Exhibit 10.4



 






EXHIBIT 10.4




AMERICAN GREETINGS CORPORATION

OUTSIDE DIRECTORS’ DEFERRED COMPENSATION PLAN




 









 








AMERICAN GREETINGS CORPORATION

DIRECTORS’ DEFERRED COMPENSATION PLAN




Table of Contents




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I INTRODUCTION
	 	 	1	 
	Section 1.1 Name of Plan
	 	 	1	 
	Section 1.2 Effective Date
	 	 	1	 
	Section 1.3 Purpose
	 	 	1	 
	ARTICLE II DEFINITIONS AND USAGE
	 	 	1	 
	Section 2.1 Definitions
	 	 	1	 
	Section 2.2 Usage
	 	 	3	 
	ARTICLE III ELIGIBILITY AND PARTICIPATION
	 	 	3	 
	Section 3.1 Eligibility
	 	 	3	 
	Section 3.2 Participation
	 	 	3	 
	Section 3.3 Agreement Procedure
	 	 	3	 
	Section 3.4 Deferral Period
	 	 	4	 
	Section 3.5 Termination of Suspension of Participation; Renewed Participation
	 	 	4	 
	ARTICLE IV DEFERRED COMPENSATION BENEFIT
	 	 	4	 
	Section 4.1 Deferred Compensation Benefit
	 	 	4	 
	Section 4.2 Accounts
	 	 	4	 
	Section 4.3 Director’s Contributions
	 	 	5	 
	Section 4.4 Investments
	 	 	5	 
	Section 4.5 Valuation of Accounts
	 	 	5	 
	ARTICLE V PAYMENT OF BENEFIT PRIOR TO DEATH OR DISABILITY
	 	 	5	 
	Section 5.1 Commencement of Benefit Payments
	 	 	5	 
	Section 5.2 Form of Benefit Payments
	 	 	5	 
	Section 5.3 In-Kind Payments
	 	 	6	 
	ARTICLE VI PAYMENT OF BENEFIT ON OR AFTER DEATH OR DISABILITY
	 	 	6	 
	Section 6.1 Commencement of Benefit Payments
	 	 	6	 
	Section 6.2 Designation of Beneficiary
	 	 	6	 
	Section 6.3 Disability Determinations
	 	 	6	 






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AMERICAN GREETINGS CORPORATION

DIRECTORS’ DEFERRED COMPENSATION PLAN




Table of Contents




	 	 	 	 	 
	 	 	Page	 
	ARTICLE VII ADMINISTRATION
	 	 	6	 
	Section 7.1 General
	 	 	6	 
	Section 7.2 Administrative Rules
	 	 	6	 
	Section 7.3 Duties
	 	 	7	 
	Section 7.4 Fees
	 	 	7	 
	ARTICLE VIII MISCELLANEOUS PROVISIONS
	 	 	7	 
	Section 8.1 Amendment
	 	 	7	 
	Section 8.2 Termination
	 	 	7	 
	Section 8.3 No Assignment
	 	 	8	 
	Section 8.4 Successors
	 	 	8	 
	Section 8.5 Governing Law
	 	 	8	 
	Section 8.6 No Guarantee of Position
	 	 	8	 
	Section 8.7 Severability
	 	 	8	 
	Section 8.8 Code Section 409A Compliance
	 	 	8	 






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AMERICAN GREETINGS CORPORATION OUTSIDE DIRECTORS’ DEFERRED

COMPENSATION PLAN




ARTICLE I

INTRODUCTION



Section 1.1 Name of Plan. This plan shall be known as the American Greetings Corporation
Outside Directors’ Deferred Compensation Plan (hereinafter referred to as the “Plan”).



Section 1.2 Effective Date. The Plan’s effective date is January 1, 2005.



Section 1.3 Purpose. American Greetings Corporation has established the Plan to provide
certain members of that company’s board of directors the option of deferring the receipt of fees
earned while serving in such capacity.




ARTICLE II

DEFINITIONS AND USAGE



Section 2.1 Definitions. For purposes of this Plan, capitalized terms have the meanings set
forth below:



“Account” means the individual account or accounts established on behalf of a Participant
in accordance with Section 4.2.



“Administrator” means the person or persons described in Article VII.



“Affiliate” means any limited liability company, general partnership, limited partnership,
business trust, or other non-corporate organization with respect to which American Greetings
Corporation directly or indirectly owns at least fifty percent (50%) of either the capital or
profits interest therein, and directly or indirectly has the power and authority to select and
appoint, and where applicable remove, such organization’s managers, general partner(s) and/or
trustees (as applicable).



“Agreement” means an Agreement for Deferred Compensation Benefits entered into between the
Company and a Director who is eligible to participate in the Plan.



“Board” means the Board of Directors of American Greetings Corporation; provided that, if
such Board, by resolution, designates a person or a committee to act specifically on matters
relevant to the Plan, such person or committee shall act (and have the power and authority to act)
as the Board with respect to such matters.



“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of
the Code shall include any regulations or rulings promulgated thereunder.



“Company” means American Greetings Corporation, an Ohio corporation (“AGCo”), together with
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).



“Compensation” means the total of all retainer fees, meeting fees, and any other fees for
personal services rendered by a Director for the Company, acting in that capacity, whether paid to
the Director in cash or in-kind. Compensation shall not include, for purposes of determining a
Director’s Deferred Compensation Benefit under the Plan, any remuneration received by such Director
for services he or she renders to the Company in the capacity of an independent contractor.



“Deferred Compensation Benefit” means the benefit of a Participant as determined under
Article IV of this Plan.



“Director” means any person serving as an “outside director” on the Board. An “outside
director” is any individual performing personal services as a member of the Board who does not
concurrently perform services for the Company as an Employee; provided, however, that a Director
may include an “outside director” who concurrently performs services for the Company as an
independent contractor.



“Disability” or “Disabled” means a Participant’s absence from service on the
Company’s Board due to: (i) 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) such 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, for
which the Participant is receiving income replacement benefits for a period of not less than three
(3) months under an accident and health plan covering the Company’s Directors.



“Employee” shall mean any individual employed by the Company who receives “W-2 wages” from
the Company. Any individual who provides personal services to the Company concurrently as both
Employee and Director shall not be considered a Director, while serving in such dual capacities.



“Participant” means a Director who is eligible to participate in the Plan and who is
actually participating in the Plan in accordance with Section 3.2.



“Plan” means the American Greetings Corporation Outside Directors’ Deferred Compensation
Plan.



“Plan Year” means the calendar year.



“Separation from Service” shall mean a Participant’s resignation, removal or withdrawal as
a Director (whether on account of such Participant’s death, permanent and total disability,
retirement, or other circumstances). A Participant will not be deemed to have experienced a
Separation from Service if such Participant commences employment with the Company as an Employee,
or otherwise 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




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(20%) of the services provided by such Participant to the Company during the immediately preceding
three (3) full calendar years 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 (or, if less, the period of service).



“Subsidiary” means any corporation at least eighty percent (80%) of whose equity securities
(determined either by voting power or by interest in profits) are directly or indirectly owned by
AGCo.



“Unforeseeable Emergency” means any of the following: (i) a severe financial hardship to
the Participant resulting from an illness or accident of the Participant, the Participant’s spouse
or the Participant’s dependent (as defined under Code Section 152(a)), (ii) loss of the
Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Participant’s control as determined by the
Administrator pursuant to Code Section 409A.



Section 2.2 Usage. Except where otherwise indicated by the context, any masculine
terminology used herein shall also include the feminine and vice versa, and the definition of any
term herein in the singular shall also include the plural and vice versa.




ARTICLE III

ELIGIBILITY AND PARTICIPATION



Section 3.1 Eligibility. A Director shall be eligible to participate in the Plan on the
day he or she first serves as a Director of AGCo, unless the Board, by written action, otherwise
designates such Director as ineligible to participate in the Plan.



Section 3.2 Participation. Each Director eligible to participate in the Plan in accordance
with Section 3.1 shall become a Participant by entering into an Agreement with AGCo. Each
Director’s participation in the Plan shall be governed by his or her Agreement, including the
effective date of each Director’s participation, and the terms of the Plan. In the event that the
terms of the Agreement and the terms of the Plan conflict, the terms of the Agreement control.



Section 3.3 Agreement Procedure.



(a) AGCo and each Director who is eligible to participate in the Plan may execute one or more
Agreements for all or a the portion of Compensation the Director elects to defer into the Plan.
Each Agreement shall provide for the amount credited to a Participant’s Account in accordance with
Section 4.3 below, the period of deferral in accordance with rules established by the
Administrator, the investment of such amount in accordance with Section 4.4 below, and the payment
of the Participant’s Deferred Compensation Benefit in accordance with Sections 5.1 and 5.2 below.



(b) For the initial Plan Year in which a Director becomes eligible to participate in the Plan, the
Agreement shall be properly completed, executed and delivered to the Administrator prior to the
date that ends thirty (30) days after the date on which the Director first becomes eligible to
participate in the Plan.




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(c) For any subsequent Plan Year for which a Director is eligible to participate in the Plan, the
Agreement shall be properly completed, executed and delivered to the Administrator prior to the
first day of each Plan Year for which amounts will be deferred on behalf of such Director.



(d) An Agreement shall be effective no earlier than the date on which it is delivered to the
Administrator and shall continue in effect for all succeeding Plan Years until the Deferred
Compensation Benefit attributable to such Agreement has been paid, unless otherwise provided under
the Plan.



Section 3.4 Deferral Period.



(a) A Participant may elect to defer his or her Compensation for three (3) years, five (5) years,
or until the date such Participant no longer performs personal services as a Director. A
Participant must select a deferral period on the Agreement he or she enters into with the Company
before any Compensation will be deferred under the Plan on such Participant’s behalf.



(b) A deferral period provided for under a prior Agreement (the ‘Prior Deferral Election’) may be
extended in accordance with rules established by the Administrator. Notwithstanding the foregoing,
in no event shall a change in a Prior Deferral Election (i) take effect until at least twelve (12)
months after the date on which the election to change is made, (ii) permit a payment on account of
Separation from Service or in accordance with a specified time or fixed schedule (as set forth on
the Agreement) to commence earlier than five (5) years from the date the initial payment under the
Prior Deferral Election would otherwise have been made, and (iii) permit a payment in accordance
with a specified time or fixed schedule of the Prior Deferral Election (as set forth on the
Agreement) to occur earlier than twelve (12) months prior to the date of the first scheduled
payment under the Prior Deferral Election.



Section 3.5 Termination or Suspension of Participation; Renewed Participation. A
Participant’s future participation in the Plan may be discontinued at any time by written action of
the Board, in accordance with and subject to the following rules:



(a) The terms of any discontinuance must be set forth in writing and a copy of these written terms
shall be provided to the affected Participant, the Plan Administrator, and the Board.



(b) In the event that a Participant, whose future participation in the Plan is discontinued, is
again designated for participation in the Plan by the Board, such Participant must enter into an
Agreement in accordance with Section 3.3(c) above.




ARTICLE IV

DEFERRED COMPENSATION BENEFIT



Section 4.1 Deferred Compensation Benefit. A Participant’s Deferred Compensation Benefit
shall be equal to the total amount credited to the Participant’s Account under this Article IV.



Section 4.2 Accounts. The Company shall establish and maintain Accounts on behalf of each
Participant, which shall include all Deferred Compensation Benefits deferred on behalf of such
Participant. Each Account shall list and reflect each Participant’s credits and valuations. All
amounts credited to a Participant’s Account shall be entered as of the date on which the


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Compensation would have been paid had it not been deferred. At all times prior to the distribution
of all or a portion of amounts maintained in a Participant’s Account, amounts so credited shall
represent a general unsecured obligation of the Company subject to the claims of the Company’s
general creditors.



Section 4.3 Director’s Contributions. Directors who have been identified by the Board as
eligible to participate in the Plan shall be eligible to elect to defer all or a portion of his or
her Compensation under the Plan, which may be communicated as a certain percentage or set dollar
amount. The terms of any election to defer a Director’s Compensation must be made in accordance
with Sections 3.3(b) and 3.3(c) above. Further, the timing and form of payment of such Deferred
Compensation Benefit must be specified in the Agreement, subject to the provisions of Sections
3.3(d), 5.1, 5.2 and 6.1.



Section 4.4 Investments. A Participant may elect, at the time and in the manner he or she
makes an initial deferral election, the vehicles in which assets held in his or her Account will be
invested. The Company will provide a Participant, as part of his or her Agreement, a choice of
investment vehicles, which have been pre-selected by the Board. In the event all or a portion of a
Participant’s Account is not invested pursuant to the Agreement, such Participant’s Account shall
be invested as reasonably determined by the Company, in accordance with the procedures established
by the Administrator. A Participant may elect to change his or her investment elections in
accordance with procedures established by the Administrator.



Section 4.5 Valuation of Accounts. The value of a Participant’s Account shall be
determined from time to time by the Administrator in the following manner:



(a) Each Participant’s Account shall be valued as of the last day of each Plan Year, or more
frequently as agreed upon by the Administrator, and shall again be valued as of the date that a
Participant receives a payment under the Plan, in accordance with the procedures established by the
Administrator.



(b) All allocations to a Participant’s Account under this Section 4.5 shall be deemed to have been
made on the applicable valuation date, even though actually determined at a later date.




ARTICLE V

PAYMENT OF BENEFIT PRIOR TO DEATH OR DISABILITY



Section 5.1 Commencement of Benefit Payments. Except as provided in Section 6.1 below, the
payment of a Participant’s Deferred Compensation Benefit shall commence thirty (30) days after the
date on which the earlier of the following events occurs:



(a) The expiration of the deferral period provided under the Participant’s Agreement.



(b) The Participant incurs an Unforeseeable Emergency (as determined by the Administrator in
accordance with the Plan’s terms).



(c) The Participant experiences a Separation from Service with the Company for any reason.




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Section 5.2 Form of Benefit Payments. Except as provided in Article VI, a Participant
shall be given the option to elect to receive his or her Deferred Compensation Benefit as (a) one
lump sum payment, (b) installments, payable over a period of five (5) years, or (c) installments,
payable over a period of ten (10) years. The form that a Participant’s Deferred Compensation
Benefit will be paid in, must be selected on the Participant’s Agreement. If the Participant’s
Agreement does not provide for a form of payment, then the Participant’s Deferred Compensation
Benefit shall be paid in a single lump-sum. If the Participant has negotiated two or more
Agreements that do not provide for the same form of payment, then a proportionate amount of the
Participant’s Deferred Compensation Benefit attributable to each individual Agreement shall be paid
in the form provided under both this Section 5.2 and each respective Agreement in accordance with
the procedures established by the Administrator.



Section 5.3 In-Kind Payments. A Participant’s Deferred Compensation Benefit that is payable
to such Participant, Participant’s beneficiary, or Participant’s guardian (as the case may be) in
accordance with Sections 5.1 or 6.1, as applicable, may be paid to such Participant, Participant’s
beneficiary, or Participant’s guardian in the form of cash or in-kind, as such amounts were held in
the Participant’s Account immediately prior to the commencement of benefit payments under Sections
5.1 or 6.1; provided, however, that a Participant may elect instead to receive any portion of his
or her Account that was held in-kind as cash, at the time and in the form and manner prescribed by
the Board.




ARTICLE VI

PAYMENT OF BENEFIT ON OR AFTER DEATH OR DISABILITY



Section 6.1 Commencement of Benefit Payments. If a Participant dies or becomes Disabled
prior to receiving his or her entire Deferred Compensation Benefit, then the remainder of such
Deferred Compensation Benefits payable to the Participant shall be paid to the Participant, the
Participant’s beneficiary, or the Participant’s guardian (as the case may be) in a single lump-sum
amount thirty (30) days following the date on which the Administrator is notified of the
Participant’s death or Disability.



Section 6.2 Designation of Beneficiary. A Participant may designate one or more
beneficiaries, in the manner and form determined by the Administrator, to receive the Deferred
Compensation Benefit following the Participant’s death. A Participant may change such beneficiary
designations from time to time, as permitted by the Administrator. In the event that the
Participant has beneficiary designations, the last written designation filed with the Administrator
prior to the Participant’s death shall control. If a Participant fails to specifically designate a
beneficiary, or if no designated beneficiary survives the Participant, payment shall be made by the
Administrator in accordance with the laws of descent and distribution in effect in the
Participant’s State of residence.



Section 6.3 Disability Determinations. The Administrator will be responsible for
determining whether a Participant suffers from a Disability, as defined herein. The Administrator
may delegate this responsibility to an independent third party selected by the Board.




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ARTICLE VII

ADMINISTRATION



Section 7.1 General. The Administrator shall be the Board, or such other person or persons
as designated by the Board. Except as otherwise specifically provided in the Plan, the
Administrator shall be responsible for administration of the Plan.



Section 7.2 Administrative Rules. The Administrator may adopt such rules of procedure as
it deems desirable for the conduct of its affairs, except to the extent that such rules conflict
with the provisions of the Plan.



Section 7.3 Duties. The Administrator shall have the following rights, powers and duties:



(a) Subject to the terms of this Plan and the Agreement, the decision of the Administrator in
matters within its jurisdiction shall be final, binding and conclusive upon the Company and upon
any other person affected by such decision.



(b) The Administrator shall have the duty and authority to interpret and construe the provisions of
the Plan, to decide any question which may arise regarding the rights of Directors, Participants,
and beneficiaries, including the amounts of their respective interests, to adopt such rules and to
exercise such powers as the Administrator may deem necessary for the administration of the Plan,
and to exercise any other rights, powers or privileges granted to the Administrator by the Board
under the terms of the Plan.



(c) The Administrator shall maintain full and complete records of its decisions. The Administrator
shall have the duty to maintain Account records of all Participants, including all relevant data
pertaining to Participants. The Administrator shall within a reasonable time after the end of each
Plan Year provide each Participant a detailed report of the status of the Participant’s Account.



(d) The Administrator shall cause the principal provisions of the Plan to be communicated to the
Participants, and a copy of the Plan and other documents shall be available at the principal office
of the Company for inspection by the Participants at reasonable times determined by the
Administrator.



(e) The Administrator shall periodically report to the Board with respect to the status of the
Plan.



Section 7.4 Fees. No fee or compensation shall be paid to any person for services as the
Administrator.




ARTICLE VIII

MISCELLANEOUS PROVISIONS



Section 8.1 Amendment. The Company reserves the right to amend the Plan retroactively or
otherwise, in any manner that it deems advisable, by a written action taken by the Board. No
amendment shall, without the prior written consent of the Participant or the beneficiary, as the
case may be, affect the amount or form of the Participant’s or beneficiary’s Deferred




7









 







Compensation Benefit at the time the amendment becomes effective or the right of the Participant or
the beneficiary to receive such Deferred Compensation Benefits.



Section 8.2 Termination. The Company reserves the right to terminate the Plan at any time
by a written action taken by the Board. No termination shall, without the prior written consent of
the Participant or the beneficiary, as the case may be, affect the amount or form of the
Participant’s or the beneficiary’s Deferred Compensation Benefit prior to the termination or the
right of the Participant or beneficiary to receive such Deferred Compensation Benefit.



Section 8.3 No Assignment.



(a) The Participant shall not have the power to pledge, transfer, assign, anticipate, mortgage or
otherwise encumber or dispose of in advance any interest in amounts payable hereunder or any of the
payments provided for herein, nor shall any interest in amounts payable hereunder or in any
payments be subject to seizure for payments of any debts, judgments, alimony or separate
maintenance, or be reached or transferred by operation of law in the event of bankruptcy,
insolvency or otherwise.



In the event of an attempted seizure, any amounts payable hereunder may be paid to one or more of
the Participant’s relatives or children, or the Participant’s spouse, as the Administrator shall
determine.



(b) Notwithstanding the foregoing, a Participant’s Deferred Compensation Benefit shall be subject
to division and partition in accordance with the terms of a domestic relations order satisfying the
requirements of a “qualified domestic relations order” (“QDRO”), as defined in Code Section 414(p)
and related regulations; provided, that (i) a separate benefit shall be recognized and maintained
for any spouse or former spouse determined to have an interest in the Plan as a result of a QDRO;
and (ii) all costs and expenses incurred by the Company or the Administrator in connection with
such QDRO shall be charged against such Participant’s Deferred Compensation Benefit.



Section 8.4 Successors. The provisions of the Plan are binding upon and inure to the
benefit of the Company, its successors and assigns, and the Participant, his or her beneficiaries,
heirs, and legal representatives.



Section 8.5 Governing Law. The Plan shall be subject to and construed in accordance with
the laws of the State of Ohio, to the extent not preempted by applicable law.



Section 8.6 No Guarantees. Nothing contained in the Plan shall be deemed to give any
Participant the right to any equity or other interest in the assets, business or affairs of AGCo
(or any entity comprising part of the Company). No Participant hereunder shall have a security
interest in assets of the Company used to make contributions or pay benefits.



Section 8.7 Severability. If any provision of the Plan shall be held illegal or invalid
for any reasons, such illegality or invalidity shall not affect the remaining provision of the
Plan, but the Plan shall be construed and enforced as if such illegal or invalid provision had
never been included herein.




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Section 8.8 Code Section 409A Compliance. The Plan is intended to be operated in
compliance with the provisions of Code Section 409A (including any rulings or regulations
promulgated thereunder). In the event that any provision of the Plan fails to satisfy the
provisions of Code Section 409A, then 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 to not be feasible to so 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 WHEREOF, the undersigned, on behalf of American Greetings Corporation, has executed
and adopted this Plan 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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