Sample Business Contracts

Agreement to Defer Stock Option Gains - American Greetings Corp. and Morry Weiss

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                     Agreement to Defer Stock Option Gains

         THIS AGREEMENT TO DEFER STOCK OPTION GAINS (this "Agreement") dated
December 15, 1997 between American Greetings Corporation (the "Company") and
Morry Weiss (the "Optionee"),


         WHEREAS, the Board of Directors of the Company (the "Board") awarded
the Optionee on January 25, 1988 options under which the Optionee has the right
to purchase 510,000 Class B Common Shares of the Company (the "Option");

         WHEREAS, pursuant to the terms of the Stock Option Agreement entered
into between the Company and the Optionee to evidence the Option (the "Option
Agreement"), the Optionee currently has the right to exercise the Option in full
for cash or, subject to approval by the Board, by delivery of Common Shares of
either class of the Company ("Common Shares"); and

         WHEREAS, the Optionee desires to waive certain rights under the Option
Agreement in consideration for deferral of delivery of certain of the Common
Shares issuable upon exercise of the Option.

         NOW THEREFORE, in consideration of the promises herein set forth and
other good and valuable consideration had and received, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as

                            ARTICLE I - DEFINITIONS

         The following words and phrases when used in this Agreement shall have
the following meanings:

         1.       "ADMINISTRATOR" shall mean the Compensation Committee of the
                  Board or such other person or persons as designated by the

         2.       "BENEFICIARY" shall mean the person(s) to whom the Optionee's
                  Account (as defined herein) is payable upon his death. The
                  Optionee may, by written instrument delivered to the
                  Administrator during the Optionee's lifetime, designate one or
                  more primary and contingent Beneficiaries to receive amounts
                  payable from his Account following his death and may designate
                  the proportions in which such Beneficiaries are to receive
                  such payment. The Optionee may change such designation from
                  time to time, and the last written designation filed with the
                  Administrator prior to the Optionee's death shall control. If
                  the Optionee fails to specifically designate a Beneficiary or
                  if no designated Beneficiary survives the Optionee, payment
                  shall be made by the Administrator to the Optionee's estate.


         3.       "CHANGE IN CONTROL" shall mean (a) a filing pursuant to any
                  federal or state law in connection with any tender offer for
                  shares of the Company (other than a tender offer by the
                  Company), (b) the signing of any agreement for the merger or
                  consolidation of the Company with another corporation or for
                  the sale of all or substantially all of the assets of the
                  Company, (c) the adoption of any resolution of reorganization
                  or dissolution of the Company by the shareholders, (d) any
                  other event or series of events, which, in the opinion of the
                  Board, will or is likely to, if carried out, result in a
                  change in control of the Company, or (e) if, during any period
                  of two consecutive years, individuals who at the beginning of
                  such period constituted the Board cease for any reason to
                  constitute a majority thereof (unless the election, or the
                  nomination for election by the Company's shareholders, of each
                  Director of the Company first elected during such period was
                  approved by a vote of at least two-thirds of the Directors
                  then still in office who were Directors of the Company at the
                  beginning of any such period).

         4.       "CODE" shall mean the Internal Revenue Code of 1986 as

         5.       "DISABILITY" shall mean a physical or mental condition of the
                  Optionee resulting from a bodily injury, disease, or mental
                  disorder which renders him incapable of continuing in the
                  employment of the Company. Such Disability shall be determined
                  by the Administrator based upon appropriate medical evidence
                  and examination.

                              ARTICLE II - WAIVER

         The Optionee irrevocably waives his rights under the Option Agreement
to (1) exercise the Option for cash at any time and (2) exercise the Option in
any manner during the period commencing on the date hereof and ending at
midnight, Cleveland time on April 24, 1998; provided, however, that such waiver
shall be null and void in the event that during such period (a) the Optionee's
employment is terminated by the Company, (b) the Optionee's employment
terminates as a result of his death or Disability, or (c) there is a Change in
Control of the Company.

                             ARTICLE III - DEFERRAL

         The Optionee irrevocably elects that if he shall exercise the Option,
in whole or in part, after the expiration of the period referred to in Article
II hereof:

         1.       Payment of the exercise price for the portion of the Option
                  being exercised shall be made in Common Shares which the
                  Optionee owned for at least 6 months prior to the exercise

         2.       As soon as practicable following exercise of the Option, the
                  Company shall deliver to the Optionee a number of Common
                  Shares covered by the Option equal to the number of Common
                  Shares which were surrendered by the Optionee in payment of
                  the exercise price.


         3.       The delivery of the balance of the Common Shares issuable upon
                  such exercise (the "Gain Shares") shall be deferred until
                  April 25, 2001, (the "Deferral Period"), subject to and in
                  accordance with Articles IV and V hereof. Notwithstanding the
                  foregoing, the Deferral Period specified in the preceding
                  sentence may (subject to approval by the Administrator) be
                  extended (with respect to all or a specified portion of the
                  Gain Shares) at the election of the Optionee; provided,
                  however, that (a) any such election must be made in writing
                  (in accordance with rules established by the Administrator) at
                  least six (6) months prior to the expiration of such Deferral
                  Period, and (b) such extension must be for a period of between
                  three (3) and five (5) years.

                         ARTICLE IV - DEFERRAL ACCOUNT

         The Company shall maintain an account on its books in the name of the
Optionee (the "Account") which shall be administered as follows:

         1.       The Account shall consist of two Sub-Accounts -- (a) the
                  "Common Share" Sub-Account and (b) the "Cash" Sub-Account. The
                  Common Share Sub-Account shall initially be credited with the
                  number of Gain Shares. Such Sub-Account shall be deemed to be
                  invested in Common Shares of the class covered by the Option
                  and shall be credited with stock dividends declared thereon.
                  Appropriate adjustments in the Common Share Sub-Account shall
                  be made as equitably required to prevent dilution or
                  enlargement of the Sub-Account from any stock dividend, stock
                  split, reorganization or other such corporate transaction or
                  event. The Cash Sub-Account shall be credited with an amount
                  equal to the amount of the cash dividend paid periodically
                  with respect to Common Shares multiplied by the number of
                  Common Shares credited to the Common Share Sub-Account as of
                  the record date for the corresponding cash dividend, PLUS, IF

         2.       The value of the Optionee's Account shall be determined from
                  time to time by the Administrator in the following manner:

                  (a)      The Account shall be valued as of each December 31 or
                           more frequently as agreed upon by the Administrator,
                           and shall again be valued as of the date that an
                           Optionee receives any payment under the Agreement, in
                           accordance with the procedures established by the

                  (b)      All allocations to the Account shall be deemed to
                           have been made on the applicable valuation date in
                           the manner set forth in this paragraph, even though
                           actually determined at a later date.


         3.       All amounts which are credited to the Account shall be
                  credited solely for purposes of accounting and computation and
                  shall remain assets of the Company subject to the claims of
                  the Company's general creditors. This Agreement is designed to
                  be unfunded, with amounts payable hereunder being paid from
                  the general assets of the Company. Notwithstanding the
                  foregoing, the Company may, but is not required to, deposit
                  the Gain Shares in a grantor trust for the purpose of securing
                  the benefits to be provided to the Optionee pursuant to this
                  of any such trust shall at all times be subject to the claims
                  of the Company's general creditors in the event of insolvency
                  or bankruptcy.

                           ARTICLE V - DISTRIBUTIONS

         1.       On each June 30 and December 31 while the Agreement is in
                  effect, the Optionee shall be paid a lump sum distribution in
                  cash equal to the balance credited to his Cash Sub-Account and
                  such balance shall be reduced to zero.

         2.       The Optionee shall receive a distribution of his Account as
                  soon as practicable following the earliest of (a) his
                  termination of employment with the Company for any reason,
                  whether voluntary or involuntary (with or without cause),
                  (b) the expiration of the Deferral Period or (c) a Change in

         3.       In the event of the death or Disability of the Optionee, the
                  Optionee's Account shall be paid to the Optionee's Beneficiary
                  or guardian (as the case may be) within 30 days following the
                  date on which the Company is notified or otherwise determines
                  that such event has occurred.

         4.       Distributions from the Optionee's Account shall be made in a
                  single lump sum payment unless the Optionee elects to receive
                  such payment in the form of annual installment payments over a
                  three (3) or five (5) year period. Any election to receive
                  installment payments must be made in writing (in accordance
                  with rules established by the Administrator) at least six (6)
                  months prior to the date on which the payment is due to be
                  made. Notwithstanding the foregoing, any remaining installment
                  payments shall be accelerated and paid in a single payment in
                  the event of the death of the Optionee, a Change in Control of
                  the Company or the Optionee's involuntary termination of
                  employment from the Company. All payments under the Agreement
                  (except for the semi-annual distributions from the Cash
                  Sub-Account described in paragraph 1 above) shall be in the
                  form of Common Shares of the class covered by the Option (with
                  any fractional shares being paid in cash).


         5.       Notwithstanding the foregoing provisions of this Article V, if
                  the deduction of all or any portion of a payment or
                  distribution otherwise due to be made by the Company under the
                  Agreement would be disallowed solely by reason of Code Section
                  162(m) but for the operation of this paragraph, then such
                  payment or distribution (or portion thereof) shall be deferred
                  and made at the earliest time that Section 162(m) would not
                  apply to disallow the corresponding deduction by the Company.

         6.       Distributions under the Agreement shall be subject to all
                  applicable withholding taxes.

                           ARTICLE VI- MISCELLANEOUS

         1. GENERAL PROVISIONS. This Agreement shall be governed by the laws of
the State of Ohio. This Agreement may be amended only by a written instrument
executed by both of the parties hereto. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof. If any provision of this Agreement is found to be unenforceable, the
balance of this Agreement shall not be affected thereby.

         2. AUTOMATIC TERMINATION. Notwithstanding anything to the contrary
contained in this Agreement, the Agreement shall automatically terminate (and
the Optionee's Account shall be immediately distributed in a single lump sum) in
the event it is determined by the Company that, based upon a change in the
federal tax laws, a published ruling, regulation or final decision issued by the
Internal Revenue Service or the Department of Labor or by a court of competent
jurisdiction that (a) the Agreement is considered "funded" for purposes of
Title I of ERISA, (b) there is a transfer of property for purposes of Section 83
of the Code resulting in a currently taxable benefit to be realized by the
Optionee or a Beneficiary pursuant to the "economic benefit" doctrine, or (c)
pursuant to Section 451 of the Code, amounts are includable as compensation in
the gross income of the Optionee or Beneficiary in a taxable year that is prior
to the year or years in which such amounts are actually distributed or made
available thereto.

         3. EFFECT OF PRIOR AGREEMENTS. The provisions of any and all Agreements
to Defer Stock Option Gains between the Company and the Optionee are hereby
superseded in their entirety by the provisions of this Agreement.

         4.       ADMINISTRATION.

                  (a)      The Administrator may adopt such rules of procedure
                           as it deems desirable for the conduct of its affairs,
                           except to the extent that such rules conflict with
                           the provisions of the Agreement.

                  (b)      The Administrator shall have the following rights,
                           powers and duties: (i) Subject to the terms of this
                           Agreement (including without limitation the claims
                           procedure in paragraph 5 below), the decision of the
                           Administrator in matters within its jurisdiction
                           shall be final, binding and conclusive upon the
                           Company and upon any other person affected by such


                           decision. (ii) The Administrator shall have the duty
                           and authority to interpret and construe the
                           provisions of the Agreement, to decide any question
                           which may arise regarding the rights of the Optionee
                           and his Beneficiaries, and the amounts of their
                           respective interests, to adopt such rules and to
                           exercise such powers as the Administrator may deem
                           necessary for the administration of the Agreement,
                           and to exercise any other rights, powers or
                           privileges granted to the Administrator by the Board
                           under the terms of the Agreement. (iii) The
                           Administrator shall maintain full and complete
                           records of its decisions. The Administrator shall
                           within a reasonable time after the end of each
                           calendar year provide the Optionee with a detailed
                           report of the status of the Account.

                  (c)      No fee or compensation shall be paid to any person
                           for services as the Administrator.

         5. CLAIMS PROCEDURE. If a claim for benefits under the Agreement is
wholly or partially denied, notice of the decision shall be furnished to the
claimant by the Administrator within a reasonable period of time after receipt
of a claim by the Administrator. Any claimant who is denied a claim shall be
furnished written notice setting forth the specific reason or reasons for the
denial; specific reference to the pertinent provision of the Agreement upon
which the denial is based; a description of any additional material or
information necessary for the claimant to perfect the claim; and an explanation
of the claim review procedure. In order that a claimant may appeal a denial of a
claim, the claimant or the claimant's duly authorized representative may:
request a review by written application to the Administrator, or its designate,
no later than 60 days after receipt by the claimant of written notification of
denial of a claim; review pertinent documents; and submit issues and comments in
writing. A decision on review of a denied claim shall be made not later than 60
days after receipt of a request for review, unless special circumstances require
an extension of time for processing, in which case a decision shall be rendered
within a reasonable period of time, but not later than 120 days after receipt of
a request for review. The decision on review shall be in writing and shall
include the specific reason(s) for the decision and the specific reference(s) to
the pertinent provisions of the Agreement on which the decision is based. If a
claimant disagrees with the decision on review, he shall have 30 days from
receipt of the decision on review to demand binding confidential arbitration
before three arbitrators in Cleveland, Ohio under Ohio law and the rules of the
Center for Public Resources or American Arbitration Association (as the claimant
may choose) for arbitration of employment disputes as his sole remedy. The award
of the arbitrator shall be enforceable under 9 USC Sections 1-16 in any Court of
competent jurisdiction.

         6. NO ASSIGNMENT OF BENEFIT. It is a condition of this Agreement and
all rights of the Optionee shall be subject thereto, that no right or interest
of the Optionee shall be assignable or subject to execution, garnishment,
attachment, pledge, bankruptcy or levy of any kind, but excluding devolution by
death or mental incompetency. Further, no interest of the Optionee and no
benefit payable hereunder shall be assigned as security for a loan, and any such
purported assignment shall be null, void and of no effect, nor shall any such
interest of any such benefit be subject in any manner, either voluntarily or
involuntarily, to anticipation, sale, transfer, assignment, or encumbrance by or
through the Optionee. If any attempt is made to alienate, pledge or charge any


such interest of any such benefit or any debt, liabilities in tort or contract,
or otherwise, of the Optionee contrary to the prohibitions of the preceding
sentence, then the Administrator in his discretion may suspend or forfeit the
interest of the Optionee and during the period of such suspension, or in the
case of forfeiture, the Administrator shall hold such interest for the benefit
of or shall make the payments to which the Optionee would otherwise be entitled
to, to the Optionee's spouse, children or other relatives to be selected in the
sole discretion of the Administrator.

         7. SUCCESSORS. The provisions of the Agreement are binding upon and
inure to the benefit of the Company, its successors and assigns, and the
Optionee, his Beneficiaries, heirs, and legal representatives.

         8. NO GUARANTEE OF EMPLOYMENT. Nothing contained in the Agreement shall
be construed as a contract of employment or deemed to give the Optionee the
right to be retained in the employ of the Company or any equity or other
interest in the assets, business or affairs of the Company.

         9. NOTIFICATION OF ADDRESSES. The Optionee and each Beneficiary shall
file with the Administrator, from time to time, in writing, the post office
address of the Optionee, the post office address of each Beneficiary, and each
change of post office address. Any communication, statement or notice addressed
to the last post office address filed with the Administrator (or if no such
address was filed with the Administrator, then to the last post office address
of the Optionee or Beneficiary as shown on the Company's records) shall be
binding on the Optionee and each Beneficiary for all purposes of the Agreement
and neither the Administrator nor the Company shall be obliged to search for or
ascertain the whereabouts of the Optionee or any Beneficiary.

         IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto on the date first above written.

                                 AMERICAN GREETINGS CORPORATION

                                 By: /s/ Harvey Levin
                                 Title: Sr. V.P. Human Resources

                                 /s/ Morry Weiss
                                 Morry Weiss