EXHIBIT 10.1
Amendment Number One to the American Greetings Corporation
Supplemental Executive Retirement Plan
     WHEREAS, the American Greetings Corporation (the “Company”) currently
maintains the American Greetings Corporation Supplemental Executive Retirement
Plan (the “Plan”), which was originally adopted effective March 1, 1986 and
which has subsequently been amended and restated effective March 1, 2004; and
     WHEREAS, the Company desires to amend the Plan to update its provisions in
accordance with the American Jobs Creation Act of 2004, the applicable
requirements of which are set forth in Internal Revenue Code (the “Code”)
Section 409A, by virtue of the specific amendments to the Plan as set forth
below; and
     WHEREAS, Section 8.4 of the Plan permits the Company to amend the Plan at
any time, by action taken by its Board of Directors, and acting in its sole
discretion, including those circumstances in which a change has occurred in the
law (or in its interpretation) which would adversely affect the Company or a
Participant if the Plan were to be left unamended;
     NOW, THEREFORE, the Plan is hereby amended as set forth below. Unless
otherwise noted, all provisions of this Amendment Number One are effective
January 1, 2005.
1. Article II, Definitions, is hereby amended by adding the definitions of “409A
Disability,” “Code,” “Specified Employee,” and “Separation from Service” to the
end thereof, and by amending the definitions of “Assumed Bonus Percentage,”
“Board,” and “Company” in their entireties, as provided for below:

  “2.3   Assumed Bonus Percentage shall mean, for any Fiscal Year, 50% of the
Participant’s target bonus under the Company’s key management incentive plan,
for which the Participant is eligible during any Fiscal Year, based on the
Participant’s job classification. For this purpose, the schedule set forth by
the Company’s Board for the various levels of job classifications covered by the
Company’s key management incentive plan shall be used to calculate such awards.
    2.5   Board shall mean the board of directors of AGCo (as defined herein);
provided, that if the Board by resolution designates a person or a committee to
act specifically on matters relevant to this Plan, such person or committee
shall act (and have the power and authority to act) as the Board with respect to
such matters.     2.8   Company shall mean American Greetings Corporation, an
Ohio corporation (“AGCo”) and its controlled Subsidiaries and Affiliates;
provided, that for Plan Years commencing after December 31, 2004, such term
shall also include (to the extent not previously included in the preceding
definition) any corporation, limited liability company, partnership, or other
business organization which is part of a “controlled

 

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      group of corporations” that includes AGCo (within the meaning of 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).

  2.21   Code shall mean the Internal Revenue Code of 1986, as amended from time
to time. Any reference to a Code section shall include any regulations, notices,
or rulings promulgated thereunder.     2.22   409A Disability shall mean a
Participant’s absence from employment with the Company which: (i) is due to 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) results from a 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, and causes
such Participant to receive income replacement benefits for a period of not less
than three (3) months under an accident and health plan covering the Company’s
employees.         Notwithstanding the foregoing, if the Company’s Long Term
Disability Plan defines a Participant’s disability in accordance with the
foregoing or, in the alternative, as determined by the Social Security
Administration, then the definition of ‘409A Disability’ shall have the same
meaning as the definition of ‘disability’ provided for under the Company’s Long
Term Disability Plan.     2.23   Specified Employee shall mean any Participant
for whom the following conditions, (a) and (b), are satisfied:

(a) at any time during the twelve (12) month period ending on the December 31st
preceding the calendar year in which a given distribution is to occur, such
Participant:
(i) is one of the top fifty (50) compensated officers of AGCo and has annual
“W-2” compensation of at least One Hundred Thirty Thousand Dollars ($130,000);
or
(ii) owns more than five percent (5%) of AGCo’s stock; or
(iii) owns more than one percent (1%) of AGCo’s stock and has annual “W-2”
compensation in excess of One Hundred Fifty Thousand Dollars ($150,000); and
(b) AGCo’s stock is publicly traded on the date such Participant Separates from
Service.

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In applying the above rules, the following shall apply: the foregoing
compensation amounts shall be adjusted from time to time in accordance with the
cost-of-living adjustments under Code Section 416(i); and an individual who
qualifies as a Specified Employee under this Section 2.23 shall be treated as a
Specified Employee for the twelve (12) month period beginning on the April 1st
next following the date he or she so qualifies.

  2.24   Separation from Service or “Separates from Service” shall mean a
Participant’s termination from employment with the Company on account of such
Participant’s death, permanent and total disability, retirement, or other such
termination of employment. A Participant will not be deemed to have experienced
a Separation from Service if such Participant is on military leave, sick leave,
or other bona fide leave of absence, to the extent such leave does not exceed a
period of six (6) months or, if longer, such longer period of time as is
protected by either statute or contract. A Participant will not be deemed to
have experienced a Separation from Service, if such Participant 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 (20%) of the services provided by such Participant to the Company during
the immediately preceding three (3) full calendar year of employment 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 of employment (or, if less, the period of employment).”

2. Section 3.3, Termination or Suspension of Participation; Renewed
Participation, is hereby amended by adding a new subsection (d) to the end
thereof, as follows:
          “(d) Notwithstanding the foregoing, in the event that a Participant
commences employment with a Subsidiary or Affiliate that has its principal place
of business located outside of the United States, but otherwise does not
Separate from Service, such Participant will cease being an active Participant
and stop accruing any benefit in the Plan until and unless such Participant
(i) again performs services as an employee for AGCo, a Subsidiary or an
Affiliate located within the United States, and (ii) is designated as an
Executive eligible to participate in the Plan.
3. Section 4.1, Form of Accrued Benefit, is hereby amended by deleting the
section in its entirety and replacing it with the following provision:
     “Form of Accrued Benefit. A Participant’s accrued benefit hereunder shall
consist of a monthly benefit. Where paid as a Normal Retirement Benefit, such
monthly benefit shall commence payment on the first day of the calendar month
coincident with or next following the date such Participant attains his or her
Normal Retirement Age, and shall be paid to such Participant as an annuity for
life (with 180 monthly payments, guaranteed) (the “Accrued Benefit”).

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Where paid as a Late Retirement Benefit, such monthly benefit shall commence
payment on the first day of the calendar month coincident with or next following
the date such Participant Separates from Service, and shall be paid to such
Participant as an annuity for life (with 180 monthly payments, guaranteed).
Notwithstanding the foregoing, in the event the Participant is a Specified
Employee, such Participant’s Normal Retirement Benefit or Late Retirement
Benefit, as applicable, shall not commence payment until six (6) months after
such Participant’s Separation from Service”
4. Section 5.1, Normal/Late Retirement Benefits, is hereby amended by deleting
the section in its entirety and replacing it with the following provision:
“Normal/Late Retirement Benefit. A Participant shall be entitled to receive
either a Normal Retirement Benefit or a Late Retirement Benefit, as applicable,
commencing as of the first of the month next following the later of the date
such Participant attains his or her Normal Retirement Age (“Normal Retirement”)
or actually Separates from Service (“Late Retirement”). For purposes of this
Plan, Normal Retirement Age shall mean a Participant’s attainment of age
sixty-five (65). The Participant’s Normal Retirement Benefit or Late Retirement
Benefit, as applicable, shall consist of his or her Accrued Benefit, determined
as of the date of his Separation from Service.
Notwithstanding the foregoing, in the event the Participant is a Specified
Employee, such Participant’s Normal Retirement Benefit or Late Retirement
Benefit, as applicable, shall not commence payment until six (6) months after
such Participant’s Separation from Service.”
5. Section 5.2, Early Retirement Benefit, is hereby amended by deleting the
section in its entirety and replacing it with the following provision:
“Early Retirement Benefit. A Participant is eligible to receive an Early
Retirement Benefit under the Plan, if such Participant Separates from Service
and satisfies the criteria for obtaining an Early Retirement Benefit, as set
forth below.
A Participant shall be eligible to receive an Early Retirement Benefit if such
Participant Separates from Service and vests in his or her Accrued Benefit in
accordance with Section 5.3, on the first day of the month coinciding with or
next following:

  (a)   the date such Participant attains age fifty-five (55) and completes at
least ten (10) years of Service (at least five (5) of which must be completed
while a Participant); or     (b)   any date certain, designated by the Board in
writing by agreement with such Participant within thirty (30) days of such
Participant first becoming eligible to participate in the Plan.

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Notwithstanding the foregoing, in the event a Participant is a Specified
Employee and he or she is eligible for an Early Retirement Benefit due to his or
her Separation from Service, such Participant’s Early Retirement Benefit shall
not commence payment until six (6) months after such Participant’s Separation
from Service.
The Early Retirement Benefit payable to a Participant who retires under this
Section 5.2 shall be in an amount equal to such Participant’s Accrued Benefit,
determined as of the date such Benefit commences payment hereunder, but reduced
by the appropriate reduction factor specified in Schedule A (attached hereto).”
6. Section 5.3, Deferred Vested Benefit, is hereby amended by deleting the
section in its entirety and replacing it with the following:
“Deferred Vested Benefit.
     A Participant’s right to an Accrued Benefit shall vest after completing ten
(10) years of Service (at least five (5) of which is completed while a
Participant), even though such Participant Separates from Service with the
Company prior to the attainment of age fifty-five (55), so long as one (1) or
more of the following events occurs after such Participant’s forty-fifth (45th)
birthday:
(a) Such Participant’s Separation from Service results from unilateral action
taken by the Company;
(b) Such Participant is a member of a class of Executives declared by written
Board action to be ineligible to participate further in the Plan;
(c) Such Participant is demoted to non-Executive status by the Company; or
(d) A Change in Control occurs.
     Any Participant who vests hereunder (as provided above), but Separates from
Service from the Company prior to attaining age fifty-five (55) nevertheless
shall be eligible to commence receiving a Plan Benefit on the later of such
Participant’s sixty-fifth (65th) birthday or the date such Participant Separates
from Service. Notwithstanding the preceding sentence, a Participant, by special
election made within thirty (30) days of first becoming eligible to participate
in the Plan, may elect to have his/her Plan Benefit commence on the first of any
calendar month commencing after such Participant’s fifty-fifth (55th) birthday
and prior to such Participant’s sixty-fifth (65th) birthday (or if later, the
first of the calendar month next following the date such Participant Separates
from Service). The Accrued Benefit of a Participant who Separates from Service
with the

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Company prior to attaining age fifty-five (55) shall be computed and frozen as
of the date such Participant Separates from Service with the Company.
     The Plan Benefit actually payable to a Participant whose Accrued Benefit
vests hereunder shall be determined in accordance with (i) Section 5.1 hereof,
if such Participant commences receiving such Plan Benefit on or after attaining
age sixty-five (65); or (ii) Section 5.2 hereof, if such Participant commences
receiving such Plan Benefit prior to attaining age sixty-five (65) but on or
after the date such Participant attains age fifty-five (55); provided, however,
that such Plan Benefit shall be based on the above determination of the
Participant’s Accrued Benefit.”
7. Section 5.4, Disability Retirement Benefit, is hereby amended by deleting the
section in its entirety and replacing it with the following:
“Disability Retirement Benefit.
     A Participant who becomes disabled for purposes of the Long Term Disability
Plan and, as a result, is eligible for and receiving benefits under the Long
Term Disability Plan, may commence receiving a Disability Retirement Benefit on
the later of the first day of the month coinciding with or next following:
(a) The date such Participant ceases to receive benefit payments under the Long
Term Disability Plan; and
(b) (i) The date such Participant attains age sixty-five (65); or
 (ii) The date such Participant is found to have qualified for a 409A Disability
(as herein defined).
     The Plan Benefit so payable to a Participant shall consist of such
Participant’s Accrued Benefit, determined as of the date such Participant
commenced receiving benefits under the Long Term Disability Plan, if any. In the
event such Participant is not eligible to receive benefits under the Long Term
Disability Plan, such Participant’s Accrued Benefit shall be determined as of
the date such Participant is found to have qualified for a 409A Disability.
Notwithstanding any contrary Plan provision, if a Participant is found to have
qualified for a 409A Disability on or after attaining age fifty-five (55), but
ceases to be so disabled before such Participant’s Disability Plan Benefit would
have otherwise commenced, such Participant shall be eligible to receive an Early
Retirement Benefit as provided under Section 5.2 herein.”
8. Section 7.3, Discretion to Accelerate, is hereby amended by deleting the
first sentence therein in its entirety and replacing it with the following:

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“The Plan Administrator shall pay a Death Benefit in a single lump representing
the present value of such Death Benefit, less applicable withholding, if the
deceased Participant previously elected a lump sum payout within thirty
(30) days of the commencement of his or her participation in the Plan.”
9. Section 9.7, Tax Withholding, is hereby amended by deleting the section in
its entirety and replacing it with the following:
“Tax Withholding. Where and to the extent the accrual of Plan benefits by or for
a Participant, and/or the payment and distribution of Plan rights or interests
to a Participant or Beneficiary, results in employment taxes imposed under the
Federal Income Contributions Act (“FICA”) with respect to such Participant’s
Plan interest, or any related federal state or local income tax withholding
obligation(s) to be imposed upon the Company or the Plan Administrator, or some
other party (including without limitation, a participating Subsidiary or
Affiliate), the Company (or such other party) shall have the right to withhold
such amounts from any Plan benefit(s) due or becoming due and payable to such
Participant or Beneficiary, and to the extent not unlawful, from any regular
remuneration paid by the Company to a Participant.”
9. Article IX, General Provisions, is hereby amended by adding a new
Section 9.10 to the end thereto, which shall provide as follows:

  “9.10   Code Section 409A Compliance. The Plan is intended to be operated in
compliance with the requirements of Code Section 409A (including any rulings or
regulations promulgated thereunder). In the event that any provision of the Plan
fails to satisfy such requirements, 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 not to be feasible to 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 HEREOF, the Company by action of its Board of Directors has
caused this Amendment Number One to the Plan to be executed on 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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