##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 FORM 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    February 28, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from                      to   Commission File
    No. 1-13859
 American Greetings
    Corporation
 (Exact name of registrant as
    specified in its charter)
  Ohio(State or other
    jurisdiction
    of incorporation or organization)

34-0065325(I.R.S. Employer
    Identification No.)One American Road, Cleveland, Ohio(Address of principal
    executive offices)

44144(Zip
    Code)   Registrants telephone number, including area code:
    (216) 252-7300
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredClass A Common Shares, Par Value $1.00

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 Class B Common Shares, Par Value $1.00
 (Title of Class)
  þ o
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer oNon-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o
   Rule 12b-2 o þ
    Number of
    shares outstanding as of April 27, 2010:
    CLASS A COMMON 36,270,550
    CLASS B COMMON 3,256,893DOCUMENTS INCORPORATED BY REFERENCE




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##### 





AMERICAN
    GREETINGS CORPORATION
    INDEX
   
 PageNumberPART IItem 1.


Business


1Item 1A.


Risk Factors


5Item 1B.


Unresolved Staff Comments


15Item 2.


Properties


16Item 3.


Legal Proceedings


17Item 4.


Reserved


19PART IIItem 5.


Market for the Registrants Common Equity,
    Related Stockholder Matters and 
      Issuer Purchases of Equity Securities


21Item 6.


Selected Financial Data


24Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of 
      Operations


25Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


47Item 8.


Financial Statements and Supplementary Data


48Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial 
      Disclosure


95Item 9A.


Controls and Procedures


95Item 9B.


Other Information


97PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


97Item 11.


Executive Compensation


97Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related 
      Stockholder Matters


97Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


98Item 14.


Principal Accounting Fees and Services


98PART IVItem 15.


Exhibits, Financial Statement Schedules


98SIGNATURES


107EX-2.6EX-10.59EX-21EX-23EX-31.1EX-31.2EX-32




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PART I  Unless otherwise indicated or the context otherwise requires,
    the Corporation, we, our,
    us and American Greetings are used in
    this report to refer to the businesses of American Greetings
    Corporation and its consolidated subsidiaries.
  Item 1.
    Business  OVERVIEW
      PRODUCTS
  and/or
  BUSINESS
    SEGMENTS
    CONCENTRATION
    OF CREDIT RISKS
   1




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CONSUMERS
    COMPETITION
      
    Online digital photography services companies such as
    Shutterfly, Kodak EasyShare Gallery (formerly known as Ofoto),
    Snapfish, which is a service of Hewlett-Packard, Vista Print,
    and others;
    Internet portals and search engines such as Yahoo!, AOL, and
    Google that offer broad-reaching digital photography and related
    products and services to their large user bases;
    Social media companies that host images such as MySpace,
    Facebook and Hi5; and
    Specialized companies in the photo book and stationery business
    such as Hallmark, Shutterfly, Tiny Prints, Minted, Picaboo and
    Blurb.    PRODUCTION
    AND DISTRIBUTION
    direct-to-plate
 2




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INTELLECTUAL
    PROPERTY RIGHTS
    EMPLOYEES
    Union

Location

Contract Expiration DateInternational Brotherhood of Teamsters

Bardstown, Kentucky;

March 20, 2011Kalamazoo, Michigan;

April 30, 2010*Cleveland, Ohio

March 31, 2013UNITE-HERE Union

Greeneville, Tennessee (Plus Mark)

October 19, 2011     *
    
    In connection with our sale of certain assets, equipment and
    processes used in the manufacture and distribution of party
    goods, we are in the process of winding down and closing our
    Kalamazoo, Michigan facility.   3




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SUPPLY
    AGREEMENTS
      ENVIRONMENTAL
    AND GOVERNMENTAL REGULATIONS
        
    The CAN-SPAM Act of 2003 and similar laws adopted by a number of
    states. These laws are intended to regulate unsolicited
    commercial
    e-mails,
    create criminal penalties for unmarked sexually-oriented
    material and
    e-mails
    containing fraudulent headers and control other abusive online
    marketing practices. 4




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
    The Communications Decency Act, which gives statutory protection
    to online service providers who distribute third-party content.
    The Digital Millennium Copyright Act, which is intended to
    reduce the liability of online service providers for listing or
    linking to third-party websites that include materials that
    infringe copyrights or other rights of others.
    The Childrens Online Privacy Protection Act and the
    Prosecutorial Remedies and Other Tools to End Exploitation of
    Children Today Act of 2003, which are intended to restrict the
    distribution of certain materials deemed harmful to children and
    impose additional restrictions on the ability of online services
    to collect user information from minors. In addition, the
    Protection of Children From Sexual Predators Act of 1998
    requires online service providers to report evidence of
    violations of federal child pornography laws under certain
    circumstances.
    Statutes adopted in the State of California require online
    services to report certain breaches of the security of personal
    data, and to report to California consumers when their personal
    data might be disclosed to direct marketers.  and/or
    AVAILABLE
    INFORMATION
  Form 10-K, Form 10-Q, Form 8-K
    Item 1A.
    Risk
    Factors   5




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There
    are factors outside of our control that may decrease the demand
    for our products and services, which may adversely affect our
    performance.
    Providing
    new and compelling products is critical to our future
    profitability and cash flow.
    We
    rely on a few customers for a significant portion of our
    sales.
    Difficulties
    in integrating acquisitions could adversely affect our business
    and we may not achieve the cost savings and increased revenues
    anticipated as a result of these acquisitions.
   6




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day-to-day
  If
    Schurman Fine Papers is unable to operate its retail stores
    successfully, it could have a material adverse effect on
    us.
    
    we remain subject to certain of the Retail Operations store
    leases on a contingent basis through our subleasing of stores to
    Schurman (as described in Note 13 to the Consolidated
    Financial Statements included in Part II, Item 8 of
    this Annual Report, as of February 28, 2010,
    Schurmans aggregate commitments to us under these
    subleases was approximately $51 million);
    we are the predominant supplier of greetings cards and other
    social expression products to the retail stores operated by
    Schurman; and
    we have provided credit support to Schurman, including up to
    $24.0 million of guarantees in favor of the lenders under
    Schurmans senior revolving credit facility as described in
    Note 2 to the Consolidated Financial Statements under
    Part II, Item 8 of this Annual Report.   7




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##### Table of Contents



Our
    business, results of operations and financial condition may be
    adversely affected by retail consolidations.
    Bankruptcy
    of key customers could give rise to an inability to pay us and
    increase our exposure to losses from bad debts.
    We
    rely on foreign sources of production and face a variety of
    risks associated with doing business in foreign
    markets.
    
    political instability, civil unrest and labor shortages;
    imposition of new legislation and customs regulations
    relating to imports that may limit the quantity
    and/or
    increase the cost of goods which may be imported into the United
    States from countries in a particular region;
    lack of effective product quality control procedures by foreign
    manufacturers and suppliers;
    currency and foreign exchange risks; and
    potential delays or disruptions in transportation as well as
    potential border delays or disruptions.     8




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We
    have foreign currency translation and transaction risks that may
    materially and adversely affect our operating
    results.
    The
    greeting card and gift wrap industries are extremely
    competitive, and our business, results of operations and
    financial condition will suffer if we are unable to compete
    effectively.
    
    adapt to changes in customer requirements or consumer
    preferences more quickly;
    take advantage of acquisitions and other opportunities more
    readily;
    devote greater resources to the marketing and sale of its
    products; and
    adopt more aggressive pricing policies.    We
    face intense competition from a range of competitors in the
    digital photography products and services industries and may be
    unsuccessful in competing against current and future
    competitors.
   9




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
    Online digital photography services companies such as
    Shutterfly, Kodak EasyShare Gallery (formerly known as Ofoto),
    Snapfish, which is a service of Hewlett-Packard, Vista Print,
    and others;
    Internet portals and search engines such as Yahoo!, AOL and
    Google that offer broad-reaching digital photography and related
    products and services to their large user bases;
    Social media companies that host images such as MySpace,
    Facebook and Hi5; and
    Specialized companies in the photo book and stationery business
    such as Hallmark, Shutterfly, Tiny Prints, Minted, Picaboo and
    Blurb.    We are
    subject to a number of restrictive covenants under our borrowing
    arrangements, which could affect our flexibility to fund ongoing
    operations, uses of capital and strategic initiatives, and, if
    we are unable to maintain compliance with such covenants, could
    lead to significant challenges in meeting our liquidity
    requirements.
   10




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We may
    be unsuccessful in completing the divestiture of the Strawberry
    Shortcake and Care Bears properties.
    Pending
    litigation could have a material, adverse effect on our
    business, financial condition, liquidity, results of operations,
    and cash flows.
    We may
    not realize the full benefit of the material we license from
    third parties if the licensed material has less market appeal
    than expected or if sales revenue from the licensed products is
    not sufficient to earn out the minimum guaranteed
    royalties.
  and/or
  Our
    inability to protect or defend our intellectual property rights
    could reduce the value of our products and brands.
   11




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Rapidly
    changing trends in the childrens entertainment market
    could adversely affect our business.
    Our
    results of operations fluctuate on a seasonal
    basis.
    Increases
    in raw material and energy costs may materially raise our costs
    and materially impact our profitability.
    The
    loss of key members of our senior management and creative teams
    could adversely affect our business.
   12




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If we
    fail to extend or renegotiate our primary collective bargaining
    contracts with our labor unions as they expire from time to
    time, or if our unionized employees were to engage in a strike,
    or other work stoppage, our business and results of operations
    could be materially adversely affected.
    Employee
    benefit costs constitute a significant element of our annual
    expenses, and funding these costs could adversely affect our
    financial condition.
    Various
    environmental regulations and risks applicable to a manufacturer
    and/or distributor of consumer products may require us to take
    actions, which will adversely affect our results of
    operations.
    We may
    be subject to product liability claims and our products could be
    subject to voluntary or involuntary recalls and other
    actions.
  and/or
 13




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Government
    regulation of the Internet and
    e-commerce
    is evolving, and unfavorable changes or failure by us to comply
    with these regulations could harm our business and results of
    operations.
  e-commerce. e-commerce e-commerce.
  Information
    technology infrastructure failures could significantly affect
    our business.
     14




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Acts
    of nature could result in an increase in the cost of raw
    materials; other catastrophic events, including earthquakes,
    could interrupt critical functions and otherwise adversely
    affect our business and results of operations.
    Members
    of the Weiss family and related entities, whose interests may
    differ from those of other shareholders, own a substantial
    portion of our common shares.
    Our
    charter documents and Ohio law may inhibit a takeover and limit
    our growth opportunities, which could adversely affect the
    market price of our common shares.
    Item 1B.
    Unresolved
    Staff Comments   15




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##### Table of Contents



Item 2.
    Properties        ExpirationApproximate Square Feet


Date ofOccupied


MaterialLocation

Owned


Leased


Leases*


Principal ActivityCleveland,
    (1)(3)(4)Ohio


1,700,000










World Headquarters: General offices of North American Greeting
    Card Division; Plus Mark, Inc.; AG Interactive, Inc.; and AGC,
    LLC; creation and design of greeting cards, gift wrap, party
    goods, stationery and giftware; marketing of electronic greetingsBardstown,(1)Kentucky


413,500










Cutting, folding, finishing and packaging of greeting cardsDanville,(1)Kentucky


1,374,000










Distribution of everyday products including greeting cardsOsceola,(1)Arkansas


2,552,000










Cutting, folding, finishing and packaging of greeting cards and
    warehousing; distribution of seasonal productsRipley,(1)Tennessee


165,000










Greeting card printing (lithography)Kalamazoo,
    (1)(5)Michigan


602,500










Manufacture and distribution of party goodsForest
    City,(4)North Carolina


498,000










Manufacture of display fixtures and other custom display
    fixtures by A.G. Industries, Inc.Greeneville,(1)Tennessee (Two Locations)


1,410,000










Printing and packaging of seasonal greeting cards and wrapping
    items and order filling and shipping for Plus Mark, Inc.Chicago,(1)Illinois






45,000



2018


Administrative office for Recycled Paper Greetings, Inc. (now
    known as Papyrus-Recycled Greetings, Inc.)University
    Park,(1)Illinois






184,500



2010


Warehousing and distribution for Recycled Paper Greetings, Inc.
    (now known as Papyrus-Recycled Greetings, Inc.)Mississauga,(1)Ontario, Canada






38,000



2018


General office of Carlton Cards Limited (Canada)Clayton,(2)Australia


208,000










General offices of John Sands companiesDewsbury,(2)England (Two Locations)


441,500










General offices of UK Greetings Ltd. and manufacture and
    distribution of greeting cards and related productsCorby, England
    (2)


85,000










Distribution of greeting cards and related products     1

    
    North American Social Expression Products2

    
    International Social Expression Products3

    
    AG Interactive4

    
    Non-reportable5

    
    In connection with our sale of certain assets, equipment and
    processes used in the manufacture and distribution of party
    goods, we are in the process of winding down and closing our
    Kalamazoo, Michigan facility. 16




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Item 3.
    Legal
    Proceedings  Cookie Jar/MoonScoop Litigation.
    third-party cross-claim
 17




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##### Table of Contents



Electrical Workers Pension Fund, Local 103, I.B.E.W.
    Litigation. and/or
  RPG Investment Holdings, LLC Litigation.
   18




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##### Table of Contents



Item 4.
    Reserved  Executive
    Officers of the Registrant
    Name

Age

Current Position and OfficeMorry Weiss


69


ChairmanZev Weiss


43


Chief Executive OfficerJeffrey Weiss


46


President and Chief Operating OfficerJohn W. Beeder


50


Senior Vice President, Executive Sales and Marketing OfficerMichael L. Goulder


50


Senior Vice President, Executive Supply Chain OfficerThomas H. Johnston


62


Senior Vice President, Creative/MerchandisingCatherine M. Kilbane


47


Senior Vice President, General Counsel and SecretaryJosef Mandelbaum


43


CEOAG Intellectual PropertiesBrian T. McGrath


59


Senior Vice President, Human ResourcesDouglas W. Rommel


54


Senior Vice President, Chief Information OfficerStephen J. Smith


46


Senior Vice President and Chief Financial OfficerRobert C. Swellie


58


Senior Vice President, Wal-Mart Team; President Carlton Cards
    Limited (Canada)Erwin Weiss


61


Senior Vice President, Enterprise Resource PlanningJoseph B. Cipollone


51


Vice President, Corporate Controller     
    Morry Weiss has held various positions with the Corporation
    since joining in 1961, including most recently Chief Executive
    Officer of the Corporation from October 1987 until June 2003.
    Mr. Morry Weiss has been Chairman since February 1992.
    Zev Weiss has held various positions with the Corporation since
    joining in 1992, including most recently Executive Vice
    President from December 2001 until June 2003 when he was named
    Chief Executive Officer.
    Jeffrey Weiss has held various positions with the Corporation
    since joining in 1988, including most recently Executive Vice
    President, North American Greeting Card Division of the
    Corporation from March 2000 until June 2003 when he was named
    President and Chief Operating Officer.
    John W. Beeder held various positions with Hallmark Cards, Inc.
    since 1983, most recently as Senior Vice President and General
    Manager  Greeting Cards from 2002 to 2006.
    Thereafter, Mr. Beeder served as the President and Chief
    Operating Officer of Handleman Corporation (international music
    distribution company) in 2006, and the Managing Partner and
    Chief Operating Officer of Compact Clinicals (medical publishing
    company) in 2007. He became Senior Vice President, Executive
    Sales and Marketing Officer of the Corporation in April 2008.
    Michael L. Goulder was a Vice President in the management
    consulting firm of Booz Allen Hamilton from October 1998 until
    September 2002. He became a Senior Vice President of the
    Corporation in November 2002 and is currently the Senior Vice
    President, Executive Supply Chain Officer.
    Thomas H. Johnston was Managing Director of Gruppo,
    Levey & Co., an investment banking firm focused on the
    direct marketing and specialty retail industries, from November
    2001 until May 2004, when he became Senior Vice President and
    President of Carlton Cards Retail, a position he held until 19




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May 2009, shortly after the sale of the Corporations
    Retail Operations segment in April 2009. Mr. Johnston
    became Senior Vice President, Creative/Merchandising in December
    2004.  
    Catherine M. Kilbane was a partner with the law firm of
    Baker & Hostetler LLP until becoming Senior Vice
    President, General Counsel and Secretary in October 2003.
    Josef Mandelbaum has held various positions with the Corporation
    since joining in 1995, including most recently President and
    Chief Executive Officer of the Corporations subsidiary, AG
    Interactive, Inc. from May 2000 until becoming CEO 
    AG Intellectual Properties, which consists of the
    Corporations AG Interactive, outbound licensing and
    entertainment businesses, in February 2005.
    Brian T. McGrath has held various positions with the Corporation
    since joining in 1989, including most recently Vice President,
    Human Resources from November 1998 until July 2006, when he
    became Senior Vice President, Human Resources.
    Douglas W. Rommel has held various positions with the
    Corporation since joining in 1978, including most recently Vice
    President, Information Services from November 2001 until March
    2010, when he became Senior Vice President, Chief Information
    Officer.
    Stephen J. Smith was Vice President and Treasurer of General
    Cable Corporation, a wire and cable company, from 1999 until
    2002. He became Vice President, Treasurer and Investor Relations
    of the Corporation in April 2003, and became Senior Vice
    President and Chief Financial Officer in November 2006.
    Robert C. Swellie, has held various positions with the
    Corporation since joining in 1977, including most recently as
    Group Vice President, Key Accounts, until becoming Senior Vice
    President, Wal-Mart Team in October, 2008. He is also President,
    Carlton Cards Limited (Canada), a position he has held since
    2005.
    Erwin Weiss has held various positions with the Corporation
    since joining in 1977, including most recently Senior Vice
    President, Program Realization from June 2001 to June 2003, and
    Senior Vice President, Specialty Business from June 2003 until
    becoming Senior Vice President, Enterprise Resource Planning in
    February 2007.
    Joseph B. Cipollone has held various positions with the
    Corporation since joining in 1991, including most recently
    Executive Director, International Finance from December 1997
    until becoming Vice President and Corporate Controller in April
    2001. 20




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PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market Information.
  2010


2009High


Low


High


Low1st

    Quarter

$
8.85


$
3.24


$
19.99


$
16.952nd

    Quarter


16.13



6.33



19.14



11.693rd

    Quarter


24.10



13.20



18.45



7.854th

    Quarter


25.58



17.05



13.04



3.73       Shareholders.
  Dividends.
  Dividends per share declared in

2010


20091st

    Quarter

$
*


$
0.122nd

    Quarter


0.12



0.123rd

    Quarter


0.12



0.124th

    Quarter


0.12



0.24
*Total

$
0.36


$
0.60       *
    
    We generally pay dividends on a quarterly basis. During the
    fourth quarter of fiscal 2009, however, two dividends were
    declared, but only one dividend of $0.12 per share was paid in
    the fourth quarter. The other $0.12 per share dividend was paid
    in the first quarter of fiscal 2010. 21




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COMPARISON
    OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
    AMERICAN GREETINGS CORPORATION, THE S&P 400 INDEX AND PEER
    GROUP INDEX
    
  2/05

2/06

2/07

2/08

2/09

2/10American Greetings


$100



$86



$97



$80



$17



$89S & P 400


$100



$117



$129



$123



$71



$119Peer Group*


$100



$94



$109



$104



$72



$124     *Peer GroupBlyth Inc. (BTH)

Fossil Inc. (FOSL)

McCormick & Co.-Non Vtg Shrs (MKC)Central Garden & Pet Co. (CENT)

Jo-Ann Stores Inc. (JAS)

Scotts Miracle-Gro Co. (The) - CL A (SMG)CSS Industries Inc. (CSS)

Lancaster Colony Corp. (LANC)

Tupperware Brands Corp. (TUP)    22




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Securities Authorized for Issuance Under Equity Compensation
    Plans. Form 10-K.
      MaximumTotal


NumberNumber of Shares


(or ApproximatePurchased as


Dollar Value) of SharesAverage


Part of Publicly


that May Yet BeTotal Number of


Price Paid


Announced Plans or


Purchased UnderPeriod

Shares Purchased


per Share


Programs(2)


the Plans or ProgramsDecember 2009


Class A -



-
(2)


-



-


$
46,578,874Class B -



-



-



-January 2010


Class A -



-
(2)


-



-


$
46,578,874Class B -



1,107
(1)

$
20.49



-February 2010


Class A -



-
(2)


-



-


$
46,578,874Class B -



9,217
(1)

$
19.07



-Total


Class A -



-
(2)






-Class B -



10,324
(1)






-     (1)
    
    There is no public market for our Class B common shares.
    Pursuant to our Amended and Restated Articles of Incorporation,
    all of the Class B common shares were repurchased by
    American Greetings for cash pursuant to its right of first
    refusal. It is the Corporations general policy to
    repurchase Class B common shares, in accordance with the
    terms set forth in our Amended and Restated Articles of
    Incorporation, whenever they are offered by a holder, unless
    such repurchase is not otherwise permitted under agreements to
    which the Corporation is a party.(2)
    
    On January 13, 2009, American Greetings announced that its
    Board of Directors authorized a program to repurchase up to
    $75 million of its Class A common shares. There is no
    set expiration date for this repurchase program. No repurchases
    were made in the current quarter under this program. 23




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Item 6.
    Selected
    Financial Data  Thousands
    of dollars except share and per share amounts
  2010(1)


2009


2008


2007(2)


2006Summary of OperationsNet sales

$
1,598,292


$
1,646,399


$
1,730,784


$
1,744,798


$
1,875,472Total revenue


1,635,858



1,690,738



1,776,451



1,794,290



1,928,136Goodwill and other intangible assets impairment


-



290,166



-



2,196



43,153Interest expense


26,311



22,854



20,006



34,986



35,124Income (loss) from continuing operations


81,574



(227,759)



83,320



39,938



89,219(Loss) income from discontinued operations, net of tax


-



-



(317)



2,440



(4,843)Net income (loss)


81,574



(227,759)



83,003



42,378



84,376Earnings (loss) per share:Income (loss) from continuing operations


2.07



(4.89)



1.54



0.69



1.35(Loss) income from discontinued operations, net of tax


-



-



(0.01)



0.04



(0.07)Earnings (loss) per share


2.07



(4.89)



1.53



0.73



1.28Earnings (loss) per share  assuming dilution


2.03



(4.89)



1.52



0.71



1.16Cash dividends declared per share


0.36



0.60



0.40



0.32



0.32Fiscal year end market price per share


19.07



3.73



18.82



23.38



20.98Average number of shares outstanding


39,467,811



46,543,780



54,236,961



57,951,952



65,965,024Financial PositionNet sales

$
1,598,292


$
1,646,399


$
1,730,784


$
1,744,798


$
1,875,472Inventories


163,956



194,945



207,629



174,426



205,057Working capital


305,381



227,915



242,860



431,128



586,803Total assets


1,529,651



1,448,049



1,809,133



1,784,748



2,229,789Property, plant and equipment additions


26,550



55,733



56,623



41,716



46,177Long-term debt


328,723



389,473



220,618



223,915



300,516Shareholders equity(3)


636,064



529,189



943,411



1,012,574



1,220,025Shareholders equity per share


16.11



13.05



19.35



18.37



20.22Net return on average shareholders equityShareholders equity per share


16.11



13.05



19.35



18.37



20.22from continuing operations


14.0
%


(30.9
%)


8.5
%


3.6
%


6.8
%     (1)
    
    During 2010, the Corporation incurred a loss of
    $29.3 million on the disposition of the Retail Operations
    segment. The Corporation also recorded a gain of
    $34.2 million related to the Party Goods Transaction and a
    charge of approximately $15.8 million for asset impairments
    and severance associated with a facility closure. In 2010, the
    Corporation recognized a cost of $18.2 million in
    connection with shutdown of its distribution operations in
    Mexico. See Note 2 and 3 to the Corporations 2010
    financial statements.(2)
    
    During 2007, as a result of retailer consolidation, wherein,
    multiple long-term supply agreements were terminated and a new
    agreement was negotiated with a new legal entity with
    substantially different terms and sales commitments, a gain of
    $20.0 million was recorded. Also, in 2007, the Corporation
    sold substantially all of the assets associated with its candle
    product lines and recorded a loss of approximately
    $16.0 million.(3)
    
    The Corporation adopted new guidance on accounting for
    convertible debt instruments in 2010. This guidance requires an
    issuer of certain convertible instruments that may be settled in
    cash or other asset on conversion to separately account for the
    liability and equity components of the instrument in a manner
    that reflects the issuers nonconvertible debt borrowing
    rate. The impact on Shareholders equity of retrospectively
    applying this guidance related to the Corporations 7.00%
    convertible subordinated notes issued in 2002 and settled in
    2007 would have been $35 million for both 2006 and 2007.
    The convertible subordinated notes were not outstanding in the
    three years ended February 28, 2010. 24




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    OVERVIEW
          
    February 24, 2009 acquisition of RPG;
    April 17, 2009 acquisition of the Papyrus trademark and
    wholesale business division of Schurman that supplies Papyrus
    brand greeting cards to specialty, mass merchandise, grocery and
    drug store channels;
    April 17, 2009 divestiture of our Retail Operations segment;
    September 3, 2009 execution of a distribution agreement
    with a distributor in Mexico and determination to shutdown our
    operations in Mexico; and
    December 21, 2009 transaction (the Party Goods
    Transaction) with Amscan, Inc., a leading designer,
    manufacturer and distributor of party goods.     25




---



##### Table of Contents



Party Goods


Mexico


RetailTransaction


Shut Down


Disposition


TotalNet sales

$
-


$
0.7


$
-


$
0.7Material, labor and other production costs


15.6



4.4



1.0



21.0Selling, distribution and marketing expenses


0.2



1.0



-



1.2Administrative and general expenses


-



0.6



-



0.6Other operating (income) expense - net


(34.2)



11.5



28.2



5.5$
(18.4)


$
18.2


$
29.2


$
29.0           company-owned
 26




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##### Table of Contents



RESULTS
    OF OPERATIONS
  Comparison
    of the years ended February 28, 2010 and 2009
      % Total





% Total(Dollars in thousands)

2010


Revenue


2009


RevenueNet sales

$
1,598,292



97.7
%

$
1,646,399



97.4
%Other revenue


37,566



2.3
%


44,339



2.6
%Total revenue


1,635,858



100.0
%


1,690,738



100.0
%Material, labor and other production costs


713,075



43.6
%


809,956



47.9
%Selling, distribution and marketing expenses


507,960



31.0
%


618,899



36.6
%Administrative and general expenses


276,031



16.9
%


226,317



13.4
%Goodwill and other intangible assets impairment


-



0.0
%


290,166



17.2
%Other operating income  net


(310
)


(0.0
%)


(1,396
)


(0.1
%)Operating income (loss)


139,102



8.5
%


(253,204
)


(15.0
%)Interest expense


26,311



1.6
%


22,854



1.4
%Interest income


(1,676
)


(0.1
%)


(3,282
)


(0.2
%)Other non-operating (income) expense  net


(6,487
)


(0.4
%)


2,157



0.1
%Income (loss) before income tax expense (benefit)


120,954



7.4
%


(274,933
)


(16.3
%)Income tax expense (benefit)


39,380



2.4
%


(47,174
)


(2.8
%)Net income (loss)

$
81,574



5.0
%

$
(227,759
)


(13.5
%)   Revenue
    Overview
     27




---



##### Table of Contents



e-commerce
    2010


2009Everyday greeting cards


48
%


43
%Seasonal greeting cards


23
%


22
%Gift packaging


14
%


14
%All other products*


15
%


21
%       Wholesale
    Unit and Pricing Analysis for Greeting Cards
    Increase (Decrease) From the Prior YearEveryday Cards


Seasonal Cards


Total Greeting Cards2010


2009


2010


2009


2010


2009Unit volume


7.2
%


1.7
%


6.7
%


3.4
%


7.0
%


2.2
%Selling prices


1.4
%


(1.5
%)


(1.6
%)


(5.3
%)


0.4
%


(2.7
%)Overall increase / (decrease)


8.7
%


0.2
%


5.0
%


(2.1
%)


7.5
%


(0.5
%)        28




---



##### Table of Contents



Expense
    Overview
         29




---



##### Table of Contents



company-owned
  Segment
    Results
    North
    American Social Expression Products Segment
  (Dollars in thousands)

2010

2009

% ChangeTotal revenue

$
1,226,746


$
1,086,940



12.9
%Segment earnings


232,794



67,107



246.9
%      30




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##### Table of Contents



International
    Social Expression Products Segment
  (Dollars in thousands)

2010

2009

% ChangeTotal revenue

$
209,974


$
205,687



2.1
%Segment earnings (loss)


13,778



(60,206
)


-       Retail
    Operations Segment
  (Dollars in thousands)

2010

2009

% ChangeTotal revenue

$
11,727


$
170,066



(93.1
%)Segment loss


(34,830
)


(19,727
)


(76.6
%)         AG
    Interactive Segment
  (Dollars in thousands)

2010

2009

% ChangeTotal revenue

$
78,955


$
81,615



(3.3
%)Segment earnings (loss)


10,586



(156,325
)


-   e-commerce
 31




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##### Table of Contents



Unallocated
    Items
    Comparison
    of the years ended February 28, 2009 and February 29,
    2008
      % Total





% Total(Dollars in thousands)

2009


Revenue


2008


RevenueNet sales

$
1,646,399



97.4
%

$
1,730,784



97.4
%Other revenue


44,339



2.6
%


45,667



2.6
%Total revenue


1,690,738



100.0
%


1,776,451



100.0
%Material, labor and other production costs


809,956



47.9
%


780,771



43.9
%Selling, distribution and marketing expenses


618,899



36.6
%


621,478



35.0
%Administrative and general expenses


226,317



13.4
%


246,722



13.9
%Goodwill and other intangible assets impairment


290,166



17.2
%


-



0.0
%Other operating income  net


(1,396
)


(0.1
%)


(1,325
)


(0.1
%)Operating (loss) income


(253,204
)


(15.0
%)


128,805



7.3
%Interest expense


22,854



1.4
%


20,006



1.1
%Interest income


(3,282
)


(0.2
%)


(7,758
)


(0.4
%)Other non-operating expense (income)  net


2,157



0.1
%


(7,411
)


(0.4
%)(Loss) income from continuing operationsbefore income tax (benefit) expense


(274,933
)


(16.3
%)


123,968



7.0
%Income tax (benefit) expense


(47,174
)


(2.8
%)


40,648



2.3
%(Loss) income from continuing operations


(227,759
)


(13.5
%)


83,320



4.7
%Loss from discontinued operations, net of tax


-



0.0
%


(317
)


(0.0
%)Net (loss) income

$
(227,759
)


(13.5
%)

$
83,003



4.7
%  32




---



##### Table of Contents



Revenue
    Overview
            2009


2008Everyday greeting cards


43%



41%Seasonal greeting cards


22%



22%Gift packaging


14%



15%All other products*


21%



22%      33




---



##### Table of Contents



Wholesale
    Unit and Pricing Analysis for Greeting Cards
    Increase (Decrease) From the Prior YearEveryday Cards


Seasonal Cards


Total Greeting Cards2009


2008


2009


2008


2009


2008Unit volume


1.7
%


9.6
%


3.4
%


7.0
%


2.2
%


8.8
%Selling prices


(1.5
%)


(5.6
%)


(5.3
%)


(4.4
%)


(2.7
%)


(5.2
%)Overall increase / (decrease)


0.2
%


3.5
%


(2.1
%)


2.3
%


(0.5
%)


3.1
%         Expense
    Overview
       34




---



##### Table of Contents



Segment
    Results
    North
    American Social Expression Products Segment
  (Dollars in thousands)

2009

2008

% ChangeTotal revenue

$
1,086,940


$
1,118,342



(2.8
%)Segment earnings


67,107



173,955



(61.4
%)  35




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##### Table of Contents



International
    Social Expression Products Segment
  (Dollars in thousands)

2009

2008

% ChangeTotal revenue

$
205,687


$
211,191



(2.6
%)Segment (loss) earnings


(60,206
)


15,979



-   year-over-year
    Retail
    Operations Segment
  (Dollars in thousands)

2009

2008

% ChangeTotal revenue

$
170,066


$
184,099



(7.6
%)Segment loss


(19,727
)


(5,011
)


-      36




---



##### Table of Contents



AG
    Interactive Segment
  (Dollars in thousands)

2009


2008


% ChangeTotal revenue

$
81,615


$
75,637



7.9
%Segment (loss) earnings


(156,325
)


5,974



-       Unallocated
    Items
    Liquidity
    and Capital Resources
  Operating
    Activities
     37




---



##### Table of Contents



Investing
    Activities
     38




---



##### Table of Contents



Financing
    Activities
          Credit
    Sources
   39




---



##### Table of Contents



364-day 364-day
 40




---



##### Table of Contents



41




---



##### Table of Contents



and/or
    Contractual
    Obligations
    Payment Due by Period as of February 28, 2010(In thousands)

2011


2012


2013


2014


2015


Thereafter


TotalLong-term debt

$
1,000


$
1,000


$
1,000


$
96,250


$
-


$
254,867


$
354,117Operating leases(1)


20,993



15,459



11,431



7,778



5,680



14,863



76,204Commitments under customer agreements


53,701



27,303



24,500



-



-



-



105,504Commitments under royalty agreements


11,732



9,854



10,623



3,400



3,400



11,427



50,436Interest payments


21,789



21,056



20,759



18,934



18,794



23,627



124,959Severance


12,797



1,229



4



-



-



-



14,030Commitments under purchase agreements


4,500



4,500



4,500



4,500



4,500



-



22,500$
126,512


$
80,401


$
72,817


$
130,862


$
32,374


$
304,784


$
747,750    (1)
    
    Approximately $51 million of the operating lease
    commitments in the table above relate to retail stores acquired
    by Schurman that are being conditionally subleased to Schurman.
    The failure of Schurman to operate the retail stores
    successfully could have a material adverse effect on the
    Corporation, because if Schurman is not able to comply with its
    obligations under the subleases, the Corporation remains
    contractually obligated, as primary lessee, under those leases.       42




---



##### Table of Contents



Critical
    Accounting Policies
    Allowance
    for Doubtful Accounts
    Sales
    Returns
  and/or
  Deferred
    Costs
       43




---



##### Table of Contents



Goodwill
    and Other Intangible Assets
    Deferred
    Income Taxes
    New
    Accounting Pronouncements
     44




---



##### Table of Contents



2010-09 2010-09), 2010-09 855-10. 855-10 2010-09
   45




---



##### Table of Contents



2010-06 2010-06), 2010-06 820-10 2010-06 820-10 2010-06
  Factors
    That May Affect Future Results
    
    a weak retail environment and general economic conditions;
    the ability to achieve both the desired benefits from the Party
    Goods Transaction as well as ensuring a seamless transition for
    affected retail customers and consumers;
    the ability to successfully integrate acquisitions, including
    the recent acquisitions of RPG and Papyrus;
    our ability to successfully complete the sale of the Strawberry
    Shortcake and Care Bears properties;
    our successful transition of the Retail Operations segment to
    its buyer, Schurman Fine Papers, and Schurmans ability to
    successfully operate its retail operations and satisfy its
    obligations to us;
    retail consolidations, acquisitions and bankruptcies, including
    the possibility of resulting adverse changes to retail contract
    terms; 46




---



##### Table of Contents




    the ability to achieve the desired benefits associated with our
    cost reduction efforts;
    competitive terms of sale offered to customers;
    our ability to comply with our debt covenants and to refinance
    our debt on acceptable terms as the debt instruments mature;
    the timing and impact of investments in new retail or product
    strategies as well as new product introductions and achieving
    the desired benefits from those investments;
    consumer acceptance of products as priced and marketed;
    the impact of technology on core product sales;
    the timing and impact of converting customers to a scan-based
    trading model;
    escalation in the cost of providing employee health care;
    the ability to successfully implement, or achieve the desired
    benefits associated with, any information systems refresh we may
    implement;
    our ability to achieve the desired accretive effect from any
    share repurchase programs;
    fluctuations in the value of currencies in major areas where we
    operate, including the U.S. Dollar, Euro, U.K. Pound
    Sterling, and Canadian Dollar; and
    the outcome of any legal claims known or unknown.    Form 10-K.
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Derivative Financial Instruments
  Interest Rate Exposure
  Foreign Currency Exposure
 47




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  PageIndex to Consolidated Financial Statements and Supplementary
    Financial Data

NumberReport of Independent Registered Public
    Accounting Firm


49Consolidated Statement of Operations 
    Years ended February 28, 2010, February 28, 2009 and
    February 29, 2008


50Consolidated Statement of Financial
    Position  February 28, 2010 and 2009


51Consolidated Statement of Cash Flows 
    Years ended February 28, 2010, February 28, 2009 and
    February 29, 2008


52Consolidated Statement of Shareholders
    Equity  Years ended February 28, 2010,
    February 28, 2009 and February 29, 2008


53Notes to Consolidated Financial
    Statements  Years ended February 28, 2010,
    February 28, 2009 and February 29, 2008


54Supplementary Financial Data:Quarterly Results of Operations (Unaudited)


94  48




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               
    49




---



##### Table of Contents



CONSOLIDATED
    STATEMENT OF OPERATIONS



Years ended February 28, 2010, February 28,
    2009 and February 29, 2008



Thousands of dollars except share and per share amounts 2010


2009


2008Net sales

$
1,598,292


$
1,646,399


$
1,730,784Other revenue


37,566



44,339



45,667Total revenue


1,635,858



1,690,738



1,776,451Material, labor and other production costs


713,075



809,956



780,771Selling, distribution and marketing expenses


507,960



618,899



621,478Administrative and general expenses


276,031



226,317



246,722Goodwill and other intangible assets impairment






290,166



Other operating income  net


(310
)


(1,396
)


(1,325
)Operating income (loss)


139,102



(253,204
)


128,805Interest expense


26,311



22,854



20,006Interest income


(1,676
)


(3,282
)


(7,758
)Other non-operating (income) expense- net


(6,487
)


2,157



(7,411
)Income (loss) from continuing operations before income tax
    expense (benefit)


120,954



(274,933
)


123,968Income tax expense (benefit)


39,380



(47,174
)


40,648Income (loss) from continuing operations


81,574



(227,759
)


83,320Loss from discontinued operations, net of tax










(317
)Net income (loss)

$
81,574


$
(227,759
)

$
83,003Earnings (loss) per share  basic:Income (loss) from continuing operations

$
2.07


$
(4.89
)

$
1.54Loss from discontinued operations










(0.01
)Net income (loss)

$
2.07


$
(4.89
)

$
1.53Earnings (loss) per share  assuming dilution:Income (loss) from continuing operations

$
2.03


$
(4.89
)

$
1.53Loss from discontinued operations










(0.01
)Net income (loss)

$
2.03


$
(4.89
)

$
1.52Average number of shares outstanding


39,467,811



46,543,780



54,236,961Average number of shares outstanding  assuming
    dilution


40,159,651



46,543,780



54,506,048Dividends declared per share

$
0.36


$
0.60


$
0.40    50




---



##### Table of Contents



CONSOLIDATED
    STATEMENT OF FINANCIAL POSITION



February 28, 2010 and 2009



Thousands of dollars except share and per share amounts 2010


2009ASSETSCURRENT ASSETSCash and cash equivalents

$
137,949


$
60,216Trade accounts receivable, net


135,758



77,703Inventories


163,956



194,945Deferred and refundable income taxes


78,433



67,267Assets of businesses held for sale


13,280



23,627Prepaid expenses and other


148,048



162,125Total current assets


677,424



585,883GOODWILL


31,106



26,871OTHER ASSETS


428,160



376,665DEFERRED AND REFUNDABLE INCOME TAXES


148,210



183,066PROPERTY, PLANT AND EQUIPMENT  NET


244,751



275,564$
1,529,651


$
1,448,049LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESDebt due within one year

$
1,000


$
750Accounts payable


95,434



117,504Accrued liabilities


79,478



90,236Accrued compensation and benefits


85,092



32,198Income taxes payable


13,901



11,743Other current liabilities


97,138



105,537Total current liabilities


372,043



357,968LONG-TERM DEBT


328,723



389,473OTHER LIABILITIES


164,642



149,820DEFERRED INCOME TAXES AND NONCURRENT INCOME TAXES PAYABLE


28,179



21,599SHAREHOLDERS EQUITYCommon shares  par value $1 per share:Class A  80,884,505 shares issued less
    44,627,298 treasury shares in 2010 and 80,548,353 shares
    issued less 43,505,203 treasury shares in 2009


36,257



37,043Class B  6,066,092 shares issued less
    2,843,069 treasury shares in 2010 and 6,066,092 shares
    issued less 2,566,875 treasury shares in 2009


3,223



3,499Capital in excess of par value


461,076



449,085Treasury stock


(946,724
)


(938,086
)Accumulated other comprehensive loss


(29,815
)


(67,278
)Retained earnings


1,112,047



1,044,926Total shareholders equity


636,064



529,189$
1,529,651


$
1,448,049    51




---



##### Table of Contents



CONSOLIDATED
    STATEMENT OF CASH FLOWS



Years ended February 28, 2010, February 28,
    2009 and February 29, 2008



Thousands of dollars 2010


2009


2008OPERATING ACTIVITIES:Net income (loss)

$
81,574


$
(227,759
)

$
83,003Loss from discontinued operations










317Income (loss) from continuing operations


81,574



(227,759
)


83,320Adjustments to reconcile income (loss) from continuing
    operations to cash flows from operating activities:Goodwill and other intangible assets impairment






290,166



Net gain on dispositions


(6,507
)






Net loss on disposal of fixed assets


59



1,215



961Depreciation and intangible assets amortization


45,165



50,016



48,535Deferred income taxes


25,268



(29,438
)


(7,562
)Fixed assets impairment


13,005



5,465



1,436Other non-cash charges


18,289



8,270



7,867Changes in operating assets and liabilities, net of acquisitions
    and dispositions:Trade accounts receivable


(56,105
)


(6,504
)


41,698Inventories


14,923



2,877



(28,926
)Other current assets


16,962



17,585



26,342Deferred costs  net


18,405



27,596



53,438Accounts payable and other liabilities


14,193



(67,542
)


18,934Other  net


12,259



1,093



(2,506
)Total Cash Flows From Operating Activities


197,490



73,040



243,537INVESTING ACTIVITIES:Proceeds from sale of short-term investments










692,985Purchases of short-term investments










(692,985
)Property, plant and equipment additions


(26,550
)


(55,733
)


(56,623
)Cash payments for business acquisitions, net of cash acquired


(19,300
)


(37,882
)


(76,338
)Cash receipts related to discontinued operations










4,283Proceeds from sale of fixed assets


1,124



433



3,104Other  net


4,713



(44,153
)


Total Cash Flows From Investing Activities


(40,013
)


(137,335
)


(125,574
)FINANCING ACTIVITIES:Net (decrease) increase in long-term debt


(62,350
)


118,991



20,100Sale of stock under benefit plans


6,705



525



27,156Purchase of treasury shares


(11,848
)


(73,983
)


(172,328
)Dividends to shareholders


(19,049
)


(22,566
)


(21,803
)Total Cash Flows From Financing Activities


(86,542
)


22,967



(146,875
)DISCONTINUED OPERATIONS:Cash used by operating activities from discontinued operations










(59
)Total Cash Flows From Discontinued Operations










(59
)EFFECT OF EXCHANGE RATE CHANGES ON CASH


6,798



(21,956
)


7,758INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


77,733



(63,284
)


(21,213
)Cash and Cash Equivalents at Beginning of Year


60,216



123,500



144,713Cash and Cash Equivalents at End of Year

$
137,949


$
60,216


$
123,500    52




---



##### Table of Contents





CONSOLIDATED
    STATEMENT OF SHAREHOLDERS EQUITY



Years ended February 28, 2010, February 28,
    2009 and February 29, 2008

Thousands of dollars except per share amounts AccumulatedCapital in





OtherCommon Shares


Excess of


Treasury


Comprehensive


RetainedClass A


Class B


Par Value


Stock


Income (Loss)


Earnings


TotalBALANCE MARCH 1, 2007

$
50,839


$
4,283


$
414,859


$
(710,414
)

$
(1,013
)

$
1,254,020


$
1,012,574Cumulative effect adjustment, adoption of ASC Topic 740






















(14,017
)


(14,017
)Net income






















83,003



83,003Other comprehensive income (loss):Foreign currency translation adjustment


















18,691







18,691Pension and postretirement adjustments recognized in accordance
    with ASC 715 (net of tax of $7,093)


















3,567







3,567Unrealized loss on
    available-for-sale
    securities (net of tax of $1)


















(1
)






(1
)Comprehensive income


























105,260Cash dividends  $0.40 per share






















(21,803
)


(21,803
)Sale of shares under benefit plans, including tax benefits


1,220



2



25,533



79







(43
)


26,791Purchase of treasury shares


(6,736
)


(928
)






(164,664
)










(172,328
)Stock compensation expense










6,547















6,547Stock grants and other


1



77



(1,243
)


2,050







(498
)


387BALANCE FEBRUARY 29, 2008


45,324



3,434



445,696



(872,949
)


21,244



1,300,662



943,411Net loss






















(227,759
)


(227,759
)Other comprehensive loss:Foreign currency translation adjustment


















(80,845
)






(80,845
)Pension and postretirement adjustments recognized in accordance
    with ASC 715 (net of tax of $6,839)


















(7,674
)






(7,674
)Unrealized loss on
    available-for-sale
    securities (net of tax of $0)


















(3
)






(3
)Comprehensive loss


























(316,281
)Cash dividends  $0.60 per share






















(27,491
)


(27,491
)Sale of shares under benefit plans, including tax benefits


26







384















410Purchase of treasury shares


(8,311
)


(10
)






(67,158
)










(75,479
)Stock compensation expense










4,369















4,369Stock grants and other


4



75



(1,364
)


2,021







(486
)


250BALANCE FEBRUARY 28, 2009


37,043



3,499



449,085



(938,086
)


(67,278
)


1,044,926



529,189Net income






















81,574



81,574Other comprehensive income:Foreign currency translation adjustment


















22,467







22,467Reclassification of currency translation adjustment for amounts
    recognized in income (net of tax of $0)


















8,627







8,627Pension and postretirement adjustments recognized in accordance
    with ASC 715 (net of tax of $5,837)


















6,366







6,366Unrealized gain on
    available-for-sale
    securities (net of tax of $0)


















3







3Comprehensive income


























119,037Cash dividends  $0.36 per share






















(14,124
)


(14,124
)Sale of shares under benefit plans, including tax benefits


336







6,172















6,508Purchase of treasury shares


(1,125
)


(292
)






(9,111
)










(10,528
)Stock compensation expense










5,819















5,819Stock grants and other


3



16







473







(329
)


163BALANCE FEBRUARY 28, 2010

$
36,257


$
3,223


$
461,076


$
(946,724
)

$
(29,815
)

$
1,112,047


$
636,064     53




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS

Years ended February 28, 2010, February 28,
    2009 and February 29, 2008



Thousands of dollars except per share amounts NOTE 1 
    SIGNIFICANT
    ACCOUNTING POLICIES  Consolidation
    Reclassifications
  Use of Estimates
  Cash Equivalents
  Short-term Investments available-for-sale
  Allowance for Doubtful Accounts
  Customer Allowances and Discounts
 54




---



##### Table of Contents



Concentration of Credit Risks
    Inventories last-in, first-in,
  Deferred Costs
  Deferred Film Production Costs
   55




---



##### Table of Contents



Investment in Life Insurance
  Goodwill and Other Intangible Assets
  Property and Depreciation
  Operating Leases
  Pension and Other Postretirement Benefits
  Revenue Recognition
 56




---



##### Table of Contents



Sales Taxes
  Translation of Foreign Currencies
  Shipping and Handling Fees
  Advertising Expense
  Income Taxes
 57




---



##### Table of Contents



Recent Accounting Pronouncements
         58




---



##### Table of Contents



2010-09 2010-09), 2010-09 855-10. 855-10 2010-09
      2010-06 2010-06), 2010-06 820-10
 59




---



##### Table of Contents



2010-6 820-10 2010-06
  NOTE 2 
    ACQUISITIONS
    AND DISPOSITIONS  Papyrus
    Brand & Wholesale Business Acquisition / Retail
    Operations Disposition
       60




---



##### Table of Contents



Purchase price (in millions):Cash paid

$
20.0Fair value of Retail Operations


6.0Cash acquired


(6.0
)$
20.0Allocation (in millions):Current assets

$
9.9Property, plant and equipment


0.1Other assets


5.4Intangible assets


4.7Goodwill


0.8Liabilities assumed


(0.9
)$
20.0     Recycled
    Paper Greetings Acquisition
  Other-net
     61




---



##### Table of Contents



debtor-in-possession debtor-in-possession
    Purchase price (in millions):Cash paid in 2009

$
22.9Cash paid in 2010


5.3Fair market value of first lien debt securities


41.4Fair market value of long-term debt issued


28.4Cash acquired


(0.6
)$
97.4Allocation (in millions):Current assets

$
17.6Property, plant and equipment


1.5Other assets (including deferred tax assets)


24.2Intangible assets


36.4Goodwill


28.2Liabilities assumed


(10.5
)$
97.4       Card
    Connection Acquisition
   62




---



##### Table of Contents



Webshots
    and Photoworks
        Online
    Greeting Card Business Acquisition
      Carlton
    Mexico Shutdown
     63




---



##### Table of Contents



Party
    Goods Transaction
    and/or
        Party Goods


Mexico


Retail(In millions)

Transaction


Shutdown


Disposition


TotalNet sales

$



$
0.7


$



$
0.7Material, labor and other production costs


15.6



4.4



1.0



21.0Selling, distribution and marketing expenses


0.2



1.0







1.2Administrative and general expenses






0.6







0.6Other operating (income) expense  net


(34.2
)


11.5



28.2



5.5$
(18.4
)

$
18.2


$
29.2


$
29.0     (In millions)North American Social Expression Products

$
(0.2
)Retail Operations


29.2$
29.0  64




---



##### Table of Contents



Sale
    of Strawberry Shortcake and Care Bears Properties
      Form 10-K.
  NOTE 3 
    OTHER
    INCOME AND EXPENSE  2010


2009


2008Loss on disposition of retail stores

$
28,333


$



$
Gain on disposition of calendar product lines


(547
)






Gain on disposition of candy product lines


(115
)






Gain on disposition of party goods product lines


(34,178
)






Loss on recognition of foreign currency translation adjustments


8,627







Miscellaneous


(2,430
)


(1,396
)


(1,325
)Other operating income  net

$
(310
)

$
(1,396
)

$
(1,325
)     Other-net
   65




---



##### Table of Contents



2010


2009


2008Foreign exchange (gain) loss

$
(4,746
)

$
483


$
(7,206
)Rental income


(1,194
)


(1,432
)


(1,225
)Miscellaneous


(547
)


3,106



1,020Other non-operating (income) expense  net

$
(6,487
)

$
2,157


$
(7,411
)     NOTE 4 
    EARNINGS
    (LOSS) PER SHARE    2010


2009


2008Numerator (thousands):Income (loss) from continuing operations

$
81,574


$
(227,759
)

$
83,320Denominator (thousands):Weighted average shares outstanding


39,468



46,544



54,237Effect of dilutive securities:Stock options and other


692



-



269Weighted average shares outstanding  assuming dilution


40,160



46,544



54,506Income (loss) from continuing operations per share

$
2.07


$
(4.89
)

$
1.54Income (loss) from continuing operations per share 
    assuming dilution

$
2.03


$
(4.89
)

$
1.53    66




---



##### Table of Contents



NOTE 5 
    ACCUMULATED
    OTHER COMPREHENSIVE LOSS    February 28, 2010


February 28, 2009Foreign currency translation adjustments

$
10,856


$
(20,238
)Pension and postretirement benefits adjustments, net of tax (See
    Note 12)


(40,672
)


(47,038
)Unrealized investment gain (loss), net of tax


1



(2
)$
(29,815
)

$
(67,278
)   NOTE 6 
    CUSTOMER
    ALLOWANCES AND DISCOUNTS    February 28, 2010


February 28, 2009Allowance for seasonal sales returns

$
36,443


$
47,121Allowance for outdated products


10,438



11,486Allowance for doubtful accounts


2,963



5,006Allowance for cooperative advertising and marketing funds


24,061



25,048Allowance for rebates


29,338



31,211$
103,243


$
119,872     NOTE 7 
    INVENTORIES  February 28, 2010


February 28, 2009Raw materials

$
18,609


$
20,741Work in process


6,622



7,068Finished products


194,283



232,305219,514



260,114Less LIFO reserve


75,491



86,025144,023



174,089Display material and factory supplies


19,933



20,856$
163,956


$
194,945    67




---



##### Table of Contents



NOTE 8 
    PROPERTY,
    PLANT AND EQUIPMENT  February 28, 2010


February 28, 2009Land

$
10,147


$
9,977Buildings


178,977



214,242Equipment and fixtures


651,572



698,394840,696



922,613Less accumulated depreciation


595,945



647,049$
244,751


$
275,564         NOTE 9 
    GOODWILL
    AND OTHER INTANGIBLE ASSETS    e-commerce
     68




---



##### Table of Contents



InternationalNorth American


Social





Non-Social Expression


Expression


AG


ReportableProducts


Products


Interactive


Segments


TotalBalance at February 29, 2008

$
47,862


$
87,050


$
150,078


$
82


$
285,072Acquisition related


22,465



6,096



794



-



29,355Impairment


(47,850
)


(82,110
)


(149,553
)


(82
)


(279,595
)Currency translation


(12
)


(6,630
)


(1,319
)


-



(7,961
)Balance at February 28, 2009


22,465



4,406



-



-



26,871Acquisition related


6,510



-



-



-



6,510Adjustment related to income taxes


(2,501
)


-



-



-



(2,501
)Currency translation


-



226



-



-



226Balance at February 28, 2010

$
26,474


$
4,632


$
-


$
-


$
31,106    69




---



##### Table of Contents



February 28, 2010


February 28, 2009Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


AmountIntangible assets with indefinite lives

$
6,200


$
-


$
6,200


$
10,000


$
-


$
10,000Patents


4,194



(3,417
)


777



3,910



(3,303
)


607Trademarks


10,071



(8,496
)


1,575



9,547



(7,949
)


1,598Artist relationships


19,180



(1,598
)


17,582



15,750



-



15,750Customer relationships


24,669



(10,544
)


14,125



26,105



(9,476
)


16,629Other


17,633



(12,064
)


5,569



15,526



(9,517
)


6,009$
81,947


$
(36,119
)

$
45,828


$
80,838


$
(30,245
)

$
50,593     Balance at February 28, 2009

$
50,593Purchase accounting adjustment related to RPG acquisition


(5,110
)Intangible assets acquired in the transaction with Schurman


4,670Amortization expense


(5,533
)Other additions


715Currency translation


493Balance at February 28, 2010

$
45,828          70




---



##### Table of Contents



NOTE 10 
    DEFERRED
    COSTS        February 28, 2010


February 28, 2009Prepaid expenses and other

$
82,914


$
107,596Other assets


310,555



273,311Deferred cost assets


393,469



380,907Other current liabilities


(53,701
)


(55,877
)Other liabilities


(51,803
)


(22,023
)Deferred cost liabilities


(105,504
)


(77,900
)Net deferred costs

$
287,965


$
303,007     Balance at February 28, 2007

$
389,747Payments


104,705Net contract termination


(14,920
)Amortization


(143,223
)Currency translation and other


1,815Balance at February 29, 2008


338,124Payments


105,952Amortization


(133,548
)Currency translation and other


(7,521
)Balance at February 28, 2009


303,007Payments


84,345Amortization


(102,750
)Currency translation and other


3,363Balance at February 28, 2010

$
287,965  71




---



##### Table of Contents



NOTE 11 
    LONG AND
    SHORT-TERM DEBT               72




---



##### Table of Contents



73




---



##### Table of Contents



364-day 364-day
            February 28, 2010


February 28, 20097.375% senior notes, due 2016

$
212,184


$
211,4407.375% notes, due 2016


18,103



16,997Term loan facility, due 2013


98,250



99,250Revolving credit facility, due 2011


-



61,6006.10% senior notes, due 2028


181



181Other


5



5$
328,723


$
389,473    74




---



##### Table of Contents



2011

$
1,0002012


1,0002013


1,0002014


96,2502015


-Thereafter


254,867$
354,117     NOTE 12 
    RETIREMENT
    AND POSTRETIREMENT BENEFIT PLANS      710-10-25,
       75




---



##### Table of Contents



76




---



##### Table of Contents



Pension Plans


Postretirement Benefits2010


2009


2010


2009Change in benefit obligation:Benefit obligation at beginning of year

$
140,116


$
152,565


$
120,113


$
139,665Service cost


730



954



2,365



3,495Interest cost


9,279



9,128



7,359



8,682Participant contributions


32



46



4,591



4,546Retiree drug subsidy payments


-



-



-



2,898Plan amendments


53



-



-



-Actuarial loss (gain)


22,034



(6,311
)


(14,649
)


(31,191
)Benefit payments


(10,080
)


(10,081
)


(8,858
)


(7,982
)Settlements


(3,512
)


-



-



-Currency exchange rate changes


4,193



(6,185
)


-



-Benefit obligation at end of year


162,845



140,116



110,921



120,113Change in plan assets:Fair value of plan assets at beginning of year


86,489



126,023



61,898



76,686Actual return on plan assets


21,691



(26,002
)


11,180



(11,352
)Employer contributions


4,001



1,776



(1,883
)


-Participant contributions


32



46



4,591



4,546Benefit payments


(10,080
)


(10,081
)


(8,858
)


(7,982
)Settlements


(3,512
)


-



-



-Currency exchange rate changes


3,471



(5,273
)


-



-Fair value of plan assets at end of year


102,092



86,489



66,928



61,898Funded status at end of year

$
(60,753
)

$
(53,627
)

$
(43,993
)

$
(58,215
)     Pension Plans


Postretirement Benefits2010


2009


2010


2009Other assets

$
-


$
623


$
-


$
-Accrued compensation and benefits


(2,335
)


(2,076
)


-



-Other liabilities


(58,418
)


(52,174
)


(43,993
)


(58,215
)Net amount recognized

$
(60,753
)

$
(53,627
)

$
(43,993
)

$
(58,215
)Amounts recognized in accumulated other comprehensive income:Net actuarial loss

$
55,275


$
50,277


$
23,611


$
47,720Net prior service cost (credit)


828



1,036



(11,766
)


(19,184
)Net transition obligation


46



43



-



-Accumulated other comprehensive income

$
56,149


$
51,356


$
11,845


$
28,536  77




---



##### Table of Contents



Pension Plans

Postretirement Benefits2010

2009

2010

2009Weighted average discount rate used to determine:Benefit obligations at measurement dateUS

5.50-5.75%

6.75%

5.75%

6.75%International

5.50%

7.50%

N/A

N/ANet periodic benefit costUS

6.75%

6.50%

6.75%

6.50%International

7.50%

5.75%

N/A

N/AExpected long-term return on plan assets:US

7.00%

7.00%

7.00%

7.00%International

6.00%

6.00%

N/A

N/ARate of compensation increase:US

Up to 6.50%

Up to 6.50%

N/A

N/AInternational

Up to 3.50%

Up to 3.50%

N/A

N/AHealth care cost trend rates:For year ending February 28 or 29

N/A

N/A

9.00%

9.00%For year following February 28 or 29

N/A

N/A

8.50%

9.00%Rate to which the cost trend rate is assumed to decline (the
    ultimate trend rate)

N/A

N/A

5.00%

5.00%Year the rate reaches the ultimate trend rate

N/A

N/A

2017

2017     15-year
  2010


2009Effect of a 1% increase in health care cost trend rate on:Service cost plus interest cost

$
1,036


$
1,429Accumulated postretirement benefit obligation


10,262



11,298Effect of a 1% decrease in health care cost trend rate on:Service cost plus interest cost


(841
)


(1,155
)Accumulated postretirement benefit obligation


(8,373
)


(9,362
)  78




---



##### Table of Contents



2010


2009For all pension plans:Accumulated benefit obligation

$
158,351


$
136,595For pension plans that are not fully funded:Projected benefit obligation


162,845



126,386Accumulated benefit obligation


158,351



122,923Fair value of plan assets


102,092



72,136     2010


2009


2008Components of net periodic benefit cost:Service cost

$
730


$
954


$
987Interest cost


9,279



9,128



8,919Expected return on plan assets


(5,637
)


(8,049
)


(8,761
)Amortization of transition obligation


6



6



6Amortization of prior service cost


261



260



260Amortization of actuarial loss


1,942



459



1,454Settlements


126



-



1,172Net periodic benefit cost


6,707



2,758



4,037Other changes in plan assets and benefit obligations recognized
    in other comprehensive income:Actuarial loss


6,069



27,681



1,047Prior service cost


53



-



90Amortization of prior service cost


(261
)


(260
)


(260
)Amortization of actuarial loss


(1,942
)


(459
)


(1,454
)Amortization of transition obligation


(6
)


(6
)


(6
)Settlements


(126
)


-



(1,172
)Total recognized in net periodic benefit cost and other
    comprehensive income

$
10,494


$
29,714


$
2,282  79




---



##### Table of Contents



2010


2009


2008Components of net periodic benefit cost:Service cost

$
2,365


$
3,495


$
3,885Interest cost


7,359



8,682



8,229Expected return on plan assets


(4,107
)


(5,100
)


(5,097
)Amortization of prior service credit


(7,418
)


(7,418
)


(7,418
)Amortization of actuarial loss


2,386



4,224



6,042Net periodic benefit cost


585



3,883



5,641Other changes in plan assets and benefit obligations recognized
    in other comprehensive income:Actuarial gain


(21,723
)


(14,739
)


(10,919
)Amortization of actuarial loss


(2,386
)


(4,224
)


(6,042
)Amortization of prior service credit


7,418



7,418



7,418Total recognized in net periodic benefit cost and other
    comprehensive income

$
(16,106
)

$
(7,662
)

$
(3,902
)     Pension Plans


Postretirement Benefits2010


2009


2010

2009

Target AllocationEquity securities:US


46
%


39
%

37%

24%

15% - 35%International


31
%


24
%

N/A

N/A

N/ADebt securities:US


53
%


60
%

59%

68%

55% - 75%International


67
%


59
%

N/A

N/A

N/ACash and cash equivalents:US


1
%


1
%

4%

8%

0% - 20%International


2
%


17
%

N/A

N/A

N/A   30/60/10
   80




---



##### Table of Contents



Quoted prices inactive markets for


Significant otherFair value at


identical assets


observable inputsFebruary 28, 2010


(Level 1)


(Level 2)U.S. plans:Short-term investments

$
683


$
683


$
-Equity securities


38,079



-



38,079Fixed-income funds


43,073



-



43,073International plans:Short-term investments


241



241



-Equity securities


6,487



-



6,487Fixed-income funds


13,529



-



13,529Total:

$
102,092


$
924


$
101,168     Quoted prices inactive markets for


Significant otherFair value at


identical assets


observable inputsFebruary 28, 2010


(Level 1)


(Level 2)Short-term investments

$
2,565


$
2,565


$
-Common stock


25,035



25,035



-Fixed-income funds


39,328



-



39,328Total:

$
66,928


$
27,600


$
39,328   Short-term investments:
  Equity securities:
  Debt securities:
       81




---



##### Table of Contents



Postretirement BenefitsPension


Excluding Effect of


Including Effect ofPlans


Medicare Part D Subsidy


Medicare Part D Subsidy2011

$
10,571


$
6,720


$
5,7252012


10,577



7,011



6,0942013


10,647



7,192



6,1722014


10,705



7,306



6,2112015


10,862



7,577



6,3942016  2020


56,262



41,033



39,454   NOTE 13 
    LONG-TERM
    LEASES AND COMMITMENTS    2010


2009


2008Gross rentals

$
47,473


$
48,332


$
47,536Sublease rentals


(24,891
)


(460
)


(241
)Net rental expense

$
22,582


$
47,872


$
47,295     Gross rentals:2011

$
20,9932012


15,4592013


11,4312014


7,7782015


5,680Later years


14,86376,204Sublease rentals


(51,207
)Net rentals

$
24,997     NOTE 14 
    FAIR
    VALUE MEASUREMENTS  and/or
 82




---



##### Table of Contents




    Level 1  Valuation is based upon quoted prices
    (unadjusted) in active markets for identical assets or
    liabilities.
    Level 2  Valuation is based upon quoted prices
    for similar assets and liabilities in active markets, or other
    inputs that are observable for the asset or liability, either
    directly or indirectly, for substantially the full term of the
    financial instrument.
    Level 3  Valuation is based upon unobservable
    inputs that are significant to the fair value measurement.    Quoted prices


Quoted pricesin active


in activeBalance


markets for


markets for


Significantas of


identical assets


similar assets


unobservableFebruary


and liabilities


and liabilities


inputs28, 2010


(Level 1)


(Level 2)


(Level 3)Financial assets:Active employees medical plan trust assets

$
4,087


$
4,087


$
-


$
-Deferred compensation plan assets(1)


4,785



4,785



-



-Warrant  Amscan


16,274



-



-



16,274Total

$
25,146


$
8,872


$
-


$
16,274Non-financial assets:Assets held for sale

$
5,557


$
-


$
5,557


$
-Total

$
5,557


$
-


$
5,557


$
-     (1)
    
    There is an offsetting liability for the obligation to its
    employees on the Corporations books.       83




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##### Table of Contents



NOTE 15 
    COMMON
    SHARES AND STOCK OPTIONS         84




---



##### Table of Contents



Weighted-AverageNumber of


Weighted-


Remaining


AggregateClass A


Average


Contractual


Intrinsic ValueOptions


Exercise Price


Term (in years)


(in thousands)Outstanding at February 28, 2009


5,692,819


$
21.72







-Granted


1,104,450



8.51Exercised


(335,937
)


23.28Cancelled


(1,156,200
)


22.58Outstanding at February 28, 2010


5,305,132


$
19.00



6.2



14,190Exercisable at February 28, 2010


3,776,073


$
22.07



6.0



2,340   Weighted-AverageNumber of


Weighted-


Remaining


AggregateClass B


Average


Contractual


Intrinsic ValueOptions


Exercise Price


Term (in years)


(in thousands)Outstanding at February 28, 2009


1,017,520


$
22.55







-Granted


193,000



7.73Outstanding at February 28, 2010


1,210,520


$
20.19



6.4



2,372Exercisable at February 28, 2010


835,270


$
23.01



5.9



65     2010

2009

2008Risk-free interest rate


1.3
%


2.5
%


4.6
%Dividend yield


6.0
%


2.7
%


1.25
%Expected stock volatility


0.71



0.31



0.25Expected life in years


2.4



2.4



2.3        85




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##### Table of Contents



2010


2009


2008Risk-free interest rate


0.67
%


1.74
%


4.95
%Dividend yield


14.81
%


2.55
%


1.38
%Expected stock volatility


0.99



0.37



0.25Expected life in years


1.0



1.0



1.0         2010Risk-free interest rate


1.54
%Dividend yield


4.48
%Expected stock volatility


0.78Expected life in years


2.3        86




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##### Table of Contents



NOTE 16 
    BUSINESS
    SEGMENT INFORMATION                     87




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##### Table of Contents



Operating
    Segment Information
  Total Revenue


Segment Earnings (Loss)2010


2009


2008


2010


2009


2008North American Social Expression Products

$
1,231,850


$
1,139,745


$
1,171,235


$
236,305


$
106,006


$
213,617Intersegment items


(5,104
)


(52,805
)


(52,893
)


(3,511
)


(38,899
)


(39,662
)Exchange rate adjustment


8,433



8,508



11,300



3,620



2,844



3,273Net


1,235,179



1,095,448



1,129,642



236,414



69,951



177,228International Social Expression Products


209,974



205,687



211,191



13,778



(60,206
)


15,979Exchange rate adjustment


44,058



65,040



100,135



3,068



(17,463
)


8,757Net


254,032



270,727



311,326



16,846



(77,669
)


24,736Retail Operations


11,727



170,066



184,099



(34,830
)


(19,727
)


(5,011
)Exchange rate adjustment


112



8,746



13,250



(285
)


496



1,358Net


11,839



178,812



197,349



(35,115
)


(19,231
)


(3,653
)AG Interactive


78,955



81,615



75,637



10,586



(156,325
)


5,974Exchange rate adjustment


1,491



1,798



3,078



833



(5,366
)


481Net


80,446



83,413



78,715



11,419



(161,691
)


6,455Non-reportable segments


53,975



62,338



59,356



7,634



(7,627
)


3,779Unallocated


387



-



63



(116,103
)


(83,966
)


(83,071
)Exchange rate adjustment


-



-



-



(141
)


5,300



(1,506
)Net


387



-



63



(116,244
)


(78,666
)


(84,577
)$
1,635,858


$
1,690,738


$
1,776,451


$
120,954


$
(274,933
)

$
123,968   Depreciation and Amortization


Capital Expenditures2010


2009


2008


2010


2009


2008North American Social Expression Products

$
32,507


$
28,179


$
29,289


$
22,144


$
43,470


$
43,346Exchange rate adjustment


8



17



23



8



42



42Net


32,515



28,196



29,312



22,152



43,512



43,388International Social Expression Products


3,907



4,359



3,455



1,086



1,026



663Exchange rate adjustment


752



1,339



1,591



207



307



271Net


4,659



5,698



5,046



1,293



1,333



934Retail Operations


395



4,653



5,257



29



4,330



5,901Exchange rate adjustment


18



268



368



(2
)


228



547Net


413



4,921



5,625



27



4,558



6,448AG Interactive


4,932



8,274



5,026



2,615



3,910



3,326Exchange rate adjustment


190



689



1,498



(4
)


8



-Net


5,122



8,963



6,524



2,611



3,918



3,326Non-reportable segments


1,820



1,628



1,425



260



2,218



2,492Unallocated


636



610



603



207



194



35$
45,165


$
50,016


$
48,535


$
26,550


$
55,733


$
56,623   88




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##### Table of Contents



Assets2010


2009North American Social Expression Products

$
961,112


$
924,824Exchange rate adjustment


2,218



(3,163
)Net


963,330



921,661International Social Expression Products


117,874



112,836Exchange rate adjustment


19,006



6,021Net


136,880



118,857Retail Operations


1,738



32,728Exchange rate adjustment


-



(643
)Net


1,738



32,085AG Interactive


19,988



23,432Exchange rate adjustment


287



176Net


20,275



23,608Non-reportable segments


39,026



39,281Unallocated and intersegment items


351,425



312,631Exchange rate adjustment


16,977



(74
)Net


368,402



312,557$
1,529,651


$
1,448,049   Geographical
    Information
  Total Revenue


Fixed Assets - Net2010


2009


2008


2010


2009United States

$
1,266,876


$
1,235,828


$
1,286,213


$
220,626


$
244,111United Kingdom


209,059



222,918



260,288



21,909



22,632Other international


159,923



231,992



229,950



2,216



8,821$
1,635,858


$
1,690,738


$
1,776,451


$
244,751


$
275,564   Product
    Information
  Total Revenue2010


2009


2008Everyday greeting cards

$
764,199


$
704,380


$
709,824Seasonal greeting cards


368,781



356,762



379,603Gift packaging


221,167



240,452



264,040Other revenue


37,566



44,339



45,667All other products


244,145



344,805



377,317$
1,635,858


$
1,690,738


$
1,776,451    89




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##### Table of Contents



Termination
    Benefits and Facility Closings
        2010


2009


2008North American Social Expression Products

$
8,517


$
6,247


$
4,902International Social Expression Products


263



4,119



71Retail Operations


618



1,787



74AG Interactive


802



1,626



22Non-reportable


232



1,108



27Unallocated


382



801



1,192Total

$
10,814


$
15,688


$
6,288     NOTE 17 
    INCOME
    TAXES    2010


2009


2008United States

$
129,115


$
(136,523
)

$
89,409International


(8,161
)


(138,410
)


34,559$
120,954


$
(274,933
)

$
123,968     2010


2009


2008Current:Federal

$
7,730


$
(21,530
)

$
21,849International


2,079



2,918



18,496State and local


4,303



876



8,07514,112



(17,736
)


48,420Deferred


25,268



(29,438
)


(7,772
)$
39,380


$
(47,174
)

$
40,648  90




---



##### Table of Contents



2010


2009


2008Income tax expense (benefit) at statutory rate

$
42,334


$
(96,227
)

$
43,389State and local income taxes, net of federal tax benefit


1,431



(1,128
)


3,744Corporate-owned life insurance


(4,688
)


(633
)


(395
)Nondeductible goodwill


-



61,445



-International items, net of foreign tax credits


(2,490
)


(7,613
)


(6,770
)Worthless stock deduction on international subsidiary


(6,043
)


(9,460
)


-Charitable contributions carryforward expiration


-



2,434



-Exchange loss of international liquidation


2,562



-



-Valuation allowance


302



(2,000
)


(752
)Accruals and settlements


6,313



486



3,491Other


(341
)


5,522



(2,059
)Income tax at effective tax rate

$
39,380


$
(47,174
)

$
40,648           February 28, 2010


February 28, 2009Deferred tax assets:Employee benefit and incentive plans

$
59,859


$
63,423Net operating loss carryforwards


41,221



33,725Deferred capital loss


8,379



8,291Reserves not currently deductible


32,993



44,001Charitable contributions carryforward


2,094



2,580Foreign tax credit carryforward


35,948



33,682Goodwill and other intangible assets


58,104



60,263Other


2,085



5,540240,683



251,505Valuation allowance


(25,109
)


(24,807
)Total deferred tax assets


215,574



226,698Deferred tax liabilities:Property, plant and equipment


20,647



22,846Other


1,057



2,896Total deferred tax liabilities


21,704



25,742Net deferred tax assets

$
193,870


$
200,956  91




---



##### Table of Contents



February 28, 2010


February 28, 2009Deferred and refundable income taxes (current)

$
51,929


$
54,929Deferred and refundable income taxes (noncurrent)


143,770



147,857Deferred income taxes and noncurrent income taxes payable


(1,829
)


(1,830
)Net deferred tax assets

$
193,870


$
200,956               2010


2009


2008Balance at beginning of year

$
34,760


$
27,523


$
24,722Additions based on tax positions related to the current year


12,673



229



1,401Reductions based on tax positions related to the current year


-



(408
)


-Additions for tax positions of prior years


4,656



18,744



9,339Reductions for tax positions of prior years


(6,345
)


(6,581
)


(7,939
)Settlements


(83
)


(4,747
)


-Balance at end of year

$
45,661


$
34,760


$
27,523  92




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##### Table of Contents



NOTE 18 
    DISCONTINUED
    OPERATIONS      2008Total revenue

$
299Pre-tax loss from operations


(47
)Gain on sale


34(13
)Income tax expense


304Loss from discontinued operations, net of tax

$
(317
)      93




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##### Table of Contents



QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)      Quarter EndedFiscal 2010

May 29


Aug 28


Nov 27


Feb 28Net sales

$
409,277


$
348,639


$
431,512


$
408,864Total revenue


412,922



356,350



440,166



426,420Gross profit


242,108



195,391



226,515



221,203Net income


9,961



23,122



29,695



18,796Earnings per share

$
0.25


$
0.59


$
0.75


$
0.48Earnings per share  assuming dilution


0.25



0.59



0.75



0.46Dividends declared per share


-



0.12



0.12



0.12         Quarter EndedFiscal 2009

May 30


Aug 29


Nov 28


Feb 28Net sales

$
425,463


$
372,942


$
444,527


$
403,467Total revenue


428,300



385,835



454,084



422,519Gross profit


232,121



202,830



221,313



180,179Net income (loss)


13,333



2,297



(193,311
)


(50,078
)Earnings (loss) per share

$
0.27


$
0.05


$
(4.25
)

$
(1.13
)Earnings (loss) per share  assuming dilution


0.27



0.05



(4.25
)


(1.13
)Dividends declared per share


0.12



0.12



0.12



0.24        94




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures.
      Changes
    in Internal Controls.
    Report of
    Management on Internal Control Over Financial
    Reporting.
       95




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING
                
    96




---



##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    EQUITY
    COMPENSATION PLAN INFORMATION
    Number of





Number of securitiessecurities to be





remaining available forissued upon


Weighted-average


future issuance underexercise of


exercise price of


equity compensationoutstanding


outstanding


plans (excludingoptions, warrants


options,


securitiesPlan Category

and rights


warrants and rights


reflected in column (a))(a)


(b)


(c)Equity compensation plans approved by security holders(1)


8,124,115


$
19.22



1,377,755Equity compensation plans not approved by security holders


-



N/A



-Total


8,124,115


$
19.22



1,377,755     (1)
    
    Column (a) includes 5,305,132 Class A common shares
    and 1,210,520 Class B common shares that may be issued in
    connection with the exercise of outstanding stock options. The
    amount in column (a) also includes 1,214,000 Class A
    common shares and 247,864 Class B common shares that may be
    issued upon the settlement of outstanding performance shares
    that have been awarded under the Corporations equity
    compensation plans, assuming the maximum performance or other
    criteria have been achieved. The amount in column (a) also
    includes 6,659 Class A common shares and 139,940
    Class B common shares representing share equivalents that
    have been credited to the account of certain officers or
    directors who have deferred receipt of shares earned and vested
    under our 1997 Equity and Performance Incentive Plan 97




---



##### Table of Contents



or our 2007 Omnibus Incentive Compensation Plan or that were to
    be paid in lieu of cash directors fees under the
    1995 Director Stock Plan, which will be issued under these
    plans upon the expiration of the deferral period.Column (b) is the weighted-average exercise price of
    outstanding stock options; excludes restricted stock,
    performance shares and deferred compensation share equivalents.Column (c) includes 1,091,891 Class A common shares
    and 285,864 Class B common shares, which shares may
    generally be issued under the Corporations equity
    compensation plans upon the exercise of stock options or stock
    appreciation rights and/or awards of deferred shares,
    performance shares or restricted stock units.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  Form 10-K
  1.

Financial StatementsReport of Independent Registered Public Accounting Firm


49Consolidated Statement of Operations  Years ended
    February 28, 2010, February 28, 2009 
      and February 29, 2008


50Consolidated Statement of Financial
    Position February 28, 2010 and 2009


51Consolidated Statement of Cash Flows  Years ended
    February 28, 2010, February 28, 2009 
      and February 29, 2008


52Consolidated Statement of Shareholders Equity 
    Years ended February 28, 2010, 
      February 28, 2009 and February 29, 2008


53Notes to Consolidated Financial Statements  Years
    ended February 28, 2010, February 28, 
      2009 and February 29, 2008


54Quarterly Results of Operations (Unaudited)


942.

Financial Statement SchedulesSchedule II  Valuation and Qualifying Accounts


S-13.

Exhibits required by Item 601 of
    Regulation S-K   Item



Description2

Plan of acquisition, reorganization, arrangement, liquidation or
    succession.2.1

Binding Letter Agreement, dated July 20, 2008, between
    Cookie Jar Entertainment Inc. and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference. 98




---



##### Table of Contents



Item



Description2.2

Agreement, dated December 30, 2008, among the Corporation,
    Lakeshore Trading Company, RPG Holdings, Inc., and Recycled
    Paper Greetings, Inc. (now known as Papyrus-Recycled Greetings,
    Inc.)This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.2.3

Recycled Paper Greetings (now known as Papyrus-Recycled
    Greetings, Inc.) Debtors Joint Plan of Reorganization
    Under Chapter 11 of the Bankruptcy Code, dated
    January 2, 2009.This Exhibit has been previously filed as an Exhibit to
    Amendment No. 1 to
    Form T-3,
    with respect to the Corporations
    73/8% Senior
    Notes due 2016, filed by the Corporation with the Securities and
    Exchange Commission on January 7, 2009, and is incorporated
    herein by reference.2.4

Purchase and Sale Agreement, dated as of April 17, 2009, by
    and among Schurman Fine Papers, 644064 N.B. INC., Carlton Cards
    Retail, Inc., Carlton Cards Limited, AGC, LLC, and the
    Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended May 29, 2009.2.5

Binding Term Sheet between MoonScoop SAS and the Corporation,
    dated March 24, 2009.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended May 29, 2009.2.6

Asset Purchase Agreement by and among the Corporation and Amscan
    Holdings, Inc., dated December 21, 2009.This Exhibit is filed herewith.3

Articles of Incorporation and By-laws.3.1

Amended and Restated Articles of Incorporation of the
    Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated July 1, 2008, and is incorporated herein by reference.3.2

Amended and Restated Code of Regulations of the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated July 1, 2008, and is incorporated herein by reference.4

Instruments defining the rights of security holders, including
    indentures.4.1

Trust Indenture, dated as of July 27, 1998.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 1999, and is
    incorporated herein by reference.4.2

First Supplemental Indenture, dated May 25, 2006, to the
    Indenture dated July 27, 1998, with respect to the
    Corporations 6.10% Senior Notes due April 1,
    2028, between the Corporation, as issuer, and JP Morgan
    Trust Company, National Association, as Trustee.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated May 26, 2006, and is incorporated herein by reference.4.3

Form of Trust Indenture, dated May 24, 2006, between
    the Corporation, as Issuer, and The Bank of Nova Scotia
    Trust Company of New York, as Trustee, with respect to the
    Corporations
    73/8% Senior
    Notes due June 1, 2016.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated May 22, 2006, and is incorporated herein by reference.4.4

Form of Global Note for the
    73/8% Senior
    Notes due June 1, 2016. 99




---



##### Table of Contents



Item



DescriptionThis Exhibit is included in the Form of Trust Indenture
    between the Corporation, as Issuer, and The Bank of Nova Scotia
    Trust Company of New York, as Trustee, which has been
    previously filed as an Exhibit to the Corporations Current
    Report on
    Form 8-K,
    dated May 22, 2006, and is incorporated herein by reference.4.5

First Supplemental Indenture, dated February 24, 2009,
    between the Corporation, as Issuer, and The Bank of Nova Scotia
    Trust Company of New York, as Trustee, with respect to the
    Corporations
    73/8% Senior
    Notes due June 1, 2016.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.4.6

Trust Indenture, dated February 24, 2009, between the
    Corporation, as Issuer, and The Bank of Nova Scotia
    Trust Company of New York, as Trustee, with respect to the
    Corporations
    73/8% Notes
    due June 1, 2016.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.4.7

Form of Global Note for the
    73/8% Notes
    due June 1, 2016.This Exhibit is included in the Trust Indenture, dated
    February 24, 2009, between the Corporation, as Issuer, and
    The Bank of Nova Scotia Trust Company of New York, as
    Trustee, with respect to the Corporations
    73/8% Notes
    due June 1, 2016, which has been previously filed as an
    Exhibit to the Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.10

Material Contracts10.1

Credit Agreement, dated April 4, 2006, among the
    Corporation, various lending institutions party thereto,
    National City Bank, as the global agent, joint lead arranger,
    joint bookrunner, Swing Line Lender, LC Issuer and collateral
    agent, UBS Securities LLC, as joint lead arranger, joint
    bookrunner and syndication agent, and KeyBank National
    Association, JPMorgan Chase Bank, N.A., and LaSalle Bank
    National Association, as documentation agents (the Credit
    Agreement).This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated April 4, 2006, and is incorporated herein by
    reference.10.2

Amendment No. 1 to Credit Agreement, dated as of
    July 3, 2006.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.10.3

Amendment No. 2 to Credit Agreement, dated as of
    February 26, 2007.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.10.4

Amendment No. 3 to Credit Agreement, dated as of
    April 16, 2007.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.10.5

Amendment No. 4 to Credit Agreement, dated as of
    March 28, 2008.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 2008, and is
    incorporated herein by reference.10.6

Amendment No. 5 to Credit Agreement, dated as of
    September 23, 2008.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended August 29, 2008, and is incorporated
    herein by reference. 100




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Item



Description10.7

Pledge and Security Agreement, dated as of April 4, 2006,
    by and among, the Corporation, each of the domestic subsidiaries
    of American Greetings Corporation identified therein and
    National City Bank, as collateral agent.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated April 4, 2006, and is incorporated herein by
    reference.10.8

Amended and Restated Receivables Purchase Agreement, dated as of
    October 24, 2006, among AGC Funding Corporation, the
    Corporation, as Servicer, members of the various Purchaser
    Groups from time to time party thereto and PNC Bank, National
    Association, as Administrator and as issuer of Letters of Credit
    (the Receivables Purchase Agreement).This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated October 26, 2006, and is incorporated herein by
    reference.10.9

First Amendment to Receivables Purchase Agreement, dated
    January 12, 2007.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.10.10

Omnibus Amendment to Receivables Sale Agreement, Sale and
    Contribution Agreement and Receivables Purchase Agreement, dated
    as of February 28, 2007, among AGC Funding Corporation, the
    Corporation, Gibson Greetings, Inc., Plus Mark, Inc., members of
    the various Purchaser Groups from time to time party thereto,
    and PNC Bank, National Association, as Administrator and as
    issuer of Letters of Credit.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.10.11

Third Amendment to Receivables Purchase Agreement, dated
    March 28, 2008.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 2008, and is
    incorporated herein by reference.10.12

Fourth Amendment to Receivables Purchase Agreement, dated as of
    September 23, 2009.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K
    dated September 24, 2009, and is incorporated herein by
    reference.*10.13

Form of Employment Contract with Specified Officers.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.*10.14

Amendment to Form of Employment Contract with Specified Officers.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.15

American Greetings Severance Benefits Plan
    (Officers)  Summary Plan Description.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.16

Amendment to American Greetings Severance Benefits Plan
    (Officers).This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.17

American Greetings Corporation Executive Deferred Compensation
    Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended August 31, 2005, and is incorporated
    herein by reference. 101




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Item



Description*10.18

Amendment One to American Greetings Corporation Executive
    Deferred Compensation Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended August 31, 2005, and is incorporated
    herein by reference.*10.19

Amendment Two to American Greetings Corporation Executive
    Deferred Compensation Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended August 31, 2005, and is incorporated
    herein by reference.*10.20

Amendment Number Three to American Greetings Corporation
    Executive Deferred Compensation Plan  American
    Greetings Corporation Executive Third Party Option Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended August 31, 2005, and is incorporated
    herein by reference.*10.21

Amendment Number Four to American Greetings Corporation
    Executive Deferred Compensation Plan and Amendment Number One to
    the American Greetings Corporation Executive Third Party Option
    Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated December 14, 2005, and is incorporated herein by
    reference.*10.22

Form of Agreement under American Greetings Corporation Executive
    Deferred Compensation Plan Executive Third Party Option Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended August 31, 2005, and is incorporated
    herein by reference.*10.23

American Greetings Corporation Outside Directors Deferred
    Compensation Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated December 14, 2005, and is incorporated herein by
    reference.*10.24

1992 Stock Option Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Registration Statement on
    Form S-8
    (Registration
    No. 33-58582),
    dated February 22, 1993, and is incorporated herein by
    reference.*10.25

1995 Director Stock Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Registration Statement on
    Form S-8
    (Registration
    No. 33-61037),
    dated July 14, 1995, and is incorporated herein by
    reference.*10.26

1996 Employee Stock Option Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Registration Statement on
    Form S-8
    (Registration
    No. 333-08123),
    dated July 15, 1996, and is incorporated herein by
    reference.*10.27

1997 Equity and Performance Incentive Plan (as amended on
    June 25, 2004).This Exhibit has been previously filed as an Exhibit to the
    Corporations Registration Statement on
    Form S-8
    (Registration
    No. 333-121982),
    dated January 12, 2005, and is incorporated herein by
    reference.*10.28

American Greetings Corporation 2007 Omnibus Incentive
    Compensation Plan, as Amended April 27, 2009.This Exhibit has been previously filed as an Exhibit to the
    Corporations Current Report on
    Form 8-K,
    dated June 26, 2009, and is incorporated herein by
    reference.*10.29

Description of Compensation Payable to Non-Employee Directors. 102




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Item



DescriptionThis Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended May 29, 2009, and is incorporated
    herein by reference.*10.30

American Greetings Corporation Second Amended and Restated
    Supplemental Executive Retirement Plan (Effective
    October 31, 2007).This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended November 23, 2007, and is
    incorporated herein by reference.*10.31

Severance Agreement, dated as of July 15, 2008, between
    William R. Mason and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended August 29, 2008, and is incorporated
    herein by reference.*10.32

Employment Agreement, dated as of October 17, 2002, between
    Michael Goulder and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2003, and is
    incorporated herein by reference.*10.33

Amendment to Employment Agreement, effective as of
    January 1, 2009, between Michael Goulder and the
    Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.34

Employment Agreement, dated as of May 6, 2002, between
    Erwin Weiss and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2003, and is
    incorporated herein by reference.*10.35

Amendment to Employment Agreement, effective as of
    January 1, 2009, between Erwin Weiss and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.36

Employment Agreement, dated as of August 22, 2003, between
    Catherine M. Kilbane and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 2004, and is
    incorporated herein by reference.*10.37

Employment Agreement, dated as of March 4, 2004, between
    Thomas H. Johnston and the Corporation, as amended on
    March 11, 2004.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2005, and is
    incorporated herein by reference.*10.38

Employment Agreement, dated as of June 1, 1991, between
    Jeffrey M. Weiss and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 2004, and is
    incorporated herein by reference.*10.39

Employment Agreement, dated as of May 1, 1997, between Zev
    Weiss and the Corporation. 103




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Item



DescriptionThis Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 2004, and is
    incorporated herein by reference.*10.40

Employment Agreement, dated April 14, 2003, between Stephen
    J. Smith and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.*10.41

Employment Agreement, dated February 4, 2000, between Josef
    A. Mandelbaum and AG Interactive, Inc. (fka
    AmericanGreetings.com, Inc.).This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.*10.42

Amendment to Employment Agreement, effective as of
    January 1, 2009, between Josef Mandelbaum and AG
    Interactive, Inc.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.43

Executive Employment Agreement, dated as of June 12, 2008,
    between John W. Beeder and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended May 30, 2008, and is incorporated
    herein by reference.*10.44

Amendment to Employment Agreement, effective January 1,
    2009, between John W. Beeder and the Corporation.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.45

Key Management Annual Incentive Plan (fiscal year 2009
    Description).This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended May 30, 2008, and is incorporated
    herein by reference.*10.46

Key Management Annual Incentive Plan (fiscal year 2010
    Description)This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended May 29, 2009, and is incorporated
    herein by reference.*10.47

Form of Employee Stock Option Agreement under 1997 Equity and
    Performance Incentive Plan (as amended on June 25, 2004).This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2005, and is
    incorporated herein by reference.*10.48

Form of Employee Stock Option Agreement (Revised) under 1997
    Equity and Performance Incentive Plan (as amended on
    June 25, 2004) for grants on or after May 1, 2007.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by refrence.*10.49

Form of Director Stock Option Agreement under 1997 Equity and
    Performance Incentive Plan (as amended on June 25, 2004). 104




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Item



DescriptionThis Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2005, and is
    incorporated herein by reference.*10.50

Form of Director Stock Option Agreement (Revised) under 1997
    Equity and Performance Incentive Plan (as amended on
    June 25, 2004) for grants on or after May 1, 2007.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2007, and is
    incorporated herein by reference.*10.51

Form of Employee Stock Option Agreement under 2007 Omnibus
    Incentive Compensation Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended May 25, 2007, and is incorporated
    herein by reference.*10.52

Form of Director Stock Option Agreement under 2007 Omnibus
    Incentive Compensation Plan.This Exhibit has been previously filed as an Exhibit to the
    Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended August 24, 2007, and is incorporated
    herein by reference.*10.53

Form of Restricted Shares Grant Agreement.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2005, and is
    incorporated herein by reference.*10.54

Performance Share Grant Agreement, dated April 22, 2008,
    between the Corporation and Zev Weiss.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 2008, and is
    incorporated herein by reference.*10.55

Performance Share Grant Agreement, dated April 22, 2008,
    between the Corporation and Jeffrey Weiss.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 2008, and is
    incorporated herein by reference.*10.56

Split-Dollar Agreement, dated May 7, 2001, between American
    Greetings and the Morry Weiss and Judith S. Weiss 2001
    Irrevocable Insurance Trust, dated March 1, 2001, Gary
    Weiss, Jeffrey Weiss, Zev Weiss and Elie Weiss, co-trustees.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.57

Agreement to Terminate Split-Dollar Agreement, dated
    February 16, 2009, between American Greetings and the Morry
    Weiss and Judith S. Weiss 2001 Irrevocable Insurance Trust,
    dated March 1, 2001, Gary Weiss, Jeffrey Weiss, Zev Weiss
    and Elie Weiss, co-trustees.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.58

Agreement between American Greetings Corporation and Morry Weiss
    in connection with Termination of the Split-Dollar Agreement,
    dated February 16, 2009.This Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.59

Form of Performance Share Award Agreement. 105




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Item



DescriptionThis Exhibit has been previously filed as an Exhibit to the
    Corporations Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2009, and is
    incorporated herein by reference.*10.60

Form of Restricted Stock Unit Agreement.This Exhibit is filed herewith.21



Subsidiaries of the Corporation.This Exhibit is filed herewith.23



Consent of Independent Registered Public Accounting Firm.This Exhibit is filed herewith.(31)a



Certification of Principal Executive Officer Pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934.This Exhibit is filed herewith.(31)b



Certification of Principal Financial Officer Pursuant to
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934.This Exhibit is filed herewith.32



Certification Pursuant to 18 U.S.C. Section 1350 as
    adopted pursuant to Section 906 of the Sarbanes- Oxley Act
    of 2002.This Exhibit is filed herewith.     *
    
    Management contracts or compensatory plans or arrangements
    required to be filed as an exhibit hereto pursuant to
    Item 601 of
    Regulation S-K.             106




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SIGNATURES     AMERICAN GREETINGS CORPORATION(Registrant)Date: April 29, 2010

By: /s/  Catherine
    M.
    KilbaneCatherine
    M. Kilbane, Senior Vice President,
    General Counsel and Secretary     SIGNATURE

TITLE



DATE/s/  Morry
    WeissMorry
    Weiss

Chairman of the Board; Director

)
    )./s/  Zev
    WeissZev
    Weiss

Chief Executive Officer (principal executive officer); Director

)
    )
    )/s/  Jeffrey
    WeissJeffrey
    Weiss

President and Chief Operating Officer; Director

)
    )
    )/s/  Scott
    S. CowenScott
    S. Cowen

Director

)
    )
    )/s/  Jeffrey
    D. DunnJeffrey
    D. Dunn

Director

)
    )
    )/s/  William
    E. MacDonald, IIIWilliam
    E. MacDonald, III

Director

)
    )
    )

April 29, 2010/s/  Michael
    J. Merriman, Jr.Michael
    J. Merriman, Jr.

Director

)
    )
    )/s/  Charles
    A. RatnerCharles
    A. Ratner

Director

)
    )
    )/s/  Jerry
    Sue ThorntonJerry
    Sue Thornton

Director

)
    )
    )/s/  Stephen
    J. SmithStephen
    J. Smith

Senior Vice President and Chief Financial Officer (principal
    financial officer)

)
    )
    )/s/  Joseph
    B. CipolloneJoseph
    B. Cipollone

Vice President and Corporate Controller; Chief Accounting
    Officer (principal accounting officer)

)
    )
    )  107




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SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
    AMERICAN GREETINGS CORPORATION AND SUBSIDIARIES
    (In thousands of dollars)
  COLUMN A

COLUMN B


COLUMN C


COLUMN D


COLUMN EADDITIONS(1)


(2)Balance


Charged to


Charged (Credited)





Balanceat Beginning


Costs


to Other


Deductions-


at EndDescription

of Period


and Expenses


Accounts-Describe


Describe


of PeriodYear ended February 28, 2010:Deduction from asset account:Allowance for doubtful accounts

$
5,006
(A)

$
478


$
264
(B)

$
2,785
(C)

$
2,963Allowance for seasonal sales returns

$
47,121


$
179,109


$
1,854
(B)

$
191,641
(D)

$
36,443Allowance for other assets

$
30,897


$
(8,683
)

$
-


$
9,814
(E)

$
12,400Year ended February 28, 2009:Deduction from asset account:Allowance for doubtful accounts

$
3,768
(A)

$
4,869
(A)

$
(18
)(B)(F)

$
3,613
(C)(A)

$
5,006
(A)Allowance for seasonal sales returns

$
57,126


$
223,095


$
(3,068
)(B)(F)

$
230,032
(D)

$
47,121Allowance for other assets

$
29,700


$
4,547


$
-


$
3,350
(E)

$
30,897Year ended February 29, 2008:Deduction from asset account:Allowance for doubtful accounts

$
6,337
(A)

$
(268
)(A)

$
271
(B)

$
2,572
(C)(A)

$
3,768
(A)Allowance for seasonal sales returns

$
57,584


$
220,596


$
1,539
(B)

$
222,593
(D)

$
57,126Allowance for other assets

$
28,000


$
5,300


$
-


$
3,600
(E)

$
29,700        Note F:
    Includes additions of $577 for the allowance for doubtful
    accounts and $2,348 for the allowance for seasonal sales returns
    due to business acquisitions during 2009. S-1