EXHIBIT 10(a)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of the 25th day of
September 2001, between Xxxxx X. Xxxxx ("Xxxxx") and American Greetings
Corporation ("AG" or "Company").
In consideration of the mutual promises contained herein, the parties
agree as follows:
1. POSITION: Spira is employed by AG as the Company's President and
Chief Operating Officer. Spira will perform any and all reasonable duties
commensurate with these positions, devote substantially all of his business time
and attention and give his reasonable best efforts to the business affairs of
the Company as the AG Board of Directors or Executive Committee may from time to
time determine. Spira may serve on corporate, civic and charitable boards and
committees, deliver lectures, fulfill speaking engagements and manage personal
investments so long as they do not significantly interfere with the performance
of his duties under this Agreement.
2. TERM: Employment pursuant to this Agreement commenced on June 25,
2000, and will continue until terminated by Company or Spira. While the parties
contemplate that the term, unless extended by the parties, will end on or around
June 25, 2003, it is understood that Spira's employment with AG, whether
pursuant to this Agreement or otherwise, is terminable at-will, and may be
terminated by either party at any time for any reason or for no reason.
3. COMPENSATION: During the term of this Agreement, in addition to the
other health and welfare benefits normally offered to Executive Officers (as
designated by the AG Board of Directors or otherwise), including participation
in the AG Retirement Profit Sharing and Savings Plan, and the health care,
disability and life insurance plans, Spira will receive the following base
salary and benefits:
a. BASE SALARY: Spira will be paid an annual base salary of
$500,000, less payroll taxes and other withholdings ("Base Salary").
Such Base Salary will be reviewed around the end of each AG fiscal year
and at that time may be increased at the discretion of the AG Board of
Directors.
b. STOCK GRANT. The Company has granted to Spira the following
shares of Class A Common Stock of AG on the terms stated herein. Spira
shall pay no purchase price for the shares, but at Spira's written
election, shares may be withheld by the Company to pay federal, state
and local taxes and withholdings.
(i) UNRESTRICTED GRANT. As of June 22, 2001, the
Company granted to Spira 175,000 shares of Class A
Common Stock, which grant vested immediately as of
June 22, 2001, at the grant date price of $10.36 per
share, for a total value of $1,813,000. This is an
unrestricted grant from shares held in Treasury that
may be sold, assigned, transferred, pledged,
hypothecated, gifted or otherwise disposed of
(collectively, "transferred") by Spira at any time
following the June 22, 2001 grant date, subject to
applicable federal, state and local law and AG
policies and procedures regarding trading by
insiders. The Company shall file at its expense, and
as soon as practical, a Form S-8 and/or such other
forms and documents (including, but not limited to, a
reoffer prospectus) as may be necessary to register
the shares subject to this unrestricted grant and
Spira shall fully cooperate in such filings. To the
extent that it has not already done so, the
Company shall deliver certificates for the shares
subject to this unrestricted grant to Spira as soon
as practical after the date hereof. Xx. Xxxxx has
informed the Company that if he does not use shares
of Class A Common Stock to satisfy any tax
withholding requirement, he intends to deposit the
shares subject to this unrestricted grant with a
broker with an order to sell such shares should their
fair market value decrease to a stated price. The
Company acknowledges that the foregoing is neither
addressed nor prohibited under AG policies and
procedures regarding trading by insiders. Spira
acknowledges that his decision to proceed with the
foregoing is a personal decision and his alone, that
he will fully comply with the requirements for Rule
10b5-1 plans, and that prior to any transaction in
such shares he will allow the Company to review and
approve the planned transaction, which approval shall
not be unreasonably withheld.
(ii) RESTRICTED GRANT. As of September 5, 2001, the
Company granted to Spira 65,000 restricted shares of
Class A Common Stock ("Restricted Shares") at the
grant date price of $12.70 per share, for a total
value of $825,500. These Restricted Shares were
granted under the Company's 1997 Equity and
Performance Incentive Plan ("1997 Plan") [Attachment
1] and are subject to the substantial risk of
forfeiture and restrictions on transfer described in
paragraph 6. of the Plan. Such restrictions on the
Restricted Shares shall lapse and Spira may
thereafter transfer them upon the occurrence of the
following:
(a) 43,333 Restricted Shares may be transferred on
and after (but not before) June 25, 2002, only
if both of the following occur for FY02: (1) the
Company attains the restructure savings goal set
in the annual management incentive plan and
earns $1.14 per share (as adjusted for stock
splits or stock dividends after September 5,
2001); and (2) the AG Board declares an annual
bonus to AG management under the annual
management incentive plan. Except as set forth
in paragraph 3.b.(ii)(c) below, if both
conditions are not met, Spira's interest in the
43,333 Restricted Shares shall terminate on June
26, 2002, and Spira shall forthwith deliver or
cause to be delivered to the AG Secretary the
certificates(s), if any, previously delivered to
Spira for such shares, accompanied by such
endorsement(s) and/or instrument(s) of transfer
as the Secretary may require.
(b) 21,667 Restricted Shares may be transferred on
and after June 25, 2003, only if both of the
following occur for FY03: (1) the Company
attains the annual bonus goals for AG management
established hereafter by the AG Board; and (2)
the AG Board declares an annual bonus to AG
management under the annual management incentive
plan. Except as set forth in paragraph
3.b.(ii)(c) below, if both conditions are not
met, Spira's interest in the 21,667 Restricted
Shares shall terminate on June 26, 2003, and
Spira shall forthwith deliver or cause to be
delivered to the AG Secretary the
certificates(s), if any, previously delivered to
Spira for such shares, accompanied by such
endorsement(s) and/or instrument(s) of transfer
as the Secretary may require.
(c) All of the Restricted Stares shall become
immediately vested (and all substantial risk
of forfeitures and restrictions on transfer
will lapse) upon the happening of: (a)
Spira's death, or permanent and total
disability, (b)
AG's termination of Spira's employment
without cause, or (c) a Change in Control of
the Company (as defined in the Company's
1997 Equity and Performance Incentive Plan
as in effect as of the date hereof).
The terms of the restricted stock grant contained
herein are incorporated into the attached Restricted
Share Agreement.
c. STOCK OPTIONS. Effective September 5, 2001, the Company
granted to Spira, pursuant to the equity plans set forth below, stock
options to purchase shares of Class A Common Stock ("Option Shares") in
the number, at the prices and on the vesting schedule set forth below
in accordance with Company policies and procedures regarding the
exercise of Options and as further set forth in the attached Stock
Option Agreements [Attachment 2]:
----------------------- ----------------------- ------------------------------------- -----------------------------
OPTION XXXXX XXXXX ATTACHED PLAN GRANTED UNDER
NO. OF OPTIONS * PER SHARE VESTING DATE
----------------------- ----------------------- ------------------------------------- -----------------------------
164,712 $13.01 1992 Plan 3/6/02
51,449 $13.01 1996 Plan 3/6/02
51,113 $13.01 1996 Plan 6/26/02
2,375 $12.70 1997 Plan 6/26/02
25,557 $13.01 1996 Plan 6/26/03
1,188 $12.70 1997 Plan 6/26/03
*See attached Schedule for Calculations [Attachment 3]
(I) TIME WITHIN WHICH TO EXERCISE OPTIONS. The options vesting
on March 6, 2002, shall be exercisable for 10 years, through
September 5, 2011. The options vesting on June 26, 2002, shall
be exercisable for 10 years, through September 5, 2011;
provided, however, if AG does not achieve both (a) the
restructure savings goal in the annual management incentive
plan for FY02, and (b) FY02 earnings of $1.14 per share (as
adjusted for stock splits or stock dividends after September
5, 2001), then such options shall be exercisable for 6 months
plus 1 day following the later of (x) the date that it is
determined that such FY02 thresholds were not met or (y) the
date of the termination of Spira's employment with AG. The
options vesting on June 26, 2003, shall be exercisable for 10
years, through September 5, 2011; provided, however, if AG
does not achieve the annual bonus goals for AG management set
by the Board for FY03, then such options shall be exercisable
for 6 months plus 1 day following the later of (x) the date
that it is determined that such FY03 thresholds were not met
or (y) the date of the termination of Spira's employment with
AG.
(ii) ACCELERATION OF VESTING. Any options not vested at the
time of any of the following events shall become vested
immediately upon the happening thereof:
(a) Spira's death, or permanent and total disability, (b)
AG's termination of Spira's employment without cause, or (c)
a Change in Control of the Company (as defined in the
Company's 1997 Equity and Performance Incentive Plan as in
effect as of the date hereof). The options so vested by
acceleration shall be exercisable on the same basis as the
options vesting on the next scheduled vesting date. For
purposes hereof, "cause" means any of the following: (I)
Spira's conviction of a felony or misdemeanor involving fraud
or moral turpitude, (ii) the willful or intentional breach of
a material fiduciary duty owed to the Company or (iii) the
willful or intentional refusal to follow the lawful and
reasonable written policies of the Company or lawful and
reasonable written directives of the Company's Board of
Directors, which refusal is not cured within thirty
(30) days after delivery of written notice to Spira.
d. REIMBURSEMENT FOR PROFESSIONAL FEES. The Company will
reimburse Spira for up to $10,000 of fees and costs for legal,
accounting and other professional services related to the negotiation
and drafting of this Agreement.
e. OTHER COMPENSATION. Except as set forth herein, Spira shall
not be eligible to participate in or receive any other compensation,
bonus or benefits, including without limitation, benefits under the AG
Supplemental Executive Retirement Plan.
4. CONFIDENTIAL AND TRADE SECRET INFORMATION:
x. Xxxxx acknowledges that in the course of his employment
with AG he has and will have access to confidential information and
trade secrets ("Confidential Information"), misuse or disclosure of
which would adversely affect AG's business. Spira agrees that he will
not, either during his employment with AG or at any time thereafter,
use for himself or others, or disclose or convey to others (except as
is necessary in the ordinary course of his employment) any of AG's
Confidential Information. Confidential Information shall include
documents so marked, as well as any other information, oral or written,
that a reasonable person would believe to be confidential to or a trade
secret of AG. This paragraph shall not prohibit disclosure of
information that has become public, unless it became public through
Spira's breach of this Agreement.
b. Upon Spira's termination, regardless of the reason, Spira
will promptly surrender to AG any of its property in Spira's possession
including, but not limited to, all correspondence, memoranda, notes,
records, reports, plans, electronic files, computer printouts,
reproductions, slides and any other papers, files or items, and all
copies thereof, received or made by Spira in connection with his
employment with AG.
5. NON-COMPETITION; NON-DISPARAGEMENT: In consideration of AG's
agreement to employ Spira under the terms of this Agreement, Spira agrees that
he will not engage anywhere in the United States or Canada, directly or
indirectly, in any business activities, either as principal, agent or consultant
or through any corporation, firm or organization of which he may be an officer,
director, employee, substantial shareholder, partner, member or be otherwise
affiliated that are in competition with AG's businesses at such time, for the
period of his employment hereunder and for three (3) years thereafter.
Spira has carefully read and considered the provisions hereof and,
having done so, agrees that the restrictions set forth herein (including, but
not limited to, the time periods and geographical area of the restrictions) are
fair and reasonably required for the protection of the interests of the Company.
At no time during or after his employment with AG shall Spira, directly
or indirectly, disparage AG or AG's management.
In addition to all of the remedies otherwise available to the Company,
including, but not limited to, recovery of damages and reasonable attorneys'
fees incurred in the enforcement of this Agreement, the Company shall have the
right to injunctive relief to restrain and enjoin any actual or threatened
breach of the provisions of paragraphs 4 and 5. All of the Company's remedies
for breach of this Agreement shall be cumulative and the pursuit of one remedy
shall not be deemed to exclude any other remedies.
6. CONFLICT OF INTEREST: Spira represents and warrants that he has no
interest or obligation that is inconsistent with or in conflict with this
Agreement or that would prevent, limit or impair his performance of any part of
this Agreement.
7. CONFLICT WITH PLANS: If the terms of this Agreement conflict or
cannot otherwise be construed consistently with any of the terms of the 1992,
1996 and/or 1997 Plans, as applicable, the terms of such applicable Plan(s)
shall govern. In this regard, to the Company's knowledge, the terms of the
Restricted Shares and Options described in Section 3.b.(ii) and 3.c. of this
Agreement and incorporated in the Restricted Share Agreement and Stock Option
Agreements attached hereto do not conflict with any of the terms of the 1992,
1996 and/or 1997 Plans, as applicable.
8. MISCELLANEOUS:
a. This Agreement constitutes the entire understanding between
Spira and AG relating to the subject matter contained herein and this
Agreement supersedes any previous oral or written agreement(s) and
understandings. This Agreement may not be changed, modified, or altered
without the express written consent of Spira and AG.
b. Either party's failure to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a
waiver or deprive the other party of his/its rights thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.
c. If any part or section of this Agreement is found to be
contrary to law or unenforceable, the remainder shall remain in full
force and effect.
d. This Agreement will be governed by and construed in
accordance with the laws of the State of Ohio. Any disputes that cannot
be resolved amicably shall be resolved by binding arbitration in
Cleveland in accordance with the applicable rules of Solutions, the
Company's alternative dispute resolution program, administered through
the American Arbitration Association.
9. REVIEW BY ADVISORS: Spira acknowledges that he has had ample
opportunity to consult with his legal and financial advisors, has carefully
considered this Agreement, and fully understands its provisions. He has not
relied on any other representations or statements, written or oral.
10. SURVIVAL: The following paragraphs shall survive the expiration or
termination of this Agreement: 3.b(II); 3.c.; 3.d; 3.e; 4.; 5.; 7; 8; AND 10.
AMERICAN GREETINGS CORPORATION XXXXX X. XXXXX
BY: /s/ Xxxxx Xxxxx /s/ Xxxxx X. Xxxxx
-------------------------- -----------------------------
NAME: Xxxxx Xxxxx DATE: December 21, 2001
------------------------ -----------------------
TITLE: Chairman and CEO
-----------------------
DATE: December 20, 2001
------------------------
AMERICAN GREETINGS CORPORATION
ADDITIONAL STOCK OPTION AGREEMENT TERMS
1992 EMPLOYEE STOCK OPTION 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
"Corporation"); and
WHEREAS, the Board of Directors of the Corporation at a meeting held on February
24, 1992, adopted the 1992 Employee Stock Option Plan ("1992 Plan") and the
Corporation through the Board of Directors or the Stock Option Committee of the
Board of Directors (the "Committee") has duly authorized the execution of this
stock option agreement;
NOW, THEREFORE, in consideration of their mutual promises herein, the
Corporation and the Optionee agree as follows:
Subject to the terms and conditions set forth in the 1992 Plan:
(1) As of September 5, 2001, the Corporation hereby grants to the Optionee
options ("Options") to purchase Class A of Common Shares, par value $1 per Share
("Shares"), of the Corporation in the amount and at the price indicated on the
attached form, the option price being the fair market value of the stock at the
time of the grant of this option, and agrees to cause certificates for any
shares purchased hereunder to be delivered to the Optionee upon receipt of the
purchase price in cash or, in whole or in part, in Class A or Class B Common
Shares of the Corporation valued at fair market value as of the close of
business on the last business day preceding the date of exercise, to the extent
permitted by all applicable laws and regulations; provided that the Board of
Directors does not determine that the application of any Financial Accounting
Standards Board rule affecting the tender of Class A Common Shares would be
detrimental to the best interests of the Corporation.
(2) The Options shall be exercisable, from time to time, in whole or in
part, at any time after the earliest of (i) Xxxxx 0, 0000, (xx) the Optionee's
death, or permanent and total disability, (iii) the termination of the
Optionee's employment with the Corporation by the Corporation without cause (as
defined in that certain Employment Agreement (the "Employment Agreement")
between the Optionee and the Corporation dated as of September 25, 2001, or (iv)
a Change in Control of the Corporation (as defined in the Corporation's 1997
Equity and Performance Incentive Plan as in effect on the date hereof);
provided, however, in the case of (i), (ii) or (iv), only to the extent that the
Optionee is employed by the Corporation on such date.
(3) The Options shall terminate on September 5, 2011, or, if earlier, the
date of such act or omission as constitutes grounds for termination of the
Optionee's employment with the Corporation by the Corporation for cause (as
defined in the Employment Agreement) if Optionee is thereafter terminated for
cause. Nothing contained in this option shall limit whatever right the
Corporation might otherwise have to terminate the employment of the Optionee and
the terms of this option shall not be affected in any manner by any agreement
between the Optionee and the Corporation other than the main Employment
Agreement together with its attachments.
(4) This option is not transferable by the Optionee otherwise than by will
or by the laws of descent and distribution and shall be exercisable during the
Optionee's lifetime only by the Optionee.
(5) The option shall not be exercisable if such exercise would involve a
violation of any applicable state securities law, and the Corporation hereby
agrees to make reasonable efforts to comply with any
applicable state securities law.
(6) This option shall not be exercisable if at the time of exercise such
exercise would require registration of the Class A 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 Corporation shall register the
Class A Common Shares or other securities covered by this option under any such
law if (i) such registration shall be necessary to the exercise of this option
and the Board of Directors shall not determine that such registration would
result in undue expense or undue hardship to the Corporation or (ii) the Board
of Directors in its sole discretion determines that such registration is
desirable to effect the purposes for which this option is granted and would not
result in undue expense or undue hardship to the Corporation.
(7) The Board of Directors shall make such adjustments in the option price
and in the number or kind of Class A Common Shares or other securities covered
by this option as the Board in its sole discretion, exercised in good faith, may
determine is equitably required to prevent dilution or enlargement of the rights
of the Optionee that would otherwise result from (a) any stock dividend, stock
split, combination of shares, issuance of stock purchase warrants or rights,
recapitalization or other changes in the capital structure of the Corporation,
or (b) any merger, consolidation, separation, reorganization or partial or
complete liquidation, or (c) any other corporate transaction or event having an
effect similar to any of the foregoing. No adjustment provided for in this
Section (7) shall require the Corporation to sell any fractional shares.
(8) Option rights may be exercised by the Optionee by (i) delivering to the
Corporation (Attention of the Director, Retirement and Stock Administration)
written notice of the number and class of shares with respect to which the
rights are being exercised, and (ii) in those cases where the Optionee does not
intend to immediately sell the shares covered by this option, 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 this option until the date that the option becomes exercisable with
respect to such shares, and for which the Optionee shall have paid in full. In
those cases where the Optionee intends to immediately sell shares covered by
this option, after notifying the Corporation of his or her intention to sell,
the broker retained to sell the exercised shares may provide the required amount
on or before the transaction settlement date.
(9) Upon the exercise of options through the delivery of any class of the
Corporation's Common Shares, an Optionee who is in the active employ of the
Corporation shall receive Reload Options equal in number to the number of Common
Shares surrendered in order to exercise the Option. The option price for any
such Reload Options shall be the price of the Corporation's Class A Common
Shares, quoted by the National Association of Securities Dealers at the close of
business on the last business day preceding the date of grant of the Reload
Options. The Reload Options themselves may not be reloaded, may be exercised at
any time after they are granted, but 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.
(10) The term "subsidiary" as used in this agreement means any corporation
or other entity (other than the Corporation) in which the Corporation has a
direct or indirect interest of 50 percent or more of the total combined voting
power of all classes of stock of the corporation or other entity.
(11) If any of the provisions of this Stock Option Agreement conflict with
those of the 1992 Plan, the provisions of the 1992 Plan shall govern.
AMERICAN GREETINGS CORPORATION
NOTICE OF GRANT OF STOCK OPTIONS AMERICAN GREETINGS
AND OPTION AGREEMENT ID: 00-0000000
Xxx Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Expiration 09/05/11
XXXXX X. XXXXX OPTION NUMBER: 0000________
00000 XXXXX XXXXXXXX XXXX XXXX: 92___
XXXXXX XXXXXXX, XX 00000 ID: ###-##-####
--------------------------------------------------------------------------------
Effective 09/05/01, you have been granted Non-Qualified Stock Options to buy
164,712 shares of American Greetings Corporation (the Company) stock at $13.01
per share.
The total option price of the shares granted is $2,142,903.10.
Shares will become vested on the date shown.
Shares VEST
------ ----
164,712 03/06/02
--------------------------------------------------------------------------------
By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.
--------------------------------------------------------------------------------
------------------------------- ---------------------------------------
American Greetings Corporation Date
------------------------------- ---------------------------------------
XXXXX X. XXXXX Date
Date: 11/14/2001
Time: 9:23:46 AM
AMERICAN GREETINGS CORPORATION
STOCK OPTION AGREEMENT
1996 EMPLOYEE STOCK OPTION PLAN
Cleveland, Ohio
WHEREAS, the Associate identified on the attached form, (the
"Optionee") is an employee of American Greetings Corporation (the "Company");
and
WHEREAS, the Shareholders of the Corporation at a meeting held on
June 28, 1996, adopted the 1996 Employee Stock Option Plan ("Plan");
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) As of September 5, 2001, 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 price of the Company's Class A Common
Shares quoted by the New York Stock Exchange ("NYSE") at the close of business
on the last business day preceding that 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 in cash or, 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 price for Class A Common
Shares quoted by NYSE at the close of business on the date of exercise, to the
extent permitted by all applicable laws and regulations.
(2) The Options shall be exercisable, from time to time, in whole or
in part, as follows:
(a) As of March 6, 2002, the Options shall become exercisable
as to 51,449 of the Options subject to this Stock Option
Agreement, provided that the Optionee is then employed by the
Company.
(b) As of June 26, 2002, the Options shall become exercisable
as to an additional 51,113 of the Options subject to this Stock
Option Agreement, provided that the Optionee is then employed by
the Company.
(c) As of June 26, 2003, the Options shall become exercisable as to
the remaining 25,557 of the Options subject to this Stock Option
Agreement, provided that the Optionee is then employed by the
Company.
(d) Notwithstanding anything to the contrary in this Section (2), the
Options shall become exercisable in full (i.e., as to all of the
Options subject to this Stock Option Agreement) at any time after
the earliest of (i) the Optionee's death or permanent and total
disability, (ii) the termination of the Optionee's employment with
the Company by the Company without cause (as defined in that
certain Employment Agreement (the "Employment Agreement") between
the Optionee and the Company dated as of September 25, 2001, or
(iii) a Change of Control of the Company (as defined in the
Company's 1997 Equity and Performance Incentive Plan as in effect
as of the date hereof); provided, however, in the case of (i) or
(iii), only if the Optionee is employed by the Company on the date
of such event.
(3) The Options shall terminate on September 5, 2011, or, if earlier,
the date of such act or omission as constitutes grounds for termination of the
Optionee's employment with the Corporation by the Corporation for cause (as
defined in the Employment Agreement) if Optionee is thereafter terminated for
cause. Notwithstanding the foregoing, if the Company does not achieve both (a)
the restructure savings goals in the annual management incentive plan for FY02
and (b) FY02 earnings of $1.14 per share ( as adjusted for stock splits or stock
dividends after the date hereof), then the Options that vested pursuant to
Section (2)(b ) above shall terminate upon the later of (x) the date that it is
determined that the FY02 thresholds set forth in (a) and (b) of this sentence
were not met or (y) the date that is six months and one day following the
Optionee's termination of employment with the Company, whether with cause or
without cause. Similarly, if the Company does not achieve the annual bonus goals
for Company management set by the Company's Board of Directors for FY03, then
the Options that vested pursuant to Section (2)( c) above shall terminate upon
the later of (x) the date that it is determined that the FY03 annual bonus goals
were not met or (y) the date that is six months and one day following the
Optionee's termination of employment with the Company, whether with cause or
without cause.
Nothing contained in this option shall limit whatever right
the Corporation might otherwise have to terminate the employment of the Optionee
and the terms of this option shall not be affected in any manner by any
agreement between the Optionee and the Corporation other than the main
Employment Agreement together with its attachments.
(4) The Options are not transferable by the Optionee other than by will
or by the laws of descent and distribution. Those receiving Options in this
manner may exercise the Options upon the terms provided for in the Plan and this
Stock Option Agreement. The Options shall be exercisable during the Optionee's
lifetime only by the Optionee, except that in case of incompetence or disability
of an Optionee, an Option may be exercised on behalf of the Optionee by the
Optionee's guardian or legal representative.
(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 (a) such registration shall be necessary to the
exercise of the Options and the Compensation Committee shall not determine that
such registration would result in undue expense or undue hardship to the Company
or (b) the Compensation Committee in its sole discretion determines that such
registration is desirable to effect the purposes for which the Options are
granted and would not result in undue expense or undue hardship to the Company.
(6) The Compensation Committee may make such adjustments in the xxxxx
xxxxx and in the number or kind of Class A or Class B Common Shares covered by
this Stock Option Agreement as are equitably required to prevent dilution or
enlargement of the rights of the Optionee that would otherwise result from (a)
any stock dividend, stock split, combination of shares, recapitalization or
other changes in the capital structure of the Company, (b) any merger,
consolidation, separation, reorganization or partial or complete liquidation, or
(c) any other corporate transaction or event having an effect similar to any of
the foregoing. No adjustments provided for in this Section (6) shall require the
Company to sell any fractional Shares.
(7) The Options may be exercised by the Optionee by (a) delivering to
the Company (Attention of the Manager of Retirement Plans) 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 xxxxx xxxxx 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.
(8) Upon the exercise of Options through the delivery of any class of
the Company's Common Shares 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 surrendered in order to
exercise the Option ("Reload Options"). The xxxxx xxxxx for any such Reload
Options shall be the price of the Company's Class A Common Shares as quoted by
NYSE as of the close of business on the date of exercise of the 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.
(9) If any of the provisions of this Stock Option Agreement conflict with
those of the 1996 Employee Stock Option Plan, the provisions of the 1996
Employee Stock Option Plan shall govern.
AMERICAN GREETINGS CORPORATION
NOTICE OF GRANT OF STOCK OPTIONS AMERICAN GREETINGS
AND OPTION AGREEMENT ID: 00-0000000
Xxx Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
XXXXX X. XXXXX OPTION NUMBER: 0000_____
00000 XXXXX XXXXXXXX XXXX XXXX: 96___
XXXXXX XXXXXXX, XX 00000 ID: ###-##-####
--------------------------------------------------------------------------------
Effective 09/05/01, you have been granted a(n) Non-Qualified Stock Option to buy
103,723 shares of of American Greetings Corporation (the Company) stock at
$13.01 per share.
The total option price of the shares granted is $1,666,828.10.
Shares will become vested on the date shown.
SHARES VEST
51,449 03/06/02
51,113 06/26/02
25,557 06/26/03
By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.
--------------------------------- ----------------------------------
American Greetings Corporation Date
---------------------------------
XXXXX X. XXXXX
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 be exercisable, from time to time, in whole or in
part, as follows:
(a) As of June 26, 2002, the Options shall become exercisable as to an
additional 2,375 of the Options subject to this Stock Option
Agreement, provided that the Optionee is then employed by the Company.
(b) As of June 26, 2003, the Options shall become exercisable as to the
remaining 1,188 of the Options subject to this Stock Option Agreement,
provided that the Optionee is then employed by the Company.
(c) Notwithstanding anything to the contrary in this Section (2), the
Options shall become exercisable in full (i.e., as to all of the
Options subject to this Stock Option Agreement) at any time after the
earliest of (i) the Optionee's death or permanent and total disability,
(ii) the termination of the Optionee's employment with the Company by
the Company without cause (as defined in that certain Employment
Agreement (the "Employment Agreement") between the Optionee and the
Company dated as of September 25, 2001, or (iii) a Change of Control of
the Company (as defined in the Company's 1997 Equity and Performance
Incentive Plan as in effect as of the date hereof); provided, however,
in the case of (i) or (iii), only if the Optionee is employed by the
Company on the date of such event.
(3) The Options shall terminate on September 5, 2011, or, if earlier, the
date of such act or omission as constitutes grounds for termination of the
Optionee's employment with the Corporation by the Corporation for cause (as
defined in the Employment Agreement) if Optionee is thereafter terminated for
cause. Notwithstanding the foregoing, if the Company does not achieve both (a)
the restructure savings goals in the annual management incentive plan for FY02
and (b) FY02 earnings of $1.14 per share ( as adjusted for stock splits or stock
dividends after the date hereof), then the Options that vested pursuant to
Section (2)(a) above shall terminate upon the later of (x) the date that it is
determined that the FY02 thresholds set forth in (a) and (b) of this sentence
were not met or (y) the date that is six months and one day following the
Optionee's termination of employment with the Company, whether with cause or
without cause. Similarly, if the Company does not achieve the annual bonus goals
for Company management set by the Company's Board of Directors for FY03, then
the Options that vested pursuant to Section (2)(b) above shall terminate upon
the later of (x) the date that it is determined that the FY03 annual bonus goals
were not met or (y) the date that is six months and one day following the
Optionee's termination of employment with the Company, whether with cause or
without cause.
Nothing contained in this option shall limit whatever right the
Corporation might otherwise have to terminate the employment of the Optionee and
the terms of this option shall not be affected in any manner by any agreement
between the Optionee and the Corporation other than the main Employment
Agreement together with its attachments.
(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 xxxxx xxxxx 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
---------------------------------------------------------------------------
NOTICE OF GRANT OF STOCK OPTIONS AMERICAN GREETINGS
AND OPTION AGREEMENT ID: 00-0000000
XXX XXXXXXXX XXXX
XXXXXXXXX, XX 00000
----------------------------------------------------------------------------
XXXXX X. XXXXX OPTION NUMBER: 0000____
00000 XXXXX XXXXXXXX XXXX XXXX: 97___
XXXXXX XXXXXXX, XX 00000 ID: ###-##-####
-----------------------------------------------------------------------------
Effective 09/05/01, you have been granted a(n) Non-Qualified Stock Option
to buy 3,563 shares of American Greetings Corporation (the Company) stock at
$12.70 per share.
The total option price of the shares granted is $45,250.10.
Shares will become vested on the date shown.
Shares Vest
------ -----
2,375 06/26/02
1,188 06/26/03
