Document:

Key Management Annual Incentive Plan (fiscal year 2009 Description)

 Exhibit 10.1 
 

 

									
			 	 	 
		 		 	TABLE OF CONTENTS	  		  	
					
		 		 	Eligibility	  	1	  	
					
		 		 	How the Plan Works	  	2	  	
					
		 		 	        Your Individual Target Incentive	  	2	  	
					
		 		 	        Weighting the Measures	  	3	  	
					
		 		 	        Measuring Performance	  	4	  	
					
		 		 	        Performance Multipliers	  	4	  	
					
		 		 	Performance Measures	  	5	  	
					
		 		 	        Corporate Performance	  	5	  	
					
		 		 	        Business Unit Performance	  	7	  	
					
		 		 	        Individual Performance	  	8	  	
					
		 		 	Summary - Total Award Calculation	  	9	  	
					
		 		 	Appendix	  	10	  	
					
		 		 	        Business Unit Components	  	10	  	
					
		 		 	        Administrative Details	  	11	  	
					
		 		 	        Definition of Common Terms	  	12	  	

			
	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  
	  	
	 	  	
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	 AMERICAN GREETINGS
 KEY
MANAGEMENT
 ANNUAL INCENTIVE PLAN
  
 This brochure provides an overview of the Key Management Annual Incentive Plan — a valuable component of your total compensation package. It contains details about
how the Plan rewards for Corporate, Business Unit and Individual performance results. In addition, your Incentive Compensation Statement — provided separately — includes information specific to your participation in the plan: your assigned
business unit and sub-business unit if any, your target
	  	 incentive percentage and detailed examples of the incentive calculation under different performance scenarios. Together, these documents provide the
information you need to understand the Plan so you can maximize your annual incentive award.
  
 ¢ ELIGIBILITY
  
 You are
eligible to participate in the Key Management Annual Incentive Plan if you are a Key Manager or Officer in one of the following primary business units and you do not participate in another Company-sponsored annual incentive
plan:

  

					
		 	  
 PRIMARY BUSINESS UNIT
  
	  	  
 PARTICIPANTS
  

		 	 
		 	Corporate Consolidated	  	 Chairman, Chief Executive Officer, President and Chief Operating Officer, Corporate-level Senior Vice
Presidents and other Section 16 Executive Officers
  

		 	  
 Total
Social Expressions Group (SEG)
	  	  
 Associates who are part of:

		 	 	  	AGI In-Store
		 	 	  	Business Intelligence
		 	 	  	Canada
		 	 	  	Carlton Mexico
		 	 	  	Carlton Cards Retail
		 	 	  	Corporate Staff (Delta, Finance, HR, ISD, Legal)
		 	 	  	Creative
		 	 	  	DesignWare & Specialty SBU
		 	 	  	Everyday & Seasonal Cards
		 	 	  	Field Sales
		 	 	  	Field Sales Operations (FSO)
		 	 	  	Gift Packaging & Holiday SBU
		 	 	  	Global Sourcing
		 	 	  	Inbound Licensing
		 	 	  	Plants
		 	 	  	Product Development
		 	 	  	 All other North American Greeting Card Division
units
  

		 	  
 AG
Intellectual Properties Group
  
	  	  
 AGIP Corporate Staff
  

		 	  
 AG
Interactive
  
	  	  
 AG Interactive associates
  

		 	  
 AG
Properties
  
	  	  
 AG Properties associates
  

		 	  
 UK
Greetings
  
	  	  
 UK Greetings associates
  

		 	  
 John Sands Group
  
	  	  
 John Sands Group associates
  

		 	  
 Key Managers include individuals in Key Manager 1 and Key Manager
2 job levels. Officers include Corporate-level Executive Directors, Vice Presidents, Senior Vice Presidents, President and Chief Operating Officer, Chief Executive Officer, Chairman of the Board and any other job level(s) that may be designated.

  

			
		 	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  

	 
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	 ¢ HOW THE PLAN WORKS
  
 The Key Management Annual Incentive Plan rewards participants for their contributions to American
Greetings success over a 12-month fiscal year. The Plan rewards for successful results in three key performance areas:
  
 ¡ Corporate Performance. At the beginning of each fiscal year, the
American Greetings Board of Directors approves the corporate earnings per share (EPS) and corporate total revenue performance goals for the year. Actual corporate results are compared to these goals at the end of the fiscal year.
  
 ¡ Business
Unit Performance. Every year, each business unit develops an earnings goal — which is approved by the Board of Directors — based on its strategic direction, business opportunities and growth projections. Business unit performance
is based on actual fiscal year earnings results for your assigned business unit compared to goal.
	  	 The total award — which is paid in cash — can range from 0% to 200% of your individual target incentive. This provides significant
incentive earnings opportunity when performance in one or more of these performance areas exceeds expectations.
  
 Let’s take a look at the components of the Plan and how they work.
  
 YOUR INDIVIDUAL TARGET INCENTIVE
  
 At the
beginning of each fiscal year, an individual target incentive is established for you based on your job level. This target incentive is typically communicated as a percentage of your base earnings but may also be expressed as a dollar amount,
determined by multiplying your base earnings by your target incentive percentage as follows:

	  
 ¡ Individual Performance. Your manager will determine your individual performance compared to your objectives for the year. Your actual fiscal year-end performance rating determines the percentage of
the target individual incentive amount you earn.
  
 At the end of each fiscal year,
incentive amounts are determined based on performance in these three key performance areas and are added together to determine your total Key Management Annual Incentive Plan award.
  
 

	  	  
 

  
 The target incentive represents what you
would earn if each performance measure in this incentive plan (Corporate, Business Unit and Individual) were achieved at 100% of goal (i.e., all components achieve their target performance).
  

	  	  
 EXAMPLE
  
 For example, assume Joe is a Key Manager 1 with base earnings of $60,000. His target
incentive under the Plan is 10%, or $6,000 ($60,000 x 10% = $6,000).
  
 We’ll refer to Joe throughout this brochure as we describe how the Plan works.

		  	

			
	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  
	  	
	 	  	
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	 WEIGHTING THE MEASURES
  
 Performance measures are weighted by job level to reflect the degree to which positions within a job level can affect performance in each of the three key performance
areas. Accordingly, associates at higher job levels — who have more impact on the achievement of corporate objectives — have more weight assigned to the corporate performance measure. Lower job levels, in contrast, have more weight
assigned to the individual performance area.
  
 The following chart shows the specific
weightings for each job level for fiscal year 2009.
	  	

  

							
		 	FISCAL YEAR 2009 WEIGHTINGS
	  
  
       JOB LEVEL
	 	    Corporate    
	 	    Business Unit    
	 	    Individual    

	 	 	 	 
	     Chairman of the Board, CEO, President and COO, Corporate-level Senior Vice Presidents and other Section 16 Executive Officers
  
	 	30%	 	50%	 	20%
	 	 	 	 
	     Corporate-level Vice Presidents and Executive Directors; Key Managers 2; Key Managers 1
  
	 	20%	 	50%	 	30%

  

	
	  
 EXAMPLE
  
 Joe, a Key Manager 1 with base earnings of $60,000 and a 10% incentive target, would have the following set of
performance measure weightings and target incentive awards:

  

													
		 		  		  		  		  		  	
		 		  	Corporate	  	Business Unit	  	Individual	  	Total	  	
		 				 	
		 	 Key Manager 1 Weightings
	  	20%	  	50%	  	30%	  	100%	  	
	 	 	 	 	 	 	 
		 	 Joe’s Target Incentive
	  	2%	  	5%	  	3%	  	10%	  	
		 	 (Percent of Base Earnings)
	  	(10% x 20%)	  	(10% x 50%)	  	(10% x 30%)	  	 	  	
	 	 	 	 	 	 	 
		 	 Joe’s Target Incentive ($)
	  	$1,200
 ($60,000 x 2%)
	  	$3,000
 ($60,000 x 5%)
	  	$1,800
 ($60,000 x 3%)
	  	$6,000	  	
		 	 	  	 	  	 	  	 	  	 	  	

			
		 	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  

	 
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	 MEASURING PERFORMANCE
  
 Corporate and business unit actual performance is determined at the end of the fiscal year and expressed as a percentage of the goal. In contrast, individual results are
evaluated by your manager at fiscal year-end and communicated as an individual performance rating. If the corporation’s or your business unit’s results exceed or fall below goal, Plan payouts are adjusted.
  
 ¡Below Target
Performance. If actual results do not meet a minimum level of performance — the performance threshold — no incentive award is earned for that performance measure. Results that fall between threshold and goal result in a reduced
incentive award.
  
 ¡Target Performance. When actual results meet goal, you receive 100% of the target incentive award for that performance measure.
  
 ¡Above Target
Performance. When actual results exceed goal, you receive an increased incentive award. You can receive up to 200% of the targeted incentive award for a performance measure.
  
 As described above, there is a precise relationship between actual results and the corresponding
incentive award. As performance rises or falls, so does your award. But how much your award changes is determined by a performance multiplier, which is discussed in the following section.
	  	  
 PERFORMANCE MULTIPLIERS
  
 The performance multiplier is used to calculate the corporate and business unit incentive awards
when performance is above or below goal, provided the performance thresholds have been achieved.
  
 Corporate and business unit performance incrementally increase your incentive award for performance above goal. They also incrementally decrease your incentive award for performance below goal.
  
 For example, a multiplier of 4 means that for every 1% increase or decrease in the percentage of the
goal achieved, there is a corresponding 4% increase or decrease in the percentage of target incentive earned.
  
 The example below illustrates the role of the performance multiplier in determining the adjustment that is made to your incentive target based on actual performance achieved.
  
 

  
 Important Note: Business unit
performance multipliers vary by business unit. The multiplier assigned to your business unit is provided in your fiscal year 2009 Incentive Plan Statement. A list of all business unit multipliers is provided in the Appendix.

			
	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  
	  	
	 	  	
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	 ¢ PERFORMANCE MEASURES
  
 CORPORATE PERFORMANCE
  
 Creating value for our shareholders and increasing our focus on delivering profitable revenue growth
are key drivers to American Greetings success. To help achieve these objectives, corporate performance and your corporate incentive award will be determined using two performance measures:
  
 ¡ Corporate
earnings per share (EPS), and
  
 ¡ Corporate total revenue
  
 Your corporate incentive
award is determined using a two-step process:
	  	 Step 1: Calculate Preliminary Award
  
 Corporate EPS performance is based on fiscal year-end corporate earnings per share compared to goal. Minimum performance of 90% of goal must be attained before any
incentive is earned. Above 90%, your incentive award is determined using a performance multiplier of 4 as illustrated on page 6. This incentive amount is a preliminary award based solely on EPS performance.
  
 Step 2: Calculate Adjustment
  
 The preliminary award based on EPS performance (Step 1) may be adjusted up or down depending on
corporate total revenue performance. For high levels of performance (greater than 103% of goal) or lower levels of performance (less than 97% of goal), the adjustment is determined by applying a performance multiplier of 5 to the difference between
actual corporate total revenue performance and 103% or 97% as illustrated below. Any adjustment is added to the preliminary award from Step 1. There is no adjustment in this step for corporate total revenue performance at or between 97% and 103% of
goal.

 

 

			
		 	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  

	 
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 EXAMPLE
  
 Joe is a KM1 with $60,000 in base earnings. Let’s assume:
  
 n
Corporate EPS performance is 103% of goal
  
 nCorporate total revenue
performance is 104.3% of goal
  
 Joe’s corporate incentive award is
calculated as follows:
  
 1. Determine the preliminary award based on corporate
EPS performance
  
 2. Determine the corporate total revenue adjustment based on
corporate total revenue performance
  
 3. Add the results of Steps 1 and
2
  
 4. Multiply the result in Step 3 by Joe’s corporate target incentive
percentage
  
 5. Multiply the result in Step 4 by Joe’s base
earnings
  

  

																			
		 		 		 		 		 		 		 		 		 	
	 Preliminary Award
	 	 100%
	 	     +        
	 	 (             3%
	 	 x
	 	 4            )
	 		 	 =
	 	 112%
	 	
	 (Based on corporate
 EPS Performance)
	 	 Target Performance
	 		 	 Results Above Goal
	 		 	 Corporate EPS
 Performance Multiplier
	 		 		 		 	
										
	 Corporate Total
 Revenue
 Adjustment
	 	 (        104.3%
	 	     –        
	 	     103%        )
	 	         x
	 	 5
	 		 	 =
	 	 + 6.5%
	 	
	 	 Corporate Total
 Revenue Results
	 		 	 Top of Target Revenue
 Performance Range
	 		 	 Corporate Total Revenue
 Performance Multiplier
	 		 		 		 	
							
		 		 		 	Corporate Performance Adjustment    	 		 	118.5%	 	
		 		 		 		 		 	

  

												
		  		  		  			  		  	
		  		  	CORPORATE INCENTIVE	  		  	
						
		  	 Joe’s Target Incentive
	  		  	 	2%	  		  	
						
		  	 Corporate Performance Adjustment
	  	x	  	 	118.5%	  		  	
						
		  	 Joe’s Base Earnings
  
	  	x  
	  	$ 
	60,000  
	  		  	
						
		  	 Joe’s Incentive Earned
	  	=	  	$	1,422	  		  	
						
		  		  		  			  		  	

			
	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  
	  	
	 	  	
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	 BUSINESS UNIT PERFORMANCE
  
 Business unit performance is based on fiscal year-end earnings results compared to goal. All associates are assigned to a primary business unit. However, some will also
be assigned to a sub-business unit based on business conditions and American Greetings strategic priorities.
  
 Business unit and sub-business unit performance measures will vary, but your primary business unit measure will be one of the following:
  

¡ Business Unit Pro Forma Earnings Before Interest and Taxes (Business Unit Pro
Forma EBIT), or
  
 ¡ Corporate Earnings Before Interest and Taxes (Corporate EBIT).
  
 Earnings are charged/credited for any variation from plan in Net Capital Employed at the weighted average cost of capital. Performance is based on fiscal year-end earnings compared to goal.
	  	  
 The incentive is earned when the performance threshold for the primary business
unit (or sub-business unit, where applicable) is achieved.
  
 ¡ The performance threshold for all primary and sub-business units, except for Carlton Cards Retail, is 90% of goal.
  
 ¡ The performance
threshold for Carlton Cards Retail is 60% of goal.
  
 A listing of each business
unit’s and sub-business unit’s assigned earnings measure(s) and performance multipliers is provided in the Appendix. An example of the calculation of this incentive follows.

  

	
	  
 EXAMPLE
  
 Joe is a KM1 with $60,000 in base earnings. Let’s assume his business unit has a
performance multiplier of 4 and that its performance at year-end is 96% of goal. Joe’s business unit incentive award is calculated in three steps:
  
 1.     Determine the business unit performance adjustment
  
 2.     Apply the business unit performance
adjustment to Joe’s target incentive percentage for the business unit component
  
 3.     Multiply the result by Joe’s base earnings
  

  

																					
											
		 	 100%
	 	        +	 	    (    	 	-4%	 	      x      	 	4	 	    )	 	    =        	 	84%	 	
											
		 	 Target Performance
	 		 		 	Results Below Goal	 		 	 Business Unit
 Performance Multiplier
	 		 		 	 Business Unit
 Performance Adjustment
	 	

											
		  		  		  		  		  	
		  		  	BUSINESS UNIT INCENTIVE	  		  	
						
		  	 Joe’s Target Incentive
	  		  	5%	  		  	
						
		  	 Performance Adjustment
	  	x	  	84%	  		  	
						
		  	 Joe’s Base Earnings
  
	  	x  
	  	$60,000  
	  		  	
						
		  	 Joe’s Incentive Earned
	  	=	  	$2,520	  		  	
						
		  		  		  		  		  	

			
		 	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  

	 
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 INDIVIDUAL PERFORMANCE
  
 At the end of the fiscal year, managers assess each participant’s performance compared to other
participants within the business unit. Managers determine the degree to which the participants achieve the goals and job expectations defined at the beginning of the year.
  
 Managers rank participants based on their relative performance and determine the actual performance
rating based on these rankings and the targeted percentage of participants for each rating.
  
 ¡ Participants who receive an “Exceeds Expectations” performance rating
receive the target incentive for the individual performance measure multiplied by 150%. In certain circumstances, this target can be increased to 200%1.
  
 ¡
 Participants who receive a “Meets Expectations” rating will receive 100% of their target individual incentive.
  
 ¡ Participants who receive an “Improvement Expected/Performance Below Peer
Level” rating will not receive an individual performance incentive and will only receive 50% of any incentive otherwise earned under the corporate and business unit components.
  
 If corporate earnings performance is below the performance threshold, only those associates with a
performance
	  	 rating of “Exceeds Expectations” may receive awards for the individual performance measure.
  
 ¡ Participants
who receive an “Exceeds Expectations” performance rating will receive 50% of the target incentive payable for the individual performance component.
  
 ¡ Participants who receive a “Meets Expectations” or “Improvement
Expected/Below Peer Level” performance rating will not receive any portion of the individual performance incentive.
  
 If you are a senior executive officer, please refer to the fiscal year 2009 Addendum to the Individual Performance Component, included with your personalized Incentive
Compensation Statement, for a complete description of how individual performance under the Key Management Annual Incentive Plan applies to you.
  
 

 The following schedule shows how individual amounts will be adjusted based on individual
performance. 
  

											
	 	 	 	  	 	  	 	  	 	  	 
	 	 	 Performance
 Rating
  
	  	Target Percentage
of Participants  
	  	Will Receive  
	  	Percentage
of Incentive  
	  	 
	 					 
	 	 	 Exceeds Expectations 1
	  	30%	  	

	  	150%	  	 
	 	 	  
 Meets Expectations
	  	  
 60%
	  	  	  
 100%
	  	 
	 	 	  
 Improvement Expected/
 Performance Below Peer Level
  
	  	  
 10%
  
	  	  	  
 0%
  
	  	 
	 	 	  	  	  	  

  

	
	 1Managers can, at their discretion, increase the Individual Payout Percentage to 200% for associates rated as “Exceeds
Expectations” who demonstrate an extraordinary level of performance. Accomplishments must be the result of extraordinary effort and initiative that go well beyond the contributions of other associates rated as “Exceeds Expectations.”
The number of persons eligible to receive an Individual Payout Percentage of 200% may not exceed one-third of the total number of associates rated as “Exceeds Expectations.”

			
	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  
	  	
	 	  	
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 ¢
 SUMMARY—TOTAL AWARD CALCULATION 
 At the end of American Greetings fiscal year, corporate, business unit and individual results are
evaluated and your total incentive award is calculated. 
  

	
	 EXAMPLE
  
 The following example shows how Joe’s actual incentive award is calculated based on the assumptions that were used throughout this
brochure:

  

									
		 	JOE’S ASSUMPTIONS	  		 	PERFORMANCE ASSUMPTIONS
					
		 	Base Earnings:	  	$60,000	 	Corporate:	  	103% of Corporate EPS Goal
	 	 	 	  	 	 	 	  	104.3% of Corporate Total Revenue Goal
					
		 	Individual Target Percentage:	  	10%	 		  	
					
	 	 	 	  	 	 	Business Unit:	  	96% of Goal
					
		 	Individual Target Incentive:	  	$6,000	 		  	
					
	 	 	 	  	 	 	Individual:	  	Exceeds Expectations

  

																
		 	INCENTIVE CALCULATION	  	INCENTIVE %	 	 	BASE EARNINGS	  	INCENTIVE $
		 	  
 

  
	  		  			 		  		  		  	
		 	[100% + (3% above goal x 4)]	  		  	112	%	 		  		  		  	
								
		 	 [(104.3% - 103% top of range) x 5]
  
	  	+  
	  	6.5 
	%  
	 		  		  		  	
		 		  		  	118.5	%	 		  		  		  	
		 	 Target Corporate Incentive (20% Weight)
  
	  	x  
	  	2 
	%  
	 		  		  		  	
		 		  		  	2.37	%	 	x	  	$60,000	  	=	  	$1,422
		 	  
 +
  
	  		  			 		  		  		  	
		 	  
 

  
	  		  			 		  		  		  	
		 	[100% + (-4 % below goal x 4)]	  		  	84	%	 		  		  		  	
		 	 Target Business Unit Incentive (50% Weight)
  
	  	x  
	  	5 
	%  
	 		  		  		  	
		 		  		  	4.20	%	 	x	  	$60,000	  	=	  	$2,520
		 	  
 +
  
	  		  			 		  		  		  	
		 	  
 

  
	  		  			 		  		  		  	
		 	Individual Payout Percentage (“ Exceeds”)	  		  	150	%	 		  		  		  	
		 	 Target Individual Incentive (30% Weight)
  
	  	x  
	  	3 
	%  
	 		  		  		  	
		 		  		  	4.50	%	 	x	  	$60,000	  	=	  	$2,700
		 	  
 =
  
	  		  			 		  		  		  	
		 	  
 

  
	  		  	11.23	%	 	x	  	$60,000	  	=	  	$6,642

			
		 	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  

	 
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	 ¢ APPENDIX
  
 The following section provides additional details about the plan, including details about the business units, their performance measures and performance
multipliers.
  
 Please note that some plan participants will have their business unit
incentive determined based on performance in two areas. Details about the weightings and performance multipliers for these measures are shown below and on your personalized Incentive Compensation Statement, as appropriate.

  

													
	 	 	BUSINESS UNIT
COMPONENTS
				 
	 BUSINESS UNIT/
 PARTICIPANTS
	 	 PERFORMANCE
 MEASURE
	 	WEIGHT	 	PERFORMANCE
MULTIPLIER
	 	Primary Unit	 	Sub Unit	 	Primary Unit	 	Sub Unit	 	Primary Unit	 	Sub Unit
	 	 	 	 	 	 	 
	 Corporate Consolidated
 Chairman, CEO, President,
 COO, Corporate-level
 Senior Vice Presidents
 and other Section 16
 Executive Officers
	 	Corporate EBIT	 		 	100%	 		 	4	 	 
	 	 	 	 	 	 	 
	 Business Intelligence,
 Canada, Carlton Mexico,
 Corporate Staff (Delta,
 Finance,
HR, ISD, Legal),
 Creative, DesignWare &
 Specialty SBU,
Everyday
 & Seasonal Cards, Field
 Sales, FSO, Gift
Packaging & Holiday SBU,
 Global Sourcing, Plants,
 Product
Development,
 all other North American
 Greeting Card
Division
 units
	 	Total SEG(1) 	 		 	100%	 		 	4	 	 
	 	 	 	 	 	 	 
	Inbound Licensing	 	Total SEG(1)	 	AG Interactive pro forma EBIT	 	50%	 	50%	 	4	 	2
	 	 	 	 	 	 	 
	AGI In-Store	 	Total SEG(1)	 	AGI In-Store pro forma EBIT	 	50%	 	50%	 	4	 	2
	 	 	 	 	 	 	 
	Carlton Cards Retail	 	Total SEG(1)	 	 Carlton Cards Retail pro
 forma EBIT
	 	25%	 	75%	 	4	 	1
	 	 	 	 	 	 	 
	 AG Intellectual Properties
 Group – Corporate Staff
	 	AG Interactive pro forma EBIT + AG Properties pro forma EBIT	 		 	100%	 		 	2	 	 
	 	 	 	 	 	 	 
	AG Interactive	 	AG Interactive pro forma EBIT	 		 	100%	 		 	2	 	 
	 	 	 	 	 	 	 
	AG Properties	 	AG Properties pro forma EBIT	 		 	100%	 		 	2	 	 
	 	 	 	 	 	 	 
	UK Greetings	 	UK Greetings pro forma EBIT	 		 	100%	 		 	4	 	 
	 	 	 	 	 	 	 
	John Sands Group	 	John Sands Group pro forma EBIT	 	 	 	100%	 	 	 	2	 	 

 (1) Total SEG = NAGCD pro forma EBIT (includes
Carlton Mexico pro forma EBIT, Retail Eliminations and Corporate Expense) + Carlton Cards Retail pro forma EBIT + AGI In-Store pro forma EBIT 

			
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	 ADMINISTRATIVE DETAILS
  
 If your employment status changes, your Plan participation and any payouts may be affected as described below.
  
 ¡ New
Hires. If you are hired during the Plan year — defined as the American Greetings fiscal year ending February 28, 2009 — and are eligible to participate in the Key Management Annual Incentive Plan, you will receive a prorated
incentive payout based on the period of time you participated in the Plan and your base earnings during that time.
  
 ¡ Promotions and Transfers. If you are promoted or you move from one
business unit to another during the Plan year, your individual target incentive, base earnings, business unit goal and corresponding performance multiplier may change. If any of these do change, your incentive will be calculated based on the
targets, base earnings, plan provisions and actual performance for each business unit you participated in on a prorated basis and rounded to the nearest full month.
  
 ¡ Termination. If you voluntarily or involuntarily leave American
Greetings before the completion of the Plan year, you will forfeit your Key Management Annual Incentive Plan award for that fiscal year.
  
 ¡ Retirement, Leave of Absence,
Disability, Death. If your employment ends during the Plan year because you elect to retire after age 60, or if you take a leave of absence, suffer a permanent disability or die, your incentive payout will be
prorated to the nearest full month based on the actual period you participated in the Plan during the year.
  
 An associate will be deemed to suffer a permanent disability only in the following circumstances: (A) where an associate is absent from
employment with American Greetings due to his or her inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment, which either can be expected to result in death, or can be expected
to last for a continuous period of not less than 12 months; or (B) where an associate is scheduled
	  	 to receive income replacement benefits for a period of not less than 3 months under an accident and health plan covering
American Greetings associate on account of a medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than 12 months.
  
 ¡ Incentive
Payout. Incentive payouts earned in fiscal year 2009 will be paid to participants within two and one-half months following the end of fiscal 2009, typically within 60 days after the end of the fiscal year. Incentive payouts are subject to
normal tax withholding at a standardized rate and will be deposited to a bank account of your choice.
  
 It is the intent that incentive payouts fall under the short-term deferral rules of Section 409A of the Internal Revenue Code to exempt the payment of
such Key Management Annual Incentive Plan benefits from the requirements of Section 409A.
  
 ¡ Calculating Payouts. For computation purposes, financial goals and
actual performance results are rounded to the nearest $1,000. The percent of the financial goal achieved and the percent of target bonus earned is rounded to the nearest one-tenth of one percent. The actual incentive payout is rounded to the nearest
dollar.
  
 ¡ Omnibus Incentive Plan. The Key Management Annual Incentive Plan is governed by the American Greetings Corporation 2007 Omnibus Incentive Compensation
Plan, as such plan may be amended from time to time. In the event of a conflict between the Key Management Annual Incentive Plan and the Omnibus Incentive Plan, the terms of the Omnibus Incentive Plan will govern.
  
 ¡ Questions. If you have questions about the Key Management Annual Incentive Plan and how it works, please contact your manager. Your manager will work with you to ensure you understand the Plan so
you can maximize your annual incentive.

			
		 	 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN
  

	 
 12

	 	 
	 	

  

			
	 DEFINITION OF COMMON TERMS
  
 The following provides definitions of some common terms used throughout this brochure. Capitalized terms used herein that are not defined will have the meaning set forth
in the Omnibus Incentive Plan.
  
 ¡ Base Earnings. Your base earnings are defined as your base salary earned during the fiscal year. Base earnings exclude health and welfare benefits, bonus, commission, and incentive payments,
overtime and other indirect compensation. Base earnings for Plan participants outside of the U.S. may be defined differently and may vary by country.
  
 ¡ Business Unit EBIT. A business unit’s earnings before interest and
taxes.
  
 ¡ Business Unit Pro Forma EBIT. A business unit’s earnings before interest and taxes, charged/credited for any variation from plan in Net Capital Employed at the weighted average cost of
capital.
  
 ¡ Corporate Earnings Per Share (EPS). Corporate earnings per share is measured at the end of the fiscal year and is calculated as corporate pre-tax income minus taxes divided by the total number of
planned shares outstanding as calculated on a fully diluted basis.
	  	 ¡ Corporate Earnings Before Interest and Taxes (Corporate
EBIT). Consolidated corporate earnings before interest and taxes, charged/credited for any variation from plan in Net Capital Employed at the weighted average cost of capital.
  
 ¡ Corporate
Total Revenue. Consolidated corporate net sales and other revenues, including but not limited to royalties, advertising, subscriptions and other revenue streams directly related to the conduct of our principal business.
  
 ¡ Fiscal
Year. March 1 through February 28 or 29 of the following calendar year.
  
 ¡ Net Capital Employed (NCE). Assets (minus cash and LIFO reserve) minus
liabilities (not including interest-bearing debt, inter-company payables and income taxes).

  
  
  
  
  
  
  
  
  
  
  
  
  
 Nothing in this brochure
or in any individual Incentive Compensation Statement should be construed to create or imply any contract of employment between an associate and American Greetings and its subsidiaries or to create any binding contractual right to payment of any
specific amount under the American Greetings Key Management Annual Incentive Plan. The provisions of this brochure describe the general guidelines used by American Greetings in determining the benefits payable to Plan participants; however, in every
case, American Greetings reserves the right to reduce or eliminate the amount that would otherwise be payable to a participant or participants under such guidelines where it determines, in its discretion, that such a reduction is necessary or
appropriate, in light of the participant’s performance or other relevant business circumstances. 
 American Greetings reserves the right to
terminate or make changes to the Plan, including retroactively, at any time without prior notice to any of the Plan’s participants (provided, that no amendment to the Plan adopted more than 90 days after the beginning of the applicable fiscal
year may have the effect of increasing the amount that is or could be payable under the guidelines set forth herein for such fiscal year to any participant who is a “covered employee” of American Greetings as defined in section 162(m)(3)
of the Internal Revenue Code). In the case of our executive officers, the Board of Directors (or committee thereof), and in the case of all other participants, the Board of Directors (or committee thereof), the Chief Executive Officer and the
Chairman are the only persons who have the authority to alter or amend this Plan. Any such alteration or amendment must be done in writing. No participant should rely on an alteration or amendment to this Plan unless it is made in writing and signed
by the Chief Executive Officer or the Chairman. 

 

 

 

 
 SENIOR EXECUTIVE OFFICER 
 ADDENDUM TO INDIVIDUAL PERFORMANCE COMPONENT OF 
 FY2009 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE
PLAN 
  
  
  

			
	 INDIVIDUAL PERFORMANCE
  
 Notwithstanding the description of the Individual Performance component included in the brochure (the “Plan Brochure”) outlining the Fiscal 2009 Key Management
Annual Incentive Plan, the Individual Performance component of American Greetings Key Management Annual Incentive Plan for all Senior Executive Officers of American Greetings, consisting of the Corporation’s Chairman, Chief Executive Officer,
President and Chief Operating Officer, Senior Vice Presidents and other Section 16 officers (collectively the “Senior Executive Officers”) is modified by this Addendum as follows:
  
 ¡A range has been added
to the target percentage of participants who receive an “Exceeds Expectations” performance rating. The range is 20% to 30% of the total number of Senior Executive Officers.
  
 ¡Managers will now have
even more discretion to adjust the percentage of the individual incentive based on an individual’s performance. Senior Executive Officers who receive an “Exceeds Expectations” performance rating will earn between 100% and 150% of
their target incentive under the Individual Performance component. Those who receive a “Meets Expectations” performance rating will earn between 50% and 100% of their target incentive under the Individual Performance component.

 
 As with all participants of the Key Management Annual Incentive Plan, at the
	  	 end of the fiscal year, managers assess each Senior Executive Officer’s performance compared to other participants. Managers determine the
degree to which the participants have achieved the goals and job expectations defined at the beginning of the year.
  
 Managers rank participants based on their relative performance and determine actual performance ratings based on these rankings and the targeted percentage of participants for each rating.
  
 ¡For Senior Executive
Officers, the targeted percentage of participants for the “Exceeds Expectations” performance rating is 20% to 30%; the targeted percentage for the “Meets Expectations” performance rating is 60%; and the targeted percentage for
the “Improvement Expected / Performance Below Peer Level” is 10%. (See chart on the following page.)
  
 ¡Senior Executive Officers who receive an “Exceeds Expectations” performance
rating will receive between 100% and 150% of their target individual incentive, as determined by his or her manager. In certain circumstances, this payout can be increased up to a maximum of 200% of target1.
  
 ¡Senior Executive Officers who receive a “Meets Expectations” rating will receive between 50% and 100% of their target individual incentive, as determined by his or her
manager.
  
 ¡As with other participants, Senior Executive Officers who receive an

  

 Page 15 

 FY2009 KEY MANAGEMENT ANNUAL INCENTIVE PLAN SENIOR EXECUTIVE OFFICER ADDENDUM 
  
  
  

			
	 “Improvement Expected / Performance Below Peer Level” rating will not receive an individual performance incentive and
will only receive 50% of any incentive otherwise earned.
  
 As with other participants,
if corporate earnings performance is below the performance threshold, only those Senior Executive Officers with a performance rating of “Exceeds Expectations” may receive awards for the individual performance measure.
  
 ¡Participants,
including Senior Executive Officers, who receive an “Exceeds Expectations” performance rating, will receive 50% of the target incentive payable for the individual performance component.
	  	 ¡Senior Executives who receive a “Meets Expectations” or
“Improvement Expected / Below Peer Level” performance rating will not receive any portion of the individual performance incentive.
  
 The schedule below shows how individual amounts will be adjusted based on individual performance.
  
 Except as set forth in this Addendum, the description of the Key Management Annual Incentive Plan
included in the Plan Brochure remains unchanged. In the event of a conflict between the terms described in the Plan Brochure and this Addendum, the terms set forth in this Addendum will govern.

  

											
	  	 	Performance Rating	 	 Target Percentage
 of Participants
	 	 Will
 Receive
	 	 Percentage
 of Incentive
	 	  
	 					 
	 	 	 Exceeds Expectations1
	 	20% - 30%	 	 

	 	100% - 150%	 	 
	 	 	 Meets Expectations
	 	60%	 	 	50% - 100%	 	 
	 	 	 Improvement Expected /
 Performance Below Peer Level
	 	10%	 	 	0%	 	 

  

	 1
	 Managers can, at their discretion, increase the Individual Payout percentage up to a maximum of 200% of target, for
Senior Executive Officers rated as “Exceeds Expectations” who demonstrate an extraordinary level of performance. Accomplishments must be the result of extraordinary effort and initiative that go well beyond the contribution of other Senior
Executive Officers rated as “Exceeds Expectations.” The number of persons eligible to receive an Individual Payout Percentage between 150% and 200% may not exceed 10% of the total number of Senior Executive Officers rated as “Exceeds
Expectations.” 

  

 Page 16Employment Agreement, dated as of June 12, 2008, between Beeder and Corporation

 Exhibit 10.2 
 EXECUTIVE EMPLOYMENT AGREEMENT 
 THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made at Cleveland, Ohio, this 12th day of June 2008, by and
between AMERICAN GREETINGS CORPORATION, an Ohio corporation (the “Company”), and JOHN BEEDER (the “Executive”). 
 In
consideration of the covenants set forth in this Agreement, the parties mutually agree as follows: 
 1.        Job Title. Subject to the provisions of this Agreement, the Company shall employ Executive as the Company’s Senior Vice President, Sales and Marketing/Executive Sales and Marketing Officer, with such duties and
responsibilities as may be assigned from time-to-time by the Board of Directors or the President of the Company. Executive shall devote
Executive’s full business time and attention and give Executive’s best efforts to the business affairs of the Company and/or of its subsidiaries as the Board of Directors or the President of the Company may from time-to-time determine. Executive recognizes that in serving as an officer of the Company or as an
officer of a subsidiary, Executive serves in such capacity solely at the pleasure of the Board of Directors or the President of the Company and that
employment in such capacity or in any other capacity may be terminated at any time by the Board of Directors or the President of the Company, subject to the provisions of Section 4 of below. 
 2.        Fiduciary Obligations. Executive shall carry out his duties in a manner consistent with and in compliance with all present and future requirements and
limitations of all applicable federal and state laws, all applicable regulations, Company
policies (to the extent the policies do not conflict with the terms of this Agreement), and subject to the direction and approval of the Board of 

 
Directors or the President of the Company. Executive acknowledges and fully understands that by entering into this Agreement, he undertakes a fiduciary relationship with the Company and is under a fiduciary obligation to use due care and act in the best interest of the Company at all
times. Failure of Executive to fulfill all fiduciary obligations ordinarily imposed by law on similar Executives in a fiduciary relationship will be deemed a material breach of this Agreement by
Executive. 
 3.        Compensation & Benefits. 
 3.1      Base
Salary. The Company or a subsidiary shall, during the term of this Employment Agreement, pay to Executive as minimum compensation
for services a base salary at a rate to be fixed by the Board of Directors, the Compensation
Committee appointed by the Board of Directors, or the President of the Company, which rate shall
not be less than $36,667.00 per month ($440,000 on an annualized basis) (“base salary”), less appropriate withholdings and deductions. 
 3.2      Annual
Incentive Plan. Executive shall be eligible to participate in the Company’s Key Management Annual Incentive Plan, in accordance with the
terms and conditions of the Plan, as it may be amended from time-to-time. 
 3.3      Stock
Options. Executive shall be eligible to participate in the Company’s Stock Option Plan in accordance with the terms and conditions of the
Plan, as it may be amended from time-to-time, which Plan currently provides for employees
at Executive’s level to receive a grant of 35,000 stock options each year, subject to adjustment as provided in the Plan. As additional consideration for accepting employment with the Company and signing this Agreement,
Executive shall receive an additional grant of 35,000 stock options on American Greetings Class A Common Stock at the next regularly scheduled stock option grant date. All 

  

 2 

 
options granted to Executive are subject to the terms, conditions, vesting and exercise schedules
 set forth in the Plan, as it may be amended from time-to-time. 
 3.4      Flexible
Benefits Program. Executive shall be eligible to participate in the Company’s flexible benefits program, which includes such benefits as
health care, disability insurance, life insurance and a flexible spending account to the same extent other Executives at the Senior Vice President level participate, in accordance with the terms of the Program, as it may be amended from time-to-time. 
 3.5      Retirement Profit Sharing. Executive shall be eligible to participate in the Company’s Retirement Profit Sharing Plan to the same extent other executives at the Senior Vice President level participate, in accordance with the terms of the Plan, as it may be amended from time-to-time. 
 3.6      Other Benefits. Executive shall be eligible to receive other Company benefits to the same extent normally provided to other Senior Vice Presidents. Executive shall be entitled to
reimbursement of the reasonable attorneys’ fees for the review and negotiation of this Agreement. 
 3.7      Relocation. Executive shall be eligible to receive certain relocation benefits as set
forth in the Company’s Associate-on-the-Move Policy, as it may be amended from time-to-time. Additionally, recognizing Executive’s unique
family circumstances, the Company will reimburse Executive for: (a) the reasonable cost of commuting between their current
home and Cleveland for Executive and his spouse; and (b) the reasonable cost of temporary
housing (including rent and utilities) in the Cleveland area, in each case for up to 24 months as
Executive and his spouse transition from their current home to Cleveland. 
 4.        Termination. 
  

 3 

 4.1      Death. This Agreement shall immediately terminate upon the death of Executive. Following
the Executive’s death, the Company agrees to pay only the following amounts to Executive’s estate, as required by law: (i) the base salary at the last rate paid to Executive through the end of the month in which the Executive’s death occurs; (ii) any amounts earned, accrued or owing but not yet paid
under this Agreement; and (iii) other benefits in accordance with applicable plans and programs of the Company. 
 4.2      Disability. If Executive is disabled, which means that he is unable to perform the
essential functions of his position, with reasonable accommodations, for a period of 16 weeks or more, Executive’s employment shall terminate. Determination of disability shall be made initially by a physician appointed by Executive, but the Company reserves the right to appoint a physician to determine disability,
and Executive agrees to cooperate with the Company’s physician if the Company has a good faith doubt about the determination of disability or need for accommodation made by
the physician selected by Executive. If the determinations by the physician for Executive and the
Company cannot be reconciled, the two physicians shall select a third physician, whose
determination of disability will be final. In the event Executive’s employment terminates because of his disability, he shall
be entitled to payment by the Company only of: (i) the base salary at the last rate
paid to Executive through the end of the month in which the termination occurs; (ii) any
amounts earned, accrued or owing but not yet paid under this Agreement; and (iii) other benefits in accordance with applicable plans and programs of the Company. 
 4.3      Termination
“For Cause”. The Company shall have the right to immediately terminate Executive for “cause”. 
 a.      Cause shall mean: 
  

 4 

 (i)    A material breach by Executive of any term of this Agreement, the Company’s policies, Executive’s
fiduciary duties to the Company, or of any law, statute, or regulation; 
 (ii)    The material failure to
achieve the Company’s reasonable profit, revenue or other written objectives or written goals as determined by the Company because of Executive’s performance; 
 (iii)    Misconduct which is
injurious to the Company or any of its affiliates, either monetarily or otherwise, or which impairs Executive’s ability to effectively perform his duties or responsibilities; 
 (iv)    Personal conduct which
reflects poorly on the Company or Executive or which impairs Executive’s ability to perform his duties or manage subordinate employees, including but not limited to the abuse of alcohol or controlled substances; 
 
(v)    Habitual or repeated neglect of his duties or responsibilities by Executive; 
 (vi)    The appropriation of (or attempted appropriation of) a business opportunity of the
Company or its affiliates, including attempting to secure or securing any personal profit in
connection with any transaction by the Company or its affiliates; 
 (vii)    The commission of or
conviction for (or the procedural equivalent or conviction for), or the entering of a guilty plea or plea of no contest with respect to a crime, which in the Company’s reasonable judgment, involves moral turpitude; 
  

 5 

 (viii)    Intentional injury of another employee or any person in the course of performing services for the
Company; 
 (ix)    Any conflict of interest, including, but not limited to solicitation of business on
behalf of a competitor or potential competitor; 
 (x)    Violation of the Company’s policies prohibiting discrimination or harassment of employees, clients, guests, or vendors of the Company; 
 (xi)    Failure to comply with
the Company’s written Human Resources policies; or 
 (xii)    Failure to follow any
material and lawful instruction given to Executive by a superior at the Company. 
 b.      In the event
the Company terminates Executive’s employment for cause, he shall be entitled to payment by the Company only the following: (i) the
 base salary at the last rate paid to Executive through the date of the termination of his employment for cause, payable to the Executive immediately upon Executive’s termination; (ii) any
amounts earned, accrued or owing but not yet paid under this Agreement; and (iii) other benefits in accordance with applicable plans or
 programs of the Company. 
 4.4      Termination
“Without Cause”. The Company shall have the right to terminate this Agreement and Executive’s employment without cause upon
written notice of 30 days to Executive. At the Company’s option, the Company may pay
Executive for 30 days in lieu of notice and require no services of Executive. In the event the
Company terminates the Executive’s employment without cause, Executive shall be entitled to payment by the Company 

  

 6 

 
the following: (i) Executive’s base salary at the rate in effect immediately prior to the
date of his termination of employment, payable to Executive for 3 months, provided that such 
base salary payment shall be reduced by the amount of salary Executive may receive from subsequent
employment during the same period; (ii) any amounts earned, accrued or owing but not yet paid under this Agreement; and (iii) other
benefits in accordance with applicable plans and programs of the Company. Alternatively, in the event the Company terminates the Executive’s employment without cause and Executive signs a waiver and release of claims in a form acceptable to the Company – and Executive does not revoke his signature –
Executive shall be entitled to payment by the Company the following: (i) Executive’s base salary at the rate in effect immediately prior
to the date of his termination of employment, payable to Executive for 12 months, provided that such base salary payment shall be reduced by the amount of salary Executive may receive from subsequent employment during the same period; (ii) any amounts earned, accrued or owing but not yet paid under this Agreement;
(iii) continued health care coverage, concurrently with COBRA, for a period of 12 months immediately following
Executive’s termination date at the Senior Vice President active Executive payroll deduction rate, as it may be changed from time-to-time by the Corporation in its sole discretion; (iv) executive career outplacement services for a period of up to 6 months; and (v) other benefits in accordance with
applicable plans and programs of the Company. The payments and rights to Executive described in this Section 4.4 shall be in lieu of any
severance Executive might otherwise be eligible to receive under a Company severance plan, and
Executive agrees that he shall not be entitled to receive severance under any Company severance
plan in the event of a termination without cause. The requirement that Executive sign a waiver and release of claims under this 

  

 7 

 
Section 4.4. shall not result in the lengthening of the 12-month restrictive covenants set forth
 in Section 5 of this Agreement. 
 4.5      Termination
Upon “Change in Control”. The Company may, at its option, terminate this Agreement as a result of a Change of control of the Company.
If the Company exercises this option, it reserves the right to offer Executive another position in the Company or one of its affiliates or subsidiaries, which if offered, Executive agrees
to consider in good faith and respond accordingly. If the Company materially reduces Executive’s title, authority, duties and responsibilities
at any time because of a change of control, Executive may terminate his employment within not more than 30 days of first notice of the decrease in his authority, duties or responsibilities. If either party elects to terminate this Agreement as a result of change of control of the Company, it will provide the other party
with 30 day’s prior written notice. The Company may, at its option, relieve Executive of his duties and responsibilities under this Agreement
during this 30-day notice period. 
 a.      A “change
of control” means only: 
 (i)    The acquisition by any entity or person (which theretofore beneficially owned less than 50% of the Company’s common stock then outstanding) of shares of the Company’s common stock in a transaction
or series of transactions which result in such entity or person beneficially owning more than 50% of the Company’s outstanding common stock, where beneficial ownership and the
percentages of shares outstanding are determined pursuant to Sections 13(d) and (g) of the Securities Exchange Act of 1934 and the rules and
regulations promulgated there under; or 
  

 8 

 (ii)    The merger or consolidation of the Company with one or more companies in a transaction or series of
transactions where the common stock of the Company is exchanged for less than 50% of the voting stock of the resulting or surviving company, including, without limitation, an exchange of the common stock of the for cash; or 
 (iii)    The sale, assignment, transfer, pledge, hypothecation or other disposition of assets (except a pledge, hypothecation or other similar disposition made at the time the Company enters into a bona
fide financing transaction with a party which at the time of such transaction is not an
affiliate of the Company) of the Company having a value, as determined by the Board of Directors
in good faith, in excess of 33 –1/3% of the consolidated total assets of the Company.

 b.      In the event of a termination by the Company because of a change of control, the Company shall
make only the following payments to Executive: (i) Executive’s base salary at the rate in effect immediately prior to the date of
his termination of employment, payable to Executive for 12 months, provided that such base salary payment shall be reduced by the amount of salary Executive may receive from subsequent
employment during the same period; (ii) any amounts earned, accrued or owing but not yet paid under this Agreement; and (iii) other
 benefits in accordance with applicable plans and programs of the Company. The payments and rights to Executive described in this Section 4.5 shall be in lieu of any severance Executive
might otherwise be eligible to receive under a Company severance plan, and Executive agrees that he shall not be entitled to
receive 

  

 9 

 
severance under any Company severance plan in the event of a termination because of change in control. 
 c.      In the event of
a termination by Executive after a material decrease in his authority, duties, or responsibilities because of a change of control,
the Company shall pay Executive only the following: (i) Executive’s base salary at the
rate in effect immediately prior to the date of his termination of employment, payable to
Executive for 12 months, provided that such base salary payment shall be reduced by the amount of salary Executive may receive from subsequent
employment during the same period; (ii) any amounts earned, accrued or owing but not yet paid under this Agreement; and (iii) other benefits in accordance with applicable plans
and programs of the Company. The payments and rights to Executive described in this Section 4.5 shall be in lieu of any severance Executive
might otherwise be eligible to receive under a Company severance plan, and Executive agrees that
he shall not be entitled to receive severance under any Company severance plan in the event of a
termination because of change in control. 
 4.6      Executive’s Voluntary Termination. Upon 30 days’ prior notice to the Company, Executive may voluntarily terminate his employment with the Company. In the event that Executive
gives less than 30 days’ prior notice to the Company, Executive’s voluntary termination shall be a material breach of this Agreement. In
the event Executive voluntarily terminates his employment upon 30 days’ prior notice to the
Company, he shall be entitled to payment by the Company only of: (i) Executive’s base salary at the last rate paid to Executive through the date of the termination of his employment, which shall be payable to Executive
in 

  

 10 

 
accordance with applicable state law; (ii) any amounts earned, accrued or owing but not
yet paid under this Agreement; and (iii) other benefits in accordance with applicable plans
or programs of the Company. If Executive voluntarily terminates his employment because of the
Company’s material reduction of Executive’s title, authority, duties and responsibilities, other than as a result of a change in control
as set forth in Section 4.5 of this Agreement, Executive shall be entitled to the compensation and benefits set forth in Section 4.4 of this Agreement (Termination “Without Cause”). 
 4.7      In the event
of any termination of employment under this Section 4, the Company shall be entitled to an offset against amounts due Executive under this
Agreement on account of any remuneration attributable to any subsequent employment that he may
obtain. 
 4.8      The provisions of this Section 4 shall survive the termination of this
Agreement, as applicable. 
 5.        Restrictive Covenants. Executive covenants and agrees that in consideration of
 employment as an officer of the Company or as an officer of a subsidiary, Executive shall not for a period of 12 months after leaving the employ of the Company or a subsidiary, regardless of the reason
for such leaving, enter into the employment, directly or indirectly or in a consulting or free lance capacity, of any person, firm or corporation
in the United States or Canada, which at such date of leaving the employ of the Company or
a subsidiary shall be manufacturing or selling products that are substantially similar in nature
to the products being then manufactured or sold by the Company or the subsidiary. In addition, Executive shall not for a period of 12 months after
leaving the employ of the Company or a subsidiary, regardless of the reason for such leaving,
shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity: (i) employ or attempt to employ or enter into any 

  

 11 

 
contractual arrangement with any employee or former employee of the Company, unless such employee or former employee has not been employed by the Company for a period in excess of six months prior to the solicitation by Executive, and/or (ii) call on or solicit any of or
sell goods or services to the actual or targeted prospective customers or clients of the Company on behalf of any person or entity in connection
with any business that competes with the Company. While the covenants of this Section 5 are in effect, Executive will give notice to the Company, within ten days after accepting any other employment, of the identity of Executive’s new employer. The Company may notify such new employer that Executive is bound
by this Agreement, and at the Company’s election, furnish such employer with a copy of this Agreement or relevant portions thereof. 
 6.        In
consideration of Executive’s employment by the Company and the compensation received therefor, Executive agrees that all copyrights, patents,
trade secrets, or other intellectual property rights associated with any ideas, concepts,
techniques, inventions, processes, or works of authorship that are developed or created by Executive, either alone or with others, during the course of performing work for the Company or its clients (collectively, the
“Work Product”) shall belong exclusively to the Company and shall, to the extent possible, be considered a work made by the
Executive for hire for the Company within the meaning of Title 17 of the United States Code. To the extent the Work Product may not be considered work made by the Executive for hire for
the Company, the Executive agrees to assign, and automatically assign at the time of creation of the Work Product, without any requirement of
further consideration, any right, title, or interest the Executive may have in such Work Product. The transfer of Executive’s rights under this paragraph shall apply to Executive’s worldwide right, title and interest in and to all of the Work Product and shall mean the entire right, title and 

  

 12 

 
interest in and to all intellectual property rights, all proprietary rights and all
industrial property rights throughout the world, including, without limitation, all copyrights
under the laws of the United States and all other countries and governmental divisions throughout
the world. Upon the request of the Company, Executive and his successors, assigns and legal representatives shall (at the Company’s sole cost
and expense) take such further reasonable actions, including execution and delivery of instruments of conveyance, as may be appropriate to give full and proper effect to such assignment, provided that such actions do not adversely affect or interfere with Executive’s performance of his duties under this
Agreement. 
 7.        Executive agrees that during the period of his employment and thereafter, he will keep confidential and will not disclose any information, records, documents or trade secrets of the
Corporation acquired by him during his employment, and except as required by his employment, will not remove from the Corporation’s premises
any record or other document relating to the business of the Corporation; or make copies thereof; it being recognized by him that such information is the property of the Corporation.
 
 8.        Executive acknowledges and confirms that: (i) the restrictive covenants contained in this Agreement are reasonably necessary to prevent the inevitable disclosure of confidential and proprietary information
and trade secrets and to protect the legitimate business interests of the Company and its affiliates, and (ii) the restrictions contained
in this Agreement (including without limitation the length of the term of the provisions of
Section 5) are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. Executive further acknowledges and confirms that his full, uninhibited and faithful observance of each
of the covenants contained in this Agreement will not cause him any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained herein will not 

  

 13 

 
impair his ability to obtain employment commensurate with his abilities and on terms fully acceptable to him or otherwise to obtain income required for the comfortable support of him and his family and the satisfaction of the needs of his creditors. Executive acknowledges and confirms
that it is likely that the special knowledge of the business of the Company he will acquire by virtue of his position with the Company is such as
would cause the Company serious injury or loss if he were to use such knowledge to the benefit of
a competitor or were to compete with the Company in violation of the terms of this Agreement.
Executive further acknowledges that the restrictions contained in this Agreement are intended to be, and shall be, for the benefit of and shall be
enforceable by, the Company’s successors and assigns. 
 9.        In
the event that a court of competent jurisdiction shall determine that any of the restrictive covenants of this Agreement are invalid or more
restrictive than permitted under the governing law of such jurisdiction, then such provision shall be interpreted and enforced as if it provided for the maximum restriction permitted under such governing law. 
 10.      The restrictive covenants of this Agreement shall survive the termination of this Agreement and the termination of Executive’s employment. 
 11.      It is
recognized and hereby acknowledged by the parties hereto that a breach by Executive of any of the restrictive covenants contained in this Agreement
is likely to cause irreparable harm and damage to the Company, the monetary amount of
which may be virtually impossible to ascertain. As a result, Executive recognizes and hereby
acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction, without any requirement to post a bond,
enjoining and restraining any violation of any or all of the restrictive covenants contained in this Agreement by Executive or any of his affiliates, associates, partners 

  

 14 

 
or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to any other remedies the Company may possess. 
 12.      Indemnification. In the event of any claim against Executive relating to Executive’s services as an employee of the Company, the Company agrees to indemnify Executive to the extent permitted by
applicable law consistent with the Company’s Certificate of Incorporation and Code of Regulations in effect as of the applicable date
 with respect to any acts or omissions he may have committed during the period which he was an officer, director and/or employee of the Company or any Subsidiary thereof, or of any other entity of
which he served as an officer, director or employee at the request of the Company. Furthermore the Company shall pay the expenses (including,
without limitation, attorneys’ fees) incurred by the Executive in defending any proceeding as to which Executive asserts a right to be indemnified by the Company in advance of its final
disposition, provided, however, that the Company’s payment of expenses incurred by Executive in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by Executive to repay all amounts advanced if it should be ultimately determined that Executive is not entitled to be indemnified. The provisions of this Section 12 shall survive the termination of Executive’s employment and the
termination of this Agreement. 
 13.      Arbitration. Executive and the Company agree to submit to mandatory binding arbitration any claim arising out of or relating to Executive’s employment or this Agreement. The
Federal Arbitration Act shall govern this agreement to arbitrate. By agreeing to arbitration, Executive and the Company each acknowledge that
he/it understands that he/it is giving up the right to a trial by jury on the claims to be arbitrated. This agreement to arbitrate shall survive the termination of Executive’s employment and the termination of this Agreement. 
  

 15 

 13.1    Arbitration Procedures. 
 a.        Arbitration shall be the exclusive method to resolve all claims arising from or related to the employment of Executive or this Agreement, including all claims based on statute, contract, tort, or equity, except to the extent prohibited by law. The existence
of the agreement to arbitrate does not prevent the Company or Executive from applying for provisional remedies, such as temporary restraining
 orders, preliminary injunctions, writs of attachment, or receivers, to the extent permitted by law to prevent an arbitration award from being rendered ineffectual, and the application for
provisional relief shall not be a waiver of arbitration. 
 b.        Arbitration shall be conducted by a neutral arbitrator selected from a list obtained from the American Arbitration Association. The neutral arbitrator shall disclose all matters that might impact his or her impartiality, including any ground that might lead to the disqualification of a
judge, the names of the parties to any pending or prior arbitrations involving any of the same parties or counsel, and the results of the arbitration (date of award, amount of award, and identification of prevailing party), any prior attorney-client relationship with a party or lawyer, and any significant personal
relationship with a party or lawyer. The arbitrator shall have immunity of a judicial officer from civil liability while acting as an arbitrator,
and all communications shall have the same privileges from defamation and privacy liability as apply to judicial proceedings. 
  

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 c.        Arbitration shall be conducted in accordance with the American Arbitration
Association rules applicable to the resolution of employment disputes, provided that the parties shall be accorded the benefit of state laws on
pleadings, summary judgment and judgment on the pleadings. 
 d.        The
Arbitration hearing shall proceed in Cleveland, Ohio. 
 e.        Any dispute shall be based solely upon the law governing the claims and defenses pleaded and proved, and the arbitrator may not invoke any basis (including,
but not limited to notions of “just cause”) other than controlling law. 
 f.        The arbitrator shall have the power to set hearing times, give notices, resolve discovery disputes, and assist the parties with the issue of subpoenas as permitted by law. The arbitrator shall schedule the arbitration promptly and issue a written reasoned opinion
promptly after the conclusion of the presentation of evidence. 
 g.        The
arbitrator shall have the power to interpret this Agreement, and to decide the arbitrability of claims and defenses. 
 h.        Arbitration shall neither extend nor curtail any applicable statute of limitations. 
 13.2    Costs of Arbitration. Executive shall bear only those costs of arbitration that he would have otherwise had to bear had he brought the same claim or claims in a court of law. 
 14.      Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, legal and personal representatives, executors, 

  

 17 

 
administrators, devisees, legatees, heirs and assigns. The Company may assign and transfer all of its rights under this Agreement. The obligations of the Executive under this Agreement, being personal, may not be assigned or transferred by the Executive. 
 15.      Governing
Law; Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of Ohio. 
 16.      Entire Agreement. This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matters hereof and thereof and, upon its effectiveness, supercedes all prior agreements, understandings and
 arrangements, both oral and written, between Executive and the Company (or any of its affiliates) with respect to such subject matters covered. This Agreement may not be modified in any way unless
by a written instrument signed by both the Company and Executive. 
 17.      Notices.
All notices required or permitted to be given hereunder shall be in writing and shall be personally delivered by courier, sent by registered or
certified mail, return receipt requested or sent by confirmed facsimile transmission addressed as set forth herein. Notices personally delivered, sent by facsimile or sent by overnight courier shall be deemed given on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given upon the earlier of
receipt by the addressee, as evidenced by the return receipt thereof, or three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if to the Company, addressed to American Greetings Corporation, One American Road, Cleveland, Ohio, 44144, Attention: Catherine Kilbane, General Counsel and
Secretary and (ii) if to Executive, to his address as reflected on the payroll records of the Company, or to such other address which the
Executive has designated and as to which Executive has provided notice in accordance with this
provision. 
  

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 18.      Severability. The invalidity of any one or more of the words, phrases, sentences, clauses, provisions, sections or articles contained in this Agreement shall not affect the enforceability of the remaining portions of
this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that
any one or more of the words, phrases, sentences, clauses, provisions, sections or articles
contained in this Agreement shall be declared invalid, this Agreement shall be construed as if
such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, provisions or provisions, section or sections or article or
articles had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area that would cure such invalidity. 
 19.      Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of Executive’s employment to the extent necessary to the intended preservation of such rights and obligations. 
 20.      Waivers. The waiver by either party hereto of a breach or violation of any term
or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation. 
 21.      Prevailing Party. In the event that either party hereto brings an action for the collection of any damages resulting from, or to enjoin any action constituting, a breach of any of the terms or provisions of this Agreement, then the non-prevailing party shall pay all reasonable attorneys’ fees, costs,
and expert witness fees of the other. 
 
22.      Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument
and agreement. 
  

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 23.      Voluntary Agreement. Executive and the Company represent and agree that each has
reviewed all of the provisions of this Agreement, and is voluntarily entering into this Agreement, and has had an opportunity to review all aspects
of this Agreement with his/its legal, tax, or other advisors. 
 IN WITNESS WHEREOF, the undersigned have executed
this Agreement as of the date first above written. 
  

							
		
	 By:
	 	AMERICAN GREETINGS CORPORATION
				
		 	/s/ Jeffrey Weiss	 	6/16/08	 	
		 	 	 	
				
		 	President	 	Date	 	
				
	 By:
	 	JOHN BEEDER	 		 	
				
		 	/s/ John Beeder	 	6/12/08	 	
		 	 	 	
				
		 	John Beeder	 	Date	 	

  

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