Document:

exv10w4

Exhibit 10.4

	Rewards for Your Contributions to Our Success Key Management Annual
Incentive Plan Fiscal Year 2011

 

 

	Creativity...Innovation... Collaboration largest publicly owned developers,
producers and distributors of social expressions products. As a leader at American Greetings, you
have a unique opportunity to focus our associates on these key areas and to cultivate a work
environment that is stimulating, productive and rewarding. In addition, the decisions you make and
the things you do every day have a direct and meaningful impact both within your department and
across the company. We have designed the Key Management Annual Incentive Plan to reward you for the
critical role you play. As a leader, you help foster and channel your energy and the energy of
those around you into building on our business principles, strengthening our marketplace position
and generating value for our shareholders. Table of Contents Plan Objectives and Who is
Eligible . . . . . . . . . . . . . . . . . . . . . .2 How the Plan Works . . . .
        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Emphasis of Each Plan
Component . . . . . . . . . . . . . . . . . . . . .4 Measuring Performance . . .
        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Corporate Component . .
        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Business Unit Component
        . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Individual Component .
        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Example Calculation
        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Administrative Plan Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12 Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
        . . . . . . . . . . 13 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . .
        . . . . . . . . . . . . . . . . . . . . 14

 

 

	Plan Objectives • Focuses on shareholder value and profi table revenue growth | Our
shareholders expect us to evaluate our results in the same way they do • Emphasizes teamwork and
mutual cooperation | Our success depends on the collaborative effort within each of our business
units • Demonstrates the importance of personal drive and commitment to quality | Individual
contributions are the foundation of our collective accomplishments • Rewards leaders for success |
Award opportunity is greatest when attention is given to the achievement of objectives in each of
the three performance areas Watch for Your Participant Letter You will receive a
Participant Letter that outlines information specifi c to your participation in the Plan: • Your
assigned business unit and sub-business unit, if any • The performance multiplier for your business
unit and sub-business unit • Your total target award Who Is Eligible You are eligible to
participate in the Plan if you are a Key Manager or Corporate-level Offi cer in one of the
following primary business units and you do not participate in another Company-sponsored annual
incentive plan: • Corporate Consolidated • Total Social Expressions Group (SEG) • AG Intellectual
Properties Group • AG Interactive • AG Properties • UK Greetings • John Sands Group Refer to the
section entitled Key Terms for additional details on eligibility for participation in the Plan.
2

 

 

	How the Plan Works The Plan provides a cash award for the achievement of goals in three
key performance areas measured over a 12-month fi scal year. Success in these key areas helps
American Greetings create shareholder value and ensure profi table growth over the long term. Your
Award Opportunity Your total target award is established at the beginning of each fi scal
year and will be communicated to you at that time. Your total target award is: • A percentage of
your base earnings based on your job level • The award you would earn if each goal is achieved in
each performance area The amount of the award you receive will increase or decrease based on actual
performance in these three key areas: American Greetings will establish goals at the beginning of
each fi scal year: • Corporate goals are developed by management and approved by the Board of
Directors. • Business unit goals will be developed by each business unit based on its strategic
direction, business opportunities and growth projections. These goals will also be approved by the
Board of Directors. • Individual performance goals will be established with your manager through
the Performance Management Process. At the end of the fi scal year, American Greetings determines
the extent to which each goal has been met. Corporate Performance Business Unit Performance
Individual Performance 3 E X A M P L E If base earnings are $70,000 and target award
percentage is 10% of base earnings, total target award is $7,000. Base Earnings ($70,000) X
Target Award % (10%) = Target Award ($7,000)

 

 

	E X A M P L E Ben • Key Manager 1, Total Social Expressions Group (SEG) • $70,000
base earnings • $7,000 total target award (10% of base earnings) Emphasis of Each Plan
Component For all plan participants, the business unit component is 50% of your total target
award. The weights for the corporate and individual components vary based on the potential the job
role has to affect these results. The more senior the role, the greater the impact these
individuals’ decisions have on the achievement of corporate objectives. Therefore, senior job
levels have a heavier weighting on the corporate component and less senior job levels have more
weighting assigned to the individual component. F I S C A L Y E A R 2 0 1 0 W E I G H T I N G S
Job Level Corporate Business Unit Individual Chairman of the Board CEO President and COO
Corporate-level Senior Vice Presidents Other Section 16 Executive Offi cers 30% 50% 20%
Corporate-level Vice Presidents Executive Directors Key Managers 1 and 2 20% 50% 30% 4
$2,100 = Individual ($7,000 x 30%) $1,400 = Corporate ($7,000 x 20%) $3,500 = Business Unit
($7,000 x 50%)

 

 

	Measuring Performance When American Greetings results for the fi scal year are fi nal,
the company assesses achievement of goals in each performance area. Performance in each area will
determine your actual Plan award. Awards for the corporate and business unit components are based
on the fi nancial performance award scale. Individual awards are based on your performance rating.
Performance Multiplier — How It’s Used in the Award Scale Performance multipliers are
another way to think about the award scale. There is a relationship between performance and your
actual award. For example, there is a 4:1 multiplier for the Corporate EPS measure. This means that
for every 1% increase or decrease in the percentage of goal achieved, the Corporate EPS target
award will be adjusted up or down by 4% to determine the actual award. Performance multipliers vary
(see the Appendix on page 14 for complete list). Individual Performance Total Award
Corporate Performance Business Unit + Performance + = Actual Award
200% of Target 100% of Target THRESHOLD X% of Target* 0% of Target (No Award Below
Threshold) Performance Above Goal Goal Below Goal Below Threshold G O A L
MAXIMUM Financial Performance Award Scale Your actual award is based on fi scal
year-end performance results using the award scale shown at left for corporate and business unit fi
nancial measures. (See Measuring Performance table on page 6 for details.) To earn an award,
performance in each area must at least reach threshold. There is no award for below-threshold
performance. Achieving goal means American Greetings pays awards at target levels. Performance
above goal will result in an increased award up to a maximum level. The award range for American
Greetings fi nancial measures is 0% — 200% of target award. 5 * Varies by performance
measure (see Appendix for details)

 

 

	Corporate Component The corporate component consists of two parts: • Corporate Earnings
per Share (EPS) • Corporate Total Revenue (Total Revenue) Each of these parts is weighted based on
American Greetings current focus. The Plan is designed to emphasize the importance of our leaders’
abilities to infl uence EPS, while paying attention to how they can affect Total Revenue. The
weighting applied to the total target award for the corporate component is: • 90% for EPS • 10% for
Total Revenue The potential award under the corporate component ranges from 0% to 200% of target
award. Performance has a direct impact on actual award. For every 1% increase or decrease in the
percentage of goal achieved: • EPS target award will be adjusted up or down by 4% to determine the
actual award for this part of the corporate component. • Total Revenue target award will be
adjusted up or down by 5% to determine the actual award (Total Revenue goal is defi ned as a range
between 97% and 103% of goal). You can earn up to 200% of the total target award for the corporate
component based on EPS performance, Total Revenue performance or a combination of the two. 6
Performance Measures ME T R I C WH Y I T ‘ S IMP O RTA N T Corporate Earnings per
Share (EPS) EPS shows how much profi t was generated on a per share basis. It communicates to the
investment community the power the company has to make money. The higher our EPS, the greater value
the company is able to provide its shareholders. Corporate Total Revenue (Total Revenue) When
investing in a company, an investor wants to see it grow or improve over time. Management sets a
Corporate Total Revenue goal each year to keep activities focused on growing the business
year-over-year. Earnings Before Interest and Taxes (EBIT) EBIT is also known as operating income.
It measures the business unit’s earnings before the deduction of interest payments and taxes. Refer
to the section entitled Key Terms for defi nitions for these fi nancial measures. Total
Revenue Goal Is a Range The Total Revenue portion of the corporate component has a goal defi
ned as a range. That’s because American Greetings believes we have met our Total Revenue objective
if we perform between 97% and 103% of goal.

 

 

	C O R P O R A T E E P S Award Scale (4:1) Performance as % of Goal Actual Award as a % of Target
Actual Award in Dollars Maximum 127.5% 200% $2,800 120% 170% $2,380 110% 130% $1,820 Goal
100% 90% $1,260 95% 70% $980 Threshold 90% 50% $700 H O W I T ‘ S C A L C U L A T E D
The formula to calculate your actual award as a percent of target is: (Actual Performance —
Goal) x 4 + 90% = Actual Award as a % of Target Award Performance Above Goal: (105% — 100%) x 4 +
90% = 110% of Target Award Performance Below Goal: (95% — 100%) x 4 + 90% = 70% of Target Award
C O R P O R A T E T O T A L R E V E N U E Award Scale (5:1) Performance as % of Goal Actual
Award as a % of Target Actual Award in Dollars Maximum 141% 200% $2,800 125% 120% $1,680 105%
20% $280 Goal 97% — 103% 10% $140 96% 5% $70 Threshold 95% 0% $0 H O W I T ‘ S C A L C U L A
T E D The formula to calculate your actual award as a percent of target is: (Actual
Performance — Goal) x 5 + 10% = Actual Award as a % of Target Award Performance Above Goal: (105%
- 103%) x 5 + 10% = 20% of Target Award Performance Below Goal: (96% — 97%) x 5 + 10% = 5% of
Target Award B E N ‘ S A C T U A L A W A R D F O R C O R P O R A T E C O M P O N E N T • EPS
Actual Performance: 95% of goal = actual award of 70% of target ($980) • Total Revenue Actual
Performance: 125% of goal = actual award of 120% of target ($1,680) Corporate Component
7 E X A M P L E Ben, Key Manager 1 $7,000 total target award • $1,400 corporate
component (20% of total target award) • $1,260 Corporate EPS (90% of total corporate
component) • $140 Corporate Total Revenue (10% of total corporate component)
Corporate Performance Threshold Each part of the corporate component has its own
performance threshold: • EPS: 90% of goal • Total Revenue: 95% of goal The performance threshold
must be met to earn an actual award for that measure. Total Award: $980 + $1,680 = $2,660

 

 

	Business Unit Component The award for your primary business unit component will be based
on performance in either: • Business Unit Pro Forma EBIT • Product Line Contribution (PLC) or •
Corporate EBIT All associates are assigned to a primary business unit. Some will also be assigned
to a sub-business unit, which may have different performance measures. Refer to your personalized
Participant Letter for your assigned business unit and sub-business unit, if applicable, and
performance multiplier. See the Appendix on page 14 for more details. Business Unit
Performance Threshold • All primary and sub-business units have a performance threshold of
90% of goal. E X A M P L E Ben, Key Manager 1 $7,000 total target award •
$3,500 business unit component (50% of total target award) T O T A L S E G Award Scale (4:1)
Performance as % of Goal Actual Award as a % of Target Actual Award in Dollars Maximum 125%
200% $7,000 120% 180% $6,300 115% 160% $5,600 110% 140% $4,900 105% 120% $4,200 Goal 100% 100%
$3,500 98% 92% $3,220 95% 80% $2,800 Threshold 90% 60% $2,100 H O W I T ‘ S C A L C U L A T
E D The formula to calculate your actual award as a percent of target is: (Actual Performance
— Goal) x 4 + 100% = Actual Award as a % of Target Award Performance Above Goal: (110% — 100%) x 4
+ 100% = 140% of Target Award Performance Below Goal: (98% — 100%) x 4 + 100% = 92% of Target Award
B E N ‘ S A C T U A L A W A R D F O R B U S I N E S S U N I T C O M P O N E N T Total SEG
Actual Performance: 98% of goal = actual award of 92% of target ($3,220) 8 Award:
$3,220

 

 

	Individual Component Your award under the individual component is based on your
performance rating under the performance management process. Based on your performance rating, you
will receive 0% to 200% of your target award, as shown in the chart below. Performance Rating
Actual Award as a % of Target Exceeds Expectations (Manager Discretion) 200% Exceeds Expectations
150% Meets Expectations 100% Improvement Expected/Performance Below Peer Level 0% 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 EPS performance is below threshold,
associates with a performance rating of “Exceeds Expectations” will receive an award for the
individual performance component as shown in the chart above. Individuals with a “Meets
Expectations” or “Improvement Expected/Below Peer Level” performance rating will not receive any
portion of the individual performance incentive if Corporate EPS performance is below threshold.
Senior Executive Officers Refer to the fiscal year 2011 Addendum to the Individual
Performance Component, included with your Award Letter, for a complete description of how
individual performance under the Key Management Annual Incentive Plan applies to you. E X A
M P L E Ben, Key Manager 1 $7,000 total target award • $2,100 individual component
(30% of total target award) • Individual Actual Performance: Exceeds Expectations Individual Target
Award $2 , 1 0 0 x Actual Award as a % of Target x 1 5 0% Individual Performance Actual Award
$3,150 9

 

 

	Example Calculation 10 Here is an example of how your actual award is determined.
E X A M P L E Ben, Key Manager 1 Total Social Expressions Group (SEG) Base Earnings:
$70,000 Total Target Award: $7,000 (10% of base earnings) To illustrate how awards are calculated,
examples of performance goals are provided in this brochure. Performance is included in the
examples to calculate example awards. These are examples only; performance goals will be different
and may be higher or lower than the examples provided. $2,100 = Individual Target ($7,000 x 30%)
Individual Performance Individual Performance Rating $1,400 = Corporate Target ($7,000 x 20%) •
$1,260 EPS • $140 Total Revenue Corporate Goal • $1.25 Corporate EPS • $1.7 Billion Corporate Total
Revenue $3,500 = Business Unit Target ($7,000 x 50%) Business Unit Goal $140 Million Total SEG A C
T U A L P E R F O R M A N C E The chart below outlines the performance goals and actual performance
in the three categories — American Greetings corporate and business unit and Ben’s individual
performance. Performance Performance and Award Results Component and Measure Goal Actual
Performance Performance as a % of Goal Award as a % of Target Corporate Component Corporate EPS
$1.25 per share $1.19 per share 95% 70% Corporate Total Revenue $1.7 Billion $2.1 Billion 125% *
120% Business Unit Total Revenue Total SEG Pro Forma EBIT $140 Million $137.2 Million 98% 92%
Individual Component Individual Performance Rating Meets Expectations Exceeds Expectations N/A 150%
* Goal is a range from 97% — 103% of target.

 

 

	Ben’s Total Award Example: Here’s a look at Ben’s total award based on the performance
shown on the previous page. Total Target Award $7,000 Total Actual Award $9,030 0 2,000 4,000
6,000 8,000 $10,000 $3,500 $2,100 $3,150 $3,220 $2,660 $1,400 C O R P O R A T E C O M P
O N E N T Target Award x Award as % of Target = Actual Award Corporate EPS $1,400 x 70% =
$980 Corporate Total Revenue $1,400 x 120% = $1,680 Total = $2,660 B U S I N E S S U N I T C O
M P O N E N T Target Award x Award as % of Target = Actual Award $3,500 x 92% = $3,220 I
N D I V I D U A L C O M P O N E N T Target Award x Award as % of Target = Actual Award $2,100
x 150% = $3,150

 

 

	New Hires If you are hired during the Plan year — defi ned as the American Greetings fi scal year
ending February 28, 2011 — and are eligible to participate in the Key Management Annual Incentive
Plan, you will receive a prorated incentive award 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 award, base
earnings, business unit goal and corresponding performance multiplier may change. If any of these
do change, your award 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 fi scal 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 actual award 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 Management Annual Incentive Plan and
the Omnibus Incentive Compensation Plan, the terms of the Omnibus Incentive Compensation 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 award. It is the intent that incentive awards fall under the
shortterm deferral rules of Section 409A of the Internal Revenue Code to exempt the payment of such
Key Management Annual Incentive Plan benefi ts from the requirements of Section 409A. Calculating
Payouts For computation purposes, fi nancial goals and actual performance results are rounded to
the nearest $1,000. The percent of the fi nancial goal achieved and the percent of target award
earned is rounded to the nearest one-tenth of one percent. The actual incentive award 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 confl ict between the Key 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 benefi ts 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 Award Incentive awards earned in fi scal year 2011 will be paid to
participants within two and one-half months following the end of fi scal 2011, typically within 60
days after the end of the fi scal year. Plan awards are subject to normal tax withholding at a
standardized rate and will be deposited to a bank account of your choice. Administrative Plan
Details If your employment status changes, your Plan participation and any payouts may be
affected as described below: 12

 

 

	• Base Earnings. Your base earnings are defi ned as your base salary earned during the fi
scal year. Base earnings exclude health and welfare benefi ts, bonus, commission, and incentive
payments, overtime and other direct or indirect compensation. Base earnings for Plan participants
outside of the U.S. may be defi ned 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 fi scal year and is calculated as
corporate pre-tax income minus taxes divided by the total number of Primary Business Unit
Participants Corporate Consolidated Chairman, Chief Executive Offi cer, President and Chief
Operating Offi cer, Corporate-level Senior Vice Presidents and other Section 16 Executive Offi cers
Total Social Expressions Group (SEG) Associates who are part of: • AGI In-Store • Canada •
Corporate Staff (Delta, Finance, HR, ISD, Legal) • Creative • DesignWare & Specialty SBU • Field
Sales • Field Sales Operations (FSO) • Gift Packaging & Holiday SBU • Global Sourcing • Greeting
Cards • Inbound Licensing • Plants • Papyrus-Recycled Greetings • 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 Terms The following provides defi
nitions of some common terms used throughout this brochure. Capitalized terms used herein that are
not defi ned will have the meaning set forth in the Omnibus Incentive Compensation Plan. 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. • Eligibility. You are eligible to participate in the Key
Management Annual Incentive Plan if you are a Key Manager or Corporate-level Offi cer in one of the
following primary business units and you do not participate in another Company-sponsored annual
incentive plan. • 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, intercompany payables and income taxes). • PLC Defi nition. Product Line
Contribution equals gross sales less all of the following: allowances for obsolete cards (AOC);
cost of markdowns and unsaleables; retail allowances; off-invoice discounts; cost of good sold at
standard cost; assortment labor; cost of caption locator cards, displayer and point-ofpurchase
materials; cost of SBT scrap and shrink; and the cost of fi nished goods scrap. • Total Social
Expressions Group (SEG). Equals NAGCD pro forma EBIT (includes Corporate Expense) + AGI In-Store
pro forma EBIT.

 

 

	Appendix The following section provides additional details about the Plan, including
details about the business units, their performance measures and performance multipliers used in
the award scales. 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 at right and on your personalized Participant Letters, as
appropriate. 1 Total SEG = NAGCD pro forma EBIT (includes Corporate Expense) + AGI
In-Store pro forma EBIT 2 For every 1% increase or decrease in the percentage of goal
achieved, target award will be adjusted up or down by 1% times the multiplier to determine actual
award Business Unit/Participants Business Unit Components Performance Measure Weight
Performance Multipliers2 Primary Unit Sub Unit Primary Unit Sub Unit Primary Unit Sub
Unit Corporate Consolidated: Chairman, CEO, President and COO, Corporate-level Senior Vice
Presidents and other Section 16 Executive Offi cers Corporate EBIT 100% 4 Canada, Corporate Staff
(Delta, Finance, HR, ISD, Legal), Creative, DesignWare & Specialty SBU, Field Sales, FSO, Gift
Packaging & Holiday SBU, Global Sourcing, Greeting Cards, Plants, all other North American Greeting
Card Division units Total SEG1 100% 4 Inbound Licensing Total SEG1 AG
Interactive pro forma EBIT 50% 50% 4 2 AGI In-Store Total SEG1 AGI In-Store pro forma
EBIT 50% 50% 4 2 Papyrus-Recycled Greetings Total SEG1 PRG PLC 40% 60% 4 2 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

 

 

	American Greetings reserves the right to terminate or make changes to the Program, including
retroactively, at any time without prior notice to any of the Program’s participants (provided that
no amendment to the Program adopted more than 90 days after the beginning of the applicable fi scal
year may have the effect of increasing the amount that is or could be payable under the guidelines
set forth herein for such fi scal year to any participant who is a “covered employee” of American
Greetings as defi ned in section 162(m)(3) of the Internal Revenue Code). In the case of our
executive offi cers, 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 Offi cer and the
Chairman are the only persons who have the authority to alter or amend this Program. Any such
alteration or amendment must be done in writing. No participant should rely on an alteration or
amendment to this Program unless it is made in writing and signed by the Chief Executive Offi cer
or the Chairman. Nothing in this brochure or in any Participant Letter or addendum 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 specifi c 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 benefi ts 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.
15

 

 

 

 

SENIOR EXECUTIVE OFFICER

ADDENDUM TO INDIVIDUAL PERFORMANCE COMPONENT OF

FY2011 AMERICAN GREETINGS KEY MANAGEMENT ANNUAL INCENTIVE PLAN

INDIVIDUAL PERFORMANCE

Notwithstanding the description of the Individual Performance component included in the booklet
(the “Plan Booklet”) outlining the Fiscal 2011 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:

	•	 	Specific award percentages for the individual performance
component are replaced with award ranges,
thereby giving managers more discretion to adjust the
percentage of the individual award based on an
individual’s performance.
	 
	•	 	Senior Executive Officers who receive an “Exceeds Expectations
(Manager Discretion)” performance rating
will earn between 150% and 200% of their target award
under the individual performance component. Those who
receive an “Exceeds Expectations” performance rating
will earn between 100% and 150% of their target award
under the individual performance component. And those
who receive a “Meets Expectations” performance rating
will earn between 50% and 100% of their target award
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 participants achieved the performance objectives that had
been defined at the beginning of the year.

Managers rank participants based on their relative performance and determine actual performance
ratings and individual performance awards based on these rankings and the targeted distribution of
performance ratings.

	•	 	For Senior Executive Officers, the targeted distribution
of participants for the “Exceeds
Expectations (Manager Discretion)” performance rating
is 0% to 10%; the targeted distribution for the
“Exceeds Expectation” performance rating is 20% to 30%;
the targeted distribution for the “Meets Expectations”
performance rating is 60%; and the targeted
distribution for the “Improvement Expected /
Performance Below Peer Level” is 10%. (See chart on the
following page.)
	 
	•	 	Senior Executive Officers who receive an “Exceeds Expectations
(Manager Discretion)” performance rating
will receive between 150% and 200% of their target
individual award, as determined by his or her manager.
	 
	•	 	Senior Executive Officers who receive an “Exceeds Expectations”
performance rating will receive between
100% and

Page 1

 

FY2011 KEY MANAGEMENT ANNUAL INCENTIVE PLAN SENIOR EXECUTIVE OFFICER ADDENDUM

	 	 	150% of their target individual award, as
determined by his or her manager.
	 
	•	 	Senior Executive Officers who receive a “Meets Expectations”
rating will receive between 50% and 100%
of their target
individual award, as determined by his or her manager.
	 
	•	 	As with other participants, Senior Executive Officers
who receive an “Improvement Expected /
Performance Below Peer Level” rating will not receive
an individual performance award and will only receive
50% of any award otherwise earned under the corporate
and business unit components.

As with other participants, if corporate EPS performance is below the performance threshold, only
those Senior Executive Officers with a performance rating of “Exceeds Expectations” or “Exceeds
Expectations (Manager Discretion)” may receive awards for the individual performance measure.

	•	 	Participants, including Senior Executive Officers, who
receive an “Exceeds Expectations” or “Exceeds
Expectations (Manager Discretion)” performance rating
will receive an award for the individual performance
component as shown in the table below.
	 
	•	 	Senior Executives who receive a “Meets Expectations”
or “Improvement Expected / Below Peer
Level” performance rating will not receive any portion
of the individual performance award.

The schedule below shows how individual awards 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 Booklet remains unchanged. In the event of a conflict between the terms
described in the Plan Booklet and this Addendum, the terms set forth in this Addendum will govern.

	 	 	 	 	 	 	 	 	 
	 	 	Target Performance	 	Actual Award
	Performance Rating	 	Rating Distribution	 	as a % of Target
	Exceeds Expectations (Manager Discretion)
	 	 	0 — 10%	 	 	 	150% — 200%	 
	 
	Exceeds Expectations
	 	 	20% — 30%	 	 	 	100% — 150%	 
	 
	Meets Expectations
	 	 	60%	 	 	 	50% — 100%	 
	 
	Improvement Expected / Performance Below Peer Level
	 	 	10%	 	 	 	0%	 

Page 2exv10w5

Exhibit 10.5

Description of Compensation Payable to Non-Employee Directors

(Approved June 2010)

Effective as of March 1, 2011 the non-employee directors of American Greetings Corporation
(“American Greetings”) shall receive the following compensation with respect to their
service on the Board:

	 	•	 	An annual board retainer fee of $70,000; and
	 
	 	•	 	The Chair of the Nominating and Governance Committee to be paid an annual retainer fee
of $10,000, the Chair of the Compensation and Management Development Committee to be paid
an annual retainer fee of $15,000, and the Chair of the Audit Committee to be paid an
annual retainer fee of $20,000; and
	 
	 	•	 	Non-chair members of the Nominating and Governance Committee and the Compensation and
Management Development Committee to be paid an annual retainer fee of $7,500, and
non-chair members of the Audit Committee to be paid an annual retainer fee of $10,000; and
	 
	 	•	 	Options to purchase 7,500 Class A common shares per fiscal year;
	 
	 	•	 	A grant of 1,875 Class A Restricted Stock Units per fiscal year; and
	 
	 	•	 	Reimbursement of expenses related to attending Board and committee meetings.

Pursuant to the American Greetings Corporation 2007 Omnibus Incentive Compensation Plan,
non-employee directors may make an election prior to the beginning of each fiscal year to receive
American Greetings’ Class A and/or Class B common shares in lieu of all or a portion of the fees
due to such Director as compensation for serving on the Board of Directors. For purposes of
determining the number of shares to be issued in lieu of such fees, the shares are valued based on
the closing price of the American greetings Class A common shares on the last trading day of the
calendar quarter prior to the payment of such fees.

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