Readers Digest Buyout

The Readers Digest Association, Inc. (RDA)
$2.4B Buyout

Summary

Buyout of Reader's Digest by Ripplewood Holdings

$17 per RDA share; $2.4B total

Announced 11.16.06

Closed 3.02.07

Press release - RDA
Press release - Ripplewood
Form 8-K

Developments

New CEO to be appointed 12.01.06
Deal FAQs 12.18.06
Shareholder meeting scheduled 12.19.06
Litigation settled 1.29.07
Reg BTR notice 3.02.07

Advisors

Financial

RDA : Goldman Sachs / Michael R. Lynch
Ripplewood : Morgan Stanley / J P Morgan / Citigroup / Merrill Lynch

Legal

RDA : Jones Day / Richards Layton & Finger
Ripplewood : Cravath Swaine & Moore

Merger Agreement

General

EDGAR filing
Hyperlinked version
Detailed hyperlinked index follows

Article I. The Merger

1.1 The Merger
1.2 Closing
1.3 Effective Time
1.4 Effects
1.5 Certificate of Incorporation and By-laws
1.6 Directors
1.7 Officers

Article II. Effect on the Capital Stock of the Constituent
Corporations; Exchange of Certificates

2.1 Effect on Capital Stock
2.2 Exchange of Certificates

Article III. Company Reps

3.1 Organization, Standing and Power
3.2 Company Subsidiaries; Equity Interests
3.3 Capital Structure
3.4 Authority Execution and Delivery Enforceability
3.5 No Conflict; Consents
3.6 SEC Documents; Undisclosed Liabilities
3.7 Information Supplied
3.8 Absence of Certain Changes or Events
3.9 Taxes
3.10 Absence of Changes in Benefit Plans
3.11 ERISA Compliance; Excess Parachute Payments
3.12 Litigation
3.13 Compliance with Applicable Laws
3.14 Labor Matters
3.15 Contracts
3.16 Environmental Matters
3.17 Intellectual Property
3.18 Brokers; Schedule of Fees and Expenses
3.19 Opinion of Financial Advisor

Article IV. Parent and Sub Reps

4.1 Organization, Standing and Power
4.2 Sub; Equity Interests
4.3 Authority; Execution and Delivery; Enforceability
4.4 No Conflicts; Consents
4.5 Information Supplied
4.6 Brokers
4.7 Financing
4.8 Solvency

Article V. Covenants Relating to Conduct of Business

5.1 Conduct of Business
5.2 No Solicitation

Article VI. Additional Agreements

6.1 Preparation of Proxy Statement; Stockholders Meeting
6.2 Access to Information; Confidentiality
6.3 Reasonable Best Efforts; Notification
6.4 Company Stock-Based Awards; SAYE; ESPPs
6.5 Benefit Plans
6.6 Indemnification
6.7 Fees and Expenses
6.8 Public Announcements
6.9 Additional Tax Matters
6.10 Stockholder Litigation
6.11 Resignation of Directors of the Company
6.12 Other Actions by Parent
6.13 Actions with Respect to Existing Debt

Article VII. Conditions Precedent

7.1 Each Party
7.2 Parent and Sub
7.3 Company
7.4 Frustration of Closing Conditions

Article VIII. Termination, Amendment And Waiver

8.1 Termination
8.2 Effect of Termination
8.3 Amendment
8.4 Extension; Waiver
8.5 Procedure for Termination, Amendment, Extension or
Waiver

Article IX. General Provisions

9.1 Nonsurvival of Representations and Warranties
9.2 Notices
9.3 Definitions
9.4 Interpretation
9.5 Severability
9.6 Counterparts
9.7 Entire Agreement; No Third-Party Beneficiaries
9.8 Governing Law
9.9 Assignment
9.10 Enforcement

Other Agreements

Damages contribution agreement 11.16.06

Amendment to 2001 Income Continuation Plan 11.16.06

Employment agreement amendment 11.16.06

Schedule 13D Filings

Blue Harbour Group

Amendment #1 11.17.06

GAMCO Investors

Schedule 13D 12.11.06
Amendment #1 12.19.06
Amendment #2 1.10.07
Amendment #3 2.09.07
Amendment #4 3.06.07

Proxy Solicitation

Shareholder meeting held 2.02.07

81% of shares outstanding vote FOR
Press release 2.02.07

Proxy statements

Definitive 12.22.06
Preliminary 12.08.06

Financing

Summaries

Proxy statement summary
Form 8-K 1.31.07

Form 8-K 2.16.07

Form 8-K 2.26.07

Exhibit

Agreements

$750mm senior subordinated note offering

Announced 2.16.07

Note tender offer - consent solicitation

Commenced 1.25.07
Consent solicitation completed 2.08.07

Offer extended 2.23.07
Offer extended 3.01.07

Deal Protection

No shop covenant

Merger agreement §5.2
Proxy statement disclosure

Break-up fee

$25mm, plus out-of-pocket expenses
Agreement §8.2
Proxy statement disclosure

Regulatory Approvals

HSR Act

Merger agreement §7.1(b)
Proxy statement disclosure

Fairness Opinion

Goldman Sachs fairness opinion

Proxy statement disclosure

Tax Matters

Disclosure

Proxy statement disclosure

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