PERFORMANCE SHARE GRANT AGREEMENT

EXHIBIT 10.7

AMERICAN GREETINGS CORPORATION 1997 EQUITY AND
PERFORMANCE INCENTIVE PLAN

PERFORMANCE SHARE GRANT AGREEMENT

THIS AGREEMENT, dated as of the Grant Date stated above, is by and between American Greetings Corporation (the “Company” or “American Greetings”) and Grantee.

W I T N E S S E T H :

WHEREAS, the Company wishes to give Grantee an opportunity to acquire or enlarge his equity ownership in the Company for purposes of augmenting Grantee’s proprietary interest in the success of American Greetings and thereby focusing Grantee’s efforts on increasing shareholder value.

A G R E E M E N T

NOW, THEREFORE, the Company and Grantee hereby agree as follows:

1. Performance Share Grant . Subject to the terms and conditions of this Agreement, the Company hereby grants to Grantee the Target Grant of Shares (the “Performance Shares”) as specified above. The grant of Performance Shares shall represent the right to receive such number of Shares, if any, as determined in accordance with Section 2 upon the achievement of certain management objectives over the Performance Period. The Performance Shares described in this Agreement are in all respects subject to the terms, conditions and provisions of this Agreement and the Company’s 1997 Equity and Performance Incentive Plan (the “Plan”).

2. Award of Performance Shares .

     (a) The number of Performance Shares actually earned will be based on the percentage of Grantee’s target incentive award, if any, that Grantee achieves during the Performance Period under the Company’s Key Management Annual Incentive Plan (the “Annual Incentive Plan”). Subject to the certification of the Company’s Compensation and Management Development Committee (the “Committee”) required by Section 2(b), and provided that Grantee is actively employed by the Company or a subsidiary thereof as of the last day of such fiscal year with respect to which a calculation is made to determine if Grantee is entitled to payment of Performance Shares, Grantee will be entitled to payment of a portion of the Target Grant of Performance Shares as calculated in this Section 2(a) if he achieves all or a portion of his target incentive award for a given fiscal year during the Performance Period.

          (i) Grantee will be entitled to payment of all or a portion of his Target Grant of Performance Shares during the first three years of the Performance Period as follows:

               (1) With respect to each of fiscal years 2006, 2007 and 2008, Grantee will be deemed to have earned a number of Performance Shares, if any, determined by multiplying an amount equal to one-third of the Target Grant of Performance Shares (the “Annual Target Amount”) by the percentage of the target incentive award that Grantee achieves for such fiscal year under the Annual Incentive Plan as in effect for that fiscal year, not to exceed 100%, and then rounding the resulting number up to the nearest whole number.

               (2) If Grantee achieves 100% of his target incentive award under the Annual Incentive Plan in each of fiscal years 2006, 2007 and 2008, he will be deemed to have earned 100% of the Target Grant of Performance Shares.

               (3) If Grantee earns a portion but less than 100% of the Annual Target Amount of Performance Shares with respect to any of fiscal years 2006, 2007 or 2008, Grantee shall forfeit the remaining portion of the Annual Target Amount not earned with respect to such fiscal year.

               (4) If with respect to any of fiscal years 2006, 2007 or 2008 Grantee does not earn any portion of the Annual Target Amount of Performance Shares, Grantee shall be entitled to earn all or a portion of such Performance Shares in the fourth and fifth years of the Performance Period in accordance with Section 2(a)(ii) below.

          (ii) Subject to Section 2(a)(iii), any Performance Shares not earned or not otherwise forfeited during the first three years of the Performance Period in accordance with Section 2(a)(i) will be deemed earned as follows:

               (1) With respect to each of fiscal 2009 and 2010, Grantee will be deemed to have earned a number of Performance Shares, if any, determined by multiplying the Annual Target Amount by the percentage of the target incentive award that Grantee achieves for such fiscal year under the Annual Incentive Plan as in effect for that fiscal year, not to exceed 100%, and then rounding the resulting number up to the nearest whole number.

               (2) If Grantee earns a portion but less than 100% of the Annual Target Amount of Performance Shares with respect to any of fiscal years 2009 or 2010, Grantee shall forfeit the remaining portion of the Annual Target Amount not earned with respect to such fiscal year.

               (3) If Grantee does not earn any portion of the Annual Target Amount of Performance Shares with respect to fiscal 2009, Grantee shall be entitled to earn all or a portion of such Performance Shares with respect to fiscal 2010.

          (iii) Any portion of the Target Grant of Performance Shares not earned as of the end of the Performance Period shall be forfeited and Grantee shall have no right to receive such Performance Shares. Except as contemplated by Section 7(f), in no event may Grantee earn under this Agreement more than (1) the Annual Target Amount of Performance Shares with respect to any fiscal year, (2) an aggregate of two-thirds of the Target Grant of Performance Shares with respect to fiscal 2009 and 2010, any excess to be forfeited and (3) the total Target Grant of Performance Shares.

     (b) If Grantee is deemed to have earned any of the Performance Shares as of the end of any fiscal year within the Performance Period as set forth in Section 2(a), the Company will pay Grantee in accordance with Section 4 an award of Shares equal to the number of Performance Shares so earned; provided, however, that prior to the payment of Shares pursuant to this Agreement, the Committee must certify that the objectives establishing entitlement to the payment of Shares have been achieved.

3. Awards on Certain Events . Notwithstanding the requirement in Section 2 of this Agreement that a Grantee be actively employed on the last day of any fiscal year of the Company during the Performance Period for which Grantee has earned Performance Shares, all of the Performance Shares that have not otherwise been earned or forfeited shall be deemed earned, and Shares shall be awarded pursuant to this Agreement, as of the date of (i) Grantee’s death or disability, (ii) a Change in Control (as defined in the Plan) of the Company, or (iii) a termination of Grantee’s employment by the Company “without cause”. Termination shall be deemed to be “without cause” unless the Board of Directors of the Company, or its designee, in good faith determines that termination is because of any one or more of the following:

Grantee’s: