Exhibit 10.2

 

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Rewarding Your Long-Term Performance

Long-Term Incentive

FY14 • FY15 • FY16

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Sharing in American Greetings Success

The Long-Term Incentive Plan (also referred to herein as the “Plan” or “LTIP”)
is designed to reward you for your contributions toward the achievement of the
Company’s long-term financial objectives.

Table of Contents

Plan Overview .2

Performance Goals and Measurement .3

Award Calculation Examples .4

Important Administrative Plan Details .5-7

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Plan Objectives

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Focus on driving exceptional financial results | Motivate leaders to
substantially improve our earnings performance over the long-term.

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Share in the success of the Company when results are achieved | Instill a sense
of purpose, direction and collective unity as efforts are directed toward the
achievement of a common objective.

Who Is Eligible

Associates in job class 317 (85/86) or above are eligible to participate.

Refer to the sections entitled Important Administrative Plan Details for
additional details on eligibility for participation in the Plan.

How the Plan Works

The Long-Term Incentive Plan provides you with an opportunity to earn a cash
award if American Greetings achieves its planned three-year earnings goal. This
goal represents the cumulative earnings before interest, taxes, depreciation,
and amortization (EBITDA) that the Company needs to generate over fiscal years
2014, 2015 and 2016 to achieve its financial objectives.

Your Long-Term Incentive Plan (LTIP) award is tied directly to our three-year,
cumulative EBITDA performance. The more EBITDA we generate, the greater your
potential award.

Provided we achieve at least threshold performance, your LTIP award will be
equal to your target award opportunity multiplied by the earned award
percentage.

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Target award opportunity: a fixed dollar amount tied to your job level that
represents what your earned award would be if we achieved 100% of our
three-year, cumulative EBITDA goal. Your target award opportunity will be
communicated to you separately.

•

 

Earned award percentage: represents how much of your target award opportunity
you have earned as a result of the Company’s EBITDA performance. It can range
from 0% (no award) to 200% (maximum possible award).

If an award is earned, it will be paid to you through the Company’s regular
payroll process following the calculation of the cumulative EBITDA which will
occur after the close of fiscal 2016.

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Performance Goals and Measurement

When American Greetings three-year, cumulative EBITDA result is calculated, it
will be compared to the threshold, target and maximum EBITDA performance goals
that have been established for the purposes of the Long-Term Incentive Plan.
This comparison of our actual result to our goals is considered our EBITDA
performance and is directly tied to the Plan’s earned award percentage.

Earned Award Performance Level What it Means Percentage

The minimum performance that can be

Threshold 50% achieved and still earn an award Target What we want to achieve
100% The performance at which the largest possible Maximum 200% award can be
earned

No award is earned for performance below Threshold. The award is capped at 200%
for performance above Maximum. The earned award percentage is interpolated for
performance between Threshold and Maximum.

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Award Calculation Examples

For the purposes of these examples, assume our three-year, cumulative EBITDA
goals are as presented in the table to the right (Note that these goals are
strictly for illustration purposes only. Our actual goal may be different and
will be communicated to you separately).

Example A:

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Target Award Opportunity = $5,000

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Fiscal 2014—2016 EBITDA performance = $510 million

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Earned Award Percentage = 120% (see Example A Calculation)

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Earned Award = $6,000 ($5,000 x 120%)

Example B:

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Target Award Opportunity = $5,000

•

 

Fiscal 2014—2016 EBITDA performance = $480 million

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Earned Award Percentage = 80% (see Example B Calculation)

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Earned Award = $4,000 ($5,000 x 80%)

Three-Year Cumulative Earned Award Performance EBITDA Goal Percentage

Threshold $450 million 50% Target $500 million 100% Maximum $550 million 200%

Example A Calculation

($510 – $500)

Earned Award % = x (200%—100%) + 100% = 120% ($550 – $500)

Example B Calculation

($480 – $450)

Earned Award % = x (100%—50%) + 50% = 80% ($500 – $450)

HOW IT’S CALCULATED

The interpolation formula used to calculate the earned award percentage. When
Actual Performance less than Target Goal:

(Actual Performance – Threshold Goal)

Earned Award % = x (100%—50%) + 50% (Target Goal – Threshold Goal)

When Actual Performance greater than Target Goal:

(Actual Performance – Target Goal)

Earned Award % = x (200%—100%) + 100% (Maximum Goal – Target Goal)

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Important Administrative Plan Details

Eligibility

To be eligible to participate in the Long-Term Incentive Plan, you must be
actively employed in a corporate-level job class of 317 (85/86) or above.

New Hires

If you are hired between March 1, 2013 and February 29, 2016, your award will be
prorated for the period of time (to the nearest full month) you are a
participant in the Plan.

Promotions

If you are promoted, your award will be prorated to the nearest full month,
based on the period of participation.

Termination

No award is earned if you separate from the Company for any reason (other than
qualified leave of absence, retirement, disability, or death) before the
completion of the fiscal 2014-2016 performance period.

Leave of Absence, Permanent Disability, Death

If you take a qualified leave of absence, retire on or after attaining age 65
with 10 years of continuous service, suffer a permanent disability or die, your
award will be prorated to the first of the month on or after the date of leave,
permanent disability or death.

An associate will be deemed to suffer a permanent disability only in the
following circumstances: (A) where an associate is absent from employment with
American Greetings due to his or her inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment, which either can be expected to result in death, or can be expected
to last for a continuous period of not less than 12 months; or (B) where an
associate is scheduled to receive income replacement benefits for a period of
not less than 3 months under an accident and health plan covering an American
Greetings associate on account of a medically determinable physical or mental
impairment that can be expected to result in death or last for a continuous
period of not less than 12 months.

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Important Administrative Plan Details

Award Payments

Incentive awards earned will be paid to participants within two and one-half
months following the end of fiscal 2016, typically within 60 days after the end
of the fiscal year. Plan awards are subject to normal tax withholding at a
standardized rate and will be deposited to a bank account of your choice.

It is the intent that incentive awards fall under the short-term deferral rules
of Section 409A of the Internal Revenue Code to exempt the payment of such
Long-Term Incentive Plan benefits from the requirements of Section 409A or
otherwise comply with the requirement of Section 409A. If incentive awards are
subject to Section 409A, the Plan will be interpreted in accordance with
Section 409A and the regulations promulgated thereunder.

Calculating Payouts

For computation purposes, financial goals and actual performance results are
rounded to the nearest $1,000. The percent of the financial goal achieved and
the percent of target award earned is rounded to the nearest one-tenth of one
percent. The actual incentive award is rounded to the nearest dollar.

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Nothing in this brochure or in any Participant Letter should be construed to
create or imply any contract of employment between an associate and American
Greetings and its subsidiaries or to create any binding contractual right to
payment of any specific amount under the American Greetings Long-Term Incentive
Plan. The provisions of this brochure describe the general guidelines used by
American Greetings in determining the benefits payable to Plan participants;
however, in every case, American Greetings reserves the right to reduce or
eliminate the amount that would otherwise be payable to a participant or
participants under such guidelines where it determines, in its discretion, that
such a reduction is necessary or appropriate, in light of the participant’s
performance or other relevant business circumstances. In its capacity as
administrator of the Long-Term Incentive Plan, American Greetings reserves the
right to construe and interpret the Plan in all respects and to make all
determinations and take all actions necessary or advisable for the management
and administration of the Long-Term Incentive Plan, including establishing,
adopting or revising any rules as it may deem necessary.

Questions

If you have general questions about the American Greetings Long-Term Incentive
Plan, please contact the American Greetings Shared Services Department at World
Headquarters in Cleveland at 1-800-321-3040 ext. 4711.

Any award earned under this Long-Term Incentive Plan shall be subject to
rescission, cancellation or recoupment, in whole or part, if and to the extent
so provided under any “clawback,” recoupment or similar policy of American
Greetings in effect on the date of payment or that may be established
thereafter. Interest in any award under the Long-Term Incentive Plan may not be
assigned, alienated or encumbered by any Plan participant.

American Greetings reserves the right to terminate or make changes to the LTIP,
including retroactively, at any time without prior notice to any of the LTIP’s
participants. The Board of Directors (or committee thereof) are the only persons
who have the authority to alter or amend this LTIP. Any such alteration or
amendment must be done in writing. No participant should rely on an alteration
or amendment to this LTIP unless it is made in writing and signed by a Co-Chief
Executive Officer or the Chairman. The Plan will be governed, construed and
administered in accordance with the laws of the State of Ohio, without reference
to its conflict of laws provisions.

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Notes

8

 

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