##### 



Amendment Number Three to the American Greetings Corporation  Executive Deferred Compensation Plan
 American Greetings Corporation
 Executive Third Party Option Plan
 1.
    
    Purpose of the Plan. This plan shall be known as the American
Greetings Corporation Executive Third Party Option Plan (the Executive Option Plan
or the Plan). The purpose of the Plan is to attract and retain high quality
employees for positions of substantial responsibility, and to provide additional
incentives to a select group of management or highly compensated employees of American
Greetings Corporation so as to promote the success of the Company. The Executive
Option Plan shall serve as an amendment to the existing American Greetings Corporation
Executive Deferred Compensation Plan (Deferral Plan).2.
    
    Provision to Amend Deferral Plan. Pursuant to §10.1 of the Deferral
Plan, this Plan shall also serve as an amendment to the Deferral Plan to allow
Participants, who otherwise have an opportunity to extend the deferral period for
amounts deferred under rules adopted pursuant to §3.3(d) of the Deferral Plan, to
elect instead to receive an award of discounted options hereinafter (Option
Agreement) pursuant to this Plan in full satisfaction of such amounts due under the
Deferral Plan. As a condition to the receipt of the option award, the participant
acknowledges that they no longer have any right to such amounts under the Deferral
Plan. The Options awarded in substitution of the deferred compensation benefit shall
be governed by the terms of this Plan.In addition, adoption of this Plan shall also provide the Board of Directors (or the
Compensation Committee to the extent delegated), the sole discretion to provide
current participants in the Deferral Plan opportunities to substitute their rights to
receive deferred compensation under the Deferral Plan for the right to receive
discounted options pursuant to the Plan, provided the participant is at least 6
months from the payment date.3.
    
    Administration of the Plan. The Administrator shall be the Board, or
such other person or persons as designated by the Board. The Board, in its sole
discretion, is authorized to select the Employees who will receive Options and to
determine the number of Options and the number of Shares under each Option. The
Administrator in its sole discretion may delegate and pay compensation for services
rendered relating to the ministerial duties of plan administration including, but not
limited to, selection of investments available under the Plan. Except as otherwise
specifically provided in the
 1




---



##### 



Plan, the Administrator shall be responsible for the administration of the Plan.
 (a)
    
    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.(b)
    
    Duties. The Administrator shall have the following
rights, powers and duties:
 i.
    
    Subject to the terms of this Plan
(including without limitation the claims procedure in paragraph 23)
and the Option Agreement, the decision of the Administrator in
matters within its jurisdiction shall be final, binding and
conclusive upon the Employee and upon any other person affected by
such decision.ii.
    
    The Administrator shall have the duty
and authority to interpret and construe the provisions of the Plan
and the Option Agreement, to decide any question which may arise
regarding the rights of employees, Participants, and beneficiaries,
and 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 the Option Agreement, and to
exercise any other rights, powers or privileges granted to the
Administrator by the Board under the terms of the Plan.iii.
    
    The Administrator shall maintain full
and complete records of its decision. 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 calendar year
provide each Participant a detailed report of the status of the
Participants Account.iv.
    
    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 Employer for inspection by
the Participants at reasonable times determined by the
Administrator.v.
    
    The Administrator shall periodically
report to the Board with respect to the status of the Plan.
 2




---



##### 



(c)
    
    Fees. No fee or compensation shall be paid to any
person for services as the Administrator.
 4.
    
    Definitions. As used herein, the following definitions shall apply:
 (a)
    
    Administrator shall mean the person or persons described in
paragraph 3, above.(b)
    
    Award Date shall mean the effective date of the
Participants Option Agreement.(c)
    
    Board shall mean the Board of Directors of American
Greetings Corporation, and its subsidiaries.(d)
    
    Code shall mean the Internal Revenue Code of 1986, as
amended.(e)
    
    Company shall mean American Greetings Corporation, and its
subsidiaries.(f)
    
    Deferral Plan shall mean the existing American Greetings
Corporation Executive Deferred Compensation Plan.(g)
    
    Employee shall mean any employee of the Company.(h)
    
    Employer shall mean American Greetings Corporation, and its
subsidiaries.(i)
    
    Option shall mean an option granted pursuant to this Plan
to purchase one or more Shares.(j)
    
    Option Agreement means the written agreement evidencing the
award of an Option under the Plan.(k)
    
    Participant shall mean any Employee who receives an Option
under the Plan, as evidenced by an Option Agreement entered into between such
Employee and the Company.(l)
    
    Plan shall mean the American Greetings Executive Third
Party Option Plan as amended from time to time.(m)
    
    Shares shall mean the Shares of mutual funds, Shares of
common or preferred stock of a corporation listed or reported on a national
securities exchange or quotation system, or Shares of a regulated investment
company, as designated and amended by the Board and
 3




---



##### 



referenced in Appendix A. In no way however, may Shares include units of any
money market funds or other cash equivalents. Shares subject to purchase
pursuant to any Option shall also include any earnings on such Shares
subsequent to the Award Date.(n)
    
    Termination of Employment shall mean the date on which the
employee ceases to perform services for the Company.
 5.
    
    Term of Plan. The Plan shall become effective on the date it is
adopted by the Board or its designee and shall continue in effect as amended from time
to time until terminated pursuant to paragraph 20.6.
    
    Shares Subject to the Plan. The aggregate number and type of Shares
subject to Options will be fully described in each Option Agreement.7.
    
    Eligibility. All Employees of the Company who are both in the group
of employees determined by the Board to be part of the select group of management or
highly compensated employees and are also designated as Participants by the Board are
eligible to receive Options under the Plan.8.
    
    Grant of Options. The Board shall determine the number of Shares to
be offered from time to time and grant Options under the Plan. The grant of Options
shall be evidenced by written Option Agreements containing such terms and provisions
as are approved by the Board. The Administrator of the Plan shall execute the Option
Agreements on behalf of the Company upon instructions from the Board.9.
    
    Time of Grant of Options. The date of grant of an Option under the
Plan shall, for all purposes, be the date on which the Board awards the Option, as
evidenced by the execution of an Option Agreement.10.
    
    Option Price. The Option Price for each Share shall be expressed in
each Option Agreement, provided, however, the Option Price shall at no time be less
than 25 percent of the fair market value of a Share on the date of grant of the
Option. Fair market value on any day of reference shall be the closing price of the
Share on such date, unless the Board, in its sole discretion shall determine otherwise
in a fair and uniform manner. For this purpose, the closing price of the Share on any
business day shall be (i) if the Share is listed or admitted for trading on any United
States national securities exchange, the last reported sale price of the Share on such
exchange, as reported in any newspaper of general circulation, (ii) if the Share is
not listed or admitted for trading on any United States national securities exchange,
the average of the high and low sale prices of the Share for such day reported on the
NASDAQ SmallCap Market or a comparable consolidated
 4




---



##### 



transaction reporting system, or if no sales are reported for such day, such average
for the most recent business day within five business days before such day which
sales are reported, or (iii) if neither clause (i) or (ii) is applicable, the average
between the lowest bid and highest asked quotations for the Share on such day as
reported by the NASDAQ SmallCap Market or the National Quotation Bureau,
Incorporated, if at least two securities dealers have inserted both bid and asked
quotations for the Share on at least 5 of the 10 preceding business days.11.
    
    Exercise. Except as otherwise provided in the Option Agreement, all
Options granted under the Plan will be vested at grant and therefore may be
exercisable immediately.The Option may be exercised, as provided in the Option Agreement, in full or in part
from the date of the grant at increments of no less than 100% of each grant.
However, in no event shall any option be exercised more than 20 years after the date
of grant, with the option to extend the exercise period at the discretion of the
Board.Reinvested dividends shall be attributed proportionally to the property subject to
the Option awards and will be purchased when the underlying award is exercised. For
example, if an original grant of an Option to purchase 400 shares (after the payment
of the exercise price) generated 100 additional shares on such 400 shares from
reinvested dividends, an exercise of one-fourth of the originally granted options
will result in the purchase (after the payment of the exercise price) of 125 shares
in order to proportionally include the resulting reinvested dividends.In addition, all Options granted under the Plan may only be exercised subject to any
other terms specified in the Option Agreement and if such terms conflict with the
terms of this Plan, the terms of this Plan Document control.12.
    
    Limitations on Option Disposition. Any Option granted under the Plan
and the rights and privileges conferred therewith shall not be sold, transferred,
encumbered, hypothecated or otherwise anticipated by the Participant other than by
will or the laws of descent and distribution. Options shall not be subject to, in
whole or in part, the debts, contracts, liabilities, or torts of the Participant, nor
shall they be subject to garnishment, attachment, execution, levy or other legal or
equitable process.13.
    
    Limitations on Option Exercise and Distribution. In the event that
the listing, registration or qualification of an Option or Shares on any securities
exchange or under any state or federal law, or the consent of approval of any
governmental regulatory body, or the availability of any exemption
 5




---



##### 



therefrom, is necessary as a condition of, or in connection with, the exercise of an
Option, then the Option shall not be exercised in whole or in part until such
listing, registration, qualification, consent or approval has been effected or
obtained. Notwithstanding any provision of the Plan to the contrary, the Company
shall have no obligation or liability to deliver any Shares under the Plan unless
such delivery would comply with all applicable laws and all applicable requirements
of any securities exchange or similar entity.14.
    
    Option Financing. Upon the exercise of any Option granted under the
Plan, the Participant may instruct the Administrator to sell or deem to sell a number
of Shares otherwise deliverable to the Participant and attributable to the exercise of
the Option in order to pay the exercise price of the Option. The Board will, in a
matter similar to that provided under §4 of the 1997 Equity and Performance Incentive
Plan, make financing available to the Participant to facilitate the exercise of the
Option, subject to such terms as the Board may specify.15.
    
    Withholding of Taxes. The Company may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of any taxes
which is required by any law or regulation of any governmental authority, whether
federal, state or local, domestic or foreign, to withhold in connection with any
Option including, but not limited to, the withholding of the issuance of all or any
portion of such Shares until the Participant reimburses the Company for the amount the
Company is required to withhold with respect to such taxes, canceling any portion of
such issuance in an amount sufficient to reimburse itself for the amount it is
required to so withhold, or taking any other action reasonably required to satisfy the
Companys withholding obligation.16.
    
    Modification of Option or Plan. At any time and from time to time
the Board may execute an instrument providing for the modification, extension, or
renewal of any outstanding Option and or the Plan. However, no such modification,
extension, or renewal shall impair the rights of any Participant except to the extent
necessary to comply with any provision of the federal or applicable state laws or
except to the extent necessary to prevent detriment to the Company as so determined by
the Board.17.
    
    Substitution of Option. If a Participant has been granted an Option
to purchase Shares under an Option Agreement, then except as limited by the terms of
the Option Agreement, the Participant may direct that the Option be converted into an
Option to purchase other Shares as listed in Appendix A. Such substitution shall only
be allowed to the extent that, immediately following the substitution, the difference
between the fair market value of the Shares subject to the substituted Option and the
exercise price of the
 6




---



##### 



substituted Option is no greater than the difference which existed immediately prior
to the substitution between the fair market value of the Shares subject to the
original Option and the exercise price of the original Option. In no event shall a
participant make substitutions more often than the frequency set forth in the Option
Agreement or administrative procedures adopted by the Board from time to time.18.
    
    Change in Control. In the event of a Change in Control as defined in
the Companys Employee Stock Option Plan, the executives options shall
continue to be exercisable for the remaining term of the option.19.
    
    Continued Employment Not Presumed. Nothing in the Plan or any
document describing it nor the grant of an Option via an Option Agreement shall give
any Participant the right to continue in employment with the Company or affect the
right of the Company to terminate the employment of any such person with or without
cause.20.
    
    Amendment and Termination of the Plan or Option
Agreement. The Board,
in its sole discretion, may amend, suspend or discontinue the Plan or Option
Agreement. No amendment, suspension, or discontinuance shall impair the rights of any
Participant except to the extent necessary to comply with any provision of federal or
applicable state laws or except to the extent necessary to prevent detriment to the
Company as so determined by the Board.21.
    
    Governing Law. The Plan shall be governed by and construed in
accordance with the laws of Ohio.22.
    
    Severability of Provisions. Should any provision of the Plan be
determined to be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect the remaining provisions of the Plan, but shall be
fully severable, and the Plan shall be construed and enforced as if such provision had
never been inserted herein.23.
    
    Claims Procedure. In general, any claim for benefits under the Plan
shall be filed by the Participant or beneficiary (claimant) on the form prescribed
for such purpose with the Administrator. If a claim for benefits under the Plan is
wholly or partially denied, notice of the decision shall be furnished to the claimant
by the Administrator within a reasonable period of time after receipt of the claim by
the Administrator. The claims procedure shall be as follows:
 (a)
    
    Any claimant who is denied a claim for benefits shall be
furnished written notice setting forth:
 7




---



##### 



(i)
    
    The specific reason or reasons for the
denial;(ii)
    
    Specific reference to the pertinent
provision of the Plan upon which the denial is based;(iii)
    
    A description of any additional material
or information necessary for the claimant to perfect the claim; and(iv)
    
    An explanation of the claim review
procedure under the Plan.
 (b)
    
    In order that a claimant may appeal a denial of a claim, the
claimant or the claimants duly authorized representative may:
 (i)
    
    Request a review by written application to
the Administrator, or its designate, no later than sixty (60) days
after receipt by the claimant of written notification of denial of a
claim;(ii)
    
    Review pertinent documents; and(iii)
    
    Submit issues and comments in writing.
 (c)
    
    A decision on review of a denied claim shall be made not
later than sixty (60) days after receipt of a request for review, unless
special circumstances require an extension of time for processing, in which
case a decision shall be rendered within a reasonable period of time, but not
later than one hundred and twenty (120) days after receipt of a request for
review. The decision on a review shall be in writing and shall include the
specific reason(s) for the decision and the specific reference(s) to the
pertinent provisions of the Plan on which the decision is based.
 24.
    
    Designation of Beneficiary. A Participant, by filing the prescribed
form with the Administrator (See Appendix B), may designate one or more beneficiaries
and successor beneficiaries who shall be given the right to exercise Options in
accordance with the terms of the Plan in the event of the Participants death. In the
event the Participant does not file a form designating one or more beneficiaries, or
no designated beneficiary survives the Participant, the Option shall be exercisable by
the individual to whom such right passes by will or the laws of descent and
distribution.25.
    
    Intent. The Plan is intended to be unfunded and maintained by the
Company solely to provide options to a select group of management or highly
compensated employees as such group is described under Sections 201(2), 301(a)(3), and
401(a)(1) of the Employee Retirement Income Security Act of 1974 (ERISA) as
interpreted by the U.S. Department of Labor. The Plan is not intended to be a plan
described in Sections 401(a) or 457 of the Code. The obligation of the Company to
deliver Shares subject to the
 8




---



##### 



Options granted under this Plan constitutes nothing more than an unsecured promise of
the Company to fulfill such obligations and any property of the Company that may be
set aside to permit it to fulfill such obligations under the Plan shall, in the event
of the Companys bankruptcy or insolvency, remain subject to the claims of the
Companys general creditors until such Options are exercised.
   American Greetings CorporationBy:
    
    /s/ Dale CableTitle:
    
    Vice President
 9




---



##### 



APPENDIX A
 Mutual Funds Available by the Company for Grant or
Substitution
 Description




---



##### 



APPENDIX B
 Beneficiary Designation for the
American Greetings Corporation
Executive Third Party Option Plan
  From:
  Primary Beneficiary(ies):Name:
    
    
    
    
    %%%Secondary Beneficiary(ies)Name:
    
    
    
    
    %%%%
  2




---



##### 



Signed:ParticipantDate
 3