EXHIBIT 10(b)
RESTRICTED SHARE AGREEMENT
WHEREAS, Xxxxx X. Xxxxx (hereinafter called the "Grantee") is a key employee of
American Greetings Corporation (hereinafter called the "Corporation"); and
WHEREAS, the execution of a Restricted Share Agreement (hereinafter called the
"Agreement") substantially in the form hereof has been authorized by a
resolution of the Compensation and Management Development Committee of the Board
of Directors of the Corporation duly adopted on September 5, 2001.
NOW, THEREFORE, the Corporation, pursuant to its 1997 Equity and Performance
Incentive Plan (the "Plan"), has this day granted to the Grantee, a total of
**65,000** shares of the Corporation's Class A Common Stock ("Common Shares")
subject to the terms and conditions of the Plan and the following terms,
conditions, limitations and restrictions:
1. The Common Shares subject to this grant shall be fully paid and
nonassessable and shall be represented by a certificate or certificates
registered in the Grantee's name, endorsed with an appropriate legend
referring to the restrictions hereinafter set forth. The Grantee shall have
all the rights of a shareholder with respect to such shares, including the
right to vote the shares and to receive all dividends paid thereon,
provided that such shares, together with any additional shares which the
Grant may become entitled to receive by virtue of a share dividend, a
merger or reorganization in which the Corporation is the surviving
corporation or any other change in capital structure, shall be subject to
the restrictions hereinafter set forth.
2. Except as set forth in Section 4 hereof, the Common Shares subject to this
grant may not be sold, exchanged, assigned, transferred, pledged or
otherwise disposed of by the Grantee except to the Corporation, except that
the Grantee's rights with respect to such shares may be transferred by will
or pursuant to the laws of descent and distribution. Any purported transfer
in violation of the provisions of this section shall be void, and the
purported transferee shall obtain no rights with respect to such shares.
The Corporation in its sole discretion, when and as permitted by the Plan,
may waive the restrictions on transferability with respect to all or a
portion of the Common Shares subject to this grant.
3. All the Common Shares with respect to which the substantial risk of
forfeiture set forth in this Section 3 and the restrictions or transfer set
forth in Section 2 hereof have not lapsed pursuant to Section 4 hereof
shall be forfeited to the Corporation upon the Grantee's voluntary
termination of employment (other than any reason of his permanent and total
disability) or the Corporation's termination of the Grantee's employment
with the Corporation for cause (as defined in that certain Employment
Agreement between the Grantee and the Corporation dated as of September 25,
2001).
4. The substantial risk of forfeiture and restrictions on transfer imposed on
the Common Shares pursuant to Section 2 and 3 hereof shall lapse and
Grantee may thereafter transfer such Common Shares upon the occurrence of
the following:
(a) 43,333 of the Common Shares may be transferred on and after (but
not before) June 25, 2002, only if both of the following occur
for FY02:
(1) The Corporation 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 Corporation's Board declares
an annual bonus to the Corporation's management under the
annual management incentive plan. Except as set forth in (c)
below, if both conditions are not met, Grantee's interest in
the 43,333 of the Common Shares shall terminate on June 25,
2002, and Grantee shall forthwith deliver or cause to be
delivered to the Corporation's Secretary the certificate(s),
if any, previously delivered to Grantee for such shares,
accompanied by such endorsement s) and /or instrument(s) of
transfer as the Secretary may require.
(b) 21,667 of the Common Shares may be transferred on and after June
25, 2003, only if both of the following occur for FY03:
(1) The Corporation attains the annual bonus goals for the
Corporation management established hereafter by the
Corporation's Board; and (2) the Corporation's Board
declares an annual bonus to the Corporation's management
under the annual management incentive plan. Except as set
forth in paragraph (c) below, if both conditions are not
met, Grantee interest in the 21,667 of the Common Shares
shall terminate on June 25, 2003, and Grantee shall
forthwith deliver or cause to be delivered to the
Corporation's Secretary the certificate(s), if any,
previously delivered to Grantee for such shares, accompanied
by such endorsement(s) and /or instrument(s) of transfer as
the Secretary may require.
(c) Notwithstanding anything to the contrary in this Section 4, all
of the Common Shares shall become immediately vested (and all
substantial risk of forfeitures and restrictions on transfer
imposed on the Common Share will lapse and the Common Shares may
be transferred) upon the happening of:
(1) Grantee's death, or permanent and total disability,
(2) The Corporation's termination of Grantee's employment with
the Corporation without cause (as defined in that section
Employment Agreement between the Grantee and the Corporation
dated as of September 25, 2001, or
(3) a Change in Control of this Corporation (as defined in the
Plan).
1. During the period in which the transferability and forfeiture restrictions
provided in Sections 2 and 3 hereof are in effect, the certificates
representing the Common Shares covered by this grant shall be retained by
the Corporation, together with the accompanying stock power, signed by the
Grantee and endorsed in blank. Certificates for those Common Shares which
have not previously been distributed to the Grantee shall be distributed to
the Grantee as soon a reasonably practical after any substantial risk of
forfeiture or restriction on transfer period on such Common Shares have
lapsed pursuant to Section 4 hereof.
2. The Grantee hereby acknowledges that federal and state income, payroll or
other applicable taxes may apply with respect to this grant. If the
Corporation determines, in its sole discretion, that withholding is
required, the Grantee agrees by the acceptance of this grant that such
withholding may be accomplished through withholding from the cash
compensation due to the Grantee from the Corporation an amount sufficient
to satisfy the full withholding obligation. If withholding pursuant to the
foregoing sentence is insufficient (in the sole judgment of the
Corporation) to satisfy the full withholding obligation, the Grantee agrees
that either (a) the Grantee will pay over to the Corporation the amount of
cash necessary to satisfy such remaining withholding obligation by the time
thereafter specified in writing by the Corporation, or (b) the Corporation
may retain such number of the shares covered by this grant as shall be
equal in value to the amount of the remaining withholding obligation. Upon
due notice from the Grantee, the Corporation may (in its discretion)
satisfy the entire withholding obligation by retaining shares as provided
in (b) above in lieu of withholding from the Grantee's cash compensation.
3. For purposes of this Agreement, the continuous employ of the Grantee with
the Corporation or a Subsidiary shall not be deemed interrupted, and the
Grantee shall not be deemed to have ceased to be an employee of the
Corporation or any Subsidiary, by reason of the transfer of his or her
employment among the Corporation and its Subsidiaries.
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4. Nothing contained in this Agreement shall limit whatever right the
Corporation or a Subsidiary might otherwise have to terminate the
employment of the Grantee.
5. This Agreement is subject to the terms and conditions of the Plan.
Capitalized terms used herein without definition shall have the meanings
assigned to them in the Plan.
EXECUTED as of the 5th day of September, 2001.
By: /s/ Xxxxx Xxxxx
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Chairman of the Board and
Chief Executive Officer
The undersigned Grantee hereby acknowledges receipt of an executed
original of this Restricted Share Agreement and accepts the Restricted Shares
granted thereunder.
Dated: As of September 5, 2001 /s/ Xxxxx X. Xxxxx
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Grantee
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