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Exhibit
10.2
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”)
is made at Cleveland, Ohio, this 12th day of June 2008, by and
between AMERICAN GREETINGS CORPORATION , an
Ohio corporation (the
“Company”), and JOHN BEEDER (the
“Executive”).
In
consideration of the covenants set forth in this Agreement, the
parties mutually agree as follows:
1.
Job Title . Subject to the provisions of this Agreement,
the Company shall employ Executive as the Company’s
Senior Vice President, Sales and Marketing/Executive
Sales and Marketing Officer, with such duties and
responsibilities as may be assigned from time-to-time
by the
Board of Directors or the President of the Company. Executive
shall devote Executive’s full business time and attention and
give Executive’s best efforts to the business affairs of
the Company and/or of its subsidiaries as the Board of
Directors or the President of the Company
may from time-to-time
determine. Executive recognizes that in serving as an officer of
the Company or as an officer of a subsidiary, Executive
serves in such capacity solely at the pleasure
of the Board of
Directors or the President of the Company and that employment in
such capacity or in any other capacity may be terminated at any time
by the Board of Directors or the President
of the Company,
subject to the provisions of Section 4 of
below.
2.
Fiduciary Obligations . Executive shall carry out his
duties in a manner consistent with and in compliance with all
present and future requirements and limitations of all
applicable federal and state laws, all applicable regulations,
Company policies (to the extent the policies do not
conflict with the
terms of this Agreement), and subject to the direction and
approval of the Board of
Directors or the President of the Company. Executive
acknowledges and fully understands that by entering into this Agreement,
he undertakes a fiduciary relationship with the Company
and is under a fiduciary obligation to use due care and
act in
the best interest of the Company at all times.
Failure of Executive
to fulfill all fiduciary obligations ordinarily
imposed by law on similar Executives in a fiduciary
relationship will be deemed a material breach of this
Agreement by Executive.
3.
Compensation & Benefits .
3.1 Base
Salary . The Company or a subsidiary shall, during the term
of this Employment Agreement, pay to Executive as minimum
compensation for services a base salary at a rate to be fixed by the
Board of Directors, the Compensation Committee appointed by the Board
of Directors, or the President of the Company,
which rate shall not
be less than $36,667.00 per month ($440,000 on an
annualized basis) (“base salary”), less
appropriate withholdings and deductions.
3.2 Annual
Incentive Plan . Executive shall be eligible to participate
in the
Company’s Key Management Annual Incentive Plan, in
accordance with the terms and conditions of the Plan, as
it may be amended from time-to-time.
3.3 Stock
Options . Executive shall be eligible to participate in
the Company’s Stock Option Plan in accordance with
the terms and conditions of the Plan, as it may be amended from
time-to-time, which Plan currently provides for
employees at Executive’s level to receive a grant of 35,000
stock options each year, subject to adjustment as provided in the
Plan. As additional consideration for accepting
employment with the
Company and signing this Agreement, Executive shall receive
an additional grant of 35,000 stock options on American
Greetings Class A Common Stock at the next regularly scheduled
stock option grant date. All
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options granted to Executive are subject to the terms,
conditions, vesting and exercise schedules
set forth in the
Plan, as it may be amended from time-to-time.
3.4 Flexible
Benefits Program . Executive shall be eligible to
participate in the Company’s flexible benefits program, which
includes such benefits as health care, disability
insurance, life
insurance and a flexible spending account to the same extent
other Executives at the Senior Vice President level participate, in
accordance with the terms of the Program, as it
may be amended from
time-to-time.
3.5 Retirement
Profit Sharing . Executive shall be eligible to participate
in the Company’s Retirement Profit Sharing Plan to the
same extent other executives at the Senior Vice
President level
participate, in accordance with the terms of the Plan, as it may
be amended from time-to-time.
3.6 Other
Benefits . Executive shall be eligible to receive other
Company benefits to the same extent normally provided to other
Senior Vice Presidents. Executive shall be entitled to reimbursement of
the reasonable attorneys’ fees for the review and
negotiation of this Agreement.
3.7
Relocation . Executive shall be eligible to receive
certain relocation benefits as set forth in the Company’s
Associate-on-the-Move Policy, as it may be amended
from time-to-time. Additionally, recognizing
Executive’s unique family circumstances, the
Company will reimburse Executive for: (a) the reasonable
cost of commuting between their current home
and Cleveland for
Executive and his spouse; and (b) the reasonable cost of
temporary housing (including rent and utilities) in the Cleveland
area, in each case for up to 24 months as Executive and his spouse
transition from their current home to
Cleveland.
4.
Termination .
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4.1 Death .
This Agreement shall immediately terminate upon the
death of Executive.
Following the Executive’s death, the Company
agrees to pay only the following amounts to Executive’s
estate, as required by law: (i) the base salary at the
last rate paid to Executive through the end of the
month in
which the Executive’s death occurs; (ii) any amounts
earned, accrued or owing but not yet paid under this Agreement; and
(iii) other benefits in accordance with applicable plans
and programs of the Company.
4.2
Disability . If Executive is disabled, which means that
he is unable to perform the essential functions of his
position, with reasonable accommodations, for a period of
16 weeks or more, Executive’s employment
shall terminate.
Determination of disability shall be made initially by
a physician appointed by Executive, but the Company
reserves the right to appoint a physician to determine disability,
and Executive agrees to cooperate with the Company’s
physician if the Company has a good faith doubt about the
determination of disability or need for accommodation made by the
physician selected by Executive. If the determinations by the physician
for Executive and the Company cannot be reconciled, the two physicians
shall select a third physician, whose determination of disability will
be final. In the event Executive’s employment terminates because of
his disability, he shall be entitled to payment by the
Company only of: (i) the base salary at the last
rate paid to Executive through the end of the
month in which the
termination occurs; (ii) any amounts
earned, accrued or
owing but not yet paid under this Agreement; and
(iii) other
benefits in accordance with applicable plans and programs of the
Company.
4.3 Termination
“For Cause” . The Company shall have
the right to immediately terminate Executive for
“cause”.
a. Cause shall
mean:
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(i) A material breach by
Executive of any term of this Agreement, the Company’s
policies, Executive’s fiduciary duties to the
Company, or of any
law, statute, or regulation;
(ii) The material failure to
achieve the Company’s reasonable profit,
revenue or other
written objectives or written goals as determined by
the Company because of Executive’s
performance;
(iii) Misconduct which is
injurious to the Company or any of its affiliates, either monetarily or
otherwise, or which impairs Executive’s ability
to effectively perform his duties or
responsibilities;
(iv) Personal conduct which
reflects poorly on the Company or Executive or which impairs
Executive’s ability to perform his duties or
manage subordinate employees, including but not limited to the
abuse of alcohol or controlled substances;
(v) Habitual or repeated neglect
of his duties or responsibilities by Executive;
(vi) The appropriation of (or
attempted appropriation of) a business opportunity of the Company or
its affiliates, including attempting to secure
or securing any
personal profit in connection with any transaction by the Company or
its affiliates;
(vii) The commission of or
conviction for (or the procedural equivalent or conviction for),
or the entering of a guilty plea or plea of no
contest with respect
to a crime, which in the Company’s reasonable
judgment, involves moral turpitude;
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(viii) Intentional injury of
another employee or any person in the course of
performing services
for the Company;
(ix) Any conflict of interest,
including, but not limited to solicitation
of business on behalf
of a competitor or potential competitor;
(x) Violation of the
Company’s policies prohibiting discrimination
or harassment of employees, clients, guests, or vendors of
the Company;
(xi) Failure to comply with the
Company’s written Human Resources policies; or
(xii) Failure to follow any
material and lawful instruction given to Executive by a superior at the
Company.
b. In the event the
Company terminates Executive’s employment for
cause, he shall be
entitled to payment by the Company only the following:
(i) the base salary at the last rate paid to Executive through
the date of the termination of his employment for cause, payable to
the Executive immediately upon Executive’s
termination;
(ii) any amounts earned, accrued or owing but not yet paid
under this Agreement; and (iii) other benefits in
accordance with applicable plans or programs of the
Company.
4.4 Termination
“Without Cause” . The Company shall have the
right to terminate this Agreement and Executive’s
employment without cause upon written notice of 30 days to Executive.
At the Company’s option, the Company may pay
Executive for 30 days
in lieu of notice and require no services of Executive. In the
event the Company terminates the Executive’s employment
without cause, Executive shall be entitled to payment by the
Company
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the
following: (i) Executive’s base salary at the rate in
effect immediately prior to the date of his termination of
employment, payable to Executive for 3 months, provided that
such base salary payment shall be reduced by the amount of
salary Executive may receive from subsequent employment during the
same period; (ii) any amounts earned, accrued
or owing
but not yet paid under this Agreement; and (iii) other
benefits in accordance with applicable plans and programs of
the Company. Alternatively, in the event the
Company terminates
the Executive’s employment without cause and
Executive signs a waiver and release of claims in a form
acceptable to the Company – and Executive
does not revoke his
signature – Executive shall be entitled to payment by the
Company the following: (i) Executive’s base salary
at the rate in effect immediately prior to the date
of his termination of
employment, payable to Executive for 12 months, provided that
such base salary payment shall be reduced by the amount of
salary Executive may receive from subsequent employment during the
same period; (ii) any amounts earned, accrued
or owing
but not yet paid under this Agreement; (iii) continued
health care coverage, concurrently with COBRA, for a period of 12 months
immediately following Executive’s termination date at the Senior
Vice President active Executive payroll deduction rate, as
it may
be changed from time-to-time by the Corporation in its sole
discretion; (iv) executive career outplacement services for a
period of up to 6 months; and (v) other
benefits in
accordance with applicable plans and programs of the Company.
The payments and rights to Executive described in this
Section 4.4 shall be in lieu of any severance
Executive might
otherwise be eligible to receive under a Company severance plan,
and Executive agrees that he shall not be entitled to
receive severance under any Company severance plan in the event of a
termination without cause. The requirement that
Executive sign a
waiver and release of claims under this
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Section 4.4. shall not result in the lengthening
of the 12-month restrictive covenants set forth
in Section 5 of
this Agreement.
4.5 Termination
Upon “Change in Control” . The Company may, at
its option, terminate this Agreement as a result of a Change of
control of the Company. If the Company exercises this option,
it reserves the right to offer Executive another position
in the
Company or one of its affiliates or subsidiaries, which if
offered, Executive agrees to consider in good faith and respond
accordingly. If the Company materially reduces Executive’s title,
authority, duties and responsibilities at any time because of
a change
of control, Executive may terminate his employment within not
more than 30 days of first notice of the decrease in his authority,
duties or responsibilities. If either party elects
to terminate this
Agreement as a result of change of control of the Company, it
will provide the other party with 30 day’s prior
written notice. The Company may, at its option, relieve Executive of his
duties and responsibilities under this Agreement
during this 30-day notice period.
a. A “change
of control” means only:
(i) The acquisition by any
entity or person (which theretofore beneficially
owned less than 50%
of the Company’s common stock then outstanding)
of shares of the Company’s common stock in a
transaction or series of transactions which result in such entity or
person beneficially owning more than 50% of
the Company’s
outstanding common stock, where beneficial ownership
and the
percentages of shares outstanding are determined pursuant to
Sections 13(d) and (g) of the Securities Exchange Act of 1934 and
the rules and regulations promulgated there under;
or
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(ii) The merger or consolidation
of the Company with one or more companies in a transaction or
series of transactions where the common stock of
the Company is
exchanged for less than 50% of the voting stock of the
resulting or surviving company, including, without limitation, an
exchange of the common stock of the for cash; or
(iii) The sale, assignment,
transfer, pledge, hypothecation or other dispositio
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