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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 18, 1997
THE READER'S DIGEST ASSOCIATION, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-10434 13-1726769
(State or other juris- (Commission File (I.R.S. Employer
diction of incorporation Number) Identification No.)
or organization)
Pleasantville, New York 10570-7000
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code:
(914) 238-1000
Page 1 of 3 pages.
ITEM 5. Other Events.
In November 1997, the Compensation & Nominating
Committee (the "Committee") canceled stock options and stock
appreciation rights relating to 2,112,495 shares of Class A
Nonvoting Common Stock that had been granted on October 9, 1997
to executive officers and other key employees of the Company at
the fair market value on that date of $27.03 (the "October
Options"). These October Options were never distributed. On
November 18, 1997, the Committee granted options and stock
appreciation rights in lieu of the October Options at the fair
market value on that date of $21.47 (the "November Options").
The vesting, expiration and other terms of the November Options
were not changed from those of the October Options.
The Committee recognized that the motivation and retention
of its key employees is paramount to the successful execution of
Management's strategy to stabilize and restore growth to the
Company's operations, which would benefit all stockholders. The
Committee's decision to take the above-mentioned actions was
based on a number of factors, including that (1) the October
Options had not yet been delivered to the recipients because the
Committee and the new management of the Company were reviewing in
depth the fiscal 1998 budget and the cash incentive program and
because the program of the related annual and long-term incentive
compensation measures was to be communicated as an integrated
incentive compensation award to employees; (2) the Company's
strategy to invest its limited cash resources in its operations
had led to a decision to suspend the award of long-term cash
incentive compensation awards in favor of granting more
substantial equity awards through stock options; and (3) the
Company's projected results for fiscal 1998, as determined in
November 1997, would not justify the payment of competitive cash
incentive compensation under the Company's annual bonus program,
thus reducing the total incentive compensation opportunity.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
THE READER'S DIGEST ASSOCIATION, INC.
(Registrant)
Date: November 24, 1997
/s/George S. Scimone _
George S. Scimone
Vice President and Chief Financial
Officer
