Document:

Exhibit 4.11-D

                               GUARANTEE AGREEMENT

                                     Between

                              Georgia Power Company

                                 (as Guarantor)

                                       and

                               JPMorgan Chase Bank

                                  (as Trustee)

                                   dated as of

                               _________ __, 20__

<PAGE>

                             CROSS-REFERENCE TABLE1

Section of                                              Section of
Trust Indenture Act                                      Guarantee
of 1939, as amended                                      Agreement
-------------------                                      ---------

310(a).......................................................4.01(a)
310(b).................................................4.01(c), 2.08
310(c)..................................................Inapplicable
311(a).......................................................2.02(b)
311(b).......................................................2.02(b)
311(c)..................................................Inapplicable
312(a).......................................................2.02(a)
312(b).......................................................2.02(b)
313.............................................................2.03
314(a)..........................................................2.04
314(b)..................................................Inapplicable
314(c)..........................................................2.05
314(d)..................................................Inapplicable
314(e)..............................................1.01, 2.05, 3.02
314(f)....................................................2.01, 3.02
315(a).......................................................3.01(d)
315(b)..........................................................2.07
315(c)..........................................................3.01
315(d).......................................................3.01(d)
315(e)..................................................Inapplicable
316(a).................................................5.04(i), 2.06
316(b)..........................................................5.03
316(c)..........................................................2.02
317(a)..................................................Inapplicable
317(b)..................................................Inapplicable
318(a).......................................................2.01(b)
318(b)..........................................................2.01
318(c).......................................................2.01(a)

    1This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.

<PAGE>

                                TABLE OF CONTENTS

                                                                   Page

ARTICLE I............................................................1

SECTION 1.01. Definitions............................................1
              -----------

ARTICLE II...........................................................4

SECTION 2.01. Trust Indenture Act; Application.......................4
              --------------------------------

SECTION 2.02. Lists of Holders of Securities.........................4
              ------------------------------

SECTION 2.03. Reports by the Trustee.................................4
              ----------------------

SECTION 2.04. Periodic Reports to Trustee............................4
              ---------------------------

SECTION 2.05. Evidence of Compliance with Conditions Precedent.......5
              ------------------------------------------------

SECTION 2.06. Events of Default; Waiver..............................5
              -------------------------

SECTION 2.07. Event of Default; Notice...............................5
              ------------------------

SECTION 2.08. Conflicting Interests..................................5
              ---------------------

ARTICLE III..........................................................6

SECTION 3.01. Powers and Duties of the Trustee.......................6
              --------------------------------

SECTION 3.02. Certain Rights of Trustee..............................7
              -------------------------

SECTION 3.03. Compensation; Fees; Indemnity..........................9
              -----------------------------

ARTICLE IV...........................................................9

SECTION 4.01. Trustee; Eligibility...................................9
              --------------------

SECTION 4.02. Appointment, Removal and Resignation of Trustee.......10
              -----------------------------------------------

ARTICLE V...........................................................10

SECTION 5.01. Guarantee.............................................10
              ---------

SECTION 5.02. Waiver of Notice and Demand...........................11
              ---------------------------

SECTION 5.03. Obligations Not Affected..............................11
              ------------------------

SECTION 5.04. Rights of Holders.....................................12
              -----------------

SECTION 5.05. Guarantee of Payment..................................12
              --------------------

SECTION 5.06. Subrogation...........................................12
              -----------

SECTION 5.07. Independent Obligations...............................12
              -----------------------

ARTICLE VI..........................................................13

SECTION 6.01. Subordination.........................................13
              -------------

ARTICLE VII.........................................................13

SECTION 7.01. Termination...........................................13
              -----------

ARTICLE VIII........................................................13

SECTION 8.01. Successors and Assigns................................13
              ----------------------

SECTION 8.02. Amendments............................................13
              ----------

SECTION 8.03. Notices...............................................14
              -------

SECTION 8.04. Benefit...............................................14
              -------

SECTION 8.05. Interpretation........................................15
              --------------

SECTION 8.06. Governing Law.........................................15
              -------------

<PAGE>

                               GUARANTEE AGREEMENT

         This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of _________
__, 20__, between GEORGIA POWER COMPANY, a Georgia corporation (the
"Guarantor"), and JPMORGAN CHASE BANK, a New York banking corporation, as
trustee (the "Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of GEORGIA POWER
CAPITAL TRUST X, a Delaware statutory trust (the "Trust").

         WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of _________ __, 20__, among the Trustee, the other
Trustees named therein, Georgia Power Company, as Depositor, and the holders of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
as of ___________ __, 20__ $________ aggregate liquidation amount of its ____%
Trust Preferred Securities (the "Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Trust and having the terms
set forth in the Trust Agreement;

         WHEREAS, the Preferred Securities will be issued by the Trust and the
proceeds thereof will be used to purchase the Junior Subordinated Notes (as
defined in the Trust Agreement) of the Guarantor, which will be held by the
Trust as trust assets; and

         WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.

         NOW, THEREFORE, in consideration of the payment for Preferred
Securities by each Holder (as defined herein) thereof, which payment the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement for the benefit of the Holders from time to
time of the Preferred Securities.

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.01. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust.

         "Event of Default" means a failure by the Guarantor to perform any of
its payment obligations under this Guarantee Agreement.

         "Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Trust: (i) any accrued and
unpaid distributions that are required to be paid on such Preferred Securities
but if and only if and to the extent the Trust has funds legally and immediately
available therefor to make such payment; (ii) the redemption price, including
all accrued and unpaid distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by the
Trust but if and only if and to the extent that the Trust has funds legally and
immediately available therefor sufficient to make such payment; and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Junior Subordinated Notes to
the holders of Trust Securities or the redemption of all of the Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Preferred Securities to the date of
payment, to the extent the Trust has funds legally and immediately available
therefor, and (b) the amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust (in either case, the
"Liquidation Distribution").

         "Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.

         "Indenture" means the Subordinated Note Indenture dated as of _________
__, 20__, between the Guarantor, as Subordinated Note Issuer, and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as trustee, as supplemented
by the _____ Supplemental Indenture dated as of ________ __, 20__, by and
between the Guarantor and JPMorgan Chase Bank, as Trustee.

         "Majority in liquidation amount of Preferred Securities" means a vote
by Holder(s) of Preferred Securities, voting separately as a class, of more than
50% of the liquidation amount of all Preferred Securities outstanding at the
time of determination.

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Guarantor, and
delivered to the Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:

                  (a) a statement that each officer signing the Officers'
         Certificate has read the covenant or condition and the definitions
         relating thereto;

                  (b) a brief statement of the nature and scope of the
         examination or investigation undertaken by each officer in rendering
         the Officers' Certificate;

                  (c) a statement that each such officer has made such
         examination or investigation as, in such officer's opinion, is
         necessary to enable such officer to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                  (d) a statement as to whether, in the opinion of each such
         officer, such condition or covenant has been complied with.

         "Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.

         "Responsible Officer" means, with respect to the Trustee, any vice
president, any assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, any senior trust officer, trust officer
or assistant trust officer or any other officer of the Corporate Trust
Department of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.

         "Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.01.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.

         "Trustee" means JPMorgan Chase Bank until a Successor Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Guarantee Agreement and thereafter means each such Successor Trustee.

                                   ARTICLE II

                               TRUST INDENTURE ACT

         SECTION 2.01.     Trust Indenture Act; Application.
                           --------------------------------

         (a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; and

         (b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

         SECTION 2.02.     Lists of Holders of Securities.
                           ------------------------------

         (a) The Guarantor shall furnish or cause to be furnished to the Trustee
(a) semiannually, not later than June 1 and December 1 in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders ("List of Holders") as of a date not more than 15 days prior to the
time such list is furnished, and (b) at such other times as the Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished; provided that, the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Trustee by the Guarantor or at
any time the Trustee is the Securities Registrar under the Trust Agreement. The
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.

         (b) The Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.

         SECTION 2.03. Reports by the Trustee. Within 60 days after May 15 of
each year commencing May 15, 20__, the Trustee shall provide to the Holders of
the Preferred Securities such reports as are required by Section 313(a) of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.

         SECTION 2.04. Periodic Reports to Trustee. The Guarantor shall provide
to the Trustee such documents, reports and information as required by Section
314 of the Trust Indenture Act (if any) in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act, and shall provide,
within 120 days after the end of each of its fiscal years, the compliance
certificate required by Section 314(a)(4) of the Trust Indenture Act in the form
and in the manner required by such Section.

         SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Guarantee Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.

         SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
liquidation amount of Preferred Securities may, by vote, on behalf of all of the
Holders, waive any past Event of Default and its consequences. Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.

         SECTION 2.07.     Event of Default; Notice.
                           ------------------------

         (a) The Trustee shall, within 90 days after the occurrence of an Event
of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default known to the Trustee, unless such defaults have
been cured before the giving of such notice, provided that the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.

         (b) The Trustee shall not be deemed to have knowledge of any Event of
Default unless the Trustee shall have received written notice, or a Responsible
Officer charged with the administration of the Trust Agreement shall have
obtained written notice, of such Event of Default.

         SECTION 2.08. Conflicting Interests. The Trust Agreement, the amended
and restated trust agreement dated as of August 1, 1996, among the Guarantor, as
Depositor, Chase Manhattan Bank USA, National Association, as Delaware Trustee,
the Administrative Trustees named therein and JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank), as Property Trustee, relating to Georgia
Power Capital Trust I, the guarantee agreement dated as of August 1, 1996,
between the Guarantor, as guarantor, and JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as trustee, relating to Georgia Power Capital Trust
I, the amended and restated trust agreement dated as of January 1, 1997, among
the Guarantor, as Depositor, Chase Manhattan Bank USA, National Association, as
Delaware Trustee, the Administrative Trustees named therein and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as Property Trustee, relating
to Georgia Power Capital Trust II, the guarantee agreement dated as of January
1, 1997, between the Guarantor, as guarantor, and JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank), as trustee, relating to Georgia Power
Capital Trust II, the amended and restated trust agreement dated as of June 1,
1997, among the Guarantor, as Depositor, Chase Manhattan Bank USA, National
Association, as Delaware Trustee, the Administrative Trustees named therein and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Property
Trustee, relating to Georgia Power Capital Trust III, the guarantee agreement
dated as of June 1, 1997, between the Guarantor, as guarantor, and JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, relating to
Georgia Power Capital Trust III, the amended and restated trust agreement dated
as of February 1, 1999, among the Guarantor, as Depositor, Chase Manhattan Bank
USA, National Association, as Delaware Trustee, the Administrative Trustees
named therein and JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank), as Property Trustee, relating to Georgia Power Capital Trust IV and the
guarantee agreement dated as of February 1, 1999, between the Guarantor, as
guarantor, and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank),
as trustee, relating to Georgia Power Capital Trust IV, the amended and restated
trust agreement dated as of May 1, 2001 among the Guarantor, as Depositor, Chase
Manhattan Bank USA, National Association, as Delaware Trustee, the
Administrative Trustees named therein and JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Property Trustee, relating to Georgia Power
Capital Trust V and the guarantee agreement dated as of March 1, 2001 between
the Guarantor, as guarantor, and JPMorgan Chase Bank (formerly known as The
Chase Manhattan Bank), as trustee, relating to Georgia Power Capital Trust V,
the amended and restated trust agreement dated as of May 1, 2001, among the
Guarantor, as Depositor, Chase Manhattan Bank USA, National Association, as
Delaware Trustee, the Administrative Trustees named therein and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as Property Trustee, relating
to Georgia Power Capital Trust VI and the guarantee agreement dated as of May 1,
2001, between the Guarantor, as guarantor, and JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank), as trustee, relating to Georgia Power
Capital Trust VI, the amended and restated trust agreement dated as of _________
___, 20__, among the Guarantor, as Depositor, Chase Manhattan Bank USA, National
Association, as Delaware Trustee, the Administrative Trustees named therein and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Property
Trustee, relating to Georgia Power Capital Trust VII, the guarantee agreement
dated as of __________ __, 20___, between the Guarantor, as guarantor, and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee,
relating to Georgia Power Capital Trust VII, the amended and restated trust
agreement dated as of ______________ ___, 20___, among the Guarantor, as
Depositor, Chase Manhattan Bank USA, National Association, as Delaware Trustee,
the Administrative Trustees named therein and JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank), as Property Trustee, relating to Georgia
Power Capital Trust VIII, the guarantee agreement dated as of __________ ___,
20___, between the Guarantor, as guarantor, and JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank), as trustee, relating to Georgia Power
Capital Trust VIII, the amended and restated trust agreement dated as of
_______________ ___, 20___, among the Guarantor, as Depositor, Chase Manhattan
Bank USA, National Association, as Delaware Trustee, the Administrative Trustees
named therein and JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank), as Property Trustee, relating to Georgia Power Capital Trust IX, the
guarantee agreement dated as of ____________ ___, 20___, between the Guarantor,
as guarantor, and JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank), as trustee, relating to Georgia Power Capital Trust IX and
________________ shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.

                                   ARTICLE III

                      POWERS, DUTIES AND RIGHTS OF TRUSTEE

         SECTION 3.01.     Powers and Duties of the Trustee.
                           --------------------------------

         (a) This Guarantee Agreement shall be held by the Trustee for the
benefit of the Holders, and the Trustee shall not transfer this Guarantee
Agreement to any Person except the Trustee shall assign rights hereunder to a
Holder to the extent such assignment is necessary to exercise such Holder's
rights pursuant to Section 5.04 or to a Successor Trustee upon acceptance by
such Successor Trustee of its appointment to act as Successor Trustee. The
right, title and interest of the Trustee shall automatically vest in any
Successor Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Trustee.

         (b) If an Event of Default has occurred and is continuing, the Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.

         (c) The Trustee, before the occurrence of any Event of Default and
after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06), the
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

         (d) No provision of this Guarantee Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

                  (i) prior to the occurrence of any Event of Default and after
         the curing or waiving of all such Events of Default that may have
         occurred:

                           (A) the duties and obligations of the Trustee shall
                  be determined solely by the express provisions of this
                  Guarantee Agreement, and the Trustee shall not be liable
                  except for the performance of such duties and obligations as
                  are specifically set forth in this Guarantee Agreement; and

                           (B) in the absence of bad faith on the part of the
                  Trustee, the Trustee may conclusively rely, as to the truth of
                  the statements and the correctness of the opinions expressed
                  therein, upon any certificates or opinions furnished to the
                  Trustee and conforming to the requirements of this Guarantee
                  Agreement; but in the case of any such certificates or
                  opinions that by any provision hereof are specifically
                  required to be furnished to the Trustee, the Trustee shall be
                  under a duty to examine the same to determine whether or not
                  they conform to the requirements of this Guarantee Agreement;

                  (ii) the Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible Officer of the Trustee, unless it
         shall be proved that the Trustee was negligent in ascertaining the
         pertinent facts upon which such judgment was made;

                  (iii) the Trustee shall not be liable with respect to any
         action taken or omitted to be taken by it in good faith in accordance
         with the direction of the Holders of a Majority in liquidation amount
         of the Preferred Securities relating to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee, or
         exercising any trust or power conferred upon the Trustee under this
         Guarantee Agreement; and

                  (iv) no provision of this Guarantee Agreement shall require
         the Trustee to expend or risk its own funds or otherwise incur personal
         financial liability in the performance of any of its duties or in the
         exercise of any of its rights or powers, if the Trustee shall have
         reasonable grounds for believing that the repayment of such funds or
         liability is not reasonably assured to it under the terms of this
         Guarantee Agreement or adequate indemnity against such risk or
         liability is not reasonably assured to it.

         SECTION 3.02.     Certain Rights of Trustee.
                           -------------------------

         (a) Subject to the provisions of Section 3.01:

                  (i) the Trustee may rely and shall be fully protected in
         acting or refraining from acting upon any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, other evidence of indebtedness
         or other paper or document believed by it to be genuine and to have
         been signed, sent or presented by the proper party or parties;

                  (ii) any direction or act of the Guarantor contemplated by
         this Guarantee Agreement shall be sufficiently evidenced by an
         Officers' Certificate;

                  (iii) whenever, in the administration of this Guarantee
         Agreement, the Trustee shall deem it desirable that a matter be proved
         or established before taking, suffering or omitting any action
         hereunder, the Trustee (unless other evidence is herein specifically
         prescribed) may, in the absence of bad faith on its part, request and
         rely upon an Officers' Certificate which, upon receipt of such request,
         shall be promptly delivered by the Guarantor;

                  (iv) the Trustee may consult with counsel of its choice, and
         the written advice or opinion of such counsel with respect to legal
         matters shall be full and complete authorization and protection in
         respect of any action taken, suffered or omitted by it hereunder in
         good faith and in accordance with such advice or opinion; such counsel
         may be counsel to the Guarantor or any of its Affiliates and may
         include any of its employees; the Trustee shall have the right at any
         time to seek instructions concerning the administration of this
         Guarantee Agreement from any court of competent jurisdiction;

                  (v) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Guarantee Agreement at the
         request or direction of any Holder, unless such Holder shall have
         provided to the Trustee such adequate security and indemnity as would
         satisfy a reasonable person in the position of the Trustee, against the
         costs, expenses (including attorneys' fees and expenses) and
         liabilities that might be incurred by it in complying with such request
         or direction, including such reasonable advances as may be requested by
         the Trustee; provided that nothing contained in this Section 3.02(a)(v)
         shall be taken to relieve the Trustee, upon the occurrence of an Event
         of Default, of its obligation to exercise the rights and powers vested
         in it by this Guarantee Agreement;

                  (vi) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, other evidence of indebtedness
         or other paper or document, but the Trustee, in its discretion, may
         make such further inquiry or investigation into such facts or matters
         as it may see fit;

                  (vii) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys, and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder; and

                  (viii) whenever in the administration of this Guarantee
         Agreement the Trustee shall deem it desirable to receive instructions
         with respect to enforcing any remedy or right or taking any other
         action hereunder, the Trustee (i) may request instructions from the
         Holders, (ii) may refrain from enforcing such remedy or right or taking
         such other action until such instructions are received, and (iii) shall
         be protected in acting in accordance with such instructions.

         (b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Trustee shall be construed to be a duty.

         SECTION 3.03.     Compensation; Fees; Indemnity.
                           -----------------------------

         The Guarantor agrees:

         (a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);

         (b) except as otherwise expressly provided herein, to reimburse the
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Guarantee Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and

         (c) to indemnify the Trustee for, and to hold the Trustee harmless
against, any and all loss, damage, claims, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Guarantee Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.

The provisions of this Section 3.03 shall survive the termination of this
Guarantee Agreement.

                                   ARTICLE IV

                                     TRUSTEE

         SECTION 4.01.     Trustee; Eligibility.
                           --------------------

         (a) There shall at all times be a Trustee which shall:

                  (i) not be an Affiliate of the Guarantor; and

                  (ii) be a corporation organized and doing business under the
         laws of the United States of America or any State or Territory thereof
         or of the District of Columbia, or a corporation or Person permitted by
         the Securities and Exchange Commission to act as an institutional
         trustee under the Trust Indenture Act, authorized under such laws to
         exercise corporate trust powers, having a combined capital and surplus
         of at least 50 million U.S. dollars ($50,000,000), and subject to
         supervision or examination by Federal, State, Territorial or District
         of Columbia authority. If such corporation publishes reports of
         condition at least annually, pursuant to law or to the requirements of
         the supervising or examining authority referred to above, then, for the
         purposes of this Section 4.01(a)(ii), the combined capital and surplus
         of such corporation shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published.

         (b) If at any time the Trustee shall cease to be eligible to so act
under Section 4.01(a), the Trustee shall immediately resign in the manner and
with the effect set out in Section 4.02(c).

         (c) If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the rights of the Trustee under the
penultimate paragraph thereof.

         SECTION 4.02.     Appointment, Removal and Resignation of Trustee.
                           -----------------------------------------------

         (a) Subject to Section 4.02(b), the Trustee may be appointed or removed
without cause at any time by the Guarantor.

         (b) The Trustee shall not be removed until a Successor Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Trustee and delivered to the Guarantor.

         (c) The Trustee appointed to office shall hold office until a Successor
Trustee shall have been appointed or until its removal or resignation. The
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trustee and delivered to the Guarantor and the
resigning Trustee.

         (d) If no Successor Trustee shall have been appointed and accepted
appointment as provided in this Section 4.02 within 60 days after delivery to
the Guarantor of an instrument of resignation, the resigning Trustee may
petition any court of competent jurisdiction for appointment of a Successor
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Trustee.

                                    ARTICLE V

                                    GUARANTEE

         SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Guarantor
may have or assert against any Person. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Trust to pay such amounts to the
Holders.

         SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Trust or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

         SECTION 5.03. Obligations Not Affected. The obligation of the Guarantor
to make the Guarantee Payments under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:

         (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Trust;

         (b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Junior Subordinated Notes permitted by the Indenture);

         (c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;

         (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;

         (e) any invalidity of, or defect or deficiency in, the Preferred
Securities;

         (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

         (g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

         There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

         SECTION 5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Trustee to be held
for the benefit of the Holders; (ii) the Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee in respect of this Guarantee Agreement or exercising any trust or
power conferred upon the Trustee under this Guarantee Agreement, provided that
such direction shall not be in conflict with any rule of law or with this
Guarantee Agreement, and could not involve the Trustee in personal liability in
circumstances where reasonable indemnity would not be adequate; and (iv) any
Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against or requesting or directing that action be taken by the
Trustee or any other Person; it being understood and intended that no one or
more of such Holders shall have any right in any manner whatsoever by virtue of,
or by availing of, any provision of this Guarantee Agreement to affect, disturb
or prejudice the rights of any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Guarantee Agreement, except in the manner herein provided and
for the equal and ratable benefit of all of such Holders.

         SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication) or upon the distribution of Junior Subordinated Notes to the
Holders in exchange for all of the Preferred Securities.

         SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Trust in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

         SECTION 5.07. Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Trust with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.

                                   ARTICLE VI

                                  SUBORDINATION

         SECTION 6.01. Subordination. This Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor, including
the Junior Subordinated Notes, except those obligations or liabilities made pari
passu or subordinate by their terms, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference securities of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor.

                                   ARTICLE VII

                                   TERMINATION

         SECTION 7.01. Termination. This Guarantee Agreement shall terminate and
be of no further force and effect upon: (i) full payment of the Redemption Price
of all Preferred Securities, (ii) the distribution of Junior Subordinated Notes
to the Holders in exchange for all of the Preferred Securities, or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Preferred Securities or under this Guarantee Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         SECTION 8.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger, conveyance, transfer, or lease
involving the Guarantor that is permitted under Article Eight of the Indenture,
the Guarantor shall not assign its obligations hereunder.

         SECTION 8.02. Amendments. Except with respect to any changes which do
not materially and adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than 66-2/3% in
liquidation amount of all the outstanding Preferred Securities. The provisions
of Article Six of the Trust Agreement concerning meetings of Holders shall apply
to the giving of such approval.

         SECTION 8.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:

         (a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Trustee and the
Holders:

                           Georgia Power Company
                           241 Ralph McGill Boulevard, N.E.
                           Atlanta, Georgia  30308-3374
                           Facsimile No.: (404) 526-2945
                           Attention:  Corporate Secretary

                           with copy to:

                           Southern Company Services, Inc.
                           270 Peachtree Street, N.W.
                           Atlanta, Georgia 30303
                           Facsimile No.:   (404) 506-0674
                           Attention:  Corporate Finance Department

         (b) if given to the Trust, in care of the Trustee, or to the Trustee at
the Trust's (and the Trustee's) address set forth below or such other address as
the Trustee on behalf of the Trust may give notice to the Holders:

                           Georgia Power Capital Trust X
                           c/o JPMorgan Chase Bank
                           4 New York Plaza, 15th Floor
                           New York, New York 10004
                           Attn:  Corporate Trustee Administration Department

         (c) if given to any Holder, at the address set forth on the books and
records of the Trust.

         All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

         SECTION 8.04. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.

     SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:

         (a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.01;

         (b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;

         (c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;

         (d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;

         (e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;

         (f) a reference to the singular includes the plural and vice versa; and

         (g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.

         SECTION 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY
WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN
ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER, OR THAT THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY
INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED
IN OR BY SUCH COURTS. THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN
THIS GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.

         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

<PAGE>

         THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.

               GEORGIA POWER COMPANY

               By:
                    --------------------------------
               Name:
               Title:

               JPMORGAN CHASE BANK

               By:
                    --------------------------------
               Name:
               Title:Exhibit 10.28

                                    AGREEMENT

     This AGREEMENT, dated as of June 4, 2003 (the "Agreement"), is by and among
The Reader's Digest Association, Inc., a Delaware corporation (the "Company"),
and the entities listed on Schedule A hereto (collectively, the "H Entities").

     WHEREAS, the H Entities are the beneficial owners of shares of common
stock, par value $0.01 per share, of the Company (the "Common Stock"); and

     WHEREAS, the Company has agreed, among other matters, to (1) increase the
size of the Board of Directors of the Company (the "Board") initially from nine
(9) to ten (10) members, (2) appoint William E. Mayer to the Board to fill the
vacancy resulting therefrom and (3) thereafter, add one other new director to
the Board to be selected by the Compensation and Nominating Committee (the
"Nominating Committee") of the Board; and

     WHEREAS, the H Entities have agreed to refrain from submitting any
stockholder proposal or director nominations at the Company's 2003 Annual
Meeting of Stockholders ("2003 Annual Meeting") and, among other things, to vote
for the election of the Company's nominees for directors for a specified period;
and

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

                                       I.

                                 REPRESENTATIONS

     1.1  AUTHORITY; BINDING AGREEMENT.  The Company hereby represents that this
Agreement has been duly authorized, executed and delivered by it, and is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms.  Each of the H Entities represents and warrants that
this Agreement has been duly authorized, executed and delivered by such H
Entity, and is a valid and binding obligation of such H Entity, enforceable
against such H Entity in accordance with its terms.

     1.2  SHARE OWNERSHIP.  The H Entities hereby represent and warrant that, as
of the date hereof, they and their Affiliates and Associates (as such terms are
hereinafter defined) are, collectively, the "beneficial owners" (as such term is
hereinafter defined) of an aggregate of 8,327,431 shares of Common Stock (the
"Shares"), and that neither they nor their Affiliates or Associates beneficially
own, or have any rights, options or agreements to acquire or vote, any other
shares of Common Stock.

     1.3  DEFINED TERMS.

     For purposes of this Agreement:

     (a) "Affiliate" and "Associate" have the respective meanings set forth in
Rule 12b-2 promulgated by the Securities and Exchange Commission (the "SEC")
under the

<PAGE>

Securities Exchange Act of 1934, as amended (the "Exchange Act"). For purposes
of this Agreement, the H Entities acknowledge that Richard L. Grubman and
Jonathon S. Jacobson are Affiliates.

     (b) The terms "beneficial owner" and "beneficially own" have the same
meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange
Act, except that a person will also be deemed to be the beneficial owner of all
shares of Common Stock which such person has the right to acquire pursuant to
the exercise of any rights in connection with any securities or any agreement,
regardless of when such rights may be exercised and whether they are
conditional.

     (c) The "Standstill Period" means the period from the date of this
Agreement through June 4, 2004. If the Company (1) amends its By-laws or (2)
advances the date of the Company's 2004 Annual Meeting of Stockholders, and
either of such actions has the effect of advancing the final date by which a
notice of director nomination or other business must be submitted to the Company
under the Company's By-laws to be considered at the Company's 2004 Annual
Meeting of Stockholders (the "Notice Deadline") to a date earlier than July 4,
2004, then the Company shall (A) give written notice to the H Entities of such
amendment or advancement no later than two business days following the approval
of the action by the Board and (B) extend the Notice Deadline for the H Entities
to submit a notice of nomination or other business that otherwise meets the
requirements under the Company's By-laws to July 4, 2004.

                                      II.

                                   COVENANTS

     2.1  DIRECTORS.

     (a) APPOINTMENT OF NEW DIRECTOR. The Company agrees that at the next
regularly scheduled meeting of the Board on June 13, 2003, the Board will:

          (1) increase the size of the Board to ten (10) members and appoint
     William E. Mayer to fill the newly created directorship on the Board as a
     member of the class of directors with terms expiring at the 2003 Annual
     Meeting (each, a "Class 1 Director"); and

          (2) appoint Mr. Mayer to the Corporate Governance Committee and the
     Nominating Committee of the Board.

Mr. Mayer's appointment to the Board and these Committees will be effective from
and after June 13, 2003. At such time as Mr. Mayer becomes a director of the
Company, he will agree to be bound by the terms and conditions of the Company's
policies applicable to directors including, without limitation, the Company's
Ethical, Legal and Business Conduct Policies; Guidelines on Governance;
Guidelines for Compliance With Responsibilities Under the United States Federal
Securities Laws--Transactions in Securities by Directors and Reporting Officers;
and the policy for reimbursement of expenses.

                                      -2-

<PAGE>

     (b) NOMINATION.  The Company agrees to nominate Mr. Mayer for election as a
Class 1 Director at its 2003 Annual Meeting and to solicit votes for his
election in the same manner as votes are solicited for other Class 1 Directors.

     (c) ADDITIONAL DIRECTOR.  The Nominating Committee will undertake a search
for, and no later than the 2003 Annual Meeting, will appoint, one director to
the Board in addition to Mr. Mayer (the "Additional Director"). In reviewing
candidates, the Nominating Committee will take into account the candidates
suggested by the H Entities. The Nominating Committee will undertake the search
promptly, but will take no formal action with respect to a candidate before Mr.
Mayer becomes a member of the Nominating Committee. The Additional Director may
be appointed to any one of the three classes of the Board, as deemed appropriate
by the Nominating Committee and in light of the requirement that no classes vary
in size by more than one director.

     2.2  VOTING.

     (a) 2003 ANNUAL MEETING. The H Entities, together with their Affiliates and
Associates, will not submit any stockholder proposal (pursuant to Rule 14a-8 or
otherwise), or any notice of nomination or other business under the Company's
By-laws, and will not nominate or oppose directors for election at the 2003
Annual Meeting. The H Entities will cause all shares of Common Stock
beneficially owned by them, and their Affiliates or Associates, as of the record
date for the 2003 Annual Meeting, to be present for quorum purposes and to be
voted, at the 2003 Annual Meeting or at any adjournments or postponements
thereof, in favor of (1) the directors nominated by the Board for election at
the 2003 Annual Meeting and (2) any other matter brought before the 2003 Annual
Meeting upon the recommendation of the Board by a unanimous vote of those
members voting; provided, however, that this provision will not restrict the H
Entities from voting as they deem appropriate in the exercise of their fiduciary
duty with respect to a merger, tender offer, reorganization, recapitalization,
sale of assets or other similar transaction which is submitted for stockholder
approval at such meeting (it being understood that to the extent any such
proposal includes the proposed election of an alternate slate of directors in
lieu of those nominated by the Company, the H Entities, together with their
Affiliates and Associates, will in all events be required to vote in favor of
the Company's nominees).

     (b) OTHER MEETINGS. During the Standstill Period, the H Entities will cause
all of the shares of Common Stock beneficially owned by them, and/or their
Affiliates or Associates, as of the record date for any other meeting of
stockholders of the Company, to be present for quorum purposes and to be voted,
at such meeting or at any adjournments or postponements thereof, in favor of any
matter brought before such meeting upon the recommendation of the Board by a
unanimous vote of those members voting; provided, however, that this provision
will not restrict the H Entities from voting as they deem appropriate in the
exercise of their fiduciary duty with respect to a merger, tender offer,
reorganization, recapitalization, sale of assets or other similar transaction
which is submitted for stockholder approval at such meeting (it being understood
that to the extent any such proposal includes the proposed election of an
alternate slate of directors in lieu of directors nominated by the Company, the
H Entities, together with their Affiliates and Associates, will in all events be
required to vote in favor of the Company's nominees).

                                      -3-

<PAGE>

     2.3  LIMIT ON STOCK OWNERSHIP.

     Each of the H Entities covenants and agrees that until the expiration of
the Standstill Period, neither it nor any of its Affiliates or Associates will,
without the prior written consent of the Company, directly or indirectly,
purchase or cause to be purchased or otherwise acquire or agree to acquire, or
become or agree to become the beneficial owner of, any Common Stock or other
securities issued by the Company, or any securities convertible into or
exchangeable for Common Stock or any other equity securities of the Company, if
in any such case immediately after the taking of such action the H Entities,
together with their Affiliates and Associates, would, in the aggregate,
beneficially own more than 10% of the then outstanding shares of Common Stock.

     2.4  OTHER ACTIONS BY THE H ENTITIES.

     Each of the H Entities agrees that, during the Standstill Period, neither
it nor any of its Affiliates or Associates will, without the written consent of
the Company, directly or indirectly:

     (a) form, join in or in any other way participate in a "partnership,
limited partnership, syndicate or other group" within the meaning of Section
13(d)(3) of the Exchange Act with respect to the Common Stock or deposit any
shares of Common Stock in a voting trust or similar arrangement or subject any
shares of Common Stock to any voting agreement or pooling arrangement, other
than solely with other H Entities or one or more Affiliates of an H Entity with
respect to the Shares or pursuant to this Agreement;

     (b) solicit proxies or written consents of stockholders, or otherwise
conduct any nonbinding referendum with respect to Common Stock, or make, or in
any way participate in, any "solicitation" of any "proxy" to vote any shares of
Common Stock with respect to any matter, or become a "participant" in any
contested solicitation for the election of directors with respect to the Company
(as such terms are defined or used under the Exchange Act);

     (c) seek to call, or to request the call of, a special meeting of the
stockholders of the Company, or seek to make, or make, a stockholder proposal at
any meeting of the stockholders of the Company or make a request for a list of
the Company's stockholders; or

     (d)  publicly disclose, or cause or facilitate the public disclosure
(including without limitation the filing of any document or report with the SEC
or any other governmental agency or any disclosure to any journalist, member of
the media or securities analyst) of any intent, purpose, plan or proposal to
obtain any waiver, or consent under, or any amendment of, any provision of this
Agreement, or otherwise seek (in any manner that would require public disclosure
by any of the H Entities or its Affiliates or Associates) to obtain any waiver,
or consent under, or any amendment of, any provision of this Agreement.

     2.5  PUBLICITY.

     (a) Promptly after the execution of this Agreement, the Company will issue
a press release in the form attached hereto as Schedule B.

                                      -4-

<PAGE>

     (b) Neither the Company nor any of the H Entities, nor any of their
respective Affiliates or Associates will, directly or indirectly, make or issue
or cause to be made or issued any disclosure, announcement or statement
(including without limitation the filing of any document or report with the SEC
or any other governmental agency or any disclosure to any journalist, member of
the media or securities analyst) concerning the other party or any of its
respective past, present or future general partners, directors, officers or
employees, which disparages any of such party's respective past, present or
future general partners, directors, officers or employees as individuals
(recognizing that each party will be free to comment in good faith regarding the
business of the other party, provided any such comment shall not otherwise
violate the terms of this Agreement).

                                      III.

                                OTHER PROVISIONS

     3.1  REMEDIES.

     (a) Each party hereto hereby acknowledges and agrees, on behalf of itself
and its Affiliates and Associates, that irreparable harm would occur in the
event any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties will be entitled to specific relief hereunder, including,
without limitation, an injunction or injunctions to prevent and enjoin breaches
of the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any state or federal court in the State of Delaware, in
addition to any other remedy to which they may be entitled at law or in equity.
Any requirements for the securing or posting of any bond with such remedy are
hereby waived.

     (b) Each party hereto agrees, on behalf of itself and its Affiliates and
Associates, that any actions, suits or proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby will be brought solely
and exclusively in the courts of the State of Delaware and/or the courts of The
United States of America located in the State of Delaware (and the parties agree
not to commence any action, suit or proceeding relating thereto except in such
courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in
Section 3.3 will be effective service of process for any such action, suit or
proceeding brought against any party in any such court. Each party, on behalf of
itself and its Affiliates and Associates, irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby, in the courts of
the State of Delaware or The United States of America located in the State of
Delaware, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in any inconvenient forum.

                                      -5-

<PAGE>

     3.2  ENTIRE AGREEMENT.

     This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof and may be amended only by an agreement in
writing executed by the parties hereto.

     3.3  NOTICES.

     All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, if (a) given by
telecopy, when such telecopy is transmitted to the telecopy number set forth
below and the appropriate confirmation is received or (b) if given by any other
means, when actually received during normal business hours at the address
specified in this subsection:

     if to the Company:      The Reader's Digest Association, Inc.
                             Reader's Digest Road
                             Pleasantville, NY 10570
                             Facsimile:  (914) 244-5644
                             Attention:  Michael A. Brizel, Senior Vice
                                         President and General Counsel

     with a copy to:         Wachtell, Lipton, Rosen & Katz
                             51 W. 52nd Street
                             New York, NY 10019
                             Attention:  Patricia A. Vlahakis

     if to the H Entities:   Highfields Capital Management LP
                             200 Clarendon Street
                             51st Floor
                             Boston, MA  02493
                             Facsimile:  (617) 850-7501
                             Attention:  Joseph F. Mazzella, General Counsel

     with a copy to:         Goodwin Procter LLP
                             Exchange Place
                             Boston, Massachusetts  02109
                             Facsimile:  (617) 523-1231
                             Attention:  Joseph L. Johnson III, P.C.

     3.4  GOVERNING LAW.

     This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to any
conflict of laws provisions thereof.

                                      -6-

<PAGE>

     3.5  COUNTERPARTS.

     This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

                                      -7-

<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
or caused the same to be executed by its duly authorized representative as of
the date first above written.

                           THE READER'S DIGEST ASSOCIATION, INC.

                           By: /s/ MICHAEL A. BRIZEL
                           -----------------------------------------------------
                           Name:  Michael A. Brizel
                           Title: Senior Vice President & General Counsel

                           HIGHFIELDS CAPITAL I LP
                           By: Highfields Associates LLC, its General Partner

                           /s/ RICHARD L. GRUBMAN
                           -----------------------------------------------------
                           By: Richard L. Grubman
                           Title: Managing Member

                           HIGHFIELDS CAPITAL II LP
                           By: Highfields Associates LLC, its General Partner

                           /s/ RICHARD L. GRUBMAN
                           -----------------------------------------------------
                           By: Richard L. Grubman
                           Title: Managing Member

                           HIGHFIELDS CAPITAL LTD
                           By: Highfields Capital Management LP, its
                           Investment Manager

                           /s/ RICHARD L. GRUBMAN
                           -----------------------------------------------------
                           By: Highfields GP LLC
                           By: Richard L. Grubman
                           Title: Managing Member

                                      -8-

<PAGE>

                           HIGHFIELDS ASSOCIATES LLC

                           /s/ RICHARD L. GRUBMAN
                           -----------------------------------------------------
                           By: Richard L. Grubman
                           Title: Managing Member

                           HIGHFIELDS CAPITAL MANAGEMENT LP
                           By: Highfields GP LLC, its General Partner

                           /s/ RICHARD L. GRUBMAN
                           -----------------------------------------------------
                           By: Richard L. Grubman
                           Title: Managing Member

                                      -9-

<PAGE>

                                   SCHEDULE A

                Highfields Capital I LP

                Highfields Capital II LP

                Highfields Capital Ltd.

                Highfields Associates LLC

                Highfields Capital Management LP

                Highfields GP LLC

<PAGE>

                                   SCHEDULE B

THE READER'S DIGEST ASSOCIATION, INC.
Media: William Adler, (914) 244-7585  william.adler@rd.com
Investor Relations: Richard Clark, (914) 244-5425  richard.clark@rd.com

              READER'S DIGEST TO APPOINT WILLIAM E. MAYER TO BOARD

     PLEASANTVILLE, NY, June 4, 2003 -- The Reader's Digest Association, Inc.
(NYSE: RDA) today announced that it will appoint William E. Mayer to the
company's Board of Directors at the Board's June 13, 2003 meeting. Mr. Mayer,
63, is the founder and co-senior partner of Park Avenue Equity Partners, L.P., a
private equity fund that invests in mid-size companies by providing growth or
strategic transaction capital. Mr. Mayer previously served as president, chief
executive officer and managing director of The First Boston Corporation (now
Credit Suisse First Boston). He has also been professor and dean of the College
of Business and Management of the University of Maryland and dean of the William
E. Simon Graduate School of Business Administration at the University of
Rochester (New York). He currently serves on the boards of directors of First
Health Group Corp., Lee Enterprises, Incorporated and Technoserve and is also a
trustee of the Liberty Group of Mutual Funds, Chairman of the Aspen Institute
and a trustee of the University of Maryland. He holds B.S. and M.B.A. degrees
from the University of Maryland. Mr. Mayer will join the class of directors of
the company that stands for reelection at the company's November 2003 annual
meeting of stockholders. Mr. Mayer will also join the company's Compensation and
Nominating Committee and its Corporate Governance Committee.

(Photo: http://www.newscom.com/cgi-bin/prnh/20030604/NYW141)

     James E. Preston, Chairman of the company's Nominating Committee said, "We
are pleased to add a candidate of Bill Mayer's financial expertise and business
experience as an additional independent member of the Reader's Digest
Board."

     Mr. Mayer's appointment is the result of an agreement between the company
and Highfields Capital Management LP, which owns approximately 8.5 percent of
the outstanding common stock of the company. Also under the terms of the
agreement, the

<PAGE>

                                       2

Nominating Committee will review a range of candidates and appoint another new
director by the company's November 2003 annual meeting of stockholders. The
agreement provides that for a period of one year from the date of the agreement,
Highfields, among other things: (1) will vote its shares in favor of the
individuals who are nominated by the Nominating Committee for election to the
Board, (2) will not engage in any proxy solicitation with respect to the
company, and (3) will not increase its beneficial ownership of the company's
common stock to more than 10%.

     The Reader's Digest Association, Inc. is a global publisher and direct
marketer of products that inform, enrich, entertain and inspire people of all
ages and cultures around the world. Global headquarters are located at
Pleasantville, New York. The company's main Web site is at www.rd.com.

     This release may include "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
inherently involve risks and uncertainties that could cause actual future
results and occurrences to differ materially from the forward-looking
statements. The Reader's Digest Association, Inc.'s filings with the Securities
and Exchange Commission, including its reports on Forms 10-K, 10-Q and 8-K,
contain a discussion of additional factors that could affect future results and
occurrences. Reader's Digest does not undertake to update any forward-looking
statements.

                                       ###

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