinary salary for any purpose, including,
                without limitation, calculating any benefits, severance, redundancy,
                termination or resignation or similar
                payments.

            


    

     

    
      	 	
              (e)

            	
              This
                statement of Terms and Conditions is subject to and qualified by
                the
                provisions of the Plan.

            


    

     

    
      	 	
              (f)

            	
              The
                Committee may amend these Terms and Conditions as necessary or appropriate
                to comply with applicable laws and
                regulations.

            


    

     

    
      	 	
              (g)

            	
              The
                Plan, and the Grant Letter and the Terms and Conditions relating
                to the
                Restricted Stock Unit Award shall be governed by the laws of the
                State of
                New York, excluding any conflict of laws or choice of law rule or
                principle that might otherwise refer construction or interpretation
                of the
                Plan, the Grant Letter and the Terms and Conditions to the substantive
                law
                of another jurisdiction. You are deemed to submit to the exclusive
                jurisdiction and venue of the federal or state courts of New York,
                County
                of Westchester, to resolve any and all issues that may arise out
                of or
                relate to the Plan, the Grant Letter and the Terms and
                Conditions.

            


    

     

    


    

      
        
          
          

        

        
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