Document:

Form of Subordinated Note

THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. THIS SECURITY
IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITORY OR ITS NOMINEE, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A
TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
THIS NOTE IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT
AN OBLIGATION OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF
BANK OF AMERICA CORPORATION AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

REGISTERED                                                                               
$500,000,000

NUMBER R-1                                                                               
CUSIP 060505 BD5

                                                                                                       
ISIN No. US 060505 BD57

BANK OF AMERICA CORPORATION

4 3⁄4 % SUBORDINATED NOTE, DUE 2013

            BANK
OF AMERICA CORPORATION, a Delaware corporation (herein called the "Corporation,"
which term includes any successor corporation under the Indenture referred
to on the reverse hereof), for value received, hereby promises to pay to
CEDE & CO., or registered assigns, the principal sum of FIVE HUNDRED
MILLION DOLLARS ($500,000,000) on August 15, 2013 and to pay interest on
said principal sum, semi-annually in arrears on February 15 and August
15 of each year, at the rate of 4 3⁄4% per annum, commencing February
15, 2004, or unless no interest has been paid on the Notes, in which case
from July 22, 2003, until payment of such principal sum has been made or
duly provided for. Notwithstanding the foregoing, if the date hereof is
after a record date for the Notes, (which shall be the close of business
on the last day of the calendar month next preceding an interest payment
date), this Note shall bear interest from such interest payment date; provided,
however, that if the Corporation shall default in the payment of interest
due on such interest payment date, then this Note shall bear interest from
the next preceding interest payment date to which interest has been paid,
or, if no interest has been paid on the Notes, from July 22, 2003. Interest
on this Note will accrue from the original issue date specified above until
the principal amount is paid and will be computed utilizing a day count
fraction of 30-day months and 360-day years. Interest payments will equal
the amount of interest accrued from, and including, the preceding interest
payment date in respect of which interest has been paid or duly provided
for (or from, and including, the original issue date specified above, if
no interest has been paid or duly provided for) to, but excluding, the
interest payment date or the maturity date, as the case may be. If the
maturity date or an interest payment date falls on a day which is not a
Business Day as defined below, principal of or interest payable with respect
to such maturity date or interest payment date will be paid on the succeeding
Business Day with the same force and effect as if made on such maturity
date or interest payment date, as the case may be. The interest so payable,
and punctually paid or duly provided for, on any interest payment date
will, as provided in such Indenture, be paid to the person in whose name
this Note (or one or more predecessor Notes evidencing all or a portion
of

 

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the same debt as this Note) is registered at the close of business on
the record date for such interest payment date.

       The principal of and interest on
this Note are payable in immediately available funds in such coin or currency
of the United States as at the time of payment is legal tender for payment
of public and private debts, at the office or agency of the Corporation
in New York or such other places that the Corporation shall designate as
provided in such Indenture; provided, however, that interest may be paid,
at the option of the Corporation, by check mailed to the person entitled
thereto at his address last appearing on the registry books of the Corporation
relating to the Notes. Notwithstanding the preceding sentence, payments
of principal of and interest payable on the maturity date will be made
by wire transfer of immediately available funds to a designated account
maintained in London upon (i) receipt of written notice by the Issuing
and Paying Agent (as described on the reverse hereof) from the registered
holder hereof not less than one Business Day prior to the due date of such
principal and (ii) presentation of this Note to the Issuing and Paying
Agent, at The Bank of New York, 101 Barclay Street, New York, New York
10286. Any interest not punctually paid or duly provided for shall be payable
as provided in such Indenture. As used herein, "Business Day" means any
weekday that is not a legal holiday in New York, New York, Charlotte, North
Carolina or Luxembourg and is not a day on which banking institutions in
those cities are authorized or required by law or regulation to be closed.

       Reference is made to the further
provisions of this Note set forth on the reverse hereof, which shall have
the same effect as though fully set forth at this place.

        Unless the certificate of
authentication hereon has been executed by the Trustee or by an authenticating
agent on behalf of the Trustee by manual signature, this Note shall not
be entitled to any benefit under such Indenture or be valid or obligatory
for any purpose.

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       IN WITNESS WHEREOF, the Corporation
has caused this Note to be duly executed, by manual or facsimile signature,
under its corporate seal or a facsimile thereof.

                                                                      
BANK OF AMERICA CORPORATION

                                                                      
By: _______________________________

[SEAL]                                                          
Title: Senior Vice President

ATTEST:

By:______________________

          Assistant Secretary

 

 

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CERTIFICATE OF AUTHENTICATION

        This is one of the Securities
of the series designated therein referred to in the within-mentioned Indenture.

Dated: July 22, 2003

                                                                               
THE BANK OF NEW YORK,

                                                                                
as Trustee

                                                                               
By:__________________________

                                                                                          
Authorized Signatory

 

 

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4

 

 

[Reverse of Note]

BANK OF AMERICA CORPORATION

4 3⁄4% SUBORDINATED NOTE, DUE 2013

           This Note
is one of a duly authorized series of Securities of the Corporation unlimited
in aggregate principal amount issued and to be issued under an Indenture
dated as of January 1, 1995 (herein called the "Indenture"), between the
Corporation (successor to NationsBank Corporation) and The Bank of New
York, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), as supplemented by a First Supplemental
Indenture dated as of August 28, 1998, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Corporation, the Trustee and the holders of the
Notes, and the terms upon which the Notes are, and are to be, authenticated
and delivered. The series of which this Note is a part also is designated
as the Corporation's 4 3⁄4% Subordinated Notes, due 2013 (herein called
the "Notes"), initially in the principal amount of $500,000,000. The amount
of Notes of this series may be increased by the Corporation in the future.
The Trustee initially shall act as Security Registrar and Authenticating
and Issuing and Paying Agent in connection with the Notes.

        THE INDEBTEDNESS OF THE CORPORATION
EVIDENCED BY THE NOTES, INCLUDING THE PRINCIPAL THEREOF AND INTEREST THEREON,
IS, TO THE EXTENT AND IN THE MANNER SET FORTH IN THE INDENTURE, SUBORDINATE
AND JUNIOR IN RIGHT OF PAYMENT TO ITS OBLIGATIONS TO HOLDERS OF SENIOR
INDEBTEDNESS, AS DEFINED IN THE INDENTURE, AND EACH HOLDER OF THE NOTES,
BY THE ACCEPTANCE HEREOF, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS
OF THE INDENTURE.

        This Note is not subject
to any sinking fund.

        Except in those situations
in which the Corporation may become obligated to pay additional amounts
(as described herein), the Notes of this series are not subject to redemption
at the option of the Corporation or repayment at the option of the holder
prior to maturity.

        The provisions of Article
Fourteen of the Indenture do not apply to Securities of this Series.

        Subject to the exemptions
and limitations set forth below, the Corporation will pay additional amounts
to the beneficial owner of this Note that is a non-United States person
in order to ensure that every net payment on such Note will not be less,
due to payment of United States withholding tax, than the amount then due
and payable. For this purpose, a "net payment" on the Note means a payment
by the Corporation or any paying agent, including payment of principal
and interest, after deduction for any present or future tax, assessment
or other governmental charge of the United States. These additional amounts
will constitute additional interest on the Note.

        The Corporation will not
be required to pay additional amounts, however, in any of the circumstances
described in items (1) through (13) below.

 

 

 

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5

         (1) Additional amounts
will not be payable if a payment on the Note is reduced as a result of
any tax, assessment, or other governmental charge that is imposed or withheld
solely by reason of the beneficial owner of the Note:

	
having a relationship with the United States as a citizen, resident, or
otherwise;

	
having had such a relationship in the past; or

	
being considered as having had such a relationship.

        (2) Additional amounts will
not be payable if a payment on the Note is reduced as a result of any tax,
assessment, or other governmental charge that is imposed or withheld solely
by reason of the beneficial owner of the Note:

	
being treated as present in or engaged in a trade or business in the United
States;

	
being treated as having been present in or engaged in a trade or business
in the United States in the past;

	
having or having had a permanent establishment in the United States; or

	
having or having had a qualified business unit which has the U.S. dollar
as its functional currency.

          (3) Additional amounts
will not be payable if a payment on the Note is reduced as a result of
any tax, assessment, or other governmental charge that is imposed or withheld
solely by reason of the beneficial owner of the Note being or having been
a:

	
personal holding company;

	
foreign personal holding company;

	
foreign private foundation or other foreign tax-exempt organization;

	
passive foreign investment company;

	
controlled foreign corporation; or

	
corporation which has accumulated earnings to avoid U.S. federal income
tax.

         (4) Additional amounts
will not be payable if a payment on the Note is reduced as a result of
any tax, assessment, or other governmental charge that is imposed or withheld
solely by reason of the beneficial owner of the Note owning or having owned,
actually or constructively, 10% or more of the total combined voting power
of all classes of the Corporation's stock entitled to vote;
         (5) Additional amounts
will not be payable if a payment on the Note is reduced as a result of
any tax, assessment, or other governmental charge that is imposed or withheld
solely by

 

 

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6

reason of the beneficial owner of the Note being a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of business.

       For purposes of items (1) through
(5) above, "beneficial owner" includes a fiduciary, settlor, partner, member,
shareholder, or beneficiary of the holder if the holder is an estate, trust,
partnership, limited liability company, corporation, or other entity, or
a person holding a power over an estate or trust administered by a fiduciary
holder.

      (6) Additional amounts will not be payable
to any beneficial owner of the Note that is:

	
a fiduciary;

	
a partnership;

	
a limited liability company;

	
another fiscally transparent entity; or

	
not the sole beneficial owner of the Note, or any portion of the Note.

            
However, this exception to the obligation to pay additional amounts will
apply only to the extent that a beneficiary or settlor in relation to the
fiduciary, or a beneficial owner, partner, or member of the partnership,
limited liability company, or other fiscally transparent entity, would
not have been entitled to the payment of an additional amount had the beneficiary,
settlor, partner, beneficial owner, or member received directly its beneficial
or distributive share of the payment.
         (7) Additional amounts
will not be payable if a payment on the Note is reduced as a result of
any tax, assessment, or other governmental charge that is imposed or withheld
by reason of the failure of the beneficial owner of the Note or any other
person to comply with applicable certification, identification, documentation
or other information reporting requirements. This exception to the obligation
to pay additional amounts will apply only if compliance with such reporting
requirements is required as a precondition to exemption from such tax,
assessment, or other governmental charge by statute or regulation of the
United States or by an applicable income tax treaty to which the United
States is a party.
        (8) Additional amounts will
not be payable if a payment on the Note is reduced as a result of any tax,
assessment, or other governmental charge that is collected or imposed by
any method other than by withholding from a payment on the Note by the
Corporation or any paying agent.

        (9) Additional amounts will
not be payable if a payment on the Note is reduced as a result of any tax,
assessment, or other governmental charge that is imposed or withheld by
reason of a change in law, regulation, or administrative or judicial interpretation
that becomes effective more than 15 days after the payment becomes due
or is duly provided for, whichever occurs later.

 

 

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        (10) Additional amounts will
not be payable if a payment on the Note is reduced as a result of any tax,
assessment, or other governmental charge that is imposed or withheld by
reason of the presentation by the beneficial owner of the Note for payment
more than 30 days after the date on which such payment becomes due or is
duly provided for, whichever occurs later.

        (11) Additional amounts will
not be payable if a payment on the Note is reduced as result of any:

	
estate tax;

	
inheritance tax;

	
gift tax;

	
sales tax;

	
excise tax;

	
transfer tax;

	
wealth tax;

	
personal property tax; or

	
any similar tax, assessment, or other governmental charge.

          (12) Additional
amounts will not be payable if a payment on the Note is reduced as a result
of any tax, assessment, or other governmental charge required to be withheld
by any paying agent from a payment of principal or interest on the Note
if such payment can be made without such withholding by any other paying
agent.
          (13) Additional
amounts will not be payable if a payment on the Note is reduced as a result
of any combination of items (1) through (12) above.

           The Notes
of this series may be redeemed at the option of the Corporation in whole,
but not in part, at any time, on giving not less than 30 nor more than
60 days' notice to the Trustee and the holders of the Notes, if the Corporation
has or may become obliged to pay additional amounts as a result of any
change in, or amendment to, the laws or regulations of the United States
or any political subdivision or any authority thereof or therein having
power to tax, or any change in the application or official interpretation
of such laws or regulations after the date of this Note.

           Prior to
the publication of any notice of redemption, the Corporation shall deliver
to the Trustee a certificate signed by the Chief Financial Officer or a
Senior Vice President of the Corporation stating that the Corporation is
entitled to effect such redemption and setting forth a statement of facts
showing the conditions precedent to the right to redeem.

 

 

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           Notes so
redeemed will be redeemed at 100% of their principal amount together with
interest accrued up to (but excluding) the date of redemption.

          As provided in
the Indenture and subject to certain limitations therein set forth, the
transfer of this Note may be registered on the Security Register or registry
books of the Corporation relating to the Notes, upon surrender of this
Note for registration of transfer at the office or agency of the Corporation
designated by it pursuant to the Indenture, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Corporation
and the Trustee or the Security Registrar duly executed by the registered
holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

        No service charge will be
made for any such registration of transfer or exchange, but the Corporation
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

         Prior to due presentment
for registration of transfer of this Note, the Corporation, the Trustee,
the Issuing and Paying Agent, and any agent of the Corporation may treat
the person in whose name this Note is registered as the absolute owner
hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this Note be overdue, and neither the
Corporation, the Trustee, the Issuing and Paying Agent nor any such agent
of the Corporation shall be affected by notice to the contrary.

        The Notes are issuable only
as registered Notes without coupons in denominations of $1,000 and any
integral multiple in excess thereof. As provided in the Indenture, and
subject to certain limitations therein set forth, the Notes are exchangeable
for a like aggregate principal amount of Notes of different authorized
denominations, as requested by the holder surrendering the same.

        As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this
Note may be registered on the registry books of the Corporation relating
to the Notes, upon surrender of this Note for registration of transfer
at the office or agency of the Corporation designated by it pursuant to
the Indenture, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Corporation and the Trustee or
the Security Registrar duly executed by, the registered holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

       No service charge will be made
for any such registration of transfer or exchange, but the Corporation
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

        Prior to due presentment
for registration of transfer of this Note, the Corporation, the Trustee,
the Issuing and Paying Agent, and any agent of the Corporation may treat
the person in whose name this Note is registered as the absolute owner
hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this Note be overdue, and

 

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9

neither the Corporation, the Trustee, the Issuing and Paying Agent nor
any such agent of the Corporation shall be affected by notice to the contrary.

       If an Event of Default (defined
in the Indenture as certain events involving the bankruptcy of the Corporation)
shall occur with respect to the Notes, the principal of all the Notes may
be declared due and payable in the manner and with the effect provided
in the Indenture. THERE IS NO RIGHT OF ACCELERATION PROVIDED IN THE INDENTURE
IN CASE OF A DEFAULT IN THE PAYMENT OF INTEREST OR THE PERFORMANCE OF ANY
OTHER COVENANT BY THE CORPORATION.

        The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the modification
of the rights and obligations of the Corporation and the rights of the
holders of the Notes under the Indenture at any time by the Corporation
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of the Notes then outstanding and all other Securities then outstanding
under the Indenture and affected by such amendment and modification. The
Indenture also contains provisions permitting the holders of a majority
in aggregate principal amount of the Notes then outstanding and all other
Securities then outstanding under the Indenture and affected thereby, on
behalf of the holders of all such Securities, to waive compliance by the
Corporation with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver
by the holder of this Note shall be conclusive and binding upon such holder
and upon all future holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.

       No reference herein to the Indenture
and no provision of this Note or of the Indenture shall alter or impair
the obligation of the Corporation, which is absolute and unconditional,
to pay the principal of and interest on this Note at the times, place,
and rate, and in the coin or currency, herein prescribed.

       No recourse shall be had for the
payment of the principal of or the interest on this Note, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect
of the Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer, or director, as such, past, present, or future, of
the Corporation or any predecessor or successor corporation, whether by
virtue of any constitution, statute, or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being, by
the acceptance hereof and as part of the consideration for issue hereof,
expressly waived and released.

        The Notes of this series
shall be dated the date of their authentication.

        All terms used in this Note
which are not defined herein, but are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

        If the Notes are to be issued
and outstanding pursuant to a book-entry system, the following paragraph
is applicable: The Notes are being issued by means of a book-entry system
with no physical distribution of certificates to be made except as provided
in the Indenture. The book-entry system maintained by The Depository Trust
Company ("DTC") will evidence

 

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10

ownership of the Notes, with transfers of ownership effected on the
records of DTC and its participants pursuant to rules and procedures established
by DTC and its participants. The Corporation will recognize Cede &
Co., as nominee of DTC, while the registered holder of the Notes, as the
owner of the Notes for all purposes, including payment of principal (premium,
if any) and interest, notices, and voting. Transfer of principal (premium,
if any) and interest to participants of DTC will be the responsibility
of DTC, and transfer of principal (premium, if any) and interest to beneficial
owners of the Notes by participants of DTC will be the responsibility of
such participants and other nominees of such beneficial owners. So long
as the book-entry system is in effect, the selection of any Notes to be
redeemed will be determined by DTC pursuant to rules and procedures established
by DTC and its participants. The Corporation will not be responsible or
liable for such transfers or payments or for maintaining, supervising,
or reviewing the records maintained by DTC, its participants, or persons
acting through such participants.

        Transfers of Notes outside
of the United States may be effected through the facilities of Clearstream
Banking, société anonyme, and Euroclear Bank, S.A./N.V.,
as operator of the Euroclear system, in accordance with the rules and procedures
established by such depositories.

 

 

 

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11

ABBREVIATIONS

        The following abbreviations,
when used in the inscription on the face of the within Note shall be construed
as though they were written out in full according to applicable laws or
regulations:

             
TEN COM-- as tenants in common

             
TEN ENT-- as tenants by the entireties

             
JT TEN-- as joint tenants with right of survivorship and not as tenants
in common

              
UNIF GIFT MIN ACT--............................Custodian..............................

                                                         
(Cust)                                    
(Minor)

                                                
Under Uniform Gifts to Minors Act

                                              
..........................................................

                                                                  
(State)

                                      
Additional abbreviations may also be used though not in the above list.

 

__________________________________
ASSIGNMENT

                           
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

[PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS

INCLUDING ZIP CODE, OF ASSIGNEE]

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

Please Insert Social Security or Other

          Identifying
Number of Assignee: ______________________________

the within Note and all rights thereunder, hereby irrevocably constituting
and appointing _____________________________________ Attorney to transfer
said Note on the books of the Corporation, with full power of substitution
in the premises.

Dated: _______________________                    
_________________________________________

NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Note in every particular, without
alteration or enlargement or any change whatever and must be guaranteed.EXHIBIT 4.1

                      RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                      THE READER'S DIGEST ASSOCIATION, INC.

          The Reader's Digest Association, Inc. (hereinafter called the
"Corporation"), a corporation organized and existing under the laws of the State
of Delaware, hereby certifies as follows:

          FIRST: The present name of the Corporation is The Reader's Digest
Association, Inc.

          SECOND: The Corporation was originally incorporated under the name of
R.D.A. (Delaware), Inc., and its original Certificate of Incorporation was filed
with the Secretary of State of the State of Delaware on December 21, 1951.

          THIRD: The provisions of the Certificate of Incorporation of the
Corporation as heretofore amended and supplemented, are hereby restated and
integrated into the single instrument which is hereinafter set forth, and which
is entitled Restated Certificate of Incorporation of The Reader's Digest
Association, Inc., without further amendment and without any discrepancy between
the provisions of the Certificate of Incorporation as heretofore amended and
supplemented and the provisions of the said single instrument hereinafter set
forth.

          FOURTH: The Board of Directors of the Corporation has duly adopted
this Restated Certificate of Incorporation pursuant to the provisions of Section
245 of the General Corporation Law of the State of Delaware in the form set
forth as follows:

                                    ARTICLE I

                               NAME OF CORPORATION

          The name of the Corporation is The Reader's Digest Association, Inc.,
hereinafter referred to as the "Corporation".

                                   ARTICLE II

                                REGISTERED OFFICE

          The registered office of the Corporation in the State of Delaware is
located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County
of New Castle. The name and address of the Corporation's registered agent is The
Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19808.

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                                   ARTICLE III

                              BUSINESS AND PURPOSE

          The nature of the business of the Corporation and the purposes
proposed to be transacted, promoted and carried on by it are to engage in any
lawful act or activity for which corporations may be organized under Title 8,
Chapter 1, of the Delaware Code.

                                   ARTICLE IV

                                AUTHORIZED SHARES

          The total number of shares which the Corporation shall be authorized
to issue is two hundred twenty-five million three hundred ninety thousand
(225,390,000) shares, of which forty thousand (40,000) shares shall be Preferred
Stock of the par value of One Dollar ($1.00) per share, one hundred twenty
thousand (120,000) shares shall be Second Preferred Stock of the par value of
One Dollar ($1.00) per share, two hundred thirty thousand (230,000) shares shall
be Third Subordinated Preferred Stock of the par value of One Dollar ($1.00) per
share, twenty-five million (25,000,000) shares shall be Preference Stock of the
par value of One Cent ($.01) per share, issuable in series and two hundred
million (200,000,000) shares shall be Common Stock of the par value of One Cent
($.01) per share. The designations and the powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations and restrictions of the shares of each such class of the capital
stock of the Corporation are as follows:

          (a) The holders of shares of Preferred Stock (sometimes called "First
Preferred Stock") shall be entitled to receive, when and as declared by the
Board of Directors, dividends thereon at the rate of Four Dollars ($4.00) per
share per annum and no more, payable in cash quarterly on the first days of
January, April, July and October in each year, accruing from the date of issue
of such shares. Such dividends shall be cumulative, so that if dividends on all
issued and outstanding shares of Preferred Stock (First Preferred Stock) at the
rate of Four Dollars ($4.00) per share per annum shall not have been paid or set
apart for payment for the current and all past quarterly dividend periods, the
deficiency shall be paid or set apart for payment before any distribution,
whether by way of dividends or otherwise, on the Second Preferred Stock or the
Third Subordinated Preferred Stock or the Preference Stock or the Common Stock
of the Corporation shall be declared or paid upon or set apart for payment and
before any Second Preferred Stock or any Third Subordinated Preferred Stock or
any Preference Stock or any Common Stock of the Corporation shall be purchased
by or for the account of the Corporation.

          (b) After all dividends on the Preferred Stock (First Preferred Stock)
for all past quarterly dividend periods have been paid or declared and a sum
sufficient for the payment thereof set apart, the holders of shares of Second
Preferred Stock shall be entitled to receive, when and as declared by the Board
of Directors, dividends thereon at the rate of Four Dollars ($4.00) per share
per annum and no more, payable in cash quarterly on the first days of January,

                                       2

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April, July and October in each year, accruing from the date of issue. Such
dividends shall be cumulative so that if dividends on all issued and outstanding
shares of Second Preferred Stock at the rate of Four Dollars ($4.00) per share
per annum shall not have been paid or set apart for payment for the current and
all past quarterly dividend periods, the deficiency shall be paid or set apart
for payment before any distribution, whether by way of dividends or otherwise,
on the Third Subordinated Preferred Stock or the Preference Stock or the Common
Stock of the Corporation shall be declared or paid upon or set apart for
payment, and before any Third Subordinated Preferred Stock or any Preference
Stock or any Common Stock of the Corporation shall be purchased by or for the
account of the Corporation.

          (c) After all dividends on the Second Preferred Stock for all past
quarterly dividend periods have been paid or declared and a sum sufficient for
the payment thereof set apart, the holders of shares of Third Subordinated
Preferred Stock shall be entitled to receive, when and as declared by the Board
of Directors, dividends thereon at the rate of Five Dollars ($5.00) per share
per annum and no more, payable in cash quarterly on the first days of January,
April, July and October in each year, accruing from the record date, in the case
of a stock dividend, and the date of issue in all other cases. Such dividends
shall be cumulative so that if dividends on all issued and outstanding shares of
Third Subordinated Preferred Stock at the rate of Five Dollars ($5.00) per share
per annum shall not have been paid or set apart for payment for the current and
all past quarterly dividend periods, the deficiency shall be paid or set apart
for payment before any distribution, whether by way of dividends or otherwise,
on the Preference Stock or the Common Stock shall be declared or paid upon or
set apart for payment, and before any Preference Stock or any Common Stock of
the Corporation shall be purchased by or for the account of the Corporation.

          (d) In the event of any liquidation, dissolution or winding-up of the
Corporation (whether voluntary or involuntary) the holders of the Preferred
Stock (First Preferred Stock) shall be entitled to receive and be paid the sum
of One Hundred Dollars ($100.00) for each share of such Preferred Stock together
with an amount equal to all accrued and unpaid dividends thereon before any sum
shall be paid to or any assets distributed among the holders of the Second
Preferred Stock or the Third Subordinated Preferred Stock or the Preference
Stock or the Common Stock and after the payment to the holders of the Preferred
Stock (First Preferred) of the sums stated, the remaining assets and funds of
the Corporation shall be divided among and paid to the holders of the Second
Preferred Stock and the Third Subordinated Preferred Stock and the Preference
Stock and the Common Stock of the Corporation.

          (e) In the event of any liquidation, dissolution or winding-up of the
Corporation (whether voluntary or involuntary) the holders of the Second
Preferred Stock shall be entitled to receive and be paid the sum of One Hundred
Dollars ($100.00) for each share of such Second Preferred Stock, together with
an amount equal to all accrued and unpaid dividends thereon before any sum shall
be paid to or any assets distributed among the holders of the Third Subordinated
Preferred Stock or the Preference Stock or the Common Stock of the Corporation;
provided, however, that no such payments shall be made unless the holders of any
shares of Preferred Stock (First Preferred Stock) which may be outstanding at
the time shall have received any sums to which they may be entitled in such
event. After payment to the holders of the Preferred Stock (First Preferred
Stock) of the sums stated in subparagraph (d) hereof, and

                                       3
<PAGE>

payment to the holders of the Second Preferred Stock of the sums stated in this
subparagraph (e) the remaining assets and funds of the Corporation shall be
divided among and paid to the holders of the Third Subordinated Preferred Stock
and the Preference Stock and the Common Stock of the Corporation.

          (f) In the event of any liquidation, dissolution or winding-up of the
Corporation (whether voluntary or involuntary) the holders of the Third
Subordinated Preferred Stock shall be entitled to receive and to be paid the sum
of One Hundred Dollars ($100.00) for each share of such Third Subordinated
Preferred Stock, together with an amount equal to all accrued and unpaid
dividends thereon before any sum shall be paid to or any assets distributed
among the holders of the Preference Stock or the Common Stock of the
Corporation; provided, however, that no such payments shall be made unless the
holders of any shares of Preferred Stock (First Preferred Stock) or Second
Preferred Stock which may be outstanding at the time shall have received any
sums to which they may be entitled in such event. After payment to the holders
of the Preferred Stock (First Preferred Stock) of the sums stated in
subparagraph (d) hereof, and payment to the holders of the Second Preferred
Stock of the sums stated in subparagraph (e) and payment to the holders of the
Third Subordinated Preferred Stock of the sums stated in subparagraph (f), the
remaining assets and funds of the Corporation shall be divided among and paid to
the holders of the Preference Stock and the Common Stock of the Corporation.

          (g) The Corporation, at the option of the Board of Directors, may
redeem the whole or any part of the issued and outstanding Preferred Stock
(First Preferred Stock) at any time, or from time to time, at the redemption
price of One Hundred and Five Dollars ($105.00) per share together with an
amount equal to all unpaid accrued dividends thereon computed to the date of
redemption. In the event that less than all the issued and outstanding shares of
Preferred Stock are to be redeemed, the amount to be redeemed and the method of
effecting such redemption, whether by lot or pro rata, may be determined by the
Board of Directors. Notice of such redemption, stating the date upon which, and
the place at which certificates representing the shares to be redeemed shall be
surrendered, shall be mailed not less than fifteen (15) days prior to the
redemption date to each holder of such shares at his address as it appears on
the books of the Corporation. From and after the redemption date, unless default
shall be made by the Corporation in providing the funds for redemption, all
rights of the holders in respect of such shares shall cease except the right to
receive the redemption price payable upon surrender of certificates representing
such shares, together with any amount equal to all unpaid accrued dividends
thereon.

          (h) The Corporation, at the option of the Board of Directors, may
redeem the whole or any part of the issued and outstanding Second Preferred
Stock at any time, or from time to time, at the redemption price of One Hundred
and Five Dollars ($105.00) per share together with an amount equal to all unpaid
accrued dividends thereon computed to the date of redemption; provided, however,
that so long as any shares of the Preferred Stock (First Preferred Stock) are
outstanding the Board of Directors may not redeem any shares of the Second
Preferred Stock unless all dividends on the Preferred Stock (First Preferred
Stock) for all past quarterly dividend periods shall have been paid or declared
and a sum sufficient for the payment thereof set apart. In the event that less
than all the issued and outstanding shares of Second Preferred Stock are to be
redeemed, the amount to be redeemed and the method of effecting such

                                       4
<PAGE>

redemption, whether by lot or pro rata, may be determined by the Board of
Directors. Notice of such redemption, stating the date upon which, and the place
at which certificates representing the shares to be redeemed shall be
surrendered, shall be mailed not less than fifteen (15) days prior to the
redemption date to each holder of such shares at his address as it appears on
the books of the Corporation. From and after the redemption date, unless default
shall be made by the Corporation in providing the funds for redemption, all
rights of the holders in respect of such shares shall cease except the right to
receive the redemption price payable upon surrender of certificates representing
such shares, together with an amount equal to all unpaid accrued dividends
thereon.

          (i) The Corporation, at the option of the Board of Directors, may
redeem the whole or any part of the issued or outstanding Third Subordinated
Preferred Stock at any time, or from time to time, at the redemption price of
One Hundred and Five Dollars ($105.00) per share together with an amount equal
to all unpaid accrued dividends thereon computed to the date of redemption;
provided, however, that so long as any shares of the Preferred Stock (First
Preferred Stock) and the Second Preferred Stock are outstanding the Board of
Directors may not redeem any shares of the Third Subordinated Preferred Stock
unless all dividends on the Preferred Stock (First Preferred Stock) and Second
Preferred Stock for all past quarterly dividend periods shall have been paid or
declared and a sum sufficient for the payment thereof set apart. In the event
that less than all the issued and outstanding shares of Third Subordinated
Preferred Stock are to be redeemed, the amount to be redeemed and the method of
effecting such redemption, whether by lot or pro rata, may be determined by the
Board of Directors. Notice of such redemption, stating the date upon which, and
the place at which certificates representing the shares to be redeemed shall be
surrendered, shall be mailed not less than fifteen (15) days prior to the
redemption date to each holder of such shares at his address as it appears on
the books of the Corporation. From and after the redemption date, unless default
shall be made by the Corporation in providing the funds for redemption, all
rights of the holders in respect of such shares shall cease except the right to
receive the redemption price payable upon surrender of certificates representing
such shares, together with an amount of all unpaid accrued dividends thereon.

          (j) Except as expressly otherwise provided by law, the holders of the
Preferred Stock (First Preferred Stock) and the holders of the Second Preferred
Stock and the holders of the Third Subordinated Preferred Stock shall not be
entitled to vote at any meeting of the stockholders or to receive notice of such
meeting.

          (k)(A) The Preference Stock may be issued, from time to time, by the
Board of Directors as shares of one or more series of Preference Stock. The
Board of Directors is expressly authorized to fix, by resolution or resolutions,
the powers, designations, preferences and relative, participating, optional or
other special rights, if any, or the qualifications, limitations or restrictions
thereof, pertaining to each series of Preference Stock, including, without
limitation:

          (i) the distinctive serial designation of such series which shall
distinguish it from other series;

                                       5
<PAGE>

          (ii) the number of shares included in such series, which number may be
increased or decreased from time to time unless otherwise provided by the Board
of Directors in creating the series;

          (iii) the annual dividend rate or rates (or method of determining such
rate or rates, including the date or dates, if any, upon which and the terms and
conditions under which, such dividend rate or rates may be reset or otherwise
modified) for shares of such series and the date or dates upon which such
dividends shall be payable;

          (iv) whether dividends on the shares of such series shall be
cumulative, and, in the case of shares of any series having cumulative dividend
rights, the date or dates or method of determining the date or dates from which
dividends of the shares of such series shall be cumulative;

          (v) the amount or amounts which shall be paid out of the assets of the
Corporation to the holders of the shares of such series upon voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation;

          (vi) the price or prices at which, the period or periods within which
and the terms and conditions upon which the shares of such series may be
redeemed, in whole or in part, at the option of the Corporation;

          (vii) the obligation, if any, of the Corporation to purchase or
redeem, in whole or in part, shares of such series pursuant to a sinking fund or
redemption or purchase account, at the option of the holders of such shares,
upon the happening of a specified event or otherwise and the price or prices at
which, the period or periods within which and the terms and conditions upon
which the shares of such series shall be purchased or redeemed, in whole or in
part, pursuant to such obligation;

          (viii) whether the shares of such series shall be convertible into, or
exchangeable for, at the option of either the holder or the Corporation or upon
the happening of a specified event or otherwise, shares of any other class or
classes or any other series of the same or any other class or classes of capital
stock of the Corporation, or any other securities of the Corporation or any
shares of stock or securities of any other corporation or other entity, and the
terms and conditions of any such conversion or exchange, including (without
limitation) the price or prices or the rate or rates of conversion or exchange
and the terms and conditions of any adjustments thereof, and the period or
periods within which such conversion or exchange may occur;

          (ix) the voting rights, if any, of the shares of such series in
addition to those required by law, including the number of votes per share and
any requirement for the approval by the holders of all Preference Stock, or of
the shares of one or more series, or of both, in an amount greater than a
majority, up to such amount as is in accordance with applicable law, as a
condition to specified corporate action or amendments to the certificate of
incorporation;

          (x) the ranking of the shares of the series as compared with shares of
other series of the Preference Stock in respect of the right to receive

                                       6
<PAGE>

dividends and the right to receive payments out of the assets of the Corporation
upon voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation;

          (xi) whether there shall be any limitations applicable, while shares
of such series are outstanding, upon the payment of dividends or the making of
distributions on, or the acquisition of, or the use of moneys for purchase or
redemption of, any capital stock of the Corporation, or upon any other action of
the Corporation, and if so, the terms and conditions thereof; and

          (xii) any other powers, preferences and relative, participating,
optional or other rights and any qualifications, limitations or restrictions not
inconsistent herewith or with applicable law.

          All shares of any one series of Preference Stock shall be alike in
every particular except as to the dates from and after which dividends thereon
shall be cumulative.

          (B) Notwithstanding the provisions of the foregoing paragraph (k)(A)
of this Article IV, the authority of the Board of Directors to fix the powers,
designations, preferences, rights, qualifications, limitations and restrictions
pertaining to the shares of Preference Stock or any series thereof shall be
subject to the limitation that all shares of Preference Stock shall be subject
to the rights and preferences of the Preferred Stock (First Preferred Stock),
Second Preferred Stock and Third Subordinated Preferred Stock.

          (C) All shares of Preference Stock shall rank senior to the Common
Stock in respect of the right to receive dividends and the right to receive
payments out of the assets of the Corporation upon the voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, except as set forth
in the resolution or resolutions of the Board of Directors creating and
designating any series of Preference Stock. All shares of Preference Stock
redeemed, purchased or otherwise acquired by the Corporation (including shares
surrendered for conversion or exchange) shall be cancelled and thereupon
restored to the status of authorized but unissued shares of Preference Stock
undesignated as to series, unless otherwise provided in the resolution or
resolutions of the Board of Directors creating and designating the series of
Preference Stock of which the shares that are redeemed, purchased or otherwise
acquired by the Corporation are a part.

          (l) Subject to the rights and preferences of the First Preferred
Stock, Second Preferred Stock, Third Subordinated Preferred Stock and Preference
Stock, as set forth in paragraphs (a) through (k) of this Article IV, the Common
Stock shall participate share and share alike in all dividends and distributions
of assets upon liquidation or otherwise and the holders of the Common Stock of
the Corporation shall have full voting power for all purposes, with each share
of Common Stock entitled to one vote per share, save as otherwise required by
law.

          (m) None of the holders of capital stock of any class shall be
entitled as of right to purchase or subscribe for any unissued stock of the
Corporation of any class or any additional shares of any class to be issued by
reason of any increase of the authorized stock of the Corporation, or any other
securities convertible into or exchangeable for stock of the Corporation or
carrying any right to purchase such stock.

                                       7
<PAGE>

                                    ARTICLE V

                                    DIRECTORS

          (a) The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. The number of Directors of the
Corporation shall be fixed by the Board of Directors in the manner provided in
the By-Laws, but in no case shall the number be less than three (3) nor more
than twelve (12). The Directors need not be stockholders. The election of the
Directors of the Corporation need not be by written ballot unless the By-Laws so
require. The Directors of the Corporation, other than those who may be elected
by the holders of any series of Preferred Stock or Preference Stock under
specific circumstances, shall be divided into three classes as nearly equal in
number as is reasonably possible. Jonathan B. Bulkeley, Herman Cain and Lynne V.
Cheney shall be members of the first class of directors with terms expiring at
the 2003 annual meeting of stockholders. Lawrence R. Ricciardi, William J. White
and Ed Zschau shall be members of the second class of directors with terms
expiring at the 2004 annual meeting of stockholders. M. Christine DeVita, James
E. Preston and Thomas O. Ryder shall be members of the third class of directors
with terms expiring at the 2005 annual meeting of stockholders. At each
subsequent annual meeting of stockholders, the successors to the directors whose
terms shall expire that year shall be elected to hold office for the term of
three years, so that the term of office of one class of directors shall expire
in each year. In any event, each director of the Corporation shall hold office
until that director's successor is duly elected and qualified.

          (b) In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware, the Board of Directors is expressly
authorized and empowered:

          (1) To adopt, amend or repeal the By-Laws of the Corporation;
provided, that such action shall require the affirmative vote of a majority of
the total number of Directors. Nothing herein shall limit the power of the
holders of shares of Common Stock of the Corporation to adopt, amend or repeal
the By-Laws of the Corporation.

          (2) To provide for the issuance, from time to time, of the shares of
stock of the Corporation, whether now or hereafter authorized, for such
consideration and on such terms and conditions as it may lawfully fix from time
to time; and all shares so issued, the full consideration for which has been
paid, shall be deemed fully paid and nonassessable.

          (c) A Director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except to the extent that such exemption from liability or
limitation thereof is not permitted under Title 8, Chapter 1 of the Delaware
Code as currently in effect or as the same may hereafter be amended. No
amendment, modification or repeal of this paragraph shall adversely affect any
right or protection of a Director that exists at the time of such amendment,
modification or repeal.

                                       8
<PAGE>

                                   ARTICLE VI

                                 INDEMNIFICATION

          The Corporation shall indemnify each officer and Director (and his
heirs, successors and administrators) to the fullest extent permitted by law,
subject to any limitations set forth in the By-Laws.

                                   ARTICLE VII

                                   AMENDMENTS

          The Corporation reserves the right to amend, add to, change or repeal
any provisions contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by statute.

                                  ARTICLE VIII

                          CERTAIN BUSINESS COMBINATIONS

          Pursuant to the last sentence of Section 203(b) of Title 8, Chapter 1,
of the Delaware Code, the Company elects to be governed by Section 203 of Title
8, Chapter 1, of the Delaware Code with respect to the business combinations
referred to therein.

                                   ARTICLE IX

                            ACTION BY WRITTEN CONSENT

          No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting and the power of stockholders to consent in writing is specifically
denied.

                                       9
<PAGE>

          IN WITNESS WHEREOF, The Reader's Digest Association, Inc. has caused
this Restated Certificate of Incorporation to be executed by its duly authorized
officer on June 13, 2003.

                                  THE READER'S DIGEST ASSOCIATION, INC.

                                  By: /s/ C.H.R. DuPree
                                      ---------------------------------
                                  Name:  C.H.R. DuPree
                                  Title: Vice President, Corporate Secretary and
                                         Associate General Counsel

                                       10

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