EXHIBIT 10.4
AMERICAN GREETINGS CORPORATION
OUTSIDE DIRECTORS’ DEFERRED COMPENSATION PLAN

 

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AMERICAN GREETINGS CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN
Table of Contents

              Page  
ARTICLE I INTRODUCTION
    1  
Section 1.1 Name of Plan
    1  
Section 1.2 Effective Date
    1  
Section 1.3 Purpose
    1  
ARTICLE II DEFINITIONS AND USAGE
    1  
Section 2.1 Definitions
    1  
Section 2.2 Usage
    3  
ARTICLE III ELIGIBILITY AND PARTICIPATION
    3  
Section 3.1 Eligibility
    3  
Section 3.2 Participation
    3  
Section 3.3 Agreement Procedure
    3  
Section 3.4 Deferral Period
    4  
Section 3.5 Termination of Suspension of Participation; Renewed Participation
    4  
ARTICLE IV DEFERRED COMPENSATION BENEFIT
    4  
Section 4.1 Deferred Compensation Benefit
    4  
Section 4.2 Accounts
    4  
Section 4.3 Director’s Contributions
    5  
Section 4.4 Investments
    5  
Section 4.5 Valuation of Accounts
    5  
ARTICLE V PAYMENT OF BENEFIT PRIOR TO DEATH OR DISABILITY
    5  
Section 5.1 Commencement of Benefit Payments
    5  
Section 5.2 Form of Benefit Payments
    5  
Section 5.3 In-Kind Payments
    6  
ARTICLE VI PAYMENT OF BENEFIT ON OR AFTER DEATH OR DISABILITY
    6  
Section 6.1 Commencement of Benefit Payments
    6  
Section 6.2 Designation of Beneficiary
    6  
Section 6.3 Disability Determinations
    6  

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AMERICAN GREETINGS CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN
Table of Contents

              Page  
ARTICLE VII ADMINISTRATION
    6  
Section 7.1 General
    6  
Section 7.2 Administrative Rules
    6  
Section 7.3 Duties
    7  
Section 7.4 Fees
    7  
ARTICLE VIII MISCELLANEOUS PROVISIONS
    7  
Section 8.1 Amendment
    7  
Section 8.2 Termination
    7  
Section 8.3 No Assignment
    8  
Section 8.4 Successors
    8  
Section 8.5 Governing Law
    8  
Section 8.6 No Guarantee of Position
    8  
Section 8.7 Severability
    8  
Section 8.8 Code Section 409A Compliance
    8  

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AMERICAN GREETINGS CORPORATION OUTSIDE DIRECTORS’ DEFERRED
COMPENSATION PLAN
ARTICLE I
INTRODUCTION
Section 1.1 Name of Plan. This plan shall be known as the American Greetings
Corporation Outside Directors’ Deferred Compensation Plan (hereinafter referred
to as the “Plan”).
Section 1.2 Effective Date. The Plan’s effective date is January 1, 2005.
Section 1.3 Purpose. American Greetings Corporation has established the Plan to
provide certain members of that company’s board of directors the option of
deferring the receipt of fees earned while serving in such capacity.
ARTICLE II
DEFINITIONS AND USAGE
Section 2.1 Definitions. For purposes of this Plan, capitalized terms have the
meanings set forth below:
“Account” means the individual account or accounts established on behalf of a
Participant in accordance with Section 4.2.
“Administrator” means the person or persons described in Article VII.
“Affiliate” means any limited liability company, general partnership, limited
partnership, business trust, or other non-corporate organization with respect to
which American Greetings Corporation directly or indirectly owns at least fifty
percent (50%) of either the capital or profits interest therein, and directly or
indirectly has the power and authority to select and appoint, and where
applicable remove, such organization’s managers, general partner(s) and/or
trustees (as applicable).
“Agreement” means an Agreement for Deferred Compensation Benefits entered into
between the Company and a Director who is eligible to participate in the Plan.
“Board” means the Board of Directors of American Greetings Corporation; provided
that, if such Board, by resolution, designates a person or a committee to act
specifically on matters relevant to the Plan, such person or committee shall act
(and have the power and authority to act) as the Board with respect to such
matters.
“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code shall include any regulations or rulings promulgated
thereunder.
“Company” means American Greetings Corporation, an Ohio corporation (“AGCo”),
together with any corporation, limited liability company, partnership, or other
business organization which is part of a “controlled group of corporations” that
includes AGCo (within the meaning of

 

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Code Section 414(b) and related regulations), or is “under common control” with
AGCo (within the meaning of Code Section 414(c) and related regulations).
“Compensation” means the total of all retainer fees, meeting fees, and any other
fees for personal services rendered by a Director for the Company, acting in
that capacity, whether paid to the Director in cash or in-kind. Compensation
shall not include, for purposes of determining a Director’s Deferred
Compensation Benefit under the Plan, any remuneration received by such Director
for services he or she renders to the Company in the capacity of an independent
contractor.
“Deferred Compensation Benefit” means the benefit of a Participant as determined
under Article IV of this Plan.
“Director” means any person serving as an “outside director” on the Board. An
“outside director” is any individual performing personal services as a member of
the Board who does not concurrently perform services for the Company as an
Employee; provided, however, that a Director may include an “outside director”
who concurrently performs services for the Company as an independent contractor.
“Disability” or “Disabled” means a Participant’s absence from service on the
Company’s Board due to: (i) his or her inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months; or (ii) such
medically determinable physical or mental impairment, which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months, for which the Participant is receiving income
replacement benefits for a period of not less than three (3) months under an
accident and health plan covering the Company’s Directors.
“Employee” shall mean any individual employed by the Company who receives “W-2
wages” from the Company. Any individual who provides personal services to the
Company concurrently as both Employee and Director shall not be considered a
Director, while serving in such dual capacities.
“Participant” means a Director who is eligible to participate in the Plan and
who is actually participating in the Plan in accordance with Section 3.2.
“Plan” means the American Greetings Corporation Outside Directors’ Deferred
Compensation Plan.
“Plan Year” means the calendar year.
“Separation from Service” shall mean a Participant’s resignation, removal or
withdrawal as a Director (whether on account of such Participant’s death,
permanent and total disability, retirement, or other circumstances). A
Participant will not be deemed to have experienced a Separation from Service if
such Participant commences employment with the Company as an Employee, or
otherwise continues to provide “significant services” to the Company. For
purposes of the preceding sentence, a Participant will be considered to provide
“significant services” if such Participant provides continuing services that
average at least twenty percent

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(20%) of the services provided by such Participant to the Company during the
immediately preceding three (3) full calendar years and the annual remuneration
paid for such services is at least twenty percent (20%) of the average annual
compensation earned during the final three (3) full calendar years (or, if less,
the period of service).
“Subsidiary” means any corporation at least eighty percent (80%) of whose equity
securities (determined either by voting power or by interest in profits) are
directly or indirectly owned by AGCo.
“Unforeseeable Emergency” means any of the following: (i) a severe financial
hardship to the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse or the Participant’s dependent (as defined
under Code Section 152(a)), (ii) loss of the Participant’s property due to
casualty, or (iii) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the Participant’s control as determined by
the Administrator pursuant to Code Section 409A.
Section 2.2 Usage. Except where otherwise indicated by the context, any
masculine terminology used herein shall also include the feminine and vice
versa, and the definition of any term herein in the singular shall also include
the plural and vice versa.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
Section 3.1 Eligibility. A Director shall be eligible to participate in the Plan
on the day he or she first serves as a Director of AGCo, unless the Board, by
written action, otherwise designates such Director as ineligible to participate
in the Plan.
Section 3.2 Participation. Each Director eligible to participate in the Plan in
accordance with Section 3.1 shall become a Participant by entering into an
Agreement with AGCo. Each Director’s participation in the Plan shall be governed
by his or her Agreement, including the effective date of each Director’s
participation, and the terms of the Plan. In the event that the terms of the
Agreement and the terms of the Plan conflict, the terms of the Agreement
control.
Section 3.3 Agreement Procedure.
(a) AGCo and each Director who is eligible to participate in the Plan may
execute one or more Agreements for all or a the portion of Compensation the
Director elects to defer into the Plan. Each Agreement shall provide for the
amount credited to a Participant’s Account in accordance with Section 4.3 below,
the period of deferral in accordance with rules established by the
Administrator, the investment of such amount in accordance with Section 4.4
below, and the payment of the Participant’s Deferred Compensation Benefit in
accordance with Sections 5.1 and 5.2 below.
(b) For the initial Plan Year in which a Director becomes eligible to
participate in the Plan, the Agreement shall be properly completed, executed and
delivered to the Administrator prior to the date that ends thirty (30) days
after the date on which the Director first becomes eligible to participate in
the Plan.

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(c) For any subsequent Plan Year for which a Director is eligible to participate
in the Plan, the Agreement shall be properly completed, executed and delivered
to the Administrator prior to the first day of each Plan Year for which amounts
will be deferred on behalf of such Director.
(d) An Agreement shall be effective no earlier than the date on which it is
delivered to the Administrator and shall continue in effect for all succeeding
Plan Years until the Deferred Compensation Benefit attributable to such
Agreement has been paid, unless otherwise provided under the Plan.
Section 3.4 Deferral Period.
(a) A Participant may elect to defer his or her Compensation for three
(3) years, five (5) years, or until the date such Participant no longer performs
personal services as a Director. A Participant must select a deferral period on
the Agreement he or she enters into with the Company before any Compensation
will be deferred under the Plan on such Participant’s behalf.
(b) A deferral period provided for under a prior Agreement (the ‘Prior Deferral
Election’) may be extended in accordance with rules established by the
Administrator. Notwithstanding the foregoing, in no event shall a change in a
Prior Deferral Election (i) take effect until at least twelve (12) months after
the date on which the election to change is made, (ii) permit a payment on
account of Separation from Service or in accordance with a specified time or
fixed schedule (as set forth on the Agreement) to commence earlier than five
(5) years from the date the initial payment under the Prior Deferral Election
would otherwise have been made, and (iii) permit a payment in accordance with a
specified time or fixed schedule of the Prior Deferral Election (as set forth on
the Agreement) to occur earlier than twelve (12) months prior to the date of the
first scheduled payment under the Prior Deferral Election.
Section 3.5 Termination or Suspension of Participation; Renewed Participation. A
Participant’s future participation in the Plan may be discontinued at any time
by written action of the Board, in accordance with and subject to the following
rules:
(a) The terms of any discontinuance must be set forth in writing and a copy of
these written terms shall be provided to the affected Participant, the Plan
Administrator, and the Board.
(b) In the event that a Participant, whose future participation in the Plan is
discontinued, is again designated for participation in the Plan by the Board,
such Participant must enter into an Agreement in accordance with Section 3.3(c)
above.
ARTICLE IV
DEFERRED COMPENSATION BENEFIT
Section 4.1 Deferred Compensation Benefit. A Participant’s Deferred Compensation
Benefit shall be equal to the total amount credited to the Participant’s Account
under this Article IV.
Section 4.2 Accounts. The Company shall establish and maintain Accounts on
behalf of each Participant, which shall include all Deferred Compensation
Benefits deferred on behalf of such Participant. Each Account shall list and
reflect each Participant’s credits and valuations. All amounts credited to a
Participant’s Account shall be entered as of the date on which the

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Compensation would have been paid had it not been deferred. At all times prior
to the distribution of all or a portion of amounts maintained in a Participant’s
Account, amounts so credited shall represent a general unsecured obligation of
the Company subject to the claims of the Company’s general creditors.
Section 4.3 Director’s Contributions. Directors who have been identified by the
Board as eligible to participate in the Plan shall be eligible to elect to defer
all or a portion of his or her Compensation under the Plan, which may be
communicated as a certain percentage or set dollar amount. The terms of any
election to defer a Director’s Compensation must be made in accordance with
Sections 3.3(b) and 3.3(c) above. Further, the timing and form of payment of
such Deferred Compensation Benefit must be specified in the Agreement, subject
to the provisions of Sections 3.3(d), 5.1, 5.2 and 6.1.
Section 4.4 Investments. A Participant may elect, at the time and in the manner
he or she makes an initial deferral election, the vehicles in which assets held
in his or her Account will be invested. The Company will provide a Participant,
as part of his or her Agreement, a choice of investment vehicles, which have
been pre-selected by the Board. In the event all or a portion of a Participant’s
Account is not invested pursuant to the Agreement, such Participant’s Account
shall be invested as reasonably determined by the Company, in accordance with
the procedures established by the Administrator. A Participant may elect to
change his or her investment elections in accordance with procedures established
by the Administrator.
Section 4.5 Valuation of Accounts. The value of a Participant’s Account shall be
determined from time to time by the Administrator in the following manner:
(a) Each Participant’s Account shall be valued as of the last day of each Plan
Year, or more frequently as agreed upon by the Administrator, and shall again be
valued as of the date that a Participant receives a payment under the Plan, in
accordance with the procedures established by the Administrator.
(b) All allocations to a Participant’s Account under this Section 4.5 shall be
deemed to have been made on the applicable valuation date, even though actually
determined at a later date.
ARTICLE V
PAYMENT OF BENEFIT PRIOR TO DEATH OR DISABILITY
Section 5.1 Commencement of Benefit Payments. Except as provided in Section 6.1
below, the payment of a Participant’s Deferred Compensation Benefit shall
commence thirty (30) days after the date on which the earlier of the following
events occurs:
(a) The expiration of the deferral period provided under the Participant’s
Agreement.
(b) The Participant incurs an Unforeseeable Emergency (as determined by the
Administrator in accordance with the Plan’s terms).
(c) The Participant experiences a Separation from Service with the Company for
any reason.

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Section 5.2 Form of Benefit Payments. Except as provided in Article VI, a
Participant shall be given the option to elect to receive his or her Deferred
Compensation Benefit as (a) one lump sum payment, (b) installments, payable over
a period of five (5) years, or (c) installments, payable over a period of ten
(10) years. The form that a Participant’s Deferred Compensation Benefit will be
paid in, must be selected on the Participant’s Agreement. If the Participant’s
Agreement does not provide for a form of payment, then the Participant’s
Deferred Compensation Benefit shall be paid in a single lump-sum. If the
Participant has negotiated two or more Agreements that do not provide for the
same form of payment, then a proportionate amount of the Participant’s Deferred
Compensation Benefit attributable to each individual Agreement shall be paid in
the form provided under both this Section 5.2 and each respective Agreement in
accordance with the procedures established by the Administrator.
Section 5.3 In-Kind Payments. A Participant’s Deferred Compensation Benefit that
is payable to such Participant, Participant’s beneficiary, or Participant’s
guardian (as the case may be) in accordance with Sections 5.1 or 6.1, as
applicable, may be paid to such Participant, Participant’s beneficiary, or
Participant’s guardian in the form of cash or in-kind, as such amounts were held
in the Participant’s Account immediately prior to the commencement of benefit
payments under Sections 5.1 or 6.1; provided, however, that a Participant may
elect instead to receive any portion of his or her Account that was held in-kind
as cash, at the time and in the form and manner prescribed by the Board.
ARTICLE VI
PAYMENT OF BENEFIT ON OR AFTER DEATH OR DISABILITY
Section 6.1 Commencement of Benefit Payments. If a Participant dies or becomes
Disabled prior to receiving his or her entire Deferred Compensation Benefit,
then the remainder of such Deferred Compensation Benefits payable to the
Participant shall be paid to the Participant, the Participant’s beneficiary, or
the Participant’s guardian (as the case may be) in a single lump-sum amount
thirty (30) days following the date on which the Administrator is notified of
the Participant’s death or Disability.
Section 6.2 Designation of Beneficiary. A Participant may designate one or more
beneficiaries, in the manner and form determined by the Administrator, to
receive the Deferred Compensation Benefit following the Participant’s death. A
Participant may change such beneficiary designations from time to time, as
permitted by the Administrator. In the event that the Participant has
beneficiary designations, the last written designation filed with the
Administrator prior to the Participant’s death shall control. If a Participant
fails to specifically designate a beneficiary, or if no designated beneficiary
survives the Participant, payment shall be made by the Administrator in
accordance with the laws of descent and distribution in effect in the
Participant’s State of residence.
Section 6.3 Disability Determinations. The Administrator will be responsible for
determining whether a Participant suffers from a Disability, as defined herein.
The Administrator may delegate this responsibility to an independent third party
selected by the Board.

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ARTICLE VII
ADMINISTRATION
Section 7.1 General. The Administrator shall be the Board, or such other person
or persons as designated by the Board. Except as otherwise specifically provided
in the Plan, the Administrator shall be responsible for administration of the
Plan.
Section 7.2 Administrative Rules. The Administrator may adopt such rules of
procedure as it deems desirable for the conduct of its affairs, except to the
extent that such rules conflict with the provisions of the Plan.
Section 7.3 Duties. The Administrator shall have the following rights, powers
and duties:
(a) Subject to the terms of this Plan and the Agreement, the decision of the
Administrator in matters within its jurisdiction shall be final, binding and
conclusive upon the Company and upon any other person affected by such decision.
(b) The Administrator shall have the duty and authority to interpret and
construe the provisions of the Plan, to decide any question which may arise
regarding the rights of Directors, Participants, and beneficiaries, including
the amounts of their respective interests, to adopt such rules and to exercise
such powers as the Administrator may deem necessary for the administration of
the Plan, and to exercise any other rights, powers or privileges granted to the
Administrator by the Board under the terms of the Plan.
(c) The Administrator shall maintain full and complete records of its decisions.
The Administrator shall have the duty to maintain Account records of all
Participants, including all relevant data pertaining to Participants. The
Administrator shall within a reasonable time after the end of each Plan Year
provide each Participant a detailed report of the status of the Participant’s
Account.
(d) The Administrator shall cause the principal provisions of the Plan to be
communicated to the Participants, and a copy of the Plan and other documents
shall be available at the principal office of the Company for inspection by the
Participants at reasonable times determined by the Administrator.
(e) The Administrator shall periodically report to the Board with respect to the
status of the Plan.
Section 7.4 Fees. No fee or compensation shall be paid to any person for
services as the Administrator.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Amendment. The Company reserves the right to amend the Plan
retroactively or otherwise, in any manner that it deems advisable, by a written
action taken by the Board. No amendment shall, without the prior written consent
of the Participant or the beneficiary, as the case may be, affect the amount or
form of the Participant’s or beneficiary’s Deferred

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Compensation Benefit at the time the amendment becomes effective or the right of
the Participant or the beneficiary to receive such Deferred Compensation
Benefits.
Section 8.2 Termination. The Company reserves the right to terminate the Plan at
any time by a written action taken by the Board. No termination shall, without
the prior written consent of the Participant or the beneficiary, as the case may
be, affect the amount or form of the Participant’s or the beneficiary’s Deferred
Compensation Benefit prior to the termination or the right of the Participant or
beneficiary to receive such Deferred Compensation Benefit.
Section 8.3 No Assignment.
(a) The Participant shall not have the power to pledge, transfer, assign,
anticipate, mortgage or otherwise encumber or dispose of in advance any interest
in amounts payable hereunder or any of the payments provided for herein, nor
shall any interest in amounts payable hereunder or in any payments be subject to
seizure for payments of any debts, judgments, alimony or separate maintenance,
or be reached or transferred by operation of law in the event of bankruptcy,
insolvency or otherwise.
In the event of an attempted seizure, any amounts payable hereunder may be paid
to one or more of the Participant’s relatives or children, or the Participant’s
spouse, as the Administrator shall determine.
(b) Notwithstanding the foregoing, a Participant’s Deferred Compensation Benefit
shall be subject to division and partition in accordance with the terms of a
domestic relations order satisfying the requirements of a “qualified domestic
relations order” (“QDRO”), as defined in Code Section 414(p) and related
regulations; provided, that (i) a separate benefit shall be recognized and
maintained for any spouse or former spouse determined to have an interest in the
Plan as a result of a QDRO; and (ii) all costs and expenses incurred by the
Company or the Administrator in connection with such QDRO shall be charged
against such Participant’s Deferred Compensation Benefit.
Section 8.4 Successors. The provisions of the Plan are binding upon and inure to
the benefit of the Company, its successors and assigns, and the Participant, his
or her beneficiaries, heirs, and legal representatives.
Section 8.5 Governing Law. The Plan shall be subject to and construed in
accordance with the laws of the State of Ohio, to the extent not preempted by
applicable law.
Section 8.6 No Guarantees. Nothing contained in the Plan shall be deemed to give
any Participant the right to any equity or other interest in the assets,
business or affairs of AGCo (or any entity comprising part of the Company). No
Participant hereunder shall have a security interest in assets of the Company
used to make contributions or pay benefits.
Section 8.7 Severability. If any provision of the Plan shall be held illegal or
invalid for any reasons, such illegality or invalidity shall not affect the
remaining provision of the Plan, but the Plan shall be construed and enforced as
if such illegal or invalid provision had never been included herein.

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Section 8.8 Code Section 409A Compliance. The Plan is intended to be operated in
compliance with the provisions of Code Section 409A (including any rulings or
regulations promulgated thereunder). In the event that any provision of the Plan
fails to satisfy the provisions of Code Section 409A, then such provision shall
be void and shall not apply to a Participant’s Deferred Compensation Benefit, to
the extent practicable. In the event that it is determined to not be feasible to
so void a Plan provision as it applies to a Participant’s Deferred Compensation
Benefit, such Plan provision shall be construed in a manner so as to comply with
the requirements of Code Section 409A.
             IN WITNESS WHEREOF, the undersigned, on behalf of American
Greetings Corporation, has executed and adopted this Plan this 14th day of
December, 2005.

            AMERICAN GREETINGS CORPORATION
      By:   /s/ Brian T. McGrath       Name: Brian T. McGrath       Title: Vice
President, Human Resources      

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