EX-10.4 OUTSIDE DIRECTORS DEFERRED COMP PLAN

EXHIBIT 10.4

AMERICAN GREETINGS CORPORATION
OUTSIDE DIRECTORS’ DEFERRED COMPENSATION PLAN

AMERICAN GREETINGS CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN

Table of Contents

AMERICAN GREETINGS CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN

Table of Contents

ii

AMERICAN GREETINGS CORPORATION OUTSIDE DIRECTORS’ DEFERRED
COMPENSATION PLAN

ARTICLE I
INTRODUCTION

Section 1.1 Name of Plan . This plan shall be known as the American Greetings Corporation Outside Directors’ Deferred Compensation Plan (hereinafter referred to as the “Plan”).

Section 1.2 Effective Date . The Plan’s effective date is January 1, 2005.

Section 1.3 Purpose . American Greetings Corporation has established the Plan to provide certain members of that company’s board of directors the option of deferring the receipt of fees earned while serving in such capacity.

ARTICLE II
DEFINITIONS AND USAGE

Section 2.1 Definitions . For purposes of this Plan, capitalized terms have the meanings set forth below:

“ Account ” means the individual account or accounts established on behalf of a Participant in accordance with Section 4.2.

“ Administrator ” means the person or persons described in Article VII.

“ Affiliate ” means any limited liability company, general partnership, limited partnership, business trust, or other non-corporate organization with respect to which American Greetings Corporation directly or indirectly owns at least fifty percent (50%) of either the capital or profits interest therein, and directly or indirectly has the power and authority to select and appoint, and where applicable remove, such organization’s managers, general partner(s) and/or trustees (as applicable).

“ Agreement ” means an Agreement for Deferred Compensation Benefits entered into between the Company and a Director who is eligible to participate in the Plan.

“ Board ” means the Board of Directors of American Greetings Corporation; provided that, if such Board, by resolution, designates a person or a committee to act specifically on matters relevant to the Plan, such person or committee shall act (and have the power and authority to act) as the Board with respect to such matters.

“ Code ” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code shall include any regulations or rulings promulgated thereunder.

“ Company ” means American Greetings Corporation, an Ohio corporation (“AGCo”), together with any corporation, limited liability company, partnership, or other business organization which is part of a “controlled group of corporations” that includes AGCo (within the meaning of

Code Section 414(b) and related regulations), or is “under common control” with AGCo (within the meaning of Code Section 414(c) and related regulations).

“ Compensation ” means the total of all retainer fees, meeting fees, and any other fees for personal services rendered by a Director for the Company, acting in that capacity, whether paid to the Director in cash or in-kind. Compensation shall not include, for purposes of determining a Director’s Deferred Compensation Benefit under the Plan, any remuneration received by such Director for services he or she renders to the Company in the capacity of an independent contractor.

“ Deferred Compensation Benefit ” means the benefit of a Participant as determined under Article IV of this Plan.

“ Director ” means any person serving as an “outside director” on the Board. An “outside director” is any individual performing personal services as a member of the Board who does not concurrently perform services for the Company as an Employee; provided, however, that a Director may include an “outside director” who concurrently performs services for the Company as an independent contractor.

“ Disability ” or “ Disabled ” means a Participant’s absence from service on the Company’s Board due to: (i) his or her inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) such medically determinable physical or mental impairment, which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, for which the Participant is receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering the Company’s Directors.

“ Employee ” shall mean any individual employed by the Company who receives “W-2 wages” from the Company. Any individual who provides personal services to the Company concurrently as both Employee and Director shall not be considered a Director, while serving in such dual capacities.

“ Participant ” means a Director who is eligible to participate in the Plan and who is actually participating in the Plan in accordance with Section 3.2.

“ Plan ” means the American Greetings Corporation Outside Directors’ Deferred Compensation Plan.

“ Plan Year ” means the calendar year.

“ Separation from Service ” shall mean a Participant’s resignation, removal or withdrawal as a Director (whether on account of such Participant’s death, permanent and total disability, retirement, or other circumstances). A Participant will not be deemed to have experienced a Separation from Service if such Participant commences employment with the Company as an Employee, or otherwise continues to provide “significant services” to the Company. For purposes of the preceding sentence, a Participant will be considered to provide “significant services” if such Participant provides continuing services that average at least twenty percent

(20%) of the services provided by such Participant to the Company during the immediately preceding three (3) full calendar years and the annual remuneration paid for such services is at least twenty percent (20%) of the average annual compensation earned during the final three (3) full calendar years (or, if less, the period of service).

“ Subsidiary ” means any corporation at least eighty percent (80%) of whose equity securities (determined either by voting power or by interest in profits) are directly or indirectly owned by AGCo.

“ Unforeseeable Emergency ” means any of the following: (i) a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse or the Participant’s dependent (as defined under Code Section 152(a)), (ii) loss of the Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control as determined by the Administrator pursuant to Code Section 409A.

Section 2.2 Usage . Except where otherwise indicated by the context, any masculine terminology used herein shall also include the feminine and vice versa, and the definition of any term herein in the singular shall also include the plural and vice versa.

ARTICLE III
ELIGIBILITY AND PARTICIPATION

Section 3.1 Eligibility . A Director shall be eligible to participate in the Plan on the day he or she first serves as a Director of AGCo, unless the Board, by written action, otherwise designates such Director as ineligible to participate in the Plan.

Section 3.2 Participation . Each Director eligible to participate in the Plan in accordance with Section 3.1 shall become a Participant by entering into an Agreement with AGCo. Each Director’s participation in the Plan shall be governed by his or her Agreement, including the effective date of each Director’s participation, and the terms of the Plan. In the event that the terms of the Agreement and the terms of the Plan conflict, the terms of the Agreement control.

Section 3.3 Agreement Procedure .

(a) AGCo and each Director who is eligible to participate in the Plan may execute one or more Agreements for all or a the portion of Compensation the Director elects to defer into the Plan. Each Agreement shall provide for the amount credited to a Participant’s Account in accordance with Section 4.3 below, the period of deferral in accordance with rules established by the Administrator, the investment of such amount in accordance with Section 4.4 below, and the payment of the Participant’s Deferred Compensation Benefit in accordance with Sections 5.1 and 5.2 below.

(b) For the initial Plan Year in which a Director becomes eligible to participate in the Plan, the Agreement shall be properly completed, executed and delivered to the Administrator prior to the date that ends thirty (30) days after the date on which the Director first becomes eligible to participate in the Plan.

(c) For any subsequent Plan Year for which a Director is eligible to participate in the Plan, the Agreement shall be properl