Exhibit 10.1



 






EXHIBIT 10.1




Amendment Number One to the American Greetings Corporation




Supplemental Executive Retirement Plan




     WHEREAS, the American Greetings Corporation (the “Company”) currently maintains the
American Greetings Corporation Supplemental Executive Retirement Plan (the “Plan”), which was
originally adopted effective March 1, 1986 and which has subsequently been amended and restated
effective March 1, 2004; and



     WHEREAS, the Company desires to amend the Plan to update its provisions in accordance with the
American Jobs Creation Act of 2004, the applicable requirements of which are set forth in Internal
Revenue Code (the “Code”) Section 409A, by virtue of the specific amendments to the Plan as set
forth below; and



     WHEREAS, Section 8.4 of the Plan permits the Company to amend the Plan at any time, by action
taken by its Board of Directors, and acting in its sole discretion, including those circumstances
in which a change has occurred in the law (or in its interpretation) which would adversely affect
the Company or a Participant if the Plan were to be left unamended;



     NOW, THEREFORE, the Plan is hereby amended as set forth below. Unless otherwise noted, all
provisions of this Amendment Number One are effective January 1, 2005.


1. Article II, Definitions, is hereby amended by adding the definitions of “409A Disability,”
“Code,” “Specified Employee,” and “Separation from Service” to the end thereof, and by amending the
definitions of “Assumed Bonus Percentage,” “Board,” and “Company” in their entireties, as provided
for below:





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




 









 






	 	 	 	group of corporations” that includes AGCo (within the meaning of Code
Section 414(b) and related regulations), or is “under common control” with
AGCo (within the meaning of Code Section 414(c) and related regulations).






	 	2.21	 	Code shall mean the Internal Revenue Code of 1986, as
amended from time to time. Any reference to a Code section shall include any
regulations, notices, or rulings promulgated thereunder.
	 
	 	2.22	 	409A Disability shall mean a Participant’s absence from
employment with the Company which: (i) is due to his or her inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than
twelve (12) months; or (ii) results from a medically determinable physical or
mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12) months, and causes
such Participant to receive income replacement benefits for a period of not
less than three (3) months under an accident and health plan covering the
Company’s employees.
	 
	 	 	 	Notwithstanding the foregoing, if the Company’s Long Term Disability Plan
defines a Participant’s disability in accordance with the foregoing or, in
the alternative, as determined by the Social Security Administration, then
the definition of ‘409A Disability’ shall have the same meaning as the
definition of ‘disability’ provided for under the Company’s Long Term
Disability Plan.
	 
	 	2.23	 	Specified Employee shall mean any Participant for whom
the following conditions, (a) and (b), are satisfied:






(a) at any time during the twelve (12) month period ending on the December
31st preceding the calendar year in which a given distribution is to occur,
such Participant:




(i) is one of the top fifty (50) compensated officers of AGCo and has
annual “W-2” compensation of at least One Hundred Thirty Thousand
Dollars ($130,000); or




(ii) owns more than five percent (5%) of AGCo’s stock; or




(iii) owns more than one percent (1%) of AGCo’s stock and has annual
“W-2” compensation in excess of One Hundred Fifty Thousand Dollars
($150,000); and




(b) AGCo’s stock is publicly traded on the date such Participant Separates
from Service.



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




	 	2.24	 	Separation from Service or “Separates from Service”
shall mean a Participant’s termination from employment with the Company on
account of such Participant’s death, permanent and total disability,
retirement, or other such termination of employment. A Participant will not be
deemed to have experienced a Separation from Service if such Participant is on
military leave, sick leave, or other bona fide leave of absence, to the extent
such leave does not exceed a period of six (6) months or, if longer, such
longer period of time as is protected by either statute or contract. A
Participant will not be deemed to have experienced a Separation from Service,
if such Participant continues to provide “significant services” to the Company.
For purposes of the preceding sentence, a Participant will be considered to
provide “significant services” if such Participant provides continuing services
that average at least twenty percent (20%) of the services provided by such
Participant to the Company during the immediately preceding three (3) full
calendar year of employment and the annual remuneration paid for such services
is at least twenty percent (20%) of the average annual compensation earned
during the final three (3) full calendar years of employment (or, if less, the
period of employment).”




2. Section 3.3, Termination or Suspension of Participation; Renewed Participation, is hereby
amended by adding a new subsection (d) to the end thereof, as follows:





          “(d) Notwithstanding the foregoing, in the event that a Participant commences
employment with a Subsidiary or Affiliate that has its principal place of business located
outside of the United States, but otherwise does not Separate from Service, such Participant
will cease being an active Participant and stop accruing any benefit in the Plan until and
unless such Participant (i) again performs services as an employee for AGCo, a Subsidiary or
an Affiliate located within the United States, and (ii) is designated as an Executive
eligible to participate in the Plan.


3. Section 4.1, Form of Accrued Benefit, is hereby amended by deleting the section in its entirety
and replacing it with the following provision:





     “Form of Accrued Benefit. A Participant’s accrued benefit hereunder
shall consist of a monthly benefit. Where paid as a Normal Retirement Benefit, such
monthly benefit shall commence payment on the first day of the calendar month
coincident with or next following the date such Participant attains his or her
Normal Retirement Age, and shall be paid to such Participant as an annuity for life
(with 180 monthly payments, guaranteed) (the “Accrued Benefit”).



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Where paid as a Late Retirement Benefit, such monthly benefit shall commence
payment on the first day of the calendar month coincident with or next following the
date such Participant Separates from Service, and shall be paid to such Participant
as an annuity for life (with 180 monthly payments, guaranteed). Notwithstanding the
foregoing, in the event the Participant is a Specified Employee, such Participant’s
Normal Retirement Benefit or Late Retirement Benefit, as applicable, shall not
commence payment until six (6) months after such Participant’s Separation from
Service”


4. Section 5.1, Normal/Late Retirement Benefits, is hereby amended by deleting the section in its
entirety and replacing it with the following provision:





“Normal/Late Retirement Benefit. A Participant shall be entitled to
receive either a Normal Retirement Benefit or a Late Retirement Benefit, as
applicable, commencing as of the first of the month next following the later
of the date such Participant attains his or her Normal Retirement Age
(“Normal Retirement”) or actually Separates from Service (“Late
Retirement”). For purposes of this Plan, Normal Retirement Age shall mean a
Participant’s attainment of age sixty-five (65). The Participant’s Normal
Retirement Benefit or Late Retirement Benefit, as applicable, shall consist
of his or her Accrued Benefit, determined as of the date of his Separation
from Service.




Notwithstanding the foregoing, in the event the Participant is a Specified
Employee, such Participant’s Normal Retirement Benefit or Late Retirement
Benefit, as applicable, shall not commence payment until six (6) months
after such Participant’s Separation from Service.”


5. Section 5.2, Early Retirement Benefit, is hereby amended by deleting the section in its entirety
and replacing it with the following provision:





“Early Retirement Benefit. A Participant is eligible to receive an
Early Retirement Benefit under the Plan, if such Participant Separates from
Service and satisfies the criteria for obtaining an Early Retirement
Benefit, as set forth below.




A Participant shall be eligible to receive an Early Retirement Benefit if
such Participant Separates from Service and vests in his or her Accrued
Benefit in accordance with Section 5.3, on the first day of the month
coinciding with or next following:




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




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Notwithstanding the foregoing, in the event a Participant is a Specified
Employee and he or she is eligible for an Early Retirement Benefit due to
his or her Separation from Service, such Participant’s Early Retirement
Benefit shall not commence payment until six (6) months after such
Participant’s Separation from Service.




The Early Retirement Benefit payable to a Participant who retires under this
Section 5.2 shall be in an amount equal to such Participant’s Accrued
Benefit, determined as of the date such Benefit commences payment hereunder,
but reduced by the appropriate reduction factor specified in Schedule A
(attached hereto).”


6. Section 5.3, Deferred Vested Benefit, is hereby amended by deleting the section in its entirety
and replacing it with the following:





“Deferred Vested Benefit.




     A Participant’s right to an Accrued Benefit shall vest after completing
ten (10) years of Service (at least five (5) of which is completed while a
Participant), even though such Participant Separates from Service with the
Company prior to the attainment of age fifty-five (55), so long as one (1)
or more of the following events occurs after such Participant’s forty-fifth
(45th) birthday:




(a) Such Participant’s Separation from Service results from
unilateral action taken by the Company;




(b) Such Participant is a member of a class of Executives declared by
written Board action to be ineligible to participate further in the
Plan;




(c) Such Participant is demoted to non-Executive status by the
Company; or




(d) A Change in Control occurs.




     Any Participant who vests hereunder (as provided above), but Separates
from Service from the Company prior to attaining age fifty-five (55)
nevertheless shall be eligible to commence receiving a Plan Benefit on the
later of such Participant’s sixty-fifth (65th) birthday or the date such
Participant Separates from Service. Notwithstanding the preceding sentence,
a Participant, by special election made within thirty (30) days of first
becoming eligible to participate in the Plan, may elect to have his/her Plan
Benefit commence on the first of any calendar month commencing after such
Participant’s fifty-fifth (55th) birthday and prior to such
Participant’s sixty-fifth (65th) birthday (or if later, the first
of the calendar month next following the date such Participant Separates
from Service). The Accrued Benefit of a Participant who Separates from
Service with the



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Company prior to attaining age fifty-five (55) shall be computed and
frozen as of the date such Participant Separates from Service with the
Company.




     The Plan Benefit actually payable to a Participant whose Accrued
Benefit vests hereunder shall be determined in accordance with (i) Section
5.1 hereof, if such Participant commences receiving such Plan Benefit on or
after attaining age sixty-five (65); or (ii) Section 5.2 hereof, if such
Participant commences receiving such Plan Benefit prior to attaining age
sixty-five (65) but on or after the date such Participant attains age
fifty-five (55); provided, however, that such Plan Benefit shall be based on
the above determination of the Participant’s Accrued Benefit.”


7. Section 5.4, Disability Retirement Benefit, is hereby amended by deleting the section in its
entirety and replacing it with the following:





“Disability Retirement Benefit.




     A Participant who becomes disabled for purposes of the Long Term
Disability Plan and, as a result, is eligible for and receiving benefits
under the Long Term Disability Plan, may commence receiving a Disability
Retirement Benefit on the later of the first day of the month
coinciding with or next following:




(a) The date such Participant ceases to receive benefit payments
under the Long Term Disability Plan; and




(b) (i) The date such Participant attains age sixty-five (65);
or




 (ii) The date such Participant is found to have qualified for
a 409A Disability (as herein defined).




     The Plan Benefit so payable to a Participant shall consist of such
Participant’s Accrued Benefit, determined as of the date such Participant
commenced receiving benefits under the Long Term Disability Plan, if any.
In the event such Participant is not eligible to receive benefits under the
Long Term Disability Plan, such Participant’s Accrued Benefit shall be
determined as of the date such Participant is found to have qualified for a
409A Disability. Notwithstanding any contrary Plan provision, if a
Participant is found to have qualified for a 409A Disability on or after
attaining age fifty-five (55), but ceases to be so disabled before such
Participant’s Disability Plan Benefit would have otherwise commenced, such
Participant shall be eligible to receive an Early Retirement Benefit as
provided under Section 5.2 herein.”


8. Section 7.3, Discretion to Accelerate, is hereby amended by deleting the first sentence therein
in its entirety and replacing it with the following:




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“The Plan Administrator shall pay a Death Benefit in a single lump
representing the present value of such Death Benefit, less applicable
withholding, if the deceased Participant previously elected a lump sum
payout within thirty (30) days of the commencement of his or her
participation in the Plan.”


9. Section 9.7, Tax Withholding, is hereby amended by deleting the section in its entirety and
replacing it with the following:





“Tax Withholding. Where and to the extent the accrual of Plan
benefits by or for a Participant, and/or the payment and distribution of
Plan rights or interests to a Participant or Beneficiary, results in
employment taxes imposed under the Federal Income Contributions Act (“FICA”)
with respect to such Participant’s Plan interest, or any related federal
state or local income tax withholding obligation(s) to be imposed upon the
Company or the Plan Administrator, or some other party (including without
limitation, a participating Subsidiary or Affiliate), the Company (or such
other party) shall have the right to withhold such amounts from any Plan
benefit(s) due or becoming due and payable to such Participant or
Beneficiary, and to the extent not unlawful, from any regular remuneration
paid by the Company to a Participant.”


9. Article IX, General Provisions, is hereby amended by adding a new Section 9.10 to the end
thereto, which shall provide as follows:





	 	“9.10	 	Code Section 409A Compliance. The
Plan is intended to be operated in compliance with the requirements of
Code Section 409A (including any rulings or regulations promulgated
thereunder). In the event that any provision of the Plan fails to
satisfy such requirements, such provision shall be void and shall not
apply to a Participant’s Deferred Compensation Benefit, to the extent
practicable. In the event that it is determined not to be feasible to
void a Plan provision as it applies to a Participant’s Deferred
Compensation Benefit, such Plan provision shall be construed in a
manner so as to comply with the requirements of Code Section 409A.”





     IN WITNESS HEREOF, the Company by action of its Board of Directors has caused this Amendment
Number One to the Plan to be executed on this 14th day of December, 2005.



	 	 	 	 	 
	 	AMERICAN GREETINGS CORPORATION

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




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