Offer Letter - American Greetings Corp. and Michael Goulder
October 17,2002
Mr. Michael Goulder
Dear Mike,
We are pleased to extend to you an offer of employment with American Greetings
as Executive Operations Officer, reporting to me. We have agreed that, if you
accept this offer, you will begin with us on a date that we will mutually
determine.
The terms of this offer are that you will:
1. receive a base salary of $330,000 annually (less appropriate
withholdings and deductions); this salary will be reviewed six months
after you begin employment, and may be adjusted, as appropriate; the
salary will be reviewed annually thereafter, and may be increased based
on your performance;
2. participate in the Key Management Annual Incentive Plan at the Senior
Vice President level (35% target payout for business unit performance
and 35% target payout for Corporate performance, with the payouts
increased or decreased from target based on actual business unit,
corporate and individual performance); the payout from this Plan for
this fiscal year, if any, will be based on your actual base salary
earnings for the fiscal year; the details of the Plan are described in
the enclosed booklet, which is hereby incorporated into
this letter;.
3. participate in the American Greetings Stock Option Plan at the Senior
Vice President level:
A) 20,000 options on American Greetings Class A Common Stock
will be granted within 30 days of the date you begin your
employment with American Greetings; the grant price will be
the closing price of the stock on the date of grant:
o 15,000 of these options shall vest one year
from the date of grant;
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o 5,000 of these options shall vest two years
from the date of grant.
B) 10,000 additional options will be granted annually
thereafter (the size of these grants may be increased or
decreased based an individual performance; the actual grant
date shall be the date approved by the Board of Directors for
the general grant to all employees):
o 5,000 options from each grant will vest one
year from the date of the grant;
o 5,000 options from each grant will vest two
years from the date of the grant.
C) if you separate from American Greetings before the vesting
of any of these options, you will forfeit any unvested
options, except as provided under Paragraph 8 below.
D) the details of this Plan are described in the enclosed
booklet, which is hereby incorporated into this letter; where
the terms of the Plan and the terms of this letter
specifically differ, the terms of this letter prevail.
4. receive a supplemental grant of 40,000 stock options on American
Greetings Class A Common Stock:
o the grant will be made within 30 days of your employment date;
the grant price will be the closing price of the stock on the
date of grant;
o all 40,000 options will vest four years from the date of
grant; however:
o if the American Greeting stock price closes at or
above $30 per share on any day prior to the vesting
date, one quarter of these options (10,000) will vest
immediately;
o if the American Greetings stock price closes at or
above $35 per share on any day prior to the vesting
date, a second quarter (10,000) of these options will
vest immediately;
o if the American Greetings stock price closes at or
above $40 per share on any day prior to the vesting
date, a third quarter (10,000) of these options will
vest immediately;
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o if the American Greetings stock price closes at or
above $45 per share on any day prior to the vesting
date, the final quarter (10,000) of these options
will vest immediately;
o If you separate from American Greetings before the
vesting of any or all of these options, you will
forfeit any unvested options, except as provided
under Paragraph 8 below.
5. be eligible to participate in the American Greetings flexible
benefits program, which includes such benefits as health care,
disability and life insurance; an overview of this program is described
in the enclosed Benefits-at-a-Glance booklet.
6. be eligible to participate in the American Greetings Retirement
Profit Sharing and Savings Plan; the details of this Plan are described
in the enclosed booklet and Summary Plan Description.
7. receive other benefits normally provided to Senior Vice Presidents,
such as the personal use of a company automobile, and additional
company paid life, AD&D and personal liability insurances; the details
of these benefits as currently provided are described in the enclosed
Executive Benefits booklet.
8. be granted severance if:
(a) you are involuntarily separated for reasons other than a gross
violation of your obligation to the Corporation; a gross violation is
defined as termination as a result of your personal dishonesty, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations and similar
offenses) or final cease-and-desist order, or other behavior or actions
that a reasonable person would conclude evidences moral turpitude;
(b) your duties are reduced to such a level that your role is clearly
not that of a Senior Vice President;
(c) there is a change of control in the ownership of the Corporation;
(d) severance granted under any of these circumstances shall be instead
of, and not in addition to, any severance or separation benefits
normally granted to officers; the severance granted under these
circumstances will be:
(1) 12 months of base salary continuation at the rate in
effect at the time you are separated (which, for the purpose
of calculating such
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severance, will be no less than $330,000 annually);
(2) continued participation in the Incentive Plan at your job
level at the time of separation, for the fiscal year in which
you separate if, at the time of your separation, you have
completed at least six months of active employment in that
fiscal year (the payout ,if any, shall be based on the actual
payout percentage earned under your plan in that fiscal year,
individual performance at no less than Tier 3, and your actual
base salary earnings earned in that fiscal year up to your
separation date); payment of the incentive, if any, shall
occur with the payment of incentives to other Plan
participants;
(3) continued vesting of any stock options that would
otherwise vest during the 12 month severance period, as if you
were an active employee; you may exercise any vested options
for up to 90 days after the end of the 12 month severance
period;
(4) continued use of your company provided car for 90 days
after your separation date;
(5) participation in the company's health care and life
insurance programs for the 12 month severance period, as if
you were an active employee.
We both agree that, within 60 days of your beginning with American Greetings, we
will discuss and agree on an employment agreement that sets forth in detail the
provisions described in this offer letter, and any other terms and conditions
that we both agree are reasonable. We agree that this agreement shall contain
non-compete and confidentiality provisions, and shall include a specific
provision for mediating and arbitrating any disputes concerning the agreement. A
draft of that agreement is enclosed.
Mike, congratulations. We believe that you can make significant contributions to
our efforts. We look forward to your acceptance of this offer.
Very truly yours,
Jeff Weiss
Executive Vice President
American Greetings
encls.
cc: Morry Weiss
Jim Spira
Agreed and Accepted:
/s/ Michael Goulder 10-17-02
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Michael Goulder Date