Offer Letter - American Greetings Corp. and Stephen S. Willensky
JEFFREY WEISS
EXECUTIVE VICE PRESIDENT AMERICAN GREETINGS
ONE AMERICAN ROAD
CLEVELAND, OHIO 44144-2398
216/252-7300 - FAX 216/252-6777
September 9, 2002
Mr. Steven S. Willensky
Dear Steve,
We are pleased to extend to you a revised offer of employment with American
Greetings as Senior Vice President, Executive Sales and Marketing Officer for
the North American Greeting Card Division, reporting to me. We have agreed that
you will begin with us on August 26,2002.
The terms of this offer are that you will:
1. receive a base salary of $335,000 annually (less appropriate withholdings and
deductions); this salary will be reviewed six months after you begin employment,
and then 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
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;
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 on 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.
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Mr. Steven Willensky
Page 2
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;
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.
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Mr. Steven Willensky
Page 3
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 the circumstances described in this
Paragraph 8 (a), (b) and (c) shall be instead of, and not in addition
to, any severance or separation benefits normally granted to officers;
the severance granted under this Paragraph 8 will be:
(1) 12 months of base salary at the rate in effect at
the time you are separated (which, for these
purposes, will be no less than $335,000 annually);
(2) continued participation in the Incentive Plan at
the Senior Vice President level 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, and your
actual base salary earnings earned in that fiscal
year up to your separation date;)
(3) continued vesting of any stock options that would
otherwise vest during the 12 month severance period;
you may exercise any vested options for up to 90 days
after the end of the 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, at the premiums and rates made available to
active employees.
9. be eligible for certain relocation benefits, as described in the enclosed
Associate-on-the-Move Policy; the highlights are:
o guaranteed sale of your principal residence in Laguna Niguel
at fair market value;
o if your home sells within 60 days, a cash amount equal to 3%
of the sale price, to be used to defray the expenses of buying
a new home in the Cleveland area;
o real estate commission and other regular expenses incurred
with the sale of your principal residence in Laguna Niguel;
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Mr. Steven Willensky
Page 4
o reasonable temporary living expenses for you and your family
in the Cleveland area, for up to 90 days;
o travel expenses for two trips to Cleveland for you and your
wife to search for a new home;
o moving your household goods from your principle residence to
the Cleveland area;
o tax gross-up for those reimbursed expenses which must be
declared as taxable income to you.
A copy of the Associate-on-the-Move Policy is included, and is hereby
incorporated into this letter.
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 arbitrating any disputes concerning the agreement. A draft of such
an agreement is enclosed.
This letter supercedes the previous offer letter to you dated August 19, 2002.
Steve, congratulations. We believe that you can make significant contributions
to our efforts. We look forward to your acceptance of this offer.
Very truly yours,
/s/ Jeffrey Weiss
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Jeffrey Weiss
Executive Vice President
North American Greeting Card Division
encls.
cc: Morry Weiss
Jim Spira
Agreed and Accepted:
/s/ Steven Willensky 9/12/02
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Steven Willensky Date