Document:

Exhibit 10.XXVIII

Table of Contents

Exhibit 10(xxviii)

American Greetings

			
	 
	Key Management Annual Incentive Plan	 	 
	 

     Fiscal
Year 2006

 

	 	 	 	 	 
	American Greetings

Key Management Annual Incentive Plan

	 	 	 	1
	 

Table of Contents

	 	 	 	 	 
	Eligibility
	 	 	2	 
	 	 	 	 	 
	How the Plan Works
	 	 	3	 
	 	 	 	 	 
	Your Individual Target Incentive
	 	 	4	 
	 	 	 	 	 
	Weighting the Measures
	 	 	5	 
	 	 	 	 	 
	Measuring Performance
	 	 	6	 
	 	 	 	 	 
	Performance Multipliers
	 	 	7	 
	 	 	 	 	 
	Performance Measures
	 	 	8	 
	 	 	 	 	 
	Corporate Performance
	 	 	8	 
	 	 	 	 	 
	Business Unit Performance
	 	 	9	 
	 	 	 	 	 
	Individual Performance
	 	 	10	 
	 	 	 	 	 
	Summary – Total Award Calculation
	 	 	11	 
	 	 	 	 	 
	Administrative Details
	 	 	12	 
	 	 	 	 	 
	Definition of Common Terms
	 	 	13	 

 

Table of Contents

	 	 	 	 	 
	American Greetings

Key Management Annual Incentive Plan

	 	 	 	2
	 

American Greetings Key Management Annual Incentive Plan

This brochure provides an overview of the Key Management Annual Incentive Plan 3⁄4 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 3⁄4 provided separately 3⁄4 includes information specific
to your participation in the plan: your assigned business unit, 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 business units and you do not participate in another
Company-sponsored annual incentive plan:

	 	§  	Corporate Consolidated
	 
	 	§  	Total Social Expressions Group
	 
	 	§  	Cards & Wrap Group
	 
	 	§  	Creative Products Group
	 
	 	§  	Plus Mark
	 
	 	§  	AG Interactive Entertainment Group
	 
	 	§  	UK Greetings
	 
	 	§  	John Sands Group
	 
	 	§  	S.A. Greetings
	 
	 	§  	Carlton Mexico

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 & Chief
Operating Officer, Chief Executive Officer, Chairman of the Board and any other job level(s) that
may be designated.

 

Table of Contents

	 	 	 	 	 
	American Greetings

Key Management Annual Incentive Plan

	 	 	 	3
	 

How the Plan Works

The Key Management Annual Incentive Plan rewards participants for their contributions to
American Greetings success over a twelve-month fiscal year. The Plan rewards for successful
results in three key performance areas:

	 	 	 
	n

	 	Corporate Performance. At the beginning of each
fiscal year, the American Greetings Board of Directors
approves the corporate earnings per share (EPS) goal for the
year. Actual corporate results are compared to this goal at
the end of the year.
	 
	 	 
	n

	 	Business Unit Performance. Every year, each business
unit develops an earnings goal 3⁄4 which is approved by
the Board of Directors 3⁄4 based on its strategic
direction, business opportunities and growth projections.
Business unit performance is based on actual earnings results
for your assigned business unit compared to goal.
	 
	 	 
	n

	 	Individual Performance. Your manager will determine
your individual performance compared to your objectives for
the year. Your actual 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 areas and are added together to determine your total Key Management Annual Incentive Plan
award.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Corporate

Performance
	 	+
	 	Business Unit

Performance
	 	+
	 	Individual
Performance	 	=
	 	Your

Incentive

Award

The total award 3⁄4 which is paid in cash 3⁄4 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.

 

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	American Greetings

Key Management Annual Incentive Plan

	 	 	 	4
	 

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:

	 	 	 	 	 
	 

	 	Your Base Earnings	 	 

	 	 	 	 	 
	 

	 	×
	 	 
	

	 	Your Target Incentive %	 	 

	 	 	 	 	 
	

	 	=
	 	 
	

	 	Your Target Incentive	 	 

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 and you met
all individual performance expectations (i.e., all components achieve their target performance).

Example: Joe

For example, assume Joe is a Key Manger 1 with base earnings of $60,000. His
target incentive under the Plan is 10%, or $6,000 ($60,000 × 10% = $6,000).

We’ll refer to Joe
throughout this brochure as we describe how the Plan works.

 

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	American Greetings

Key Management Annual Incentive Plan

	 	 	 	5
	 

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 performance measurement areas. Accordingly,
associates at higher job levels 3⁄4 who have more impact on the achievement of corporate
objectives 3⁄4 have more weight assigned to the corporate performance measure. Lower job
levels, in contrast, have more weight assigned to the individual performance measure.

The following chart shows the specific weightings for each job level for fiscal year 2006.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	Fiscal Year 2006 Weightings	 	 
	 	Job Level	 	 	Corporate	 	 	 	Business Unit	 	 	 	Individual	 	 
	 	Chairman
of the Board, CEO,

 President and COO,
Senior
 Vice Presidents	 	 	 	30%	 	 	 	 	50%	 	 	 	 	20%	 	 
	 	Vice Presidents,
Executive 
Directors, Key
Managers 2,

Key Managers 1	 	 	 	20%	 	 	 	 	50%	 	 	 	 	30%	 	 
	 

Example: Joe

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

Key Manager 1 Weightings

	 	 	 	 	 	 	 
	Corporate	 	Business Unit	 	Individual	 	Total
	20%

	 	50%
	 	30%
	 	100%

Joe’s Target Incentive (Percent of Base Earnings)

	 	 	 	 	 	 	 
	2%
	 	5%
	 	3%
	 	10%
	(10% × 20%)
	 	(10% × 50%)
	 	(10% × 30%)	 	 

Joe’s Target Incentive ($)

	 	 	 	 	 	 	 
	$1,200
	 	$3,000
	 	$1,800
	 	$6,000
	($60,000 × 2%)
	 	($60,000 × 5%)
	 	($60,000 × 3%)	 	 

 

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	American Greetings

Key Management Annual Incentive Plan

	 	 	 	6
	 

Measuring Performance

At the beginning of each
fiscal year, the American Greetings Board of Directors approves the
corporate earnings per share (EPS) goal for the coming year. This goal provides the context within
which each business unit then sets its earnings goal.

Corporate and business unit actual earnings performance is determined at the end of the fiscal year
and expressed as a percentage of the earnings goal. In contrast, individual results are evaluated
by your manager and communicated as an individual performance rating. If the corporation’s or your
business unit’s results exceed or fall below the earnings goal, Plan payouts are adjusted.

	 	 	 	 	 
	n

	 	Below Target Performance. If actual earnings results
do not meet a minimum level of performance 3⁄4 the
performance threshold 3⁄4 no incentive award is earned
for that performance measure. Earnings results that fall
between threshold and goal result in a reduced incentive
award.
	 	
      Performance Threshold

The corporate and business unit performance
threshold is 90% of the fiscal year earnings goal.
	 
	 	 	 	 
	n

	 	Target Performance. When actual results meet the
earnings goal, you receive 100% of the target incentive award
for that performance measure.
	 
	 	 	 	 
	n

	 	Above Target Performance. When actual results exceed
the earnings goal, you can receive up to 200% of the targeted
incentive award for that performance measure.

As described above, there is a precise relationship between actual earnings results and the
corresponding incentive award. As performance rises or falls, so does your incentive award. But
how much your award changes as performance varies is determined by something called a performance
multiplier which is discussed in the following section.

 

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	American Greetings

Key Management Annual Incentive Plan

	 	 	 	7
	 

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
goal achieved there is a corresponding 4% increase or decrease in the percentage of target
incentive earned.

The formula below illustrates the role of the performance multiplier in determining the adjustment
that is made to your incentive target based on actual performance achieved.

	 	 	 	 	 	 	 	 	 
	 	 	Example of a performance multiplier of 4 when the percent of goal
	 	 	achieved is 105%	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	               
    100%             
+         (          
       4                    
×                     
     5%           )         =      
   120%
	 
	 	 	 	 	 	 	 	 
	

	 	Target

Performance
	 	Performance

Multiplier
	 	Results

Above

Goal
	 	Performance

Adjustment

Important Note: Business unit performance multipliers vary by business unit. The
multiplier assigned to your business unit is provided in your fiscal year 2006 Incentive Plan
Statement. A list of all business unit multipliers is provided in the Definition of Terms section
of this document.

 

Table of Contents

	 	 	 	 	 
	American Greetings

Key Management Annual Incentive Plan

	 	 	 	8
	 

Performance Measures

	 	 	 	 	 	 	 	 	 	 	 
	

	 	Corporate

Performance	 	+
	 	Business Unit

Performance	 	+
	 	Individual

Performance

Corporate Performance

Corporate 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. From
that point onward, incentive awards are determined using a performance multiplier of 4 as
illustrated in the example below.

Example: Joe

Joe is a KM1 with $60,000 in base earnings. Let’s assume corporate EPS performance is 105% of goal. Joe’s
corporate incentive award is calculated in three steps:

	 	1.  	Determine the corporate performance adjustment factor
	 
	 	2.  	Apply the corporate performance adjustment to Joe’s target incentive percentage for the corporate
component
	 
	 	3.  	Multiply the result by Joe’s base earnings

	 	 	 	 	 	 	 	 	 
	 	 	               
    100%             
+         (          
    4                    
×                  
   5%           )         =      
           120%
	 
	 	 	 	 	 	 	 	 
	

	 	Target

Performance
	 	Corporate

Performance

Multiplier
	 	Results

Above

Goal
	 	Corporate

Performance

Adjustment

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	Corporate Incentive
	Joe’s Target Incentive	 
	 	 	 	 	 	 	 	2	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Performance Adjustment	 
	 	 	 	×	 	 	 	120	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Joe’s Base Earnings	 
	 	 	 	×	 	 	$	60,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Joe’s Incentive Earned	 
	 	 	 	=	 	 	$	1,440	 

 

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	American Greetings

Key Management Annual Incentive Plan

	 	 	 	9
	 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	Corporate

Performance	 	+
	 	Business Unit

Performance	 	+
	 	Individual

Performance

Business Unit Performance

Business unit performance measures vary by business unit, but your measure will be one of the
following:

	 	§  	Business Unit Pro Forma Earnings Before Interest and Taxes (Business Unit EBIT),
	 
	 	§  	Product Profit Contribution (PPC),
	 
	 	§  	Net Operating Profit After Taxes (NOPAT), or
	 
	 	§  	Corporate Pro Forma 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. Minimum
performance of 90% of goal must be attained before any incentive is earned.

A listing of each business unit’s assigned earnings measure and performance multipliers are
presented in the Business Unit table at the end of this brochure as well as in your Incentive Plan
Statement, which is provided separately. An example of the calculation of this incentive follows.

Example: Joe

Joe is a KM1 with $60,000 in base earnings. Let’s assume his Business Unit has a
performance multiplier of 3 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 factor
	 
	 	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%             
+         (          
   3                
×             
 – 4%      )         =      
        
        
    88%
	 
	 	 	 	 	 	 	 	 
	

	 	Target

Performance
	 	Business Unit

Performance

Multiplier
	 	     Results

      Below

       Goal
	 	Business Unit

Performance

Adjustment

	 	 	 	 	 	 	 	 	 
	

	 	 	Business Unit Incentive

	Joe’s Target
Incentive	

	 	 	 	 	 	5	%
	 
	 	 	 	 	 	 	 	 
	Performance Adjustment	

	 	 	×
	 	 	88	%
	 
	 	 	 	 	 	 	 	 
	Joe’s Base Earnings	

	 	 	×
	 	$	60,000	 
	 
	 	 	 	 	 	 	 	 
	Joe’s Incentive Earned	

	 	 	=
	 	$	2,640	 

 

Table of Contents

	 	 	 
	American Greetings
	 	 
	Key Management Annual Incentive Plan

	 	10
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Corporate

Performance
	 	+
	 	Business Unit

Performance
	 	+
	 	Individual
Performance	 	
	 	

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% 3⁄4 or 200% based on manager
discretion1.
Participants who receive an “Improvement Expected / Performance Below
Peer Level” rating will not receive an individual performance incentive. Individuals that receive
a “Meets Expectations” rating will receive 100% of their target individual incentive.

If corporate earnings performance is below threshold, only 30% of the top performing participants
may receive awards for individual performance. In these instances, individual awards may not
exceed 50% of the target payable for the individual performance component.

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Target Percentage	 	 	 	 	 	 	 	 	Individual Payout	 
	Performance Rating	 	 	of Participants	 	 	 	Will Receive	 	 	 	Percentage	 
	 	 	 	 	 	 	 	 	 	 
	Exceeds Expectations1
	 	 	 	30	%	 	 	 	®	 	 	 	 	150	%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Meets Expectations
	 	 	 	60	%	 	 	 	®	 	 	 	 	100	%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Improvement Expected /
Performance Below Peer Level
	 	 	 	10	%	 	 	 	®	 	 	 	 	0	%
	 	 	 	 	 	 	 	 	 	 

	1	 	Managers 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.”

Example: Joe

For example, assume Joe receives a performance rating of “Exceeds Expectations.” His Individual
incentive award would be calculated as follows:

	 	 	 	 	 	 	 
	 	 	 	 	Individual Incentive	 
	Joe’s Target Incentive	 
	 	 	 	3	%
	 
	Payout Percentage	 
	 	 	×	 150	%
	 
	Joe’s Base Earnings	 
	 	 	×	 $60,000	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Joe’s Incentive Earned	 
	 	 	=	 $2,700	 

 

Table of Contents

	 	 	 
	American Greetings
	 	 
	Key Management Annual Incentive Plan

	 	11
	 

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: Joe

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:	 	105% of Goal
	Individual Target Percentage:
	 	 	10	%	 	Business Unit:	 	96% of Goal
	Individual Target Incentive:
	 	$	6,000	 	 	Individual:	 	Exceeds Expectations

	 	 	 	 	 	 	 	 	 
	 	 
	Incentive Calculation	 	Incentive %	 	 	Incentive $	 
	Target Corporate Incentive (20% weight)

	 	 	2	%	 	 	 	 
	[100% + (4 × 5% above goal)]

	 	 	× 120	%	 	 	 	 
	 
	 	 	 	 	 	 
	Final Corporate Incentive
	 	 	2.4	%	 	$	1,440	 
	 
	+
	 	 	 	 	 	 	 	 
	 
	Target Business Unit Incentive (50% weight) 
	 	 	5	%	 	 	 	 
	[100% + (3 × -4% above goal)] 
	 	 	× 88	%	 	 	 	 
	 
	 	 	 	 	 	 
	Final Business Unit Incentive 
	 	 	4.4	%	 	$	2,640	 
	 
	+
	 	 	 	 	 	 	 	 
	 
	Target Individual Incentive (30% weight)
	 	 	3	%	 	 	 	 
	Individual Payout Percentage (“Exceeds”)
	 	 	× 150	%	 	 	 	 
	Final Individual Incentive 
	  	4.5	%	 	$	2,700 	 	 
	 
	=
	 	 	 	 	 	 	 	 
	 
	TOTAL INCENTIVE EARNED
	 	 	11.3	%	 	$	6,780	 
	 

 

Table of Contents

	 	 	 
	American Greetings
	 	 
	Key Management Annual Incentive Plan

	 	12
	 

Administrative Details

If your employment status changes, your Plan participation and any payouts may be affected
as described below.

	 	 	 
	n

	 	New Hires. If you are hired during the plan year 3⁄4
defined as the American Greetings fiscal year ending February 28, 2006 3⁄4
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.
	 
	 	 
	n

	 	Promotions and Transfers. If you are promoted or you
move from one business unit to another during the 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.
	 
	 	 
	n

	 	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 year.
	 
	 	 
	n

	 	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.
	 
	 	 
	n

	 	Incentive Payout. Incentive payouts earned in fiscal
year 2006 will typically be paid to participants 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.
	 
	 	 
	n

	 	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.
	 
	 	 
	n

	 	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.

 

Table of Contents

	 	 	 
	American Greetings
	 	 
	Key Management Annual Incentive Plan

	 	13
	 

Common Terms

The following provides detailed definitions of some common terms used throughout this
brochure.

	 	 	 
	n

	 	Base Earnings. Your base earnings are defined as your
base salary earnings 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.
	 
	 	 
	n

	 	Business Unit

	 	 	 	 	 	 	 	 	 
	Business Unit

	 	 	Earnings Measure
	 	 	Performance
Multiplier

	 	 	 	 	 	 	 
	Corporate Consolidated

	 	 	Participant Specific:	 	 	 	4	 
	

	 	 	Corporate NOPAT (Section 16 officers only)	 	 	 	 	 
	

	 	 	Corporate pro forma EBIT (all others)
	 	 	 	 	 
	 	 	 	 	 	 	 
	Total Social Expressions Group

	 	 	Combination of...	 	 	 	4	 
	

	 	 	§
Cards & Wrap Group earnings	 	 	 	 	 
	

	 	 	§

 Creative Products Group earnings	 	 	 	 	 
	

	 	 	§

 Plus Mark pro forma EBIT
	 	 	 	 	 
	 	 	 	 	 	 	 
	Cards & Wrap Group

	 	 	Combination of...	 	 	 	4	 
	

	 	 	§
 Cards PPC	 	 	 	 	 
	

	 	 	§

 Gift Wrap PPC	 	 	 	 	 
	

	 	 	§
 Carlton Cards Retail pro forma EBIT	 	 	 	 	 
	

	 	 	§
 AGI Schutz pro forma EBIT
	 	 	 	 	 
	 	 	 	 	 	 	 
	Creative Products Group

	 	 	Combination of...	 	 	 	4	 
	

	 	 	§
 DesignWare PPC	 	 	 	 	 
	

	 	 	§
 GuildHouse PPC	 	 	 	 	 
	

	 	 	§
 Learning Horizons pro forma EBIT	 	 	 	 	 
	

	 	 	§
 Balloon Zone PPC	 	 	 	 	 
	

	 	 	§
 Product Development PPC
	 	 	 	 	 
	 	 	 	 	 	 	 
	Plus Mark

	 	 	Plus Mark pro forma EBIT
	 	 	 	4	 
	 	 	 	 	 	 	 
	AG Interactive Entertainment Group

	 	 	Combination of...	 	 	 	4	 
	

	 	 	§
Outbound licensing pro forma EBIT	 	 	 	 	 
	

	 	 	§
 AG Interactive entertainment pro forma EBIT
	 	 	 	  	 
	 	 	 	 	 	 	 
	UK Greetings

	 	 	UK Greetings pro forma EBIT
	 	 	 	4	 
	 	 	 	 	 	 	 
	John Sands Group

	 	 	John Sands Group pro forma EBIT
	 	 	 	3	 
	 	 	 	 	 	 	 
	S.A. Greetings

	 	 	S.A. Greetings pro forma EBIT
	 	 	 	3	 
	 	 	 	 	 	 	 
	Carlton Mexico

	 	 	Carlton Mexico pro forma EBIT
	 	 	 	3	 
	 	 	 	 	 	 	 

	 	 	 
	n

	 	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.
	 
	 	 
	n

	 	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 interest and taxes divided by the total
number of shares outstanding as calculated on a fully diluted basis.

 

Table of Contents

	 	 	 
	American Greetings

Key Management Annual Incentive Plan

	 	14
	 

	 	 	 
	n

	 	Corporate Pro Forma 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.
	 
	 	 
	n

	 	Corporate Net Operating Profit
After Tax (NOPAT). Consolidated corporate earnings after taxes,
charged/credited for any variation from plan in Net Capital Employed at the weighted average cost of capital.
	 
	 	 
	n

	 	Fiscal Year. March 1 through February 28 or 29 of the following year.
	 
	 	 
	n

	 	Net Capital Employed (NCE). Assets (minus cash and LIFO reserve) minus liabilities (not including
long-term debt, inter-company payables, and taxes).
	 
	 	 
	n

	 	Product Profit Contribution (PPC). Earnings before interest and taxes but not including selling and
general administration (SGA) allocations.

Nothing in this brochure should be construed to create or imply any contract of employment
between an employee and American Greetings and its subsidiaries.
Except as specifically provided in the Plan and subject to American
Greetings right to amend or terminate the Plan, no employee, former employee or
any beneficiary shall have any right to payments under the American Greetings Key Management Annual
Incentive Plan.

American Greetings
reserves the right to terminate or make changes to the Plan at any
time without prior notice to any of
the Plan’s participants. The Chief Executive Officer and Chairman are the only people who have the
authority to alter or amend this Plan as it relates to any one participant. Any such alteration or
amendment must be done in writing. No participant should rely on an alteration, amendment or
modification to this Plan unless it is made in writing and is signed by the CEO or Chairman.

For the purposes of illustrating how the Plan works, hypothetical associates, target incentives,
performance outcomes and incentive payments have been used in this brochure. The actual incentive,
if any, will be based on the actual performance of American Greetings, its business units, and your
individual performance.

This brochure and its
contents, including your incentive plan statement, are considered to be confidential and proprietary and are for the
sole use of current American Greetings employees.<PAGE>
                                                                 Exhibit 10(xxx)

                         AMERICAN GREETINGS CORPORATION
                             STOCK OPTION AGREEMENT
                   1997 EQUITY AND PERFORMANCE INCENTIVE PLAN

Cleveland, Ohio

              WHEREAS, the Associate identified on the attached form, (the
"Optionee") is an employee of American Greetings Corporation or one of its
subsidiaries (the "Company"); and

              WHEREAS, the Company is authorized under the attached 1997 Equity
and Performance Incentive Plan ("Plan") to grant stock options to certain
employees including the optionee;

              NOW, THEREFORE, in consideration of their mutual promises herein,
the Company and the Optionee agree as follows:

              Subject to the terms and conditions set forth in the Plan:

     (1) The Company hereby grants to the Optionee options ("Options") to
purchase the Class of Common Shares, par value $1 per Share ("Shares"), of the
Company in the amount and at the price indicated on the attached form, the
option price being the market price of the Company's Class A Common Shares
quoted by the New York Stock Exchange ("NYSE") on the day on which these Options
are granted, and agrees to cause certificates for any Shares purchased hereunder
(or other evidence of share ownership selected by the Company) to be delivered
to the Optionee upon receipt of the purchase price either (i) in cash or check;
(ii) in whole or in part, Class A and/or Class B Common Shares of the Company
valued (in the case of both Class A and/or Class B Common Shares) at the time of
exercise at least equal to the option price; (iii) by surrender of any other
award or grant under the Plan valued at the time of exercise at least equal to
the option price; or (iv) a combination of such payment methods.

     (2) The Options shall become exercisable, from time to time, in whole or in
part, according to the attached schedule, as long as the Optionee remains
employed with the Company. Once the Options have become exercisable, all or any
part of the Options shall be exercisable during the balance of the option
period; provided, however, if the Optionee shall die, become permanently
disabled or incompetent, or has ten (10) or more years of continuous service
with the Company and shall terminate employment at age 65 (and on such other
grounds as the Compensation Committee of the Board may hereafter determine in
its sole discretion), all Options represented by this Stock Option Agreement
that have not vested shall become immediately exercisable in full.

     (3) The Options shall terminate on the earliest of the following dates:

         (a)  Ten years from the date on which they were granted; or
         (b)  Nine months from the date of permanent disability or incompetence
              of the Optionee if the same was the cause of, or occurred within
              three months after, termination of the Optionee's employment with
              the Company; or

         (c)  Three months from the date of  termination of employment in all
               other cases.

     In the event the Compensation Committee determines that the Optionee has
intentionally committed an act materially inimical to the interests of the
Company, this Stock Option Agreement shall terminate at the date of such act,
notwithstanding any other provision hereof. Nothing in this Section (3) shall be
construed to modify or enlarge the rights of the Optionee as set forth in
Section (2) hereof. Nothing contained in this Stock Option Agreement shall limit
whatever right the Company might otherwise have to terminate the employment of
the Optionee and the terms hereof shall not be affected in any manner by any
employment or other agreement between the Optionee and the Company.

     (4) Persons receiving Options by will or by the laws of descent and
distribution may exercise the Options upon the terms provided for in the Plan
and this Stock Option Agreement.

     (5) The Options shall not be exercisable if at the time of exercise such
exercise would require registration of the Class A or Class B Common Shares or
other securities to be purchased hereunder under the Securities Act of 1933, as
amended, or under any similar federal securities law then in effect and such
registration shall not then be effective. The Company shall register the Class A
or Class B Common Shares or other securities covered by this Stock Option
Agreement under any such law if such registration shall be necessary to the
exercise of the Options and the Compensation Committee in its sole discretion
determines that such registration would not result in undue expense, hardship to
the Company and that such registration is desirable to effect the purposes for
which the Options are granted.

     (6) The Options may be exercised by the Optionee by (a) delivering to the
Company (Attention of the Director - Retirement & Payroll or successor to such
job title) written notice of the number and class of Shares with respect to
which the Options are being exercised, and (b) in those cases where the Optionee
does not intend to immediately sell the Shares covered by the Options, paying
the purchase price of the Shares being acquired plus any required withholdings.
The Optionee shall have no rights as a shareholder with respect to any Shares
covered by the Options evidenced by this Stock Option Agreement until such time
that the Option is exercised and the Optionee pays the full purchase price for
the underlying Shares. In those cases where the Optionee intends to immediately
sell Shares covered by the Options, after notifying the Company of his or her
intention to sell, the Optionee will receive the amount by which the sale price
exceeds the grant price for such shares, after deducting applicable taxes and
brokerage fees, but not interest that might otherwise be paid on an advance of
moneys to the Optionee between the exercise and settlement dates. The sale price
for both Class A and Class B Common Shares shall be the price of Class A Common
Shares as quoted by NYSE as of the close of business on the date of exercise.

     (7) Upon the exercise of Options or Reload Options (as defined below)
through the delivery of any class of the Company's Common Shares or other grants
or awards under paragraph 4.(d) of the Plan held by an Optionee for at least six
months, an Optionee who is in the active employ of the Company shall receive
replacement Options equal in number to the number of Common Shares and/or other
grants or awards surrendered in order to exercise the Options and on the same
terms as the Options or Reload Options surrendered, except that Reload Options
shall not be exercisable more than ten (10) years from the date of grant of the
initial Options ("Reload Options"). The Reload Options themselves may not be
reloaded, and may not be exercised after the date on which the Options in
respect of which such Reload Options were granted, expire, are canceled or
terminate.

     (8) If any provision of this Stock Option Agreement conflicts with any
provision in the 1997 Equity and Performance Incentive Plan, the provisions of
the 1997 Equity and Performance Incentive Plan shall govern.

AMERICAN GREETINGS CORPORATION

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