UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934 (Amendment No.     )

Filed by the Registrant    þ

Filed by a Party other than the Registrant    ¨

Check the appropriate box:

AMERICAN GREETINGS CORPORATION

(Name of Registrant as Specified in itsIn Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

In accordance with Exchange Act Rule 0-11(c), the filing fee of $80,218 was determined by multiplying 0.0001364 by the aggregate merger consideration of $588,106,593. The aggregate merger consideration was calculated based on the sum of (i) 31,894,936 outstanding common shares (29,011,853 Class A common shares and 2,883,083 Class B common shares) as of April 10, 2013 to be acquired pursuant to the merger multiplied by the $18.20 per share merger consideration, (ii) 49,316 Class A common shares underlying certain restricted stock units held by non-employee directors to be cancelled pursuant to the merger multiplied by the $18.20 per share merger consideration, (iii) (A) 768,867 Class A common shares underlying stock options to be cancelled pursuant to the merger with an exercise price of less than $18.20 multiplied by (B) the excess of the $18.20 per share merger consideration over the weighted average exercise price of $12.94, and (iv) $2,676,966, representing an estimate of the aggregate cash payment to be made with respect to 2,411,811 options to purchase Class A common shares with an exercise price of $18.20 or higher that will be cancelled pursuant to the merger.

PRELIMINARY COPY – SUBJECT TO COMPLETION

[—], 2013

Dear Shareholder:

You are cordially invited to attend a special meeting of the Annual Meeting of Shareholdersshareholders of American Greetings Corporation. The meetingCorporation, an Ohio corporation (the “Company”), which we will be held at 2:30 p.m., Cleveland, Ohio time on Friday, June 15, 2012,hold at our World Headquarters,world headquarters, One American Road, Cleveland, Ohio 44144.44144, on [—], 2013, at [—], Cleveland, Ohio time.

At the special meeting, holders of our Class A common shares, par value $1.00 per share, and our Class B common shares, par value $1.00 per share, will be asked to consider and vote on a proposal to adopt an Agreement and Plan of Merger, dated March 29, 2013, among Century Intermediate Holding Company, a Delaware corporation (“Parent”), Century Merger Company, an Ohio corporation and wholly owned subsidiary of Parent (“Merger Sub”), and the Company (which we refer to as the “merger agreement”). Pursuant to the merger agreement, Merger Sub will be merged with and into the Company and each Class A common share and Class B common share issued and outstanding at the effective time of the merger (other than shares owned by the Company, Parent (which, at the effective time of the merger, will include “common shares” currently held by the “Family Shareholders,” as those terms are defined in the enclosed proxy statement), Merger Sub and holders of common shares who have properly demanded dissenters’ rights, which shares we refer to as “dissenting shares”) will be cancelled and converted into the right to receive $18.20, in cash, without interest.

The proposed merger is a “going private transaction” under Securities and Exchange Commission rules. If the merger is completed, the Company will become a privately held company, wholly owned by Parent. All of the common stock of Parent will be indirectly owned by Zev Weiss, a director and the Company’s Chief Executive Officer, Morry Weiss, the Company’s Chairman of the board of directors, Jeffrey Weiss, a director and the Company’s President and Chief Operating Officer, and certain other members of the Weiss family.

The board of directors of the Company, with Morry Weiss, Zev Weiss and Jeffrey Weiss (the “Family Shareholder directors”) abstaining, and based in part on the unanimous recommendation of a special committee of independent directors that was established to evaluate and negotiate a potential transaction and consider other alternatives available to the Company (as described more fully in the enclosed proxy statement), has (a) determined unanimously that the merger agreement and the merger are advisable and are fair to, and in the best interests of, the Company and its shareholders (other than the Family Shareholders, Parent and Merger Sub), including the unaffiliated shareholders, (b) approved unanimously the merger agreement and the merger, and (c) resolved unanimously to recommend that the Company’s shareholders vote “FOR” the proposal to adopt the merger agreement.The board of directors (with the Family Shareholder directors abstaining) recommends unanimously that you vote “FOR” the adoption of the merger agreement.

Pursuant to rules of the Securities and Exchange Commission, you also will be asked to vote at the special meeting on an advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger, as described in the proxy statement.The board of directors (with the Family Shareholder directors abstaining) also recommends unanimously that the shareholders of the Company vote “FOR” the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger.

The accompanying Noticeenclosed proxy statement describes the merger agreement, the merger and related agreements and provides specific information concerning the special meeting. In addition, you may obtain information about us

from documents filed with the Securities and Exchange Commission. We urge you to read the entire proxy statement, including the annexes, carefully, as it sets forth the details of Annual Meetingthe merger agreement and other important information related to the merger.

Your vote is very important, regardless of Shareholdersthe number of common shares you own. The merger cannot be completed unless holders of our issued and Proxy Statement describeoutstanding Class A common shares and Class B common shares, voting together as a single class, representing at least two-thirds of the itemsoutstanding voting power of the Company, vote in favor of the adoption of the merger agreement. Pursuant to be consideredour articles of incorporation, the Class A common shares are entitled to one vote per share and acted uponthe Class B common shares are entitled to ten votes per share. In addition, the merger agreement makes it a condition to the parties’ obligations to consummate the merger that at least a majority of our issued and outstanding Class A common shares and Class B common shares, excluding all Class A common shares and Class B common shares beneficially owned by the shareholders.Family Shareholders, the Irving I. Stone Foundation or any director or executive officer of the Company or any of its subsidiaries, voting together as a single class, vote in favor of the adoption of the merger agreement (which we refer to as the “majority of the minority” shareholder approval condition). For purposes of this majority of the minority shareholder approval condition only, Class B common shares will be entitled to one vote per share. If you fail to vote on the merger agreement, the effect will be the same as a vote against the adoption of the merger agreement.

If you own shares of record, you will find enclosed a proxy and voting instruction card or cards and an envelope in which to return the card(s). Whether or not you plan to attend this meeting, please sign, date and return your enclosed proxy and voting instruction card(s), or vote over the phone or Internet, as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. You can revoke your proxy before the Annual Meetingspecial meeting and issue a new proxy as you deem appropriate. You will find the procedures to follow if you wish to revoke your proxy on page 272 of the Proxy Statement.enclosed proxy statement. Your vote is very important. I look forward

If you are a shareholder of record, submitting a proxy will not prevent you from voting your shares in person if you subsequently choose to seeing you atattend the special meeting.

Sincerely,

                    Christopher W. Haffke

                                                           Vice President, General Counsel and Secretary

Zev WeissNeither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

Chief Executive OfficerThis proxy statement is dated [—], 2013

and is first being mailed to shareholders on or about [—], 2013.

PRELIMINARY COPY – SUBJECT TO COMPLETION

NOTICE OF ANNUALSPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of American Greetings Corporation will be held at our world headquarters at One American Road, Cleveland, Ohio 44144, on [—], 2013, at [—], Cleveland, Ohio time, for the following purposes:

The holders of record of our Class A common shares, par value $1.00 per share (the “Class A common shares”), and our Class B common shares, par value $1.00 per share (the “Class B common shares” and together with the Class A common shares, the “common shares”), at the close of business on [—], 2013, are entitled to notice of and to vote at the special meeting and at any adjournment thereof. All shareholders of record are invited to attend the special meeting in person.

Your vote is important, regardless of the number of common shares you own. The merger cannot be completed unless holders of our issued and outstanding Class A common shares and Class B common shares, voting together as a single class, representing at least two-thirds of the outstanding voting power of the Company, vote in favor of the adoption of the merger agreement (which we refer to as the “Company shareholder approval”). Pursuant to our articles of incorporation, the Class A common shares are entitled to one vote per share and the Class B common shares are entitled to ten votes per share. In addition, the merger agreement makes it a condition to the parties’ obligations to consummate the merger that at least a majority of our issued and outstanding Class A common shares and Class B common shares, excluding all Class A common shares and Class B common shares beneficially owned by the Family Shareholders, the Irving I. Stone Foundation or any director or executive officer of the Company or any of its subsidiaries, voting together as a single class, vote in favor of the adoption of the merger agreement (which we refer to as the “majority of the minority” shareholder approval condition). For purposes of this majority of the minority shareholder approval condition only, Class B common shares will be entitled to one vote per share. If you fail to vote on the merger agreement, the effect will be the same as a vote against the adoption of the merger agreement.

Each of the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to obtain the Company shareholder approval or obtain the majority of the minority shareholder approval requires the affirmative vote of holders of a majority of the votes cast at the special meeting. The Class A common shares are entitled to one vote per share, and the Class B common shares are entitled to ten votes per share on each of these proposals.

Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy and thus ensure that your shares will be represented at the special meeting if you are unable to attend. You also may submit your proxy by using a toll-free telephone number or the Internet. We have provided instructions in the enclosed proxy statement and on the proxy and voting instruction card for using these convenient services.

If you sign, date and return your proxy and voting instruction card(s) without indicating how you wish to vote, your proxy will be voted in favor of the adoption of the merger agreement, in favor of the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger, and in favor of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to obtain the Company shareholder approval or obtain the majority of the minority shareholder approval. If you fail to attend the special meeting or submit your proxy, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote against the adoption of the merger agreement. However, assuming a quorum is present, failure to vote or submit your proxy will not affect the advisory vote to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger or the vote regarding the adjournment of the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to obtain the Company shareholder approval or obtain the majority of the minority shareholder approval.

You may revoke your proxy at any time before the vote at the special meeting by following the procedures outlined in the enclosed proxy statement. If you are a shareholder of record, attend the special meeting and wish to vote in person, you may revoke your proxy and vote in person.

By order of the Board of Directors

CATHERINE M. KILBANECHRISTOPHER W. HAFFKE

Secretary

Dated May 11, 2012Dated: [—], 2013

TABLE OF CONTENTS

PROXY STATEMENT

GENERAL INFORMATION

Proxy Solicitation

The BoardThis proxy statement contains information related to a special meeting of Directorsshareholders (the “Board”“special meeting”) of American Greetings Corporation (which is referred to in this Proxy Statement as “American(“American Greetings,” the “company,“Company,” “we,” “us” or “our”) has ordered solicitation of the accompanying proxy and voting instructions in connection with the Annual Meeting of Shareholders (the “Annual Meeting”) to, which will be held on Friday, June 15, 2012 at 2:30 p.m., Cleveland time, at our World Headquarters,world headquarters at One American Road, Cleveland, Ohio 44144, on [—], 2013, at [—], Cleveland, Ohio time, and any adjournments or postponements thereof. We are furnishing this proxy statement to considershareholders of the Company as part of the solicitation of proxies by the Company’s board of directors (which we refer to as the “board of directors” or the “board”) for use at the special meeting. This proxy statement is dated [—], 2013 and act upon the matters specified in the accompanying Notice of Annual Meeting of Shareholders. Copies of this Proxy Statement and the accompanying Notice and proxy and voting instruction card, along with our Annual Report to Shareholders, areis first being sent or givenmailed to shareholders on or about May 11, 2012.[—], 2013.

SUMMARY TERM SHEET

This Summary Term Sheet discusses certain material information contained in this proxy statement, including with respect to the merger agreement, as defined below, the merger and the other agreements entered into in connection with the merger. We encourage you to read carefully this entire proxy statement, including its annexes and the documents referred to or incorporated by reference in this proxy statement, as this Summary Term Sheet may not contain all of the information that may be important to you. Each item in this Summary Term Sheet includes page references directing you to a more complete description of that item in this proxy statement.

The expenseproposed merger is a “going private transaction” under Securities and Exchange Commission rules. If the merger is completed, the Company will become a privately held company, wholly owned by Century Intermediate Holding Company. All of soliciting proxies, including the costscommon stock of preparing, assembling and mailing the Notice, Proxy Statement and proxy and voting instruction card,Century Intermediate Holding Company will be borneindirectly owned by us. Besides solicitation by mail, our officersZev Weiss, a director and the Company’s Chief Executive Officer, Morry Weiss, the Company’s Chairman of the board of directors, Jeffrey Weiss, a director and the Company’s President and Chief Operating Officer, and certain other members of the Weiss family.

The Parties to the Merger Agreement

American Greetings

American Greetings is an Ohio corporation. Founded in 1906, American Greetings operates predominantly in a single industry: the design, manufacture and sale of everyday and seasonal greeting cards and other regular employees may solicit proxiessocial expression products. We manufacture and sell greeting cards, gift packaging, party goods, stationery and giftware in North America, primarily in the United States and Canada, and throughout the world, primarily in the United Kingdom, Australia and New Zealand. In addition, our subsidiary, AG Interactive, Inc., distributes social expression products, including electronic greetings and a broad range of graphics and digital services and products, through a variety of electronic channels, including Web sites, Internet portals and electronic mobile devices. We also engage in character and design licensing, and we manufacture custom display fixtures for our products and products of others. We also operate approximately 400 card and gift retail stores throughout the United Kingdom. See “Important Information Regarding American Greetings – Company Background” beginning on page 95.

Additional information about American Greetings is contained in our public filings, certain of which are incorporated by personal interview, telephone, electronic mailreference into this proxy statement. See “Where You Can Find Additional Information” beginning on page 117.

Century Intermediate Holding Company

Century Intermediate Holding Company (“Parent”) is a Delaware corporation. Parent is currently a wholly owned subsidiary of Three-Twenty-Three Family Holdings, LLC, a Delaware limited liability company (“Family LLC”), which is currently owned by Zev Weiss, a director and facsimile. We have asked brokerage houses, banksthe Chief Executive Officer of the Company. Neither Parent nor Family LLC has engaged in any business other than in connection with the merger and other persons holding shares in nominee names to forward solicitation materialsrelated transactions. See “The Parties to the beneficial ownersMerger – Century Intermediate Holding Company” beginning on page 70.

Century Merger Company

Century Merger Company (“Merger Sub”) is an Ohio corporation. Merger Sub is a wholly owned subsidiary of Parent and was formed solely for the purpose of engaging in the merger and other related transactions. Merger Sub has not engaged in any business other than in connection with the merger and other related transactions. See “The Parties to the Merger – Century Merger Company” beginning on page 70.

The Merger Proposal

You are being asked to consider and vote upon a proposal to adopt an Agreement and Plan of Merger, dated March 29, 2013, among Parent, Merger Sub and the Company (which we refer to as the “merger agreement”). The merger agreement provides that at the closing of the merger, Merger Sub will be merged with and into the Company (which we refer to as the “merger”), and each outstanding Class A common share, par value $1.00 per share (the “Class A common shares”), and Class B common share, par value $1.00 per share (the “Class B common shares” and together with the Class A common shares, the “common shares”), other than shares owned by the Company, Parent (which, at the effective time of the merger will include common shares currently held by the Family Shareholders) and Merger Sub and holders of common shares who have properly demanded dissenters’ rights (which shares we refer to as “dissenting shares”), will be converted into the right to receive $18.20 in cash, without interest and less any applicable withholding taxes.

If the merger is consummated, the Company will become a privately held company, wholly owned by Parent. All of the common stock of Parent will be owned by Family LLC, which, immediately prior to the closing of the merger, will be owned by Zev Weiss, Morry Weiss, the Company’s Chairman of the board of directors, Jeffrey Weiss, a director and the Company’s President and Chief Operating Officer, and certain other members of the Weiss family (collectively, the “Weiss Family”), who have collectively committed to roll over all of the common shares held by such nominees,them immediately prior to the closing of the merger (which we refer to as the “rolled shares”) (which rolled shares will include the common shares contributed by Irving I. Stone Limited Liability Company (“Irving Stone LLC” and, wetogether with the Weiss Family, the “Family Shareholders”) to each of the members of the Weiss Family pursuant to a planned dissolution of Irving Stone LLC), in exchange for all of the equity interests in Family LLC, and Family LLC has, in turn, committed to contribute the rolled shares to Parent in exchange for all of the common stock of Parent. For more information, see “Special Factors –Financing – Rollover Financing” beginning on page 56. Additionally, Koch AG Investment, LLC (“Koch AG Investment”), a subsidiary of Koch Industries, Inc., will reimburse such persons for their reasonable expenses.

Howhold between $215.6 million and $254.8 million in aggregate stated value of non-voting preferred stock of Parent. This preferred stock is non-voting and does not include a right to Voteany board seats in Parent or the Company, but does have limited consent rights with respect to certain significant corporate actions proposed to be taken by Parent and the Company. For more information, see “Special Factors–Financing–Koch AG Investment Non-Voting Preferred Equity Financing” beginning on page 57.

Registered Holders.    If yourThe Special Meeting (Page 71)

The special meeting will be held at our world headquarters, which are located at One American Road, Cleveland, Ohio 44144, on [—], 2013, at [—], Cleveland, Ohio time.

Record Date and Quorum (Page 71)

The holders of record of the common shares as of the close of business on [—], 2013 (the record date for determination of shareholders entitled to notice of and to vote at the special meeting) are registered in your name, then you are a “registered holder”entitled to receive notice of and you mayto vote at the special meeting.

The presence at the special meeting, in person or by proxy. If, after readingproxy, of the proxy materials, you decideholders of common shares entitled to exercise at least 25% of the outstanding voting power of the Company on the record date will constitute a quorum, permitting the Company to conduct its business at the special meeting.

Required Shareholder Votes for the Merger (Page 71)

The merger cannot be completed unless holders of our issued and outstanding Class A common shares and Class B common shares, voting together as a single class, representing at least two-thirds of the outstanding

voting power of the Company, vote in favor of the adoption of the merger agreement (which we refer to as the “Company shareholder approval”). Pursuant to our articles of incorporation, the Class A common shares are entitled to one vote per share and the Class B common shares are entitled to ten votes per share. In addition, the merger agreement makes it a condition to the parties’ obligations to consummate the merger that at least a majority of our issued and outstanding Class A common shares and Class B common shares, excluding all Class A common shares and Class B common shares beneficially owned by the Family Shareholders, the Irving I. Stone Foundation or any director or executive officer of the Company or any of its subsidiaries, voting together as a single class, vote in favor of the adoption of the merger agreement (which we refer to as the “majority of the minority” shareholder approval condition). For purposes of this majority of the minority shareholder approval condition only, Class B common shares will be entitled to one vote per share.

A failure to vote by proxy, you may do socommon shares or an abstention from voting will have the same effect as a vote against the merger for purposes of each required shareholder vote.

The Family Shareholders and the Irving I. Stone Foundation have voting power with respect to, in the aggregate, 4,766 Class A common shares and 2,510,697 Class B common shares, representing in the aggregate 43.2% of our outstanding voting power as of May 3, 2013. As of the record date, there were [—] Class A common shares outstanding and [—] Class B common shares outstanding.

The Family Shareholders and the Irving I. Stone Foundation have agreed, subject to certain conditions, to vote all common shares that they beneficially own in favor of adopting the merger agreement, pursuant to a guaranty and voting agreement entered into with the Company on March 29, 2013 (which we refer to as the “guaranty and voting agreement”). See “Agreements Involving Common Shares – Guaranty and Voting Agreement” beginning on page 94.

Except in their capacities as members of the board of directors or as members of the special committee of independent directors that was established to evaluate and negotiate a potential transaction and consider other alternatives available to the Company (as described more fully under “Special Factors – Background of the Merger” below and which we refer to as the “special committee”), no executive officer or director of the Company has made any ONErecommendation either in support of or in opposition to the merger or the merger agreement. Morry Weiss, Zev Weiss and Jeffrey Weiss (who we collectively refer to as the “Family Shareholder directors”) recused themselves from the vote of the board of directors to approve and recommend the merger agreement and the merger.

Conditions to the Merger (Page 90)

The obligations of the Company, Parent and Merger Sub to effect the merger are subject to the fulfillment or waiver, at or before the effective time, of the following three ways:conditions:

The obligation of the Company to effect the merger is subject to the fulfillment or waiver, at or before to the effective time, of the following conditions:

or material adverse effect qualifier) does not have, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect (as defined below) with respect to Parent and except that representations and warranties that are made as of a specified date or period need be true and correct only as of that specified date or period;

The obligation of Parent and Merger Sub to effect the merger is subject to the fulfillment or waiver, at or before the effective time, of the following conditions:

When the Merger Becomes Effective (Page 77)

We anticipate completing the merger in the third calendar quarter of 2013, subject to adoption of the merger agreement by the Company’s shareholders as specified herein and the satisfaction of the other closing conditions.

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger (Page 33)

Based in part on the unanimous recommendation of the special committee, the board of directors (with the Family Shareholder directors abstaining) recommends unanimously that the shareholders of the Company vote

“FOR” the proposal to adopt the merger agreement. For a description of the reasons considered by the special committee and the board for their recommendations, see “Special Factors – Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger” beginning on page 33.

The purpose of the merger for the Company is to enable its shareholders to realize the value of their investment in the Company through their receipt of the $18.20 per share merger consideration (the “per share merger consideration”) in cash, representing a premium of 13.0% to the closing price of the Class A common shares on March 28, 2013, the last trading day before the public announcement of the signing of the merger agreement, as well as a premium of 26.9% to the closing price of the Class A common shares on September 25, 2012, the last trading day before the announcement by the Weiss Family of their initial proposal to acquire the Company.

Opinion of Peter J. Solomon Company, L.P. (Page 40 and Annex B)

The special committee retained Peter J. Solomon Company, L.P. (“PJSC”) to act as its financial advisor in connection with the merger and to evaluate the fairness, from a financial point of view, of the merger consideration to be received in the merger by holders of the Class A common shares and Class B common shares (other than Family Shareholders, the Company, Merger Sub and holders of dissenting shares).

On March 28, 2013, at a meeting of the special committee held to evaluate the merger, PJSC delivered to the special committee an oral opinion, subsequently delivered to the board of directors, confirmed by delivery of a written opinion dated March 28, 2013 to the special committee and the board of directors, to the effect that, as of such date and based on and subject to various assumptions and limitations described in its opinion, the $18.20 per share merger consideration to be received by holders of Class A common shares and Class B common shares (other than Family Shareholders, the Company, Merger Sub and holders of dissenting shares) was fair, from a financial point of view, to such holders.

The full text of PJSC’s written opinion, dated March 28, 2013, to the special committee and the board of directors, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement. PJSC provided its opinion for the information and assistance of the special committee and the board of directors in connection with their consideration of the merger. The PJSC opinion is not a recommendation as to how any holder of Class A common shares or Class B common shares should vote with respect to the merger or any other matter.

Purposes and Reasons of Family LLC, Parent, Merger Sub and the Family Shareholders for the Merger (Page 48)

1.  The Weiss Family decided to pursue the merger because it believes that it is time to return the Company to its roots as a family-owned business. The Weiss Family believes that the Company can be operated more effectively as a privately owned company because the Company will have greater operating flexibility, allowing management to concentrate on long-term growth and reduce the focus on the quarter-to-quarter performance often emphasized by the public markets. For a full description of the purposes and reasons of Family LLC, Parent, Merger Sub and the Family Shareholders, see “Special Factors – Purposes and Reasons of Family LLC, Parent, Merger Sub and the Family Shareholders for the Merger” beginning on page 48.

Certain Effects of the Merger (Page 52)

If the conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the Company, the separate corporate existence of Merger Sub will cease and the Company will continue its corporate existence under Ohio law as the surviving corporation in the merger, with all of its rights, privileges, immunities, powers and franchises continuing unaffected by the merger. Upon completion of the merger, common shares, other than shares owned by the Company, Parent (including the rolled shares), Merger Sub or holders of dissenting shares, will be converted into the right to receive $18.20 per share, without interest and less any applicable withholding taxes. Following the completion of the merger, the common shares will no longer be publicly traded, and shareholders (other than the Family Shareholders through their interest in Parent) will cease to have any ownership interest in the Company.

Treatment of Company Equity Awards (Page 77)

Company Stock Options

Each option to purchase common shares, if any, held by any of the Family Shareholders immediately prior to the closing of the merger will be cancelled at the closing of the merger without the payment of any consideration.

Each other option to purchase common shares outstanding immediately prior to the closing of the merger will be cancelled at the closing of the merger in exchange for a cash payment. For any option with a per share exercise price less than $18.20, the cash payment will equal the product of (x) the excess of $18.20 over the per share exercise price and (y) the number of Company common shares subject to that option immediately prior to its cancellation. For any option with a per share exercise price that equals or exceeds $18.20, the amount of the cash payment will be based on the Black-Scholes value of the option using certain assumptions specified in the merger agreement.

Company Restricted Stock Units and Company Performance Shares

Each restricted stock unit and each performance share relating to common shares, if any, held by any of the Family Shareholders immediately prior to the closing of the merger will be cancelled at the closing of the merger without the payment of any consideration.

Each restricted stock unit held by a member of the board of directors (other than a Family Shareholder director) and outstanding immediately prior to the closing of the merger will fully vest and be settled for a cash payment equal to $18.20 and paid at the time provided under the applicable restricted stock unit award agreement and/or Company equity plan.

Each other restricted stock unit and performance share outstanding immediately prior to the closing of the merger will continue to be subject to the same terms and conditions (including vesting terms) as applied immediately before the closing of the merger, except that the applicable award will represent only the right to receive an amount of cash, instead of common shares, calculated by reference to a per share reference price of $18.20.

Interests of the Company’s Directors and Executive Officers in the Merger (Page 62)

In considering the recommendations of the special committee and of the board of directors with respect to the merger agreement, you should be aware that, aside from their interests as shareholders of the Company, the Company’s directors and executive officers have interests in the merger that are different from, or in addition to, those of other shareholders of the Company generally. In particular, the Family Shareholder directors will, together with the other Family Shareholders and related persons, control the Company following the merger. Interests of executive officers and directors other than the Family Shareholders that may be different from or in addition to the interests of the Company’s shareholders include:

These interests are discussed in more detail in the section entitled “Special Factors – Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 62. The special committee and

the board of directors were aware of the different or additional interests described herein and considered those interests along with other matters in recommending and/or approving, as applicable, the merger agreement and the transactions contemplated thereby, including the merger.

Financing (Page 56)

The Company and Parent estimate that the total amount of funds (including rollover equity) required to complete the merger and related transactions and pay related fees and expenses will be approximately $700 million. Parent expects this amount to be provided by a combination of proceeds from:

together with cash of the Company at the closing of the merger. The financing described above, when funded in accordance with the Preferred Stock Purchase Agreement, the Debt Commitment Letter and the rollover and contribution agreement (each as defined in “Special Factors – Financing”), as applicable, will provide Parent and Merger Sub with sufficient proceeds to consummate the merger.

Guaranty and Voting Agreement (Page 94)

In connection with the merger, the Family Shareholders, the Irving I. Stone Foundation and the Company entered into the guaranty and voting agreement through which (i) the Family Shareholder directors have, jointly and severally, guaranteed to the Company the obligations of Parent and Merger Sub under the merger agreement, subject to a maximum aggregate liability of $7.3 million, and (ii) each Family Shareholder and the Irving I. Stone Foundation has agreed to vote (or cause to be voted) all common shares over which they have voting power (representing 43.2% of the Company’s total outstanding voting power as of May 3, 2013) in favor of the adoption of the merger agreement and has waived any rights of appraisal or rights of dissent from the merger that are available under applicable law, unless either of the board of directors or the special committee has changed its recommendation or failed to make a recommendation with respect to the merger agreement. See “Agreements Involving Common Shares – Guaranty and Voting Agreement” beginning on page 94.

Material U.S. Federal Income Tax Consequences of the Merger (Page 65)

If you are a U.S. holder, the receipt of cash in exchange for common shares pursuant to the merger will generally be a taxable transaction for U.S. federal income tax purposes. You should consult your own tax advisors regarding the particular tax consequences to you of the exchange of common shares for cash pursuant to the merger in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws).

Anticipated Accounting Treatment of the Merger (Page 67)

The merger will be accounted for in accordance with U.S. generally accepted accounting principles. The Company is currently researching whether the merger constitutes a change of control under U.S. generally accepted accounting principles, which will impact whether the purchase method of accounting or historical book values will be used to account for the transaction.

Litigation (Page 67)

On September 26, 2012, the Company announced that the board of directors had received a non-binding proposal (the “proposal”) dated September 25, 2012 from Zev Weiss, our Chief Executive Officer, and Jeffrey Weiss, our President and Chief Operating Officer, on behalf of themselves and certain other members of the Weiss Family and related parties, to acquire all of the outstanding Class A common shares and Class B common shares not then owned by them for $17.18 per share. On September 27, 2012, Dolores Carter, a purported

shareholder, filed a putative shareholder derivative and class action lawsuit (the “Carter Action”) in the Court of Common Pleas in Cuyahoga County, Ohio (the “Cuyahoga County Court”), against American Greetings Corporation and all of the members of the board of directors. The Carter Action alleged, among other things, that the directors of the Company breached their fiduciary duties owed to shareholders in evaluating and pursuing the proposal. The Carter Action further alleged claims for aiding and abetting breaches of fiduciary duty. Among other things, the Carter Action sought declaratory, injunctive, and other equitable relief.

Subsequently, six more lawsuits were filed in the Cuyahoga County Court purporting to advance substantially similar claims on behalf of American Greetings against the members of the board of directors and, in certain cases, additional direct claims against American Greetings. One lawsuit was voluntarily dismissed. The other lawsuits were consolidated by Judge Richard J. McMonagle on December 6, 2012 (amended order dated December 18, 2012) as In re American Greetings Corp. Shareholder Litigation, Lead Case No. CV 12 792421. Lead Plaintiffs and Lead Plaintiffs’ Counsel also were appointed.

Lead Plaintiffs filed a Consolidated Class Action Complaint on April 30, 2013 against the members of the American Greetings board of directors for alleged breaches of fiduciary duty and aiding and abetting alleged breaches of fiduciary duty in connection with the merger agreement announced on April 1, 2013 and the alleged omission of material information from the preliminary proxy statement filed on April 18, 2013. The Consolidated Class Action Complaint seeks, among other things, declaratory, injunctive, and other equitable relief.

On November 6, 2012, R. David Wolfe, a purported shareholder, filed a putative class action (the “Wolfe I Action”) in the United States District Court for the Northern District of Ohio (the “Federal Court”) against certain members of the Weiss Family and the Irving I. Stone Oversight Trust, the Irving Stone Limited Liability Company, the Irving I. Stone Support Foundation, and the Irving I. Stone Foundation alleging breach of fiduciary duties in proposing and pursuing the proposal, as well as against American Greetings, seeking, among other things, declaratory, injunctive, and other equitable relief. Shortly thereafter, on November 9, 2012, the Louisiana Municipal Police Employees’ Retirement System also filed a purported class action in the Federal Court (the “LMPERS Action”) asserting substantially similar claims against the same defendants and seeking substantially similar relief.

Plaintiffs in the Wolfe I and LMPERS Actions filed motions (1) to consolidate the Wolfe I and LMPERS Actions, (2) for appointment as co-lead plaintiffs, (3) for appointment of co-lead counsel, and, in the Wolfe I Action only, (4) for partial summary judgment. Defendants responded to plaintiffs’ motions, answered the complaints, and moved to dismiss the complaints on jurisdictional grounds. On February 14, 2013, the Federal Court dismissed both the Wolfe I and LMPERS Actions for lack of subject matter jurisdiction. On March 15, 2013, plaintiffs in both the Wolfe I and LMPERS Actions filed notices of appeal with the Sixth Circuit Court of Appeals. On April 18, 2013, plaintiff Wolfe moved to dismiss his appeal, which motion was granted on April 19, 2013. On May 8, 2013, plaintiff LMPERS’s appeal also was dismissed.

Plaintiffs in the Wolfe I and LMPERS Actions had alleged, in part, that Article Seventh of the Company’s articles of incorporation prohibited the special committee from, among other things, evaluating the merger. The Company considered these allegations and concluded that the Article is co-extensive with Ohio law and thus allows the Company to engage in any activity authorized by Ohio law. The Company also has consistently construed Article Seventh as permitting directors to approve a transaction so long as they are both disinterested and independent.

On April 17, 2013, R. David Wolfe filed a new putative shareholder derivative and class action lawsuit in the Federal Court (the “Wolfe II Action”) against certain members of the Weiss Family, the Irving I. Stone Oversight Trust, the Irving Stone Limited Liability Company, the Irving I. Stone Support Foundation, the Irving I. Stone Foundation, and the members of the Company’s board of directors, as well as American Greetings as nominal defendant, challenging the merger as financially and procedurally unfair to the Company and its minority shareholders. The complaint alleged, among other things, that Article Seventh of the Company’s articles of incorporation prohibited the special committee from, among other things, evaluating the merger, that the board

breached its fiduciary duties in considering and approving the merger, and that certain members of the Weiss Family and related entities breached fiduciary duties owed to the Company’s minority shareholders. On April 29, 2013, an amended complaint was filed incorporating additional allegations and a claim that the director defendants also have breached their fiduciary duties by failing to disclose certain information to shareholders. Among other things, the Wolfe II Action seeks substantially the same declaratory, injunctive, and other equitable relief as the Wolfe I Action, the LMPERS Action, and In re American Greetings Corp. Shareholder Litigation.

The Company believes that the allegations in these actions, including the claims in the litigation concerning the Company’s articles of incorporation, are without merit.

Dissenters’ Rights (Page 112 and Annex C)

If the merger is completed, holders of common shares who do not vote in favor of adopting the merger agreement will be entitled to seek relief as dissenting shareholders under Section 1701.85 of the Ohio Revised Code, which will include the right to seek appraisal of the fair cash value of their shares as determined by the Court of Common Pleas in Cuyahoga County, Ohio, but only if they comply with the Ohio law procedures applicable to those dissenting shareholders’ rights. The appraised value of common shares could be more, the same as, or less than the $18.20 per share that shareholders are entitled to receive pursuant to the merger agreement.

SECTION 1701.85 OF THE OHIO REVISED CODE GOVERNING THE RIGHTS OF DISSENTING SHAREHOLDERS IS REPRINTED IN ITS ENTIRETY AS ANNEX C TO THIS PROXY STATEMENT. ANY AMERICAN GREETINGS SHAREHOLDER WHO WISHES TO EXERCISE DISSENTING SHAREHOLDERS’ RIGHTS OR WHO WISHES TO PRESERVE HIS, HER, OR ITS RIGHT TO DO SO SHOULD REVIEW ANNEX C CAREFULLY AND SHOULD CONSULT HIS, HER, OR ITS LEGAL ADVISOR, BECAUSE FAILURE TO TIMELY COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF THOSE RIGHTS.

No Solicitation (Page 83)

Pursuant to the merger agreement, except as described below, the Company will not, nor will it authorize or permit any of its subsidiaries to, and will use its reasonable best efforts to instruct and cause any of its or their respective officers, directors, employees, agents and representatives, not to, directly or indirectly:

If, prior to the receipt of the Company shareholder approval and the majority of the minority shareholder approval, (i) the Company receives an unsolicited alternative proposal, (ii) the Company has not breached its obligations under the non-solicitation provisions of the merger agreement (except where such breaches did not contribute to the making of the alternative proposal), (iii) the board (acting through the special committee) determines in good faith that the alternative proposal constitutes or is reasonably likely to result in a “superior proposal,” as described in the section entitled “The Merger Agreement – Other Covenants and Agreements – No Solicitation” beginning on page 83, and (iv) after consultation with its counsel, the board (acting through the special committee) determines in good faith that failure to take action concerning an alternative proposal would be inconsistent with the directors’ fiduciary duties under applicable Ohio law, then the Company may:

The Company must promptly provide to Parent any non-public information concerning the Company or any of its subsidiaries that is provided to the person making the alternative proposal or its representatives that was not previously provided or made available to Parent.

The Company must promptly (and in any event within 48 hours) advise Parent orally and in writing of (i) any alternative proposal or inquiry with respect to or that would reasonably be expected to lead to any alternative proposal and (ii) any inquiry or request for discussion or negotiation regarding an alternative proposal including, in each case, the identity of the party making the alternative proposal or inquiry and the material terms of the alternative proposal or inquiry (including, if applicable, copies of any document or correspondence evidencing the alternative proposal or inquiry). The Company, upon the request of Parent, will keep Parent reasonably informed of the status (including any material change to the terms) of any such alternative proposal or inquiry.

Except as described below, neither the board of directors nor any committee thereof is permitted to:

At any time prior to obtaining the required votes of the Company shareholders, the special committee may:

Agreement – Other Covenants and Agreements – No Solicitation”beginning on page 83, an “intervening event”), if the special committee determines in good faith, after consultation with its counsel, that the failure to do so would be inconsistent with the directors’ fiduciary duties under Ohio law; or

Termination (Page 91)

The Company (authorized by the special committee) and Parent may terminate the merger agreement by mutual written consent at any time before the completion of the merger, whether prior to or after receipt of the Company shareholder approval and the majority of the minority shareholder approval. In addition, either the Company (with the prior approval of the special committee) or Parent may terminate the merger agreement if:

The Company (with the prior approval of the special committee) may terminate the merger agreement:

•

prior to the approval of the merger agreement by our shareholders, in order to concurrently enter into a definitive agreement with respect to a superior proposal, but only if the Company has complied in all material respects with its obligations described in “The Merger Agreement – Other Covenants and Agreements – No Solicitation” beginning on page 83.

Parent may terminate the merger agreement:

Expense Reimbursement Provisions (Page 92)

The Company will pay to Parent an amount equal to the sum of Parent’s and Merger Sub’s expenses up to $7.3 million if:

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special meeting, the merger agreement and the merger. These questions and answers may not address all questions that may be important to you as a shareholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

Foundation or any director or executive officer of the Company or any of its subsidiaries, voting together as a single class, vote in favor of the adoption of the merger agreement (which we refer to as the “majority of the minority” shareholder approval condition). For purposes of this majority of the minority shareholder approval condition only, Class B common shares will be entitled to one vote per share.

The Family Shareholders and the Irving I. Stone Foundation have voting power with respect to, in the aggregate, 4,766 Class A common shares and 2,510,697 Class B common shares, representing in the aggregate 43.2% of our outstanding voting power as of May 3, 2013. As of the record date, there were [—] Class A common shares issued and outstanding and [—] Class B common shares issued and outstanding.

The Family Shareholders and the Irving I. Stone Foundation have agreed, subject to certain conditions, to vote all common shares that they beneficially own in favor of adopting the merger agreement, pursuant to the guaranty and voting agreement. See “By telephone.Agreements Involving Common Shares – Guaranty and Voting Agreement” on page 94.

Each of the directors and executive officers of the Company has informed the Company that as of the date of this proxy statement, he or she intends to vote in favor of the adoption of the merger agreement.

You should read “Special Factors – Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger” beginning on page 33 for a discussion of the factors that the special committee and the board of directors (with the Family Shareholder directors abstaining) considered in deciding to recommend and/or approve, as applicable, the merger agreement. See also “Special Factors – Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 62.

Following the consummation of the merger, the registration of the common shares and our reporting obligations with respect to the common shares under the Exchange Act will be terminated upon application to the Securities and Exchange Commission (“SEC”). In addition, upon the consummation of the merger, the Class A common shares will no longer be listed on any stock exchange or quotation system, including the NYSE. We expect, however, that we will continue to file reports with the SEC pursuant to requirements contained in the indenture with respect to our 7.375% senior notes due 2021 (the “2021 senior notes indenture”).

If you are a shareholder of record, you can ensure that your shares are voted at the special meeting by submitting your proxy via:

3.  By mail.    You may mark, sign

If you hold your shares in “street name” through a broker, bank or other nominee, you should follow the directions provided by it regarding how to instruct it to vote your shares. Without those instructions, your shares will not need to mailbe voted, which will have the proxy andsame effect as voting instruction card if you have voted by telephone or over the Internet.

The Internet and telephone voting procedures are designed to authenticate votes cast and allow shareholders to appoint a proxy and to confirm that their actions have been properly recorded. Specific voting instructions are set forth on the accompanying proxy and voting instruction card.

Participants in the Retirement Profit Sharing and Savings Plan.    Oneagainst adoption of the investment alternativesmerger agreement.

If you are a participant in the American Greetings Retirement Profit Sharing and Savings Plan is a fund consisting of our Class A common shares. Participants investing in the American Greetings stock fund are allocated units that represent an interest in such shares. Ifand you invest in the American Greetings stock fund of the Retirement Profit Sharing and Savings Plan, the plan’s independent trustee, Vanguard Fiduciary Trust Company, will vote the Class A common shares allocated to your account according to your directions. Participants may give voting directions to the plan trustee in any ONEone of the three ways set forth above under “Registered Holders.” The trustee will vote shares for which it has not receivedwith respect to record shareholders.

Q:

Can I revoke my proxy and voting instructions?

Yes. You can revoke your proxy and voting instructions in accordance with instructions that it receives from us. We will directat any time before your proxy is voted at the trustee based on the direction of the plan’s administrative committee, which is a committee consisting of our employees.

Nominee Shares.special meeting. If you are a beneficial ownershareholder of record, you may revoke your proxy by notifying the Company’s Secretary in writing at One American Road, Cleveland, Ohio 44144, by submitting a new proxy by telephone, the Internet or mail, in each case, dated after the date of the proxy being revoked, or by attending the special meeting and voting in person (but simply attending the special meeting will not cause your proxy to be revoked). Participants in our Retirement Profit Sharing and Savings Plan may revoke voting instructions in the same manner as shareholders of record, except that they may not do so by attending the special meeting and voting in person.

Please note that if you hold your shares held in “street name” throughand you have instructed a broker, bank or other nominee that holds the shares on your behalf, you mayto vote in person at the Annual Meeting by obtaining a legal proxy from the nominee that holds your shares. In addition to voting in person, you may vote by proxy by completing and signing the voting instruction card provided to you by the nominee that holds your shares, or by voting via the Internet or by telephone as permitted by the nominee that holdsabove-described options for revoking your shares. As a beneficial owner, in order to ensure your shares are voted, youmust provide voting instructions to the broker, bank or other nominee by the deadline provided in the materials you receive from them. Because the election of directors at the Annual Meeting is considered a non-routine matter under the rules of the New York Stock Exchange (“NYSE”), brokers, banks or other nomineesmay not vote on this matter unless they have received specific voting instructions from beneficial owners. Such shares that brokers do not haveapply, and instead you must follow the authority to vote in the absence of timely instructions received from the beneficial owners result in what is commonly referred to as “broker non-votes.”

Changing or Revoking Your Proxy

You have the right to change or revoke your proxy prior to the closing of the polls as indicated on your proxy and voting instruction card and may do so in any one of the following four ways:

1.  send a written notice to the American Greetings’ Secretary stating that you want to change your proxy vote;

2.  submit a properly signed proxy and voting instruction card with a later date;

3.  enter later-dated telephone or Internet voting instructions; or

4.  vote in person at the Annual Meeting.NOTE: Because your Retirement Profit Sharing and Savings Plan shares are held in a qualified plan, you are not able to vote the shares allocated to your account in the plan in person at the Annual Meeting.

Your presence at the Annual Meeting, without more, will not revoke your proxy. However, you may revoke your proxy in the manner described above at any time before it has been exercised.

If you plan to attend the Annual Meeting, please check the attendance box on the enclosed proxy and voting instruction card or indicate so when prompted if you are voting by telephone or over the Internet.

If you are a beneficial shareholder only, that is if your shares are not registered in your name but are held by a broker, bank or other nominee, you will have to check with your broker, bank or other nominee to determine how to changerevoke your vote. Also note that if you plan to attend the Annual Meeting, you will not be able to vote in person at the meeting any of your shares held by a nominee unless you have a valid proxy from the nominee.

Cumulative Voting

If cumulative voting is invoked as described below, a shareholder may cumulate votes for the election of a director nominee by casting a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the shareholder is entitled. The shareholder also may distribute his or her votes between or among two or more nominees on the same basis.

Shareholders have cumulative voting rights in the election of directors if:

(i)  any shareholder gives notice in writing to the President, a Vice President or the Secretary of American Greetings, not less than 48 hours before the time fixed for the holding of the Annual Meeting, that he or she desires that the voting at such Annual Meeting be cumulative, and

(ii)  an announcement that a shareholder has given American Greetings notice of cumulative voting is made upon the convening of the Annual Meeting by the Chairman of the Board or the Secretary or by or on behalf of the shareholder giving such notice.

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Unless otherwise indicated by the shareholder, where cumulative voting is invoked, the persons named in the accompanying proxy and voting instruction card will vote, in their discretion, for one or more of the nominees for whom authority to so vote was not withheld and will cumulate votes so as to elect the maximum number of nominees proposed by the Board.

If cumulative voting is not invoked at the Annual Meeting with respect to the election of directors, the proxies will vote the number of shares on the proxy and voting instruction card for only those Board nominees for whom authority has not been withheld.

How Shares Will Be Voted

The shares represented by your proxy will be voted in accordance with your instructions indicated on the proxy and voting instruction card or with the instructions you provided by telephone or over the Internet. If you return an executed proxy and voting instruction card without any such instructions, the shares represented by your proxy will be voted in accordance with the Board’s recommendations.

Required Vote

The presence at the Annual Meeting, either in person or by proxy, of the holders of not less than 25% of the total voting power of American Greetings on the record date will represent a quorum, permitting the conduct of business at the meeting.

The nominees for election as directors who receive the greatest number of votes cast for the election of directors at the meeting by the shares present in person or by proxy and entitled to vote will be elected directors. If you withhold your vote from one or more of the nominees, the vote will be treated as present at the meeting for purposes of determining a quorum; however, broker non-votes with respect to one or more nominees will not be treated as present for purposes of determining a quorum. Neither withhold from voting votes nor broker non-votes will be counted as votes cast with respect to the election of one or more directors and, accordingly, will have no effect on the outcome of the vote.

Voting Securities and Record Date

As of April 30, 2012, there were outstanding, excluding treasury shares which cannot be voted, 32,256,484 Class A common shares entitled to one vote per share and 2,842,748 Class B common shares entitled to ten votes per share upon all matters presented to the shareholders.

Holders of record of such shares at the close of business on April 30, 2012 are the only shareholders entitled to notice of and to vote at the Annual Meeting and any adjournments thereof.

Shares Included on the Proxy and Voting Instruction Card

If you are both a registered shareholder of American Greetings and hold shares through the Retirement Profit Sharing and Savings Plan, you may have received one proxy and voting instruction card that shows all American Greetings common shares registered in your name, including all shares you have (based on the units credited to your account) under the Retirement Profit Sharing and Savings Plan. Accordingly, your proxy and voting instruction card also serves as your voting directions to the independent trustee of the Retirement Profit Sharing and Savings Plan.

Please note, however, that unless the identical name or names appeared on all your accounts, we were not able to consolidate your share information. If that was the case, you received more than one proxy and voting instruction card and must vote each separately.

If your shares are held through a broker, bank or other nominee, you will receive either a voting form or a proxy card from the nominee with specific instructions about the voting methods available to you. As a beneficial owner, in order to ensure your shares are voted, youmust provide voting instructions to the broker, bank or other nominee by the deadline provided in the materials you receive from them. Under the rules

Georgeson Inc.

480 Washington Blvd.

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Toll Free: (888) 660-8331

If your broker, bank or other nominee holds your shares, you can also call your broker, bank or other nominee for additional information.

SPECIAL FACTORS

Background of the NYSE, your broker cannot vote your shares onMerger

The Family Shareholders are related to Jacob Sapirstein, who founded the election of directors if you do not timely provide instructions for voting your shares.

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CORPORATE GOVERNANCE

Company’s business over a century ago. From time to time, the Family Shareholders elect(including Messrs. Morry, Zev, Jeffrey and Gary Weiss, who are actively involved in the membersCompany’s business) evaluate the state and direction of the Board to oversee their interests in the long-term health, the overall success and the financial strength of our business. The Board serves as our ultimate decision-making body, except for those matters reserved to or shared with the shareholders. The Board selects and oversees the members of senior management who are charged by the Board with conducting our business.

The Board follows, both formally and informally, corporate governance principles designed to assure that, through its membership, composition, and committee structure, the Board is able to provide us informed, competent and independent oversight. The Board reviews and, as appropriate,Company. Similarly, from time to time revises our corporate governance policiesthe senior management of the Company and committee chartersthe board of directors, including the Family Shareholder directors, evaluate options available to assurethe Company, including plans for growth, cost savings measures, the Company’s dividend policy and share repurchases. After careful consideration, the Family Shareholders determined on September 25, 2012 that the Board continuesbest course of action would be for the Company to meet fullyreturn to its responsibilities to our shareholders. Below isroots as a descriptionfamily-owned business. For more information, see “Special Factors – Purposes and Reasons of Family LLC, Parent, Merger Sub and the Family Shareholders for the Merger” beginning on page 48.

On the evening of September 25, 2012, the board received a written, non-binding proposal from Messrs. Zev and Jeffrey Weiss on behalf of the measures in placeFamily Shareholders to assureacquire all the Class A common shares and Class B common shares not owned by the Family Shareholders for a price of $17.18 per share. In the Family Shareholders’ letter to the board, the Family Shareholders stated that objectivethey had no current intention to sell all or any significant part of their common shares. The letter also stated that the Family Shareholders recognized that the independent directors of the Company would need to review the proposal and that the proposal was subject to a determination by the independent directors that the proposal is achieved.fair. The letter also stated that the proposal was subject to the finalization of financing (including the entering into of definitive agreements by the Family Shareholders and entering into definitive debt financing documents) and the entry into of definitive transaction documents.

Corporate Governance Guidelines

The Board has adopted corporate governance guidelines,On September 26, 2012, the Company issued a press release announcing the Family Shareholders’ proposal, and certain of the Family Shareholders filed a joint Schedule 13D with the Securities and Exchange Commission, which may be foundincluded as an exhibit the letter to the board that is described in the investors sectionpreceding paragraph.

On September 27, 2012, at a special meeting of our Web site at www.corporate.americangreetings.com. These corporate governance guidelinesthe board that included only those directors who are intendednot Family Shareholders, whom we refer to assistin this proxy statement as the Board“independent directors,” the independent directors met with representatives of Baker & Hostetler LLP (“Baker & Hostetler”), outside counsel to the Company. Representatives of Baker & Hostetler reviewed with the independent directors their fiduciary duties in respect of the proposal, and discussed with the independent directors the approach for establishing a special committee of independent and disinterested directors to consider and act with respect to the proposal, as well as the standard for independence that should be used to evaluate a director’s ability to serve on the special committee. Representatives of Baker & Hostetler, along with Ms. Catherine Kilbane, then general counsel to the Company, encouraged the independent directors to discuss any factors that might have a bearing on the independence of a special committee member. Representatives of Baker & Hostetler also reviewed with the independent directors the process for the special committee to consider and select its own counsel and financial advisors and the types of issues the independent directors might expect to encounter in connection with the Family Shareholders’ September 25, 2012 proposal.

Also on September 27, 2012, a shareholder lawsuit was filed against the Company and each of its directors in the exerciseCourt of its responsibilitiesCommon Pleas in Cuyahoga County, Ohio, relating to the Family Shareholders’ proposal. The complaint alleged, among other things, breaches of fiduciary duties by the Company’s directors for pursuing the proposal contemplated by the Family Shareholders’ proposal letter and to serve bestfor putting their personal interests ahead of the interests of the company andCompany.

On September 28, 2012, the Company reported its shareholders. The guidelines aim to assure that director qualifications, committee structure and overall board processes provide good corporate governance and independent oversightearnings for the second quarter of management.its 2013 fiscal year, which included a net loss of $4.3 million, or $0.13 per share (on a fully-diluted basis).

Code of Business Conduct and Ethics

The Board has adoptedOn September 30, 2012, at a code of business conduct and ethics to govern our directors, executive officers and employees, including the principal executive officer, the principal financial officer and the principal accounting officer. A current copyspecial meeting of the code is available on our Web siteboard at www.corporate.americangreetings.com. We will disclose any future amendments to, or waivers from, certain provisionswhich all but one of the codeindependent directors were in attendance and in which the Family Shareholder directors did not participate, the board established a special committee to consider and act with respect to the Family Shareholders’ proposal. Following disclosure by the directors of business conduct and ethics for executive officers and directors on our Web site.

Independent Directors

The NYSE rules require listed companies toany factors that might have a board of directors with at least a majority of independent directors. Under the NYSE rules, a director qualifies as “independent” upon the Board’s affirmative determination that the director has no material relationship with American Greetings (either directly or as a partner, shareholder or officer of an organization that has a relationship with American Greetings). In assessing the materiality of a relationship, the Board broadly considers all relevant facts and circumstances. In addition to the independence standards established by the NYSE, we have adopted additional criteria for determining whether our directors, including the directors servingbearing on each of our Audit Committee, Compensation and Management Development Committee (which we also refer to herein as the “Compensation Committee”) and Nominating and Corporate Governance Committee (which we also refer to herein as the “Nominating Committee”) are independent. These additional criteria are set forth in our corporate governance guidelines, which may be found in the investors section of our Web site at www.corporate.americangreetings.com. Under our corporate governance guidelines, at least two-thirds of our directors must also satisfy these additional independence criteria. The Board has determined that Drs. Cowen and Thornton and Messrs. Dunn, MacDonald, Merriman and Ratner are independent under the NYSE rules and under the additional standards described in our corporate governance guidelines. In the course of the Board’s determination regarding the independence of a special committee member, the board appointed Dr. Scott S. Cowen and Messrs. William E. MacDonald, III, Jeffrey D. Dunn and Michael J.

Merriman, Jr., to the special committee, each non-management director,of whom the Board considered the following transactions, relationships and arrangements in determining that the director is independent:

1.board determined to be independent, with Dr. Cowen is a director of,appointed to serve as the chair. The special committee was delegated the exclusive power and Mr. Ratner is chairman of the board, a greater than 10% shareholder and the former president and chief executive officer of, Forest City Enterprises. A subsidiary of Forest City Enterprises rents retail store space in various shopping malls to us pursuant to lease agreements in the ordinary course of business. We sold our retail store operations to Schurman Fine Papers in April 2009, and since the time of the sale, we have subleased or assigned the retail store locations to Schurman Fine Papers. In addition, Mr. Ratner has a 10% indirect ownership interest, through a trust, in a Cleveland,

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Ohio shopping mall that leased space to us for one retail store that is now under sublease to Schurman Fine Papers. During fiscal 2010, 2011 and a portion of fiscal 2012, that shopping mall was managed by RMS Investment Corporation (“RMS”). Each of Mr. Ratner’s four children has a 4.28% ownership interest in RMS.

2.  Dr. Thornton is a memberauthority of the board of directors to, among other things: review and evaluate the advisability of Applied Industrial Technologies, Inc., a company from which we purchase productsthe proposal; identify, review and services from timeevaluate other alternatives available to timethe Company; recommend, reject or seek to modify the terms of the proposal or any other alternatives available to the Company; if considered appropriate or advisable by the special committee, negotiate the price, structure, form, terms and conditions of the proposal or any alternative thereto and the form, terms and conditions of any definitive agreements in connection with the proposal or other alternative; determine whether the proposal or any alternative thereto is fair to, and in the ordinary course of business. Until February 2012, Mr. Dunn was the Chief Executive Officer and owner of 5%best interests of, the common equityCompany and its shareholders; and recommend to the full board what action, if any, should be taken by the Company with respect to the proposal or any alternative thereto.

The board also authorized the special committee to retain the services of HIT Entertainment Limited, a company from which we license certain character properties in the ordinary course of business.

3.  We made discretionary charitable contributions to charitableits own legal, financial and other non-profit organizations whereadvisors, at the Company’s expense. At the request of the special committee, the Company’s management (other than any Family Shareholders) evaluated numerous legal and financial advisors for these roles in order to identify firms that could present an actual or perceived conflict of interest if those advisors were engaged by the special committee.

On October 6, 2012, the special committee met with representatives of several law firms in New York City. The representatives of the various firms presented their credentials and preliminary views on the Company, financing and other issues that could arise in connection with the proposal. They also responded to questions from the special committee regarding their experience in advising special committees, their preliminary thoughts on how to position negotiations with the Family Shareholders regarding the Company’s value, their proposed fees, and their independence, objectivity and any relationships that could present an actual or perceived conflict of interest. Following each presentation, the special committee discussed the strengths and weaknesses of Messrs. MacDonald, Merrimanthe firms, and, Ratnerafter considering all the firms, the special committee selected Sullivan & Cromwell LLP (“Sullivan & Cromwell”) as its legal advisor.

During the period from October 7, 2012, when the special committee selected Sullivan & Cromwell as its legal advisor, through March 29, 2013, when the merger agreement was executed, the special committee met 27 times in person or telephonically and Drs. Cowen and Thornton serves or has served as an executive officer, director or trustee.

4.  Under the charitable matching contribution program that we established in fiscal 2012, in a given fiscal year, we will match up to $10,000all of contributions madethose meetings were attended by an independent director to a charitable or other non-profit organization. Under this program, we made matching contributionsrepresentatives of $10,000 to charitable or non-profit organizations on behalf of Mr. Merriman and Drs. Cowen and Thornton in fiscal 2012.

Sullivan & Cromwell. All of the transactions, relationships or arrangements listed abovemeetings were entered into,attended by all members of the special committee, with the exception of the meetings held on October 14, 2012, November 1, 2012 and paymentsDecember 15, 2012, at each of which three of the four members of the special committee were made or received by us,present.

On October 8, 2012, the special committee met in New York City with representatives of Sullivan & Cromwell to discuss preliminary steps in connection with the Family Shareholders’ proposal. Later that day, a representative from Sullivan & Cromwell had an introductory conversation with a representative from Jones Day, counsel to the Family Shareholders.

Also on October 8, 2012, the special committee met telephonically with representatives of Sullivan & Cromwell to discuss the initial conversation between representatives of Sullivan & Cromwell and Jones Day and the process of hiring an independent financial advisor.

On October 9, 2012, at the direction of the special committee, representatives of Sullivan & Cromwell participated in a telephone call with Ms. Kilbane, Mr. Christopher Haffke, then the deputy general counsel of the Company, Mr. Stephen Smith, the chief financial officer of the Company, and representatives of Baker & Hostetler. During the call, at the request of the Company’s senior management and the special committee, Sullivan & Cromwell provided guidance to the Company’s management regarding the operation and management of the Company during the pendency of the Family Shareholders’ proposal.

On October 11, 2012, a shareholder of the Company filed a shareholder lawsuit against the Company and its individual directors in the ordinary courseCourt of businessCommon Pleas in Cuyahoga County, Ohio. Throughout October and November 2012, five additional shareholder lawsuits were filed against the Company and its directors in the Court of Common Pleas in Cuyahoga County, Ohio, one of which was later dismissed. The complaints alleged, among other things, breaches of fiduciary duties by the Company’s directors for pursuing the proposal contemplated by the Family Shareholders’ letter dated September 25, 2012.

Also on competitive terms. Aggregate payments that were madeOctober 11, 2012, Jones Day sent to or that we received from, eachSullivan & Cromwell a draft confidentiality agreement for the Family Shareholders to enter into with the Company.

On October 12, 2012 and October 13, 2012, the special committee and representatives of Sullivan & Cromwell met in Chicago and interviewed representatives of several financial advisory firms with the objective of selecting a financial advisor to the special committee. The representatives of the relevant organizations,various firms presented their credentials and preliminary views on valuation, financing and other issues that could arise in connection with the proposal. They also responded to questions from the special committee regarding their experience in advising special committees, their preliminary thoughts on how to position negotiations with the Family Shareholders regarding the Company’s value, their proposed fees and their independence, objectivity and any relationships that could present an actual or perceived conflict of interest. Following each presentation, the special committee discussed the strengths and weaknesses of the financial advisory firms.

Later on October 13, 2012, the special committee, after considering all the firms, determined to retain Peter J. Solomon, L.P. (“PJSC”), subject to confirmation of the absence of conflicting interests (which was subsequently confirmed and discussed at a meeting of the special committee held for that purpose on October 14, 2012) and entering into a formal engagement letter. The special committee determined to retain PJSC for a variety of reasons, including any charitable organizationPSJC’s experience in whichcomparable situations, its experience in representing special committees, its knowledge of the consumer products, social expressions and gifts, and media and IP licensing industries and its objectivity and independence with respect to the Company.

Also on October 13, 2012, the special committee was joined by Mr. Charles Ratner and Dr. Jerry Sue Thornton, the other independent directors of the Company, and Mr. Haffke, and the special committee briefed them on its intention to retain PJSC. The board then convened in a non-management director served as an executive officer,special meeting (which did not exceed the greaterinclude directors who are Family Shareholders), at which it adopted resolutions providing for a quarterly retainer of $1 million or 2% of that organization’s consolidated gross revenues$25,000, to be paid in advance, for each of the most recent three completed fiscal years and did not directly result in a change in the compensation received by the director from that organization. The Board has determined that these transactions, relationships and arrangements are not material, do not create a material relationship between American Greetings and any of Messrs. Dunn, MacDonald and Merriman, and Ratner or Drs.a quarterly retainer of $37,500, to be paid in advance, for Dr. Cowen, or Thorntonin each case for their service on the special committee (see “Interests of the Company’s Directors and Executive Officers in the Merger – Compensation of the Special Committee” on page 64). The board also directed the Company’s management to suspend the Company’s practice of repurchasing Class B common shares when offered to the Company in accordance with its articles of incorporation, consistent with its September 25, 2012 suspension of repurchases of Class A common shares under its Rule 10b5-1 share repurchase program, for so long as the proposal from the Family Shareholders remained outstanding. No Class B common shares had been repurchased since the proposal.

Between October 15, 2012 and October 17, 2012, Sullivan & Cromwell, with guidance from Dr. Cowen on behalf of the special committee, and PJSC negotiated the terms of the PJSC engagement letter, and the engagement letter was entered into on October 17, 2012. The engagement letter provided for a fee to be paid to PJSC as described in “Special Factors – Fees and Expenses” and “Special Factors – Opinion of Peter J. Solomon Company.”

On October 16, 2012, PJSC submitted a preliminary financial due diligence request list to the Company. After the special committee’s October 17, 2012 engagement of PJSC, all of its meetings included representatives of PJSC.

On October 19, 2012, Dr. Cowen (on behalf of the special committee) and representatives of Sullivan & Cromwell and PJSC met with members of the Family Shareholders and representatives of Jones Day at Jones Day’s offices in Cleveland, Ohio. At the meeting, Dr. Cowen stressed the special committee’s commitment to discharge its responsibilities and fiduciary duties in evaluating the Family Shareholders’ proposal and any alternatives available to the Company. Representatives of Jones Day stated that the independent judgmentFamily Shareholders agreed with the need for a thorough evaluation process and were prepared to work with the special committee as it evaluated and, if appropriate, negotiated the Family Shareholders’ proposal, including any related financing structure. Mr. Zev Weiss reiterated in response to a question the position noted in the Family Shareholders’ September 25, 2012 letter that the Family Shareholders had no intention to sell all or any significant portion of these directors has not beentheir shares in the Company. Later on October 19, 2012, a representative of Jones Day sent a revised draft of the confidentiality agreement to Sullivan & Cromwell, and will not be compromised by such transactions, relationshipsthe special committee met telephonically with representatives of Sullivan & Cromwell and arrangements.

In addition, basedPJSC to receive an update on the NYSE independence standards,meeting in Cleveland, the Board determined that Messrs. Zev, Jeffreydue diligence process and Morry Weiss are not independent because they are executive officersthe confidentiality agreement negotiations and to discuss retaining counsel to defend the shareholder lawsuits.

Also on October 19, 2012, representatives of American Greetings.

Board Leadership Structure

We separate the roles of Chief Executive Officer and ChairmanPJSC met telephonically with representatives of the Board in recognitionCompany’s management (other than any Family Shareholders) as part of PJSC’s due diligence review. During

the differences between the two roles. As Chief Executive Officer, Zev Weiss is responsible for setting the strategic direction for the company and the day-to-day leadership and performance of the company.

As the Chairman of the Board, Morry Weiss provides guidance in such critical functions as mergers and acquisitions and other strategic initiatives, works with the Chief Executive Officer in developing the company’s long-range strategic plans, provides guidance to the Chief Executive Officer and othercall, members of senior management discussed and presides over meetingsresponded to initial diligence questions that PJSC had prepared, including providing a general overview of the full Board. In addition,Company, its three-year financial plan prepared by the dutiesCompany's management and responsibilitiesits performance during the first half of the Chairmanfiscal year, as well as overall industry trends.

Also on October 19, 2012, at the direction of the Board includespecial committee, the following:Company issued a press release announcing that the board of directors had formed the special committee to evaluate the proposal from the Family Shareholders and that the special committee had engaged PJSC and Sullivan & Cromwell to assist it in that process.

From October 19, 2012 through March 27, 2013, PJSC and Sullivan & Cromwell continued their respective ongoing due diligence reviews of the Company, including participating in multiple in-person and telephonic due diligence meetings with various members of the Company’s management team, the first of which took place at the Company’s headquarters in Cleveland, Ohio on October 22, 2012. Included in many of these diligence calls with PJSC were discussions with the Company’s management regarding adjustments for unusual or nonrecurring items that may be considered as they relate to the Company’s historical, and fiscal year 2013 estimated, EBIT and EBITDA for purposes of PJSC’s analyses.

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Because Mr. Morry Weiss, our Chairman, is not independent, our Board has appointed Mr. Ratner to be the “presiding director” at the executive sessions of the “non-management” directors, as defined under the rules of the NYSE. The Board believes that this structure provides an effective leadership model for the company.

In addition, to further enhance its governance, during fiscal 2013, the Board expects to appoint one of its independent directors asseveral lenders, played a “Lead Independent Director.” The Lead Independent Director will be designated annually by the independent directors of the Board. The Lead Independent Director will be responsible for coordinating the activities of the independent directors of the Board as follows:

Board Oversight of Risk

The Board, as a whole and also at the committee level, is responsible for oversight of risks that could affect the company. The Board, committees or both receive regular reports from members of senior management on areas of material risk to the company, including sales, operational, financial, legal and regulatory, and strategic risks. The Audit Committee oversees the company’s enterprise risk assessment and risk management policies. In addition, the Compensation Committee evaluates risks associated with the company’s compensation policies and practices and discusses these risks with the Audit Committee. The Board focuses on the most significant risks facing the company and the company’s processes to enable the organization to identify, manage and mitigate risks. Although the Board oversees the company’s risk management, company management is responsible for day-to-day risk management processes. The company does not believe that the Board’srelatively limited role in the oversightCompany’s existing financing.

On November 19, 2012, the special committee met telephonically with representatives of risk hasSullivan & Cromwell, PJSC and Squire Sanders. At the meeting, PJSC updated its presentation from October 26, 2012. Among other things, PJSC’s presentation included updated financial analyses of the Company, based on (i) an effect

updated treasury model for fiscal year 2013 provided by the Company’s management to PJSC (with projections in the treasury model for fiscal years 2014 through 2016 remaining the same as those that had been provided to PJSC previously) and (ii) due diligence conducted by PJSC on the Board’s leadership structure.

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Board of Directors and CommitteesCompany to date.

The Board met four times duringspecial committee and PJSC then discussed management’s projections for fiscal 2012. The Board has a standing Executive Committee, Audit Committee, Nominating and Corporate Governance Committee, and Compensation and Management Development Committee. Each member of the Audit, Nominating and Corporate Governance, and Compensation and Management Development Committees is independent as defined under the current listing standards of the NYSE and under the additional standards adopted by the Board, as outlined in the company’s corporate governance guidelines.

Executive Committee

The Executive Committee has the same power and authority as the Board between meetings of the Board except that it may not fill vacancies on the Board or on committees of the Board. The Executive Committee held one meeting during fiscal 2012.

Audit Committee

The Board has determined that each Audit Committee member is financially literate under the current listing standards of the NYSE. The Board also determined that each of Mr. MacDonald and Mr. Merriman qualifies as an “audit committee financial expert” as defined by the Securities and Exchange Commission (“SEC”) rules. Shareholders should understand that the designation of each of Mr. MacDonald and Mr. Merriman as an “audit committee financial expert” is an SEC disclosure requirement and that it does not impose upon them any duties, obligations or liabilities that are greater than those generally imposed on them as members of the Audit Committeeyears 2013 through 2016 and the Board. In addition, underevolution of management forecasts as reflected in management treasury models over the Sarbanes-Oxley Act of 2002 and the NYSE rules mandated by the SEC, members of the Audit Committee must have no affiliation with the issuer, other than their board seats, and receive no compensation in any capacity other than as a director or committee member. Each member of the Audit Committee meets this additional independence standard applicable to Audit Committee members of NYSE listed companies.

The Audit Committee is responsible for assisting the Board in fulfilling its oversight responsibilities by: (1) monitoring the integrity of our financial statements; (2) monitoring the integrity of our auditing, accounting and financial reporting processes generally; (3) monitoring the independence and performance of our independent registered public accounting firm and our internal audit department; (4) monitoring our compliance with legal and regulatory requirements; (5) reviewing the adequacy of and compliance with our financial policies and procedures and systems of internal control; (6) preparing the Audit Committee Report to be included in this Proxy Statement; and (7) making regular reports to the Board and keeping written minutes of its meetings. The Audit Committee is also responsible for reviewing and approving or ratifying transactions with related persons, as described below in the “Certain Relationships and Related Transactions” section of this Proxy Statement. The Audit Committee has the sole authority to engage and replace the independent registered public accounting firm. The Audit Committee met nine times duringpast three fiscal 2012. The current version of the Audit Committee charter is available in the investors section of our Web site at www.corporate.americangreetings.com.

Nominating and Corporate Governance Committee

The purposes of the Nominating Committee are to (1) assist the Board by identifying individuals qualified to become Board members and to recommend to the Board the director nominees for each annual meeting of

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shareholders; (2) review and recommend to the Board qualifications for committee membership and committee structure and operations; (3) recommend to the Board directors to serve on each committee and a chair for each such committee; (4) develop and recommend to the Board a set of corporate governance policies and procedures; and (5) lead the Board in its annual review of the Board’s performance. The Nominating Committee met two times during fiscal 2012. A current version of the Nominating Committee charter is available in the investors section of our Web site at www.corporate.americangreetings.com.

It is the policy of the Nominating Committee to consider individuals recommended by shareholders for membership on the Board. If a shareholder desires to recommend an individual for membership on the Board, then that shareholder must provide a written notice on or before January 11, 2013 to our Chairman, Chief Executive Officer or Secretary at American Greetings Corporation, One American Road, Cleveland, Ohio 44144, for consideration by the Nominating Committee for that year’s election of directors at the Annual Meeting. It is the policy of the Committee not to evaluate candidates recommended by shareholders any differently from candidates recommended from other sources.

The Nominating Committee determines, and reviews with the Board on an annual basis, the desired skills and characteristics for directors as well as the composition of the Board as a whole. This assessment considers the nominee’s qualification as independent under the listing standards of the NYSE, as well as diversity, age, skill and experience in the context of the needs of the Board. When the Nominating Committee considers diversity, it views diversity in the broadest sense, including a person’s age, gender, race, national origin, education, professional experience and differences in viewpoints and skills. The Nominating Committee has not adopted a formal policy with respect to diversity; however, the Board and the Nominating Committee believe that it is essential that the Board members represent diverse viewpoints and skills, which contribute to a more effective decision-making process. In considering candidates for the Board, the Nominating Committee considers the entirety of each candidate’s credentials in the context of these standards. The Nominating Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective director nominees. American Greetings believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will enhance the quality of the Board’s deliberations and decisions.

The biography of each current and nominated director set forth below in Proposal One contains information regarding the person’s service as a director of our company, director positions at publicly-held companies held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board to determine that the person should serve as a director for American Greetings.

The Nominating Committee will recommend prospective Board members who have the highest personal and professional integrity, who have demonstrated exceptional ability and judgment and who the Nominating Committee believes will be effective, in conjunction with the other members of the Board, in collectively serving the long-term interests of the shareholders. When seeking candidates for the Board, the Nominating Committee may consider candidates proposed by our Chairman, Chief Executive Officer or shareholders and may also solicit suggestions from incumbent directors, management and third-party search firms, although the Board has not engaged a third-party search firm at this time.

Compensation and Management Development Committee

The Compensation Committee of the Board reviews and approves the compensation for our executive officers generally and reviews and approves our executive and employee compensation plans (including the plans for our executive officers, including our named executive officers identified in the Fiscal 2012 Summary Compensation Table in the “Fiscal 2012 Information Concerning Executive Officers” section below); reviews and approves grants and awards to executive officers and other participants under our equity-based compensation

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plans; and oversees the annual evaluation of management. The Compensation Committee is also responsible for producing the Report of the Compensation and Management Development Committee included in this Proxy Statement. The Compensation Committee met seven times during fiscal 2012. The current version of the Compensation Committee’s charter is available on the investors section of our Web site at www.corporate.americangreetings.com.

Use of Consultants

From time to time, the Compensation Committee uses outside compensation consultants to work with the Compensation Committee and management. The Compensation Committee has engaged Mercer (US) Inc. (“Mercer”), a wholly owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”), to assist it in setting executive and non-employee director compensation levels, designing and implementing incentive plans for executives and non-employee directors, and providing industry data and peer group pay practices to assist management in making recommendations regarding the compensation of our executive officers and non-employee directors. The industry data and recommendations provided by Mercer were used as one of the resources in making compensation decisions during fiscal 2012. Mercer’s fees for executive compensation consulting to the Compensation Committee in fiscal 2012 were $171,877. The use of an independent consultant provides additional assurance that our executive compensation programs are reasonable and consistent with company objectives. Although management, particularly the Senior Vice President of Human Resources, works closely with Mercer, the consultant is ultimately accountable to the Compensation Committee on engagements relating to the compensation of our executive officers and our outside directors. During fiscal 2012, Mercer periodically participated in Compensation Committee meetings and advised the Compensation Committee with respect to:

Additional information on the Compensation Committee’s processes and procedures for consideration of executive compensation is included in the Compensation Discussion and Analysis section below, and for consideration of non-employee director compensation is included in the “Director Compensation” section below.

American Greetings and its subsidiaries also separately retain Mercer and other affiliates of MMC to provide services and products that are unrelated to the services provided to the Compensation Committee on matters relating to the compensation of our executive officers and non-employee directors (the “Unrelated Company Services”). In fiscal 2012, the Unrelated Company Services included such products and services as: insurance coverage, including officer and director insurance, group life insurance, workers compensation insurance and salary continuance insurance; motor vehicle, marine transit, and corporate travel insurance; advisory and administrative services with respect to employee pension plans; and general purpose compensation surveys. During fiscal 2012, we paid Mercer or other affiliates of MMC an aggregate of $153,291 for these Unrelated Company Services, which amount does not include fees passed on by the affiliates of MMC to unrelated third parties for payment of insurance premiums on policies for which the MMC affiliate only provided brokerage or other advisory services. The decisions to engage Mercer or other affiliates of MMC for Unrelated Company Services in fiscal 2012 were made by employees of the company or its subsidiaries. However, the Compensation Committee follows a policy requiring that management receive the Compensation Committee’s prior approval to engage a compensation consultant or an affiliate thereof to provide non-executive compensation services to the extent such engagement, individually or in the aggregate, involves the payment of fees to such consultant or affiliate in excess of $50,000. Accordingly, the Compensation Committee approved in advance the engagement of Mercer and other affiliates of MMC to provide the Unrelated Company Services during fiscal 2012.

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Mercer has advised us that none of its principals or employees who provided advice to the Compensation Committee had any direct or indirect involvement in providing the Unrelated Company Services, or in the company’s selection of, or negotiation of arrangements with, Mercer or other affiliates of MMC to provide such services. In addition, none of Mercer’s principals or employees who provided advice to the Compensation Committee received any direct or indirect compensation as a result of Unrelated Company Services, other than to the extent that employees of Mercer benefit from the overall success of MMC and its affiliates generally. The Compensation Committee does not believe that Mercer’s ability to provide it with objective advice was impaired by the Unrelated Company Services provided to the company and its affiliates.

In addition, American Greetings has practices and procedures for ensuring the Compensation Committee’s compensation consultant is independent and for minimizing potential conflicts of interest including the following:

Attendance

During fiscal 2012, each incumbent director attended 75% or more of the aggregate number of meetings of the Board and the respective committees on which he or she serves. We have established a formal policy requiring director attendance at all Board meetings (and meetings of committees of which the director is a member), absent unusual circumstances. We expect our directors to attend the annual meetings of shareholders (which are usually held the same day as a meeting of the Board). Each director attended the 2011 Annual Meeting of Shareholders, except for Messrs. Morry Weiss, Merriman and Ratner, who were unable to attend.

Communications to the Board of Directors

The Board believes that it is important for shareholders and other interested parties to have a process to send communications to the Board. Accordingly, shareholders and interested parties who wish to communicate with the Board, an individual director, the presiding director of non-management director executive sessions, or the non-management or independent directors as a group can mail a letter to the Board, individual director, presiding director, or group of non-management directors (as applicable) c/o Secretary, American Greetings Corporation, One American Road, Cleveland, Ohio 44144. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Board Communication” or “Director Communication.” All such letters must identify the author and clearly state the intended recipients. The Secretary will make copies of all such letters and circulate them to the appropriate director or directors; however, the Secretary will not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic. The individual directors are not spokespeople for American Greetings and people should not expect a response or a reply to any communication.

Executive Sessions

In accordance with NYSE rules, non-management directors meet in regularly scheduled executive sessions without management. Mr. Ratner has been appointed as the presiding director by the non-management directors to preside at these sessions.

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PROPOSAL ONE

ELECTION OF DIRECTORS

Pursuant to our Amended and Restated Code of Regulations, the Board is comprised of three classes of directors, each class consisting of not less than three directors and having a three-year term. In accordance with our Amended and Restated Code of Regulations, the Board has fixed the board size at nine (9) members, with each Class having three (3) directors. Class II members are to be elected at the Annual Meeting.

It is proposed that the shareholders re-elect the following nominees for Class II directors: Charles A. Ratner, Jerry Sue Thornton and Jeffrey Weiss. The term of office to be served by each nominee in Class II, if elected, will be three years, until the 2015 Annual Meeting of Shareholders, or until his or her successor is duly elected and qualified. Each of these nominees for Class II director has agreed to stand for re-election.

If for any reason any of the nominees is not a candidate when the election occurs (which is not expected), the Board expects that proxies will be voted for the election of a substitute nominee designated by the Nominating and Corporate Governance Committee; provided, however, proxies cannot be voted for a greater number of persons than the number of nominees named.

Vote Required

The nominees who receive the greatest number of votes cast for the election of directors at the Annual Meeting by the shares present in person or by proxy and entitled to vote will be elected directors.

The Board unanimously recommends that you vote “FOR” all of the following nominees.

The biography of each of the nominees and continuing directors below contains information regarding the individual’s service as a director for American Greetings, business experience, and director positions at other publicly-traded companies that the individual holds currently or has held at any time during the last five years. In addition, the experiences, qualifications and attributes or skillsparticular, PJSC noted that caused the Board to determine that the person should serve as a directormanagement’s expectation for the company are also included.

Nominees for Election to Term Ending 2015

(Class II)

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The Board chose to nominate Mr. Weiss as a director because of his extensive executive management and leadership skills, together with his significant knowledge of the social expressions industry, gained through his 20-plus years of experience at the company. In addition, as our President and Chief Operating Officer, his day-to-day exposure to the company’s activities provides Mr. Weiss with an exhaustive understanding of our operations and an in-depth knowledge of our corporate strategies.

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Continuing Directors with Term Expiring in 2013

(Class III)

		Scott S. Cowen (65)     Class III Director (1989), Chair of the Compensation and Management Development Committee, member of the Audit Committee Dr. Cowen is President and Seymour S Goodman Professor of Management and Professor of Economics, Tulane University, a position he has held since 1998. Prior to that, Dr. Cowen served as Dean and Albert J. Weatherhead, III Professor of Management, Weatherhead School of Management at Case Western Reserve University. Dr. Cowen has served as a director of Forest City Enterprises, Inc. since 1989 and Newell Rubbermaid Inc. (a publicly-held consumer home products company) since 1999. He was a director of Jo-Ann Stores, Inc. (a publicly-held specialty store retailer) from 1987 until its sale in 2011. Dr. Cowen has been a member of the Board of Overseers of TIAA-CREF (a private financial services company) since 2010. Dr. Cowen participates as a board member of a number of civic organizations, including as Chair of the Southeast Louisiana Regional Airport Authority, and as a member of the New Orleans Business Council, New Orleans Public Belt Railroad and Greater New Orleans Inc.
The Board selected Dr. Cowen because of his breadth of knowledge in economics, finance and management, extensive experience in the public sector and his cumulative service on boards of directors in industries that are relevant to our operations. As the president of Tulane University, a national research university, Dr. Cowen also brings valuable management and leadership experience. In addition to the leadership skills he possesses as a result of his work at Tulane University, Dr. Cowen has gained extensive crisis management experience from his leadership in the rebuilding of Tulane following its devastation by Hurricane Katrina. He also played a leadership role in the rebuilding of New Orleans following Hurricane Katrina, and in major New Orleans civic and business organizations, including chairing the Southeast Louisiana Regional Airport Authority and a committee charged with reforming and rebuilding the New Orleans public schools following Hurricane Katrina.

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The Board selected Mr. MacDonald because of his valuable experience and insights into banking and capital markets gained during his thirty-eight year career in increasingly significant management positions with National City Corporation. Mr. MacDonald’s experience in leading a large corporate organization, structuring complex financial solutions, and his expertise in economic issues provide the Board with valuable expertise and qualifies him as a “financial expert” on the Board’s Audit Committee, as described above under the section “Audit Committee.” In addition, Mr. MacDonald’s service as a director on boards of other public companies has enhanced his understanding in areas of executive management, corporate governance, strategic planning and executive compensation, which has made him a valuable resource to the company. Mr. MacDonald also brings a valuable perspective as a member of the boards of several prominent local non-profit organizations.

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Continuing Directors with Term Expiring in 2014

(Class I)

The Board selected Mr. Merriman as a director because of his financial acumen, his significant public accounting experience, his service on boards of directors of other publicly-traded companies and his product development expertise. Mr. Merriman has significant finance, financial reporting and accounting expertise and was formerly a

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certified public accountant, which provides the Board with valuable expertise and qualifies him as a “financial expert” on the Audit Committee, as described above under the section “Audit Committee.” In addition, because of his wide range of management experience, including as a former partner at Arthur Andersen & Co. and his service as chief financial officer of American Greetings, Mr. Merriman provides valuable insight into the company’s operations as well as its interactions with investors and financial analysts.

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

During fiscal 2012, our total revenue, operating results and cash flows were impacted by the multiple strategic actions we executed during the year to support both our short-term and long-term business goals, including:

Although these strategic actions, along with the continued instability in the global economy, brought volatility to our earnings, we believe that these actions will help us grow our business over the long term. Moreover, to mitigate the impact that some of these activities had or may have on our earnings, we continue to seek to improve efficiencies and streamline our supply chain and back office processes in order to reduce our supply chain and general and administrative expenses. To this end, our financial performance generally met or exceeded our expectations for fiscal 2012, where we exceeded our revenue and earnings per share goals and met our earnings before interest and taxes goal under the American Greetings Key Management Annual Incentive Plan. We accomplished these goals despite these activities as well as changes during the fiscal year that caused us to absorb unanticipated events and costs.

In fiscal 2012, we continued with the same executive compensation philosophy that we have had in place for several years. We use this philosophy to determine the compensation programs and practices for all our executive officers, including our named executive officers who are listed in the Fiscal 2012 Summary Compensation Table. The fundamental principle of this philosophy is performance – performance of the organization and its business units, and performance of the individual – compared to financial goals, strategic initiatives and individual goals. The compensation decisions we made in fiscal 2012 were based on this principle. Accordingly, during fiscal 2012, we made few material changes to the principal compensation programs that we had in place during fiscal 2011. However, beginning with grants made in fiscal 2012, we revised our equity compensation program to eliminate the granting of stock options so that our regular annual equity grant program now consists of all restricted stock units, or RSUs, rather than a combination of RSUs and stock options. The actual number of RSUs granted to each of our named executive officers during fiscal 2012 was at the target level or higher, which was determined by the individual’s performance rating for fiscal 2011 and the target grant size for his position. The number of RSUs granted in fiscal 2013 to our named executive officers was also at the target level or higher, which was determined by the individual’s performance rating for fiscal 2012 and the target grant size for his position. Additionally, in an effort to eliminate compensation programs offered by the company that are not widely utilized, yet are administratively burdensome to operate, in fiscal 2012, the Compensation Committee determined to freeze our Executive Deferred Compensation Plan such that participants, including the named executive officers, are no longer permitted to make new deferral elections under this plan. In addition, effective in fiscal 2013, additional matching and profit sharing contributions under the Executive Deferred Compensation Plan’s maximizer and restoration benefits will not be provided.

As described below, the payments made to our named executive officers under the Key Management Annual Incentive Plan in April 2012 were based on our fiscal 2012 financial performance, which met or exceeded the Key Management Annual Incentive Plan’s earnings per share, or EPS, target of $2.40 per share,

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Total Revenue target of $1,669.7 million and Corporate earnings before interest and taxes, or EBIT, targetin fiscal years 2014 and 2015 had decreased from the expectations expressed in the fiscal year 2012 plan. PJSC also presented other valuation analyses that it had conducted to date, including analyses of $180.2 million (or EPS targetcomparable companies, selected precedent transactions, sum-of-the-parts, present value of $2.51the Company’s future share price, discounted cash flow and potential leveraged buyout scenarios, and the special committee and PJSC discussed at length PJSC’s discounted cash flow analysis. As part of that discussion, PJSC noted that it had revised its range of terminal multiples downward because PJSC determined that based on further consideration of the trading valuations of selected relevant comparable companies, a 5.0x trading multiple that had been included for illustrative purposes in PJSC’s October 26, 2012 presentation was no longer deemed appropriate.

At various times in November 2012, the special committee and its advisors also discussed the Company’s plans to finalize its commitment to a new world headquarters building in December 2012 and the potential impact of the financial commitments associated with the headquarters project on the Family Shareholders’ financing for the proposed transaction and ability to increase the proposed per share Total Revenue targetmerger consideration. The special committee determined that they would raise this issue with the board committee overseeing the headquarters project.

On November 27, 2012, Jones Day informed Sullivan & Cromwell that the Family Shareholders expected to be able to provide a detailed financing plan during the week of $1,651.7December 3, 2012.

On November 28, 2012, the Company issued a press release announcing the temporary delay of its project to move the Company’s world headquarters from Brooklyn, Ohio to Westlake, Ohio pending resolution of the Family Shareholders’ proposal.

On or about November 28, 2012, Dr. Cowen and Mr. Zev Weiss, and on November 29, 2012, representatives of Sullivan & Cromwell and Jones Day, respectively, discussed the Family Shareholders’ intention to provide updated information concerning financing arrangements for a potential transaction within a matter of weeks. On November 29, 2012, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders to discuss the conversations with Mr. Zev Weiss and representatives of Jones Day. Representatives of PJSC also informed the special committee that they understood that the Company’s management was in the process of making further revisions to its forecasts, and that it had produced a five-year treasury model, which would be shared with PJSC and the Family Shareholders’ potential financing sources when finalized. This updated treasury model was provided to PJSC and the potential financing sources on November 30, 2012.

On December 5, 2012, Jones Day sent to Sullivan & Cromwell (i) a preliminary draft commitment letter for a senior credit facility of up to $542.0 million, (ii) a “highly confident” letter from KeyBank National Association regarding a potential junior holding company facility of at least $150.0 million that would consist of either equity or debt and Corporate(iii) a letter from the Family Shareholders reiterating their proposal to acquire the Company at $17.18 per share, in cash. The letter from the Family Shareholders expressed the view that the $17.18 per share offer was a compelling price given the high volatility in the equity markets and the fact that it represented a 20% premium over the trading price for the Company’s Class A common shares immediately prior to the time of the Family Shareholders’ proposal on September 25, 2012.

On December 6, 2012, representatives of Sullivan & Cromwell and PJSC, and Jones Day and KeyBanc, had a telephone call during which representatives of Jones Day and KeyBanc answered questions from representatives of Sullivan & Cromwell and PJSC regarding the draft financing commitment papers and proposed structure of the financing. The representatives of Jones Day and KeyBanc requested that representatives of the special committee provide guidance as to the special committee’s view on valuation inasmuch as it was difficult to progress financing when the price was undetermined.

On December 7, 2012, the Company held a regularly scheduled board meeting and the special committee met with representatives of Sullivan & Cromwell, PJSC and Squire Sanders at the Company’s headquarters in Cleveland, Ohio. PJSC provided financial analyses of the Company, updated since PJSC’s telephonic presentation to the special committee on November 19, 2012 to reflect certain pro forma adjustments to fiscal year 2013 EBIT targetbased on estimates that the Company’s management had provided to PJSC after the November 19, 2012 special committee meeting. The special committee determined, in consultation with PJSC, that the valuation work that had been completed by PJSC to date supported a higher offer price per share than $17.18 but that the Family Shareholders’ financing package was neither firm nor detailed enough for it to be advisable for the special committee to commence price negotiations. The special committee believed it would be preferable to negotiate price at a time when it understood the Family Shareholders’ financing structure and could be confident that any price agreed would be financeable. The special committee, Sullivan & Cromwell and PJSC then discussed the possible financing alternatives that might be available to the Family Shareholders in order to produce a proposal at a price that might be acceptable to the special committee, including seeking out traditional equity financing sources such as private equity firms. The participants also discussed insolvency risks that may arise in certain highly leveraged transactions and the merits of $183.0alternative transactions that might be available to the Company, such as a share repurchase or a divided recapitalization, as well as potential responses from the special committee to the Family Shareholders’ letter of December 5, 2012. The special committee determined at the meeting that given the requests from the Family Shareholders for price guidance and their insistence that such guidance was necessary to move forward with financing, Dr. Cowen would be authorized to express the view that the special committee believed that any transaction per share price should be in the $20s. This indication was authorized to be expressed in response to the Family Shareholders’ request for guidance and did not reflect a determination as to any particular price.

Later on December 7, 2012, Dr. Cowen and representatives of Sullivan & Cromwell and PJSC met with the Family Shareholder directors and representatives from Jones Day and KeyBanc (with some persons present at the Company headquarters and some participating telephonically). During this meeting, Dr. Cowen told the representatives of the Family Shareholders and their advisors that the special committee’s view was that the valuation work that had been completed by PJSC to date supported a higher offer price per share than $17.18. Dr. Cowen argued that PJSC’s analysis supported a price in excess of $20 per share and that the special committee would not be willing to recommend a transaction for less than $20 per share. Dr. Cowen also indicated that the special committee was concerned about the Family Shareholders’ ability to execute a transaction with the financing structure that had been contemplated by the draft commitment letter and highly confident letter that had been provided on December 5, 2012. Dr. Cowen raised the possibility of pursuing alternative transactions, such as a recapitalization, to enhance value. The special committee then reconvened and discussed with its advisors additional due diligence requests that PJSC would submit to the Company.

On December 8, 2012, Messrs. Morry, Zev and Jeffrey Weiss spoke with Dr. Cowen and asked whether he wanted a personal response to the special committee’s position. Dr. Cowen indicated that a response through advisors would be acceptable. The Weisses also indicated that they expected to be in a position to have definitive financing arrangements before final holiday season results would become available in late January or early February, and that they were pursuing financing alternatives in which the Family Shareholders would be in control of the Company after any transaction.

On December 11, 2012 and December 17, 2012, representatives of Sullivan & Cromwell and PJSC, at the request of the special committee, and Jones Day and KeyBanc had teleconferences to discuss issues relating to the financing structure, including the special committee’s view that the financial analyses that had been performed by PJSC supported a higher offer price per share than $17.18.

On December 15, 2012, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders to receive an update on the recent discussions between Sullivan & Cromwell, PJSC, Jones Day, KeyBanc and Macquarie Capital (the lead placement agent for any subordinated debt or preferred equity comprising part of the Family Shareholders’ financing package). Sullivan & Cromwell reported that Jones Day stated that the Family Shareholders (i) recognized the need to propose a viable capital structure on which to obtain financing, including sufficient subordinated debt or preferred equity capital, (ii) wanted to move forward to direct price negotiations as quickly as possible due to the amount of time that had

passed since the Family Shareholders’ initial offer was made and because it was difficult to solidify financing without an agreement on transaction price, (iii) were exploring financing based on the value of certain real estate assets as well as equity financing and (iv) would not support a dividend recapitalization of the Company or a share repurchase. Sullivan & Cromwell also reported that Jones Day had inquired whether the Family Shareholders’ financial advisors could engage with PJSC on the proposal price, but that Sullivan & Cromwell, based on its instructions from the special committee, stated that PJSC was ready and willing to engage in price negotiations but would do so only once the Family Shareholders presented a firmer and more detailed financing structure. PJSC also reported to the special committee on recent due diligence conversations it had had with the Company’s management, and Squire Sanders provided an update relating to the shareholder litigation.

On December 18, 2012, representatives of Jones Day called representatives of Sullivan & Cromwell to reiterate the request for commencement of price negotiations and were advised that the special committee had determined not to commence price negotiations at this time. Later that day, Mr. Zev Weiss called Dr. Cowen and indicated both that the Family Shareholders would never pay a per share price in the $20s and that the special committee’s refusal to negotiate was making it difficult for him to solidify financing for a transaction. Dr. Cowen indicated that while the special committee was not prepared to negotiate until financing plans were more advanced, the Family Shareholders were free to submit another proposal at any time. Mr. Weiss requested an in-person meeting and Dr. Cowen agreed.

On December 19, 2012, Dr. Cowen and Mr. Zev Weiss had a meeting in Cleveland during which Dr. Cowen argued that PJSC’s analysis supported a price in excess of $20 per share and that the special committee would not be willing to recommend a transaction for less than $20 per share. Mr. Weiss reiterated that the Family Shareholders would be unable to pay a per share price in the $20s and noted that the Family Shareholders had significant concerns about obtaining financing on terms that were acceptable to them that would support their proposed price of $17.18 per share. Mr. Weiss again requested that the special committee negotiate a price to permit the Family Shareholders to advise their potential financing sources of all requirements. Dr. Cowen and Mr. Weiss discussed the Family Shareholders’ financing efforts in further detail, with Dr. Cowen noting that the Family Shareholders were free to present the special committee with an improved proposal, or withdraw their existing proposal, at any time. Mr. Weiss told Dr. Cowen that the Family Shareholders would continue to work with their financing sources, and Dr. Cowen and Mr. Weiss agreed to speak again at the beginning of January 2013.

Also on December 19, 2012, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders and discussed the status of the Family Shareholders’ financing structure and arrangements, as well as the recent conversations between the advisors and between Mr. Zev Weiss and Dr. Cowen.

On December 20, 2012, the Company reported its earnings for the third quarter of its 2013 fiscal year, which included a net loss of $0.8 million, or $0.03 per share (on a fully-diluted basis). The Company also announced an amendment to its Credit Agreement to exclude from the definition of consolidated EBITDA up to $40 million of certain cash and non-cash fees, costs and expenses incurred by the Company in each caseconnection with its acquisition of the Clinton Cards business in the United Kingdom.

In early January, a number of additional potential sources of financing for the Family Shareholders were given access to the online data room to perform due diligence on the Company. On January 11, 2013, Mr. Zev Weiss called Dr. Cowen to report that the Family Shareholders were making progress on potential financing, albeit at high funding costs. Mr. Weiss inquired about Dr. Cowen’s view of next steps, and Dr. Cowen said that it was incumbent upon the Family Shareholders to provide a revised proposal that was supported by solid financing commitments.

On January 15, 2013, a representative of Jones Day told representatives of Sullivan & Cromwell that Jones Day expected that the Family Shareholders would provide a revised proposal within a couple of days.

On January 17, 2013, Dr. Cowen and Mr. Zev Weiss had a telephone conversation during which Mr. Weiss informed Dr. Cowen that the Family Shareholders would be sending a revised proposal to the special committee that afternoon. Mr. Weiss told Dr. Cowen that the Company’s share price had decreased over the previous several days and that although the Family Shareholders had considered reducing their offer in light of this and other factors, the revised proposal would reflect an increased price per share. Mr. Weiss also told Dr. Cowen that

the Family Shareholders had no ability or intention to pay more than the amount that would be included in the revised proposal, and that they were not interested in further negotiations beyond that price. Later on January 17, the special committee received a letter from representatives of the Family Shareholders with a stated increased proposed price of $17.50 per share. The letter was filed by the Family Shareholders with the Securities and Exchange Commission on the afternoon of January 17 as a publicly available exhibit to an amendment to their Schedule 13D. On the night of January 17, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders to discuss the revised proposal. PJSC informed the special committee that it would be receiving updated financial due diligence (which would include information regarding the performance of the Company during the holiday season) within the next week and therefore would be able to update its financial analysis of the Company within 10 to 14 days. The special committee and its advisors discussed next steps, which the special committee determined would include: (i) awaiting the updated financial analysis of the Company that would be prepared by PJSC, (ii) reviewing the Family Shareholders’ proposed merger agreement, once received from Jones Day and (iii) awaiting more detailed information on the Family Shareholders’ financing structure.

On January 18, 2013, representatives of Jones Day spoke with representatives of Sullivan & Cromwell and stated that the financing structure for the Family Shareholders had become more costly and that, while the Family Shareholders believed that they ultimately would have fully committed financing for the proposed transaction, they needed to agree to a price with the special committee before the lenders would commit to provide financing or agree to the terms of the financing. Jones Day also stated that the Family Shareholders felt that the process was “dragging” and either wanted to agree to a transaction now or terminate the negotiations. Sullivan & Cromwell conveyed Jones Day’s message via e-mail to the special committee.

On January 19, 2013, Jones Day sent a draft merger agreement to Sullivan & Cromwell.

On January 22, 2013, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders to discuss the draft merger agreement and the upcoming special committee meeting scheduled for January 27, 2013. Sullivan & Cromwell noted for the special committee, among other things, that the draft merger agreement provided that the Company would not be permitted to pay its regular quarterly dividend, which was currently $0.15 per share, between the signing and closing of any transaction. In the view of the members of the special committee, assuming two regular quarterly dividend dates would occur between signing and closing of a transaction, the Family Shareholders’ revised proposal of $17.50 per share was the economic equivalent of $17.20 per share.

On January 25, 2013, Dr. Cowen called Mr. Zev Weiss to inform him that the special committee would be meeting in person on January 27, 2013 to consider the Family Shareholders’ revised proposal and to express disappointment with what the special committee viewed as effectively a nominal $0.02 price increase in the latest proposal.

On January 27, 2013, the special committee met in person with representatives of Sullivan & Cromwell and PJSC at Sullivan & Cromwell’s offices in New York. Representatives of Squire Sanders participated in the meeting telephonically. The special committee discussed and concluded that the price proposed by the Family Shareholders in their letter dated January 17, 2013 would effectively be $17.20 per share, if two regular dividend dates occurred between the date of any definitive agreement and the closing of the merger if the Company were prohibited from paying regular quarterly dividends as provided in the draft merger agreement. No negotiation of the terms of the merger agreement had been conducted at this time.

Representatives of PJSC gave a presentation to the special committee, which updated the financial information and analyses in the PJSC presentation from December 7, 2012. PJSC began by providing the special committee with an overview of the Company’s recent share trading profile and the inbound communications from shareholders. PJSC then reviewed certain elements of the Company’s recent financial performance based on information and materials provided to PJSC by the Company’s management. PJSC (i) reviewed updated financial analyses of the Company based on Company management’s five-year treasury model, taking into account a number of adjustments for unusual or nonrecurring items that the Company’s management had discussed with PJSC and (ii) noted that in updating and refining its financial analyses of the Company, PJSC had revised its range of terminal multiples slightly downward as compared to its last presentation. The financial analyses presented by PJSC included a

discounted cash flow analysis, a sum-of-the-parts analysis, an analysis of the present value of the Company’s future share price and an illustrative leveraged buyout analysis. In addition to these financial analyses, PJSC reviewed selected comparable public companies, but PJSC discussed with the special committee the limitations of such an analysis with respect to the Company and explained that the Company had no directly comparable publicly traded companies.

Mr. Smith, the chief financial officer of the Company, then joined the meeting telephonically at the invitation of the special committee. Mr. Smith discussed holiday results, expectations for the balance of fiscal year 2013, confidence levels in fiscal year 2014 projections and risks that, if realized, could hinder the Company’s performance so that it might not meet management’s projections of future performance. The special committee also discussed with Mr. Smith ways in which the Company might increase operating earnings and profitability over the next several years.

After Mr. Smith left the meeting, Sullivan & Cromwell reviewed with the special committee the draft merger agreement received from Jones Day. The discussions focused particularly on the merger agreement terms related to conditions to closing, the extent of the Family Shareholders’ obligations to obtain financing, the absence in the proposed merger agreement of a “majority of the minority” shareholder approval condition and the overall value of the offer (including the proposed suspension of quarterly dividends between signing and closing of the proposed transaction).

During the meeting the special committee also discussed with its advisors the communications it had received from various shareholders, some of which urged the special committee to respond to the Family Shareholders’ proposal in a way that would permit shareholders to choose whether or not to accept the proposal, and others of which expressed the view that the price proposed by the Family Shareholders was too low and that the Company should continue as a standalone business or pursue other alternatives.

The special committee determined that it would respond by letter to the Family Shareholders to express disappointment with respect to the Family Shareholders’ revised proposal, both as to value and proposed contract terms. The special committee also determined that the letter should state that, based upon the information currently available to the special committee, the special committee did not intend to accept an offer below $18.75 per share, with no suspension of quarterly dividends, and that any transaction would require closing certainty (including with respect to efforts to obtain financing and a reverse break fee to be paid by the Family Shareholders if financing could not be obtained or commitments fell through) and a majority of the minority shareholder approval condition in the merger agreement.

On January 29, 2013, Dr. Cowen telephoned Mr. Zev Weiss to inform him of the status of the special committee’s response to the Family Shareholders’ revised proposal.

At various times in January 2013, Dr. Cowen had conversations with Mr. Ratner and Dr. Thornton to update them on the general status of the special committee’s review of the Family Shareholders’ revised proposal.

On January 30, 2013, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders to discuss and agree on the text of the letter to be sent from the special committee to the Family Shareholders, a draft of which had been provided by Sullivan & Cromwell, setting forth the special committee’s counterproposal of not less than $18.75 per share. Later in the day on January 30, 2013, Sullivan & Cromwell sent Mr. Zev Weiss and Jones Day the letter from the special committee setting forth its counterproposal. The full text of the letter was as follows:

January 30, 2013

Via E-mail

Mr. Zev Weiss

Mr. Jeffrey Weiss

American Greetings Corporation

One American Road

Cleveland, Ohio 44144

Dear Zev and Jeff:

I am writing on behalf of the Special Committee of the Board of Directors of American Greetings Corporation. We are responding to your letter of January 17, 2013 and the draft merger agreement provided by your counsel. We thought that it would be helpful to do so in writing to bring the matter to closure as soon as possible.

I must express the Special Committee’s disappointment with your amended proposal both as to value and proposed contract terms. On value, despite your stated intention to enhance your offer “meaningfully”, the actual increase was only $0.02 per share because the draft merger agreement provides for a suspension of dividends (which we estimate to include two quarterly dividends that otherwise would be paid between signing and closing of a transaction, or $0.30 per share).

In order to address your stated need to settle on a price to obtain your financing, and based upon the information currently available to the Special Committee, I can advise you that the Special Committee does not intend to accept an offer below $18.75 per share. There would be no dividend suspension in any transaction. The financial materials we have considered, with the assistance of our financial advisors, support this price.

Although, as is typical at this stage of the process, we have a number of concerns with the terms of the draft merger agreement that your counsel has prepared, there are two issues that we want to highlight as an essential and integral part of the Special Committee’s response to your proposal.

First, a transaction must be conditioned on a “majority of the minority” approval vote by the shareholders to preserve the shareholders’ basic franchise rights.

Second, a transaction should provide at least a customary level of transaction certainty, including no financing condition to closing, customary covenants to obtain financing pursuant to the commitments (or replacement financing), and a reverse break fee should you not be able to obtain the financing necessary to complete the transaction. As you will appreciate, if financing fails to materialize, with the result that a transaction does not close, American Greetings could experience economic loss and reputational damage and will have incurred significant out-of-pocket expenses in the process. We also, of course, need to understand the terms associated with the holdco mezzanine debt financing you have said you intend to use in lieu of additional equity contributions to fund the transaction.

Please call me after you have had an opportunity to discuss this letter with your advisors. We look forward to hearing from you at your earliest convenience.

Very truly yours,

/s/ Scott S. Cowen

Scott S. Cowen,

on behalf of the Special Committee

of the Board of Directors of

American Greetings Corporation

On February 1, 2013, the special committee received an e-mail from Mr. Zev Weiss on behalf of the Family Shareholders, requesting the assistance of the Company’s Treasurer, Assistant Treasurer and Manager of Treasury Operations in the Family Shareholders’ evaluation of the Company’s 7.375% senior notes due 2021 and the Company’s working capital and cash flow trends.

On February 4, 2013, the special committee received a letter from Mr. Zev Weiss on behalf of the Family Shareholders formally requesting the assistance of the Company’s Treasurer, Assistant Treasurer and Manager of Treasury Operations in the Family Shareholders’ evaluation of the Company’s 7.375% Senior Notes due 2021 and the Company’s working capital and cash flow trends to help facilitate the Family Shareholders’ financing package, and stating that any such assistance would not impede such individuals’ abilities to perform their regular duties for the Company. The letter from Mr. Weiss also stated that PJSC would be provided with copies of any materials given to those individuals by the Family Shareholders. Based on its view that it would be in the

Company’s best interest for the Family Shareholders to be positioned to make a concrete proposal on the best possible terms, the special committee gave its permission on the evening of February 4 for the designated Company employees to provide the requested assistance, so that the Family Shareholders could finalize their potential financing structure as promptly as practicable.

On February 6, 2013, at the request of the special committee, representatives of PJSC had telephone conversations with representatives of KeyBanc and Macquarie Capital regarding the status of the Family Shareholders’ financing. In particular, the Family Shareholders’ financial advisors discussed the percentage of traditional equity that was contemplated to be part of the financing structure, and indicated that a financing involving preferred shares to be issued by a new holding company that would become the parent of the Company would be treated as equity financing by the lenders for a senior facility to be entered into between the Company and sources of senior debt financing, along the lines described in the senior debt commitment papers that were provided to the special committee and its advisors on December 5, 2012.

During the week of February 10, 2013, Dr. Cowen had several telephone calls with Mr. Zev Weiss. During these calls, Dr. Cowen reiterated the special committee’s disappointment with the $17.50 headline price in the Family Shareholders’ revised proposal and with certain of the transaction terms contained in the draft merger agreement, particularly the provision providing for the suspension of dividends between signing and closing and the absence of a majority of the minority shareholder approval condition. Mr. Weiss told Dr. Cowen that the Family Shareholders viewed their proposal as fair to the unaffiliated shareholders, but understood that the special committee may have different views of the proposed terms and that in order for a transaction to occur, there would need to be mutual agreement on all open items. Mr. Weiss expressed the belief that financing commitments would be far advanced by late February, and Dr. Cowen and Mr. Weiss agreed to meet in person on February 27, 2013 for further discussions.

On February 14, 2013, the shareholder lawsuits filed in the United States District Court for the Northern District of Ohio, Eastern Division against the Family Shareholders and the Company were dismissed for lack of subject matter jurisdiction.

On February 17, 2013, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders to discuss Dr. Cowen’s recent conversations with Mr. Zev Weiss and to receive an update from PJSC regarding its earlier telephone calls with KeyBanc and Macquarie Capital regarding the Family Shareholders’ financing.

Between February 18, 2013 and February 25, 2013, Dr. Cowen and Mr. Zev Weiss had several telephone conversations regarding the objectives and limitations of their in-person meeting scheduled for February 27, 2013. During the conversations, Mr. Weiss conveyed to Dr. Cowen that the Family Shareholders anticipated reaching an agreement with the special committee at the meeting, and Dr. Cowen informed Mr. Weiss that he would be the only member of the special committee present and therefore would not have the authority to agree on a transaction. In light of the inability to agree on transaction terms on February 27, 2013, the Family Shareholders initially cancelled the meeting. However, after further discussions, Mr. Weiss and Dr. Cowen determined that it could nonetheless be productive for the parties to meet, obtain more information on financing, better understand the basis for the parties’ respective perspectives on price, discuss the transaction terms and determine what differences remained on significant issues. Dr. Cowen and Mr. Weiss agreed that the meeting would take place, with Mr. Weiss representing the Family Shareholders and Dr. Cowen representing the special committee, together with their respective legal and financial advisors.

On February 24, 2013, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders. During the meeting, representatives of PJSC gave a presentation to the special committee that updated financial information and analyses from PJSC’s presentation of January 27, 2013. PJSC reviewed a summary of the valuation analyses it performed and noted that some of the analyses had been revised slightly based on updated management estimates of the amounts of certain adjustments being considered with respect to fiscal 2013 for purposes of the analyses. The special committee asked PJSC questions about the updated analyses and discussed with PJSC the valuation complexities associated with the lack of companies directly comparable to the Company.

The special committee and PJSC reviewed and discussed various offer price scenarios and implied trading multiples for the proposed transaction. The special committee and PJSC discussed the level at which the Company shares might trade if no transaction were agreed upon and alternative transactions available to the Company, such as a dividend recapitalization transaction, with the special committee concluding, on balance, that the potential economic benefits of such a transaction were not likely to provide a superior value to the per share merger consideration currently offered by the Family Shareholders and that the risks of realizing any such value were considerable. The members of the special committee expressed the view that, while they were interested in continuing to explore a potential recapitalization of the Company, it was currently in the best interests of the Company’s shareholders to focus on exploring whether a transaction with the Family Shareholders could be agreed upon on terms acceptable to the special committee. The special committee and its advisors also discussed the goals of Dr. Cowen’s upcoming meeting with Mr. Zev Weiss on February 27, 2013.

On February 25, 2013, representatives of Sullivan & Cromwell sent representatives of Jones Day an agenda of discussion items for the upcoming meeting on February 27, 2013. The agenda included an overview of financing components and commitment papers, the parties’ perspectives on valuation and dividend continuation, and certain conditions and covenants contained in the draft merger agreement.

On February 27, 2013, Mr. Zev Weiss and representatives of Jones Day and KeyBanc met with Dr. Cowen and representatives of Sullivan & Cromwell and PJSC in New Orleans. Mr. Weiss informed the group that the Family Shareholders had made considerable progress with their potential financing sources and felt comfortable that they would obtain sufficient financing for a transaction, but that it was likely to take several more weeks for the terms to be finalized. Representatives of PJSC then provided an overview of financial analyses that supported the special committee’s position that a price of $18.75 per share would be fully justified based on a number of financial metrics. Mr. Weiss noted that the Company’s stock had been trading below the $17.50 headline price in the Family Shareholders’ revised proposal and that the market does not value the stock above $17.50 per share, and that $17.50 is likely substantially greater than the trading price of the stock in the absence of a proposal. The parties then discussed certain key transaction terms, particularly the special committee’s requirement that the transaction be conditioned upon a majority of the minority shareholder approval.

Dr. Cowen and Mr. Weiss then met separately to discuss the offer price. Mr. Weiss stated that he believed the $17.50 price was more than fair but that the Family Shareholders might be willing to consider an offer of $18 per share as well as the payment of regular quarterly dividends between the signing and closing of a transaction, consistent with the Company’s past practice, but only if the special committee would be willing to support these terms. Dr. Cowen told Mr. Weiss that he would relay that message to the other special committee members, but that he thought $18 per share and those terms would not be acceptable to the special committee.Mr. Weiss also reiterated that the Family Shareholders were committed to pursuing a transaction that the special committee would recommend to the Company’s shareholders. Dr. Cowen and Mr. Weiss agreed they would attempt to finalize price negotiations around the next regularly scheduled board meeting on March 7, 2013.

While Dr. Cowen and Mr. Weiss were meeting, representatives of Jones Day indicated to representatives of Sullivan & Cromwell that the Family Shareholders would like to receive assistance from Messrs. Haffke and Smith with respect to the evaluation of the Family Shareholders’ potential financing arrangements. The Sullivan & Cromwell representatives indicated that they would relay the requests to the special committee.

On February 28, 2013, Mr. Zev Weiss, on behalf of the Family Shareholders, sent the special committee a letter requesting the cooperation of Mr. Smith to assist with the evaluation of the Family Shareholders’ potential financing arrangements.

Later on February 28, 2013, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders to discuss the February 27, 2013 meeting between Dr. Cowen and Mr. Zev Weiss and their respective advisors, and to discuss the Family Shareholders’ request for access to Mr. Smith. The special committee noted that while Mr. Smith could be allowed to advise the Family Shareholders regarding the structure and terms of their proposed financing package, it would require him to continue to be available to provide information to the special committee in his role as chief financial officer of the Company. On this basis, the special committee granted the request in order to facilitate the Family Shareholders’ ability to obtain financing to support a higher offer price and, ultimately, put the Family Shareholders in a position to make their best proposal to the special committee.

On March 2, 2013, representatives from Sullivan & Cromwell, Baker & Hostetler and Mr. Haffke discussed the draft merger agreement. Later that day, Sullivan & Cromwell sent a revised draft of the merger agreement to Jones Day.

On March 5, 2013, Sullivan & Cromwell and Jones Day had a telephone call to negotiate the draft merger agreement.

On March 6, 2013, representatives of Sullivan & Cromwell and Jones Day met in New York to continue to negotiate the merger agreement, and discussed in particular: (i) the Family Shareholders’ financing obligations; (ii) the majority of the minority shareholder approval condition; (iii) a reverse break fee that would become payable by the Family Shareholders in certain circumstances and, as an alternative to a reverse break fee, the possibility of a personal guaranty from the Family Shareholder directors of the obligations of Parent and Merger Sub under the merger agreement and (iv) the reimbursement by the Company of the expenses of Parent and Merger Sub (up to an agreed cap, to be determined) if the merger agreement were terminated under certain circumstances. Sullivan & Cromwell said that it would be critical for the Family Shareholders to fully negotiate definitive agreements for any preferred financing at a holding company level before a transaction was entered into, as opposed to proceeding on the basis of term sheets with commitment letters, in order to give the special committee sufficient comfort that such financing (together with senior debt commitments) would be likely to be funded to close a transaction.

On March 7, 2013, Dr. Cowen and Mr. Zev Weiss had a telephone conversation during which Mr. Weiss stated that the Family Shareholders anticipated they would receive their financing commitment letters during the week of March 18, 2013. Mr. Zev Weiss also related that as part of continuing discussions with several potential investors regarding a non-voting preferred equity financing, the Family Shareholders were currently considering Koch AG Investment, LLC (which we refer to in this proxy statement as “Koch AG Investment”), a subsidiary of Koch Industries, Inc., as the most likely investor in the non-voting preferred equity facility. Dr. Cowen and Mr. Zev Weiss agreed to defer price discussions until financing was closer to completion.

Later on March 7, 2013, the special committee met in Cleveland with representatives of Squire Sanders, with representatives of Sullivan & Cromwell and PJSC participating telephonically, to discuss the status of negotiations regarding the merger agreement and the status of the Family Shareholders’ financing. After the meeting, Dr. Cowen spoke to Mr. Zev Weiss regarding the status of the Family Shareholders’ financing. Around the same time, Dr. Cowen stated to Mr. Smith that the special committee was concerned that the process for the Family Shareholders to obtain financing and for the parties to negotiate a transaction was taking longer than expected and that it wanted a resolution no later than the end of the month. Dr. Cowen also relayed this concern to Mr. Zev Weiss at various times leading up to the meetings between the parties at the end of March.

On March 10, 2013, Jones Day sent Sullivan & Cromwell a revised draft merger agreement and draft rollover and contribution agreement providing for the contribution of the Family Shareholders’ common shares to Parent.

On March 12, 2013, the special committee received a letter from Mr. Zev Weiss on behalf of the Family Shareholders requesting the assistance of the Company’s Treasurer in the evaluation of the Family Shareholders’ financing arrangements. On the same day, the special committee gave its permission to the request for assistance, similar to the arrangement with Mr. Smith, in order to facilitate the Family Shareholders’ ability to obtain financing to support a higher offer price and, ultimately, put the Family Shareholders in a position to make their best proposal to the special committee.

On March 13, 2013, Sullivan & Cromwell sent a revised draft rollover and contribution agreement and a draft guaranty and voting agreement to Jones Day, pursuant to which (i) the Family Shareholder directors would guarantee the obligations of Parent and Merger Sub under the merger agreement and (ii) the Family Shareholders would agree to vote their common shares to adopt the merger agreement.

Between March 14, 2013 and March 23, 2013, Sullivan & Cromwell and Jones Day continued to negotiate the draft merger agreement and related agreements.

On March 22, 2013 and March 23, 2013 Jones Day sent Sullivan & Cromwell a draft of the senior debt commitment letter (which had been updated from the draft provided on December 5, 2012) and a redacted draft of the fee letter relating to the senior debt commitment.

On March 23, 2013, the special committee met telephonically with representatives of Sullivan & Cromwell, PJSC and Squire Sanders. During the meeting, Sullivan & Cromwell updated the special committee on the negotiations of the merger agreement and related agreements, and the special committee and Sullivan & Cromwell discussed in particular the special committee’s requirement that the merger agreement contain the majority of the minority shareholder approval condition, the Family Shareholders’ financing commitments, the “no shop” and “change in recommendation” provisions and the conditions to closing in the draft merger agreement, and the limited guaranty in favor of the Company to be provided by certain Family Shareholders. PJSC also reviewed with the special committee updated financial information and analyses from its February 24, 2013 presentation. In addition, PJSC reviewed with the special committee preliminary “sources and uses” of funds information that had been provided by the Family Shareholders. The special committee also discussed with PJSC the significance of historical adjusted last twelve months to January 2013 EBITDA amounts being provided by the Family Shareholders to potential financing sources. The special committee and PJSC discussed the differences between the $211 million last 12 months EBITDA identified to financing sources and the $201 million fiscal year 2013 EBITDA used in PJSC’s most recent analyses. Differences included the time period referenced (the last 12 months ended January 2013, as compared to the Company’s 2013 fiscal year ended February 28, 2013) and the treatment of selected pro forma adjustments to EBITDA. Representatives of PJSC also noted that PJSC had adjusted its range of terminal multiples slightly in the financial presentation based on refinements to its financial model.

During the meeting, Dr. Cowen told the meeting participants that he had raised with Mr. Zev Weiss reimbursement of the Company by the Family Shareholders for the time spent by Mr. Smith and certain other Company employees in advising the Family Shareholders on their financing, and that Mr. Weiss had agreed that the Family Shareholders would provide such reimbursement.

Later on March 23, 2013 and continuing through March 28, 2013, representatives from Sullivan & Cromwell and Jones Day continued to negotiate the merger agreement and related agreements and the senior debt commitment letter. On March 24, 2013, representatives from Sullivan & Cromwell and Baker & Hostetler and Mr. Haffke had a telephone conversation to discuss the draft merger agreement. On March 25, 2013 Jones Day sent to Sullivan & Cromwell drafts of the agreements with Koch AG Investment relating to the non-voting preferred equity financing, which Sullivan & Cromwell and Jones Day continued to negotiate during the week of March 25. Jones Day also negotiated the financing documents with counsel to the senior lenders and Koch AG Investment during this period.

On the evening of March 27, 2013, the special committee and the other independent directors met in Cleveland (with Messrs. MacDonald and Ratner participating telephonically) with representatives of Sullivan & Cromwell, PJSC and Squire Sanders and Mr. Haffke, general counsel to the Company. Representatives of Sullivan & Cromwell gave a presentation to the independent directors regarding the fiduciary duties of the directors generally, as well as specifically with respect to the revised proposal from the Family Shareholders. PJSC then gave a presentation to the independent directors, updating the financial information and analyses in the PJSC presentation from February 24, 2013, and providing Mr. Ratner and Dr. Thornton with an explanation of the various financial analyses that the special committee had been reviewing throughout its evaluation of the Family Shareholders’ proposal.

Mr. Smith then joined the meeting telephonically at the invitation of the special committee. He first confirmed that since the announcement of the Family Shareholders’ proposal he had not had any discussions with any Family Shareholder or any representative of the Family Shareholders regarding his compensation or continued employment with the Company following the closing of any transaction. Mr. Smith answered questions from the special committee regarding fiscal year 2013 results, fiscal year 2014 expectations, EBITDA adjustments included in information provided to financing sources, and regarding the Family Shareholders’ financing arrangements. Mr. Smith and Mr. Ratner then left the meeting.

After Mr. Smith left the meeting, representatives of Sullivan & Cromwell reviewed with the independent directors the terms of the draft merger agreement, the guaranty and voting agreement, the rollover and contribution agreement and the financing commitments. The special committee members and Dr. Thornton asked the representatives of Sullivan & Cromwell questions and discussed the provisions of the agreements. Dr. Thornton and

Mr. Haffke then left the meeting. The special committee then discussed issues related to value and price negotiations, including (i) the fact that although the Company’s estimated EBITDA for fiscal year 2013 was greater than previously expected by management, adjusted EBITDA had decreased significantly from year to year during the previous several years, (ii) how the changes in the Company’s estimated EBITDA should affect negotiations with the Family Shareholders and the special committee’s determination of a fair price for the Company’s shares and (iii) the price that the Family Shareholders might be capable of paying in light of the cost of the financing they had obtained.

On March 28, 2013, the special committee and representatives of Sullivan & Cromwell, PJSC and Squire Sanders met in Cleveland with representatives of the Family Shareholders and Jones Day and KeyBanc to negotiate price and certain open terms in the various transaction agreements. In a morning meeting of the parties, Dr. Cowen, Mr. Zev Weiss and their respective advisors discussed the current negotiations relating to price, the merger agreement and the related agreements. The meeting recessed and the special committee and the Family Shareholders met with their respective legal and financial advisors to discuss the status of the negotiations. Following these discussions, the special committee concluded that it was appropriate and prudent to continue to negotiate for a higher price and decided to reiterate its prior counterproposal of not less than $18.75 per share. Dr. Cowen conveyed this message in a meeting with Mr. Zev Weiss. Mr. Weiss responded that the Family Shareholders had no ability and no intention to pay more than $18.00 per share, plus the one regular quarterly dividend that likely would be paid in the period between signing and closing of a transaction. Following a break during which Dr. Cowen conferred with the special committee, Dr. Cowen reiterated the special committee’s request for $18.75 per share plus ordinary course dividends.

Following the meeting between Dr. Cowen and Mr. Weiss, the special committee determined that Dr. Cowen should tell Mr. Weiss that, absent an indication from the Family Shareholders that they were willing increase the offer price above $18.00 per share, the discussions should be terminated or, alternatively, a meeting of all special committee members and the Family Shareholder directors could be convened to evaluate whether to continue discussions. The special committee members and Messrs. Morry, Zev and Jeffrey Weiss then met and discussed the status of the negotiations. During that meeting the Family Shareholders indicated that they would pay $18.25 per share with no dividend, but that they would pay no more.

Following that meeting, the special committee met with its advisors and considered the position of the Family Shareholders. They discussed the current terms of the transaction, the risks and consequences of not accepting the proposal, particularly in light of the impending expiration of the standstill provision governing the Family Shareholders, the risk that the Family Shareholders would commence a tender offer at prices lower than those currently being offered, and the benefits of affording the Company’s shareholders the opportunity and ability to review, evaluate and consider the transaction on their own as a result of adopting the majority of the minority shareholder approval condition, which had been agreed to by the Family Shareholders earlier in the March 28 meetings. The special committee then agreed that Dr. Cowen should communicate an offer of $18.20 plus one quarterly dividend (in addition to payment of the regular quarterly dividend that had been declared on March 8, 2013 for payment on April 8, 2013), which offer was accepted by the Family Shareholders.

At the request of the special committee, PJSC then reviewed with the special committee its financial analyses and delivered to the special committee an oral opinion, confirmed by delivery of a written opinion dated March 28, 2013, that as of that date and based on, and subject to, various assumptions and limitations described in its opinion, the $18.20 per share merger consideration to be received by holders of common shares (other than the Family Shareholders, Parent, Merger Sub and holders of dissenting shares) was fair, from a financial point of view, to those holders.

The special committee then unanimously resolved that the merger is fair to and in the best interests of the Company and its shareholders (other than the Family Shareholders, Parent and Merger Sub) and recommended that the board (i) determine that the merger agreement is advisable and in the best interests of the Company and its shareholders (other than the Family Shareholders, Parent and Merger Sub), (ii) approve the merger agreement and (iii) resolve to recommend that the Company’s shareholders adopt the merger agreement.

Promptly thereafter a meeting of the board was convened. A representative of Baker & Hostetler reviewed for the directors their fiduciary duties in connection with their consideration of the proposed transaction. Next, the board reviewed the final proposed terms for the merger, representatives of PJSC described PJSC’s financial analysis

of the proposal and delivered to the board PJSC’s oral opinion as to the fairness of the merger consideration, in identical form to the oral opinion that was delivered to the special committee as described above (which was confirmed by delivery of a written opinion dated March 28, 2013), and representatives of Sullivan & Cromwell described the terms of the merger agreement and other transaction documents. The board, with the unanimous vote of the independent directors, and based in part on the unanimous recommendation of the special committee, adopted resolutions (i) determining and declaring that the merger agreement and the transactions contemplated thereby, including the merger, were advisable and were fair to, and in the best interests of, the Company and its shareholders (other than the Family Shareholders, Parent and Merger Sub), (ii) approving the execution, delivery and performance of the merger agreement and the transactions contemplated thereby, including the merger, (iii) recommending that the Company’s shareholders vote to approve and adopt the merger agreement and the transactions contemplated thereby, including the merger and (iv) addressing various other Company matters. The Family Shareholder directors recused themselves from the vote of the board on these matters.

The parties executed the merger agreement and related agreements on March 29, 2013. On April 1, 2013, before the opening of trading on the next NYSE trading day after March 28, 2013, the Company issued a press release and filed a Current Report on Form 8-K with the SEC announcing the transaction.

Also on April 1, 2013, the Family Shareholders filed an amendment to their Schedule 13D with the Securities and Exchange Commission reflecting their entering into definitive agreements for the transaction and attaching a copy of the merger agreement and related agreements.

During the period from the public announcement of the Family Shareholders’ proposal on September 26, 2012 through the execution of the merger agreement on March 29, 2013, no third party provided any indication of interest to the Company or its advisors or the special committee or its advisors that it might be willing to pursue a transaction involving the Company.

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger

The special committee, acting with the advice and assistance of its legal and financial advisors, evaluated and negotiated the merger, including the terms and conditions of the merger agreement, and determined that the merger is fair to and in the best interests of the Company and its shareholders (other than the Family Shareholders, Parent and Merger Sub), including the unaffiliated shareholders. Since the members of the special committee were independent non-employee directors, neither the special committee nor the other non-employee directors retained a separate unaffiliated representative to act solely on behalf of unaffiliated shareholders for purposes of negotiating the terms of the merger or preparing a report concerning the fairness of the merger. The special committee unanimously recommended to the board of directors that the board:

Overview

The special committee held almost 30 meetings to discuss the Family Shareholders’ proposed acquisition of all of the outstanding Class A common shares and Class B common shares not currently owned by them (the “Family Shareholders’ proposal”), as it was revised from time to time. On at least 14 occasions the special committee discussed the price that was proposed and other substantive issues raised by the Family Shareholders’ proposal. The special committee found that the special circumstances of the Company gave rise to unusual considerations and significant complexity that made it particularly challenging to analyze the Family Shareholders’ proposal. These factors included:

After taking into account the foregoing, as well as the factors described below, under “Key Management Annual Incentive Plan – General”), resultingand in payoutsparticular the majority of the minority shareholder approval condition, the special committee determined unanimously to recommend the merger to the named executive officers underboard.

Reasons for the corporateMerger – Additional Considerations

In the course of reaching its determination and business unit componentsrecommendation, the members of the Key Management Annual Incentive Plan at 105.2%special committee considered the following factors and 100%potential benefits of the target incentive percentages for their specific positions, respectively. In addition, under our salary increase program for North American salaried associates, in fiscal 2012,merger, each of our named executive officers received a base salary increase ranging from 3% to 14% based on his individual performancewhich the special committee believed supported its decision:

Board Processes

Salary adjustments, if any, normally take effect on May 1st, based on, performanceand subject to, various assumptions and limitations described in its opinion, the immediately preceding fiscal year.

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Named Executive Officers.    To determine the base salary$18.20 per share merger consideration to be paid to the Chief Executive Officer in fiscal 2012, as well as to determine his equity grant level, the Compensation Committee assessed the Chief Executive Officer’s performance during, and his contribution to our results in, fiscal 2011. The Compensation Committee primarily considered our financial performance, including objectives based on achieving financial goals established under our 2011 Key Management Annual Incentive Plan. The Compensation Committee also considered the Chief Executive Officer’s other individual performance goals established for fiscal 2011, which were based on his contributions to the achievementreceived by holders of our major corporate initiatives, including:

Each of these goals is primarily assessed qualitatively and there are no specific weightings given to any criteria. The Compensation Committee determined that for fiscal 2011, Mr. Zev Weiss exceeded these objectives. Also, in assessing the base salary to be paid to the Chief Executive Officer in fiscal 2012, the Compensation Committee considered the compensation data provided by Mercer, as described above under “Setting Compensation,” where it found that target total cash compensation paid to the Chief Executive Officer was above the market median, while long-term equity compensation continued to be below the market median, resulting in total direct compensation paid to our Chief Executive Officer being below the market median. Based on Mr. Zev Weiss’s performance, and in consideration for the competitiveness of his total cash compensation, effective May 1, 2011, the Compensation Committee increased Mr. Zev Weiss’s salary by 4%, from $949,103 to $987,067.

In assessing the base salaries to be paid to each named executive officer othercommon shares (other than the Chief Executive Officer in fiscal 2012, the Compensation Committee considered the compensation data provided by MercerFamily Shareholders, Parent, Merger Sub and described above under “Setting Compensation.” Also in assessing the base salaries to be paid in fiscal 2012 to each named executive officer other than the Chief Executive Officer, as well as in determining his equity grant level, the Compensation Committee considered the Chief Executive Officer’s proposed change to each named executive’s base salary, together with his assessmentholders of each other named executive officer’s performance during fiscal 2011 relative to the officer’s individual performance objectives. Our named executive officers’ individual performance goals are developed to ensure that the officers and the business units for which they are responsible are driving those actions and initiatives that will ensure that the business units and the company achieve their short-termdissenting shares) was fair, from a financial objectives and their long-term strategic goals. These goals are designed to be internally consistent across business units and to collectively drive the achievement of our short- and long-term goals and strategies. These goals are generally assessed qualitatively, with no specific weightings given to any criteria.

The fiscal 2011 goals for Mr. Jeffrey Weiss included objectives based on achieving the financial goals under our 2011 Key Management Annual Incentive Plan, as well as reducing costs and improving efficiency through process improvement, beginning implementation of an enterprise resource planning system, beginning a globalization initiative, and improving product yield. Mr. Jeffrey Weiss’s goals also included:

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Based on his exceeding most of his individual performance goals, and considering the compensation data provided by Mercer and described above under “Setting Compensation,” where it found that his target total cash compensation was above the market median, while long-term equity compensation continued to be below the market median, resulting in total direct compensation paid to be below the market median, effective May 1, 2011, the Compensation Committee determined to increase Mr. Jeffrey Weiss’s base salary by 4%, from $742,906 to $772,622.

The fiscal 2011 goals for Mr. Smith included:

The fiscal 2011 goals for Mr. Beeder included:

The fiscal 2011 goals for Mr. Goulder included:

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Based on Mr. Smith meeting most of his individual performance goals, effective May 1, 2011, the Compensation Committee determined to increase Mr. Smith’s salary by 3%, from $424,711 to $437,453. Based on Mr. Beeder significantly exceeding most of his individual performance goals, effective May 1, 2011, the Compensation Committee determined to increase Mr. Beeder’s salary by 4% from $492,000 to $511,680. In addition, during the first half of fiscal 2012, Mr. Beeder assumed additional responsibilities over our AG Interactive operations. As a result of these increased responsibilities, together with the significant contributions made to the organization since joining American Greetings in 2008, effective July 1, 2011, the Compensation Committee increased Mr. Beeder’s salary by 10% from $511,680 to $562,900. Based on Mr. Goulder meeting most of his individual performance goals, effective May 1, 2011, the Compensation Committee determined to increase Mr. Goulder’s salary by 3% from $492,067 to $506,829.

Key Management Annual Incentive Plan

General.    Consistent with our emphasis on pay-for-performance, we have established the American Greetings Corporation Key Management Annual Incentive Plan, under which our executive officers, including our named executive officers, are eligible to receive awards based on performance against annually established performance goals. These goals include company-wide and individual business unit financial measures as well as individual performance objectives. This plan is an important component of our compensation package because it is designed to focus our executive officers’ efforts on, and reward executive officers for, annual operating results that help create value for our shareholders. At its target level, in fiscal 2012 the Key Management Annual Incentive Plan award represented between 41% and 50% of a named executive officer’s total cash compensation, and between 35% and 38% of a named executive officer’s total direct compensation, depending on the executive’s position.

The corporate performance goals for the Key Management Annual Incentive Plan are determined through our annual planning process, which generally begins in the December that precedes the beginning of the fiscal year. During this process, management develops an annual operating plan that is consistent with our strategic plan, and that contains specific, quantifiable annual financial goals. These goals are established for each business unit and for American Greetings as a whole. Around the beginning of each fiscal year, the full Board of Directors meets with senior management and discusses and approves the operating plan for the subsequent fiscal year. The operating plan goals form the basis for the annual incentive performance measures and goals. In this manner, the Board of Directors approved the annual operating plan, and its financial goals and objectives, for fiscal 2012. Similarly, for fiscal 2012, the Compensation Committee approved these operating plan goals, as adjusted by the factors described below, as the incentive plan’s financial objectives for both the corporate and business unit components for executive officers.

Any awards granted under the Key Management Annual Incentive Plan are determined at year-end based on actual performance against the pre-established specific corporate, business unit and individual goals. The Chief Executive Officer reviews each named executive officer’s individual performance and recommends to the Compensation Committee for its approval the level of compensation the officer should receive based on his individual performance. The Committee itself evaluates the performance of the Chief Executive Officer. The incentive plan award payments to any named executive officer must be reviewed and approved by the Compensation Committee prior to payment. The Compensation Committee may modify the recommendation provided by the Chief Executive Officer with respect to any named executive officer, which in turn affects payment under the Key Management Annual Incentive Plan. The Compensation Committee must approve any adjustments to the financial goals applicable to executive officers for purposes of determining if a business unit or the company has achieved its goals. Except as otherwise determined by the Compensation Committee, permitted adjustments are determined at the same time that the financial goals are initially established at the beginning of each year. These adjustments are described in a manner that can be objectively determined and are intended to account for items, events or changes in the business or its plans that, if included, would either (1) not be a meaningful measure of performance, or (2) not appropriately incentivize management. When made, these adjustments apply to all managers, including the named executive officers, who are assigned to the business unit for which the adjustment is being granted or, in the case of an adjustment to a corporate goal, these adjustments apply to all managers, including the named executive officers. With respect to the corporate and business unit

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goals established under the Key Management Annual Incentive Plan for fiscal 2012, these goals are calculated in accordance with U.S. generally accepted accounting principles, or GAAP. However, at the beginning of fiscal 2012, when the goals were established, the Committee determined that the following items or events, if they occur, should be excluded, and the Corporate EPS, Total Revenue and Corporate EBIT goals, as applicable, and results as measured against such goals should be adjusted accordingly, if they were not otherwise previously factored into the financial goals:

Performance Measures.    Under the fiscal 2012 Key Management Annual Incentive Plan, incentives are awarded to our named executive officers based on three components: (1) corporate performance (weighted at 30%), (2) business unit performance (weighted at 50%), and (3) individual performance (weighted at 20%).

For the named executive officers:

(contained in the letters, dated September 25, 2012 and January 17, 2013, from certain Family Shareholders to the special committee and subsequently confirmed to the special committee) that they have no intention to sell all or any significant portion of their shares in the Company and (ii) certain provisions of Ohio law and the Company’s charter documents that, together or separately, make it unlikely that a third party could acquire control of the Company without the support of the Family Shareholders;

The special committee also considered a variety of risks and potentially negative factors concerning the merger and the merger agreement, including the following:

The special committee also considered a number of factors relating to the procedural safeguards involved in the negotiation of the merger, including those discussed below, each of which it believed supported its determination and recommendation and provided assurance of the fairness of the merger to the shareholders of the Company unaffiliated with the Family Shareholders:

The above discussion of the information and factors considered by the special committee is not intended to be exhaustive, but indicates the material matters considered. In reaching its determination and recommendation, the special committee did not quantify, rank or assign any relative or specific weight to any of the foregoing factors, and individual members of the special committee may have considered various factors differently. The special committee did not undertake to make any specific determination as to whether any specific factor, or any particular aspect of any factor, supported or did not support its ultimate recommendation. Moreover, in

considering the information and factors described above, individual members of the special committee may have given differing weights to differing factors. The special committee based its unanimous recommendation on the totality of the information presented.

The special committee did not consider the liquidation value of the Company in determining the fairness of the merger to the Company and its shareholders (other than the Family Shareholders, Parent and Merger Sub), including the unaffiliated shareholders, because of its belief that liquidation value does not present a meaningful valuation for the Company and its business, as the Company’s value is derived from the cash flows generated from its continuing operations rather than from the value of assets that might be realized in a liquidation. Accordingly, the valuation analyses presented by PJSC to the special committee (as described under “Special Factors – Opinion ofPeter J. Solomon Company” beginning on page 40) were based on the operation of the Company as a continuing business, and, to that extent, such analyses could be characterized collectively as forms of going concern valuations.

The special committee also did not consider net book value, which is an historical accounting measure, in determining the fairness of the merger to the Company and its shareholders (other than the Family Shareholders, Parent and Merger Sub), including the unaffiliated shareholders, because of its belief that net book value is not a material indicator of the value of the Company as a going concern but rather is indicative of historical acquisition costs, and does not take into account the prospects of the Company, market conditions, trends in the industries in which the Company operates or the business risks inherent in those industries. Further, the special committee did not believe that net book value accurately reflects the Company’s present market value. The Company’s net book value per share as of February 28, 2013 was approximately $21.33 (calculated based on 31,970,841 common shares outstanding), which is higher than the $18.20 per share merger consideration and higher than the $14.34, closing price of the Class A common shares on September 25, 2012, the last trading date prior to the announcement of the Weiss Family proposal.

The special committee did not view the prices paid by the Company for the open market purchases or privately negotiated transactions of Class A common shares and Class B common shares detailed in the “Important Information Regarding American Greetings – Transactions in Common Shares” section beginning on page 106 as relevant beyond indicating the trading price of Class A common shares during such periods. Further, since the Company has not received any offer concerning a potential acquisition of the Company or similar fundamental transaction during the past two years from any party (other than the proposals from the Family Shareholders that led to the merger agreement), the consideration of any alternative or recent offers was not a factor available for the special committee to consider.

Recommendation of the Board of Directors

The board of directors consists of nine directors. On March 28, 2013, based in part on the unanimous recommendation of the special committee, as well as on the basis of the other factors described above, the board (with the Family Shareholder directors abstaining) on behalf of the Company unanimously:

In reaching these determinations, the board of directors (with the Family Shareholder directors abstaining) considered a number of factors, including the following material factors:

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the procedural fairness of the transaction, including that the transaction was negotiated over a period of months by a special committee consisting of four independent directors who are not affiliated with the Family Shareholders and are not employees of the Company or any of its subsidiaries, that the members of the special committee do not have an interest in the merger different from, or in addition to, that of the Company’s unaffiliated shareholders other than their interests described under “business unit componentSpecial Factors is based—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on performance compared to a consolidated corporate earnings before interestpage 62, and taxes (Corporate EBIT) goal, after adjustments for variations in net capital employed compared tothat the special committee was advised by its own legal and financial plan, with a charge/credit at the weighted average cost of capital;advisors; and

The primary measure for performance underboard of directors (with the corporate component of our Key Management Annual Incentive Plan is Corporate EPS, weighted at 90%Family Shareholder directors abstaining) recommends unanimously that you vote “FOR” the adoption of the 30% target awardmerger agreement.

Opinion of Peter J. Solomon Company, L.P.

The special committee has retained PJSC to act as its financial advisor in connection with the merger. On March 28, 2013, at a meeting of the special committee held to evaluate the merger, PJSC delivered to the special committee an oral opinion, subsequently delivered to the board of directors, confirmed by delivery of a written opinion dated March 28, 2013 to the special committee and the board of directors, to the effect that, as of such date and based on and subject to various assumptions and limitations described in its opinion, the $18.20 per share merger consideration to be received by holders of the common shares (other than Family Shareholders, the Company, Merger Sub and holders of dissenting shares) was fair, from a financial point of view, to such holders.

The full text of PJSC's written opinion, dated March 28, 2013, to the special committee and the board of directors, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. The following summary of PJSC’s opinion is qualified in its entirety by reference to the full text of the opinion.PJSC delivered its opinion to the special committee for the corporate component. Becausebenefit and use of the special committee (in its capacity as such) and the board of directors for the benefit and use of the board of directors (in its capacity as such). PJSC’s opinion did not address any aspect of the merger except as expressly identified in its opinion and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the merger. PJSC also expressed no opinion or recommendation as to how any shareholder should vote or act in connection with the merger or any related matter.

In arriving at its opinion, PJSC, among other things:

In arriving at its opinion, PJSC was not authorized to solicit, and did not solicit, interest from any party with respect to a merger or other business combination transaction involving the Company or any of its direct correlationassets.

In arriving at its opinion, PJSC assumed and relied upon the accuracy and completeness of the information reviewed by PJSC for the purposes of its opinion and PJSC did not assume any responsibility for independent verification of such information and relied on such information being complete and correct. PJSC relied on assurances of the management of the Company that they are not aware of any facts or circumstances that would make such information inaccurate or misleading in any respect material to PJSC’s opinion. With respect to the interestsfinancial projections, PJSC assumed that the financial projections were reasonably prepared on bases reflecting the best currently available estimates and judgments of our shareholders, we believe an EPS goal isthe future financial performance of the Company. PJSC did not conduct a good measurephysical inspection of overall management performance. To provide an incentivethe facilities or property of the Company. PJSC did not assume any responsibility for any independent valuation or appraisal of the assets or liabilities of the Company, nor was PJSC furnished with any such valuation or appraisal. Furthermore, PJSC did not consider any tax, accounting or legal effects of the merger or the transaction structure on any person or entity.

PJSC assumed that the final form of the merger agreement would be substantially the same as the last draft dated March 27, 2013 reviewed by PJSC prior to delivering the opinion and would not vary in any respect material to PJSC’s analysis. PJSC also assumed that the merger will be consummated in accordance with the terms of the merger agreement, without waiver, modification or amendment of any material term, condition or agreement (including, without limitation, the consideration proposed to be received by the holders of common shares (other than the Family Shareholders, Parent and Merger Sub and the holders of dissenting shares) in connection with the merger), and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the profitablemerger, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on the Company. PJSC further assumed that all representations and warranties set forth in the merger agreement are and will be true and correct as of the dates made or deemed made for purposes of the merger agreement as set forth in the merger agreement and that all parties to the merger agreement will comply with all covenants of such parties thereunder as set forth in the merger agreement.

PJSC’s opinion is necessarily based on economic, market and other conditions as in effect on, and the information made available to PJSC as of, March 28, 2013, the day the opinion was delivered. In particular, PJSC did not express any opinion as to the prices at which common shares may trade at any future time. Furthermore, PJSC’s opinion did not address the Company’s underlying business decision to undertake the merger, and PJSC’s opinion did not address the relative merits of the merger as compared to any alternative transactions that might be available to the Company. PJSC’s opinion did not address any other aspect or implication of the merger or any other agreement, arrangement or understanding entered into in connection with the merger or otherwise except as expressly identified in the opinion. PJSC did not express a view to, and its opinion did not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation to any officers, directors or employees of any parties to the merger, or any class of persons, relative to the consideration to be received by the holders of the common shares (other than the Family Shareholders, Parent, Merger Sub and the holders of dissenting shares) pursuant to the merger agreement.

The following summarizes the significant financial analyses performed by PJSC and reviewed with the special committee and board of directors on March 28, 2013 in connection with the delivery of PJSC’s opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand PJSC’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of PJSC’s financial analyses.

Selected Publicly Traded Company Analysis

PJSC reviewed and compared selected financial information of the Company with similar information using publicly available information of the following publicly traded companies that share similar business characteristics to the Company or its operating segments, and that PJSC deemed relevant, including publicly traded companies selected as operating in the following segments similar to individual business segments in which the Company operates: social expression, print media, directories, e-commerce and licensing, as well as publicly traded companies selected as low-growth retailers with similar growth patterns to that of the Company:

Social Expression

CSS Industries Inc.

Blythe, Inc.

Print Media

Quad/Graphics, Inc.

R.R. Donnelley & Sons Company

Scholastic Corporation

Selected Low-Growth Retailers

Barnes & Noble, Inc.

hhgregg, Inc.

Best Buy Company, Inc.

GameStop Corporation

Directories

PagesJaunes Groupe

Eniro AB

Yellow Media Limited

Selected E-Commerce

Shutterfly, Inc.

1-800-Flowers.com

CaféPress Inc.

Licensing

Iconix Brand Group, Inc.

Cherokee Inc.

Meredith Corporation

These companies are referred to herein as the “selected companies”.

PJSC calculated and compared various financial multiples and ratios, including, among other things:

We have historically used stock options,purpose of complying with the requirements of Rule 13e-3 and continue to use performance shares and RSUs, as our long-term incentive vehicle because werelated rules under the Exchange Act.

As described below, the Family Shareholders believe that the usemerger is fair to the unaffiliated shareholders of multiple forms of compensation helps to provide a balance between long-term and short-term awards in our total compensation package. The Key Management Annual Incentive Plan focuses on the achievement of annual performance targets, while the multi-year vesting for our equity awards creates incentives to increase shareholder value over a longer term and encourages ongoing executive retention.

RSUs

Grant Terms.    RSUs are earnedCompany on the basis of continued service(i) the factors described in the “Special Factors – Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger” section beginning on page 33, which factors Family LLC, Parent, Merger Sub and the Family Shareholders agree with and adopt, and (ii) the additional factors described below. In this section, when we refer to us. To align their interests with thosethe “board of our shareholders, grantsdirectors” and “board,” we are referring to our named executive officersthe board of directors other than the ChiefFamily Shareholder directors (who recused themselves from the board’s vote on the merger).

None of Family LLC, Parent, Merger Sub or the Family Shareholders participated in the deliberations of the special committee or the vote of the board of directors regarding, or received advice from the Company’s legal advisor or the special committee’s legal or financial advisors as to, the fairness of the merger. As described in the “Special Factors – Interests of the Company’s Directors and Executive OfficerOfficers in the Merger” section beginning on page 62, the Family Shareholders have interests in the merger different from those of the unaffiliated shareholders of the Company by virtue of the Family Shareholders’ obligation to make an equity investment in Parent via the rollover of all of their existing holdings of Class A common shares and Class B common shares and the PresidentWeiss Family’s continuing leadership role in the surviving corporation.

The unaffiliated shareholders were represented by the special committee, which negotiated the terms and Chief Operating Officer vestconditions of the merger agreement with the assistance of the special committee’s legal and financial advisors. None of Family LLC, Parent, Merger Sub or the Family Shareholders have performed, or engaged a financial advisor to perform, any valuation or other analysis for the purpose of assessing the fairness of the merger to the unaffiliated shareholders of the Company. The Weiss Family and Parent engaged KeyBanc Capital Markets as a financial advisor in approximately equal increments over two years followingconnection with negotiating the dateterms of grantthe merger and grantsthe financing for the merger. However, KeyBanc Capital Markets did not provide any opinion with respect to our Chief Executive Officerthe fairness of the merger consideration.

Based on the Family Shareholders’ knowledge and President and Chief Operating Officer vest in approximately equal increments over three years followinganalysis of available information regarding the date of grant.

Grant Timing.    Our named executive officers are eligible to receive RSUs annuallyCompany, as well as awardsdiscussions with members of the Company’s senior management regarding the Company and its business and the factors considered by, and the analysis and resulting conclusions of, the board of directors and the special committee described in connectionthe “Special Factors – Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger” section beginning on page 33 (including, without limitation, the board’s and special committee’s analysis with promotionsrespect to higher level positions. The Compensation Committee applies a grant policy designed to ensure that RSUs are granted at such times after we publicly release our quarterly or annual financial information. Under the policy,Company’s going concern value), with which Family LLC, Parent, Merger Sub and the date of grant for annual RSU awards isFamily Shareholders agree and which analysis and resulting conclusions Family LLC, Parent, Merger Sub and the second trading day (a day thatFamily Shareholders adopt, Family LLC, Parent, Merger Sub and the NYSE is open for trading) following the filing of our Annual Report on Form 10-K. The date of grant for an individual newly hired or promoted into an eligible position is based on the month of hire or promotion, and is either granted with the annual RSU grant or on the second trading day following a quarterly earnings release.

Generally, we do not consider an executive officer’s stock holdings or previous equity grants in determining the number of equity awards to grant. WeFamily Shareholders believe that our executive officers should be fairly compensated each year relative to market pay levels of our peer group and relative to our other executive officers. Moreover, we believe that our long-term incentive compensation program furthers our significant emphasis on pay-for-performance compensation. We do not have any requirement that executive officers hold a specific amount of our common shares or stock options. We do, however, prohibit transactions by our directors, officers and employees in puts, calls, hedges and other derivatives relating to American Greetings securities, including, without limitation, financial instruments, such as prepaid variable forward contracts, equity swaps, collars and exchange funds, that are designed to hedge or offset any decrease in the market value of securities of American Greetings.

Grants

merger is substantively fair to the Named Executive Officers.    Like our other pay components, long-term equity incentive award grants are generally expected to approximate the market median as described above in “Setting Compensation.” With respect to grants made during fiscal 2012, the sizeunaffiliated shareholders of the RSU grant was a fixed, targeted number of shares based upon the level of the executive officer’s position, with the actual grant size then being adjusted depending on the level of individual performance achieved by the executive in the prior fiscal year. However, because the value of the RSU grant both to the recipient and for purposes of calculating the expense recorded by the company could vary greatly depending on the trading price of our stock on the date of grant, beginning with grants made in

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May 2012 (fiscal 2013), the size of the RSU grant is based on a fixed dollar value of shares, where the dollar value is based upon the level of the executive officer’s position. For annual grants, this dollar value of the grant size is in turn adjusted depending on the level of individual performance achieved by the executive, based on the executive’s achievement of individual goals and objectives in the fiscal year preceding the grant. As a result, the actual number of RSUs granted will vary in size depending not only on the executive officer’s level and performance in the prior year, but also based on the closing price of our common shares on the date of grant. The annual target grant sizes are as follows:

The fiscal 2012 target grant sizes set forth above were set at a level intended to maintain the aggregate accounting cost for the equity awards incurred by the company at approximately the same level as incurred when our long-term incentive program consisted solely of stock options. The dollar value of the fiscal 2013 target grant sizes set forth above was set at a level intended to approximate the aggregate target value of the RSU grants made during fiscal 2012 based on the closing price of our common shares on that date of grant, May 3, 2011, which was $23.72 per share. The target grant sizes reflected in the table above may be increased or decreased based on individual performance in the prior fiscal year. A named executive officer who has not achieved his or her individual performance goals is eligible for an equity grant ranging from 0% to 100% of the target grant size for his or her position for that fiscal year. A named executive officer who is determined to have exceeded his or her individual performance goals is eligible for an equity grant of either 115% or 125% of the target grant size for his or her position.

The RSUs granted to the named executive officers in fiscal 2012 that are reflected above were granted in May 2011 and are reflected in the Fiscal 2012 Summary CompensationCompany. In particular, Family LLC, Parent, Merger Sub and the Fiscal 2012 Grants of Plan-Based Awards Tables in the “Fiscal 2012 Information Concerning Executive Officers” section below. The size of the award was based on the officer’s target grant size and his individual performance during fiscal 2011. As described above under “Base Salaries,” the grant sizes to Messrs. Smith and Goulder were based on each of them meeting his individual performance goals for fiscal 2011. The grant sizes for Messrs. Zev and Jeffrey Weiss were based on each of them exceeding his individual performance goals for fiscal 2011 and the grant size to Mr. Beeder was based on him significantly exceeding his individual performance goals for fiscal 2011.

The annual RSU grants to our named executive officers based on fiscal 2012 performance were made on May 2, 2012, which is in our fiscal 2013. The size of the grants was based on each individual’s target annual RSU grant size, the closing price of our common shares on the date of grant and each individual’s performance rating, based on the officer’s individual performance assessment described above under the heading “Key Management Annual Incentive Plan – Awards to Named Executive Officers.” Because the RSUs granted to each of the named executive officers were granted in fiscal 2013, they are not reflected in the Fiscal 2012 Summary Compensation or the Fiscal 2012 Grants of Plan-Based Awards Tables in the “Fiscal 2012 Information Concerning Executive Officers” section below.

Performance Shares

With the achievement in fiscal 2010 and 2011 of the goals established for the performance share program that was implemented in April 2009, no performance share grants were made to the named executive officers in fiscal 2012. In April 2012, however, the Compensation Committee approved a new performance share award

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program under which each year, beginning in fiscal 2013, executive officers, including the named executive officers, will be eligible to receive grants of performance shares under the American Greetings 2007 Omnibus Incentive Compensation Plan that can be earned based on the achievement of long-term performance goals established by the Compensation Committee from time to time. The program is designed to reward participants for successfully executing key strategic, operational and business objectives that are intended to produce exceptional long-term performance and create significant value for our shareholders. The performance share program, like the Key Management Annual Incentive Plan, is intended to drive operational performance while also driving shareholder value creation, thereby better aligning the interests of our executives with those of our shareholders. Performance share grants, if made, will entitle the recipient to receive common shares based on the achievement of such performance goals as may be established by the Compensation Committee at the time of grant. No performance share grants have been made to the named executive officers under this program prior to the date of this Proxy Statement.

Benefits

To offer competitive compensation packages, during fiscal 2012, we provided our executive officers a Supplemental Executive Retirement Plan, a Retirement Profit Sharing and Savings Plan, and an Executive Deferred Compensation Plan. Effective January 1, 2012, we froze the Executive Deferred Compensation Plan and determined to no longer provide the maximizer benefit and restoration benefit described below.

The Supplemental Executive Retirement Plan is designed to provide benefits that are competitive with those offered by other comparable companies, while requiring a meaningful tenure as an officer before becoming eligible to receive benefits. Although all of our employees meeting the requisite service requirements are entitled to participate in the Retirement Profit Sharing and Savings Plan, for officers at the Vice President level and above, which includes all of the named executive officers, during fiscal 2012, we offered a benefit that permitted those officers to contribute more than the statutory maximum ($16,500 for 2011) under the 401(k) savings component of the plan, and receive a corresponding match (the “maximizer benefit”) on the additional contributions (40% of the first 6% of eligible compensation deferred). Similarly, for our executives at the Vice President level and above, which includes our named executive officers, during fiscal 2012, we offer a benefit under which participants in the profit sharing component of the plan will receive an additional profit sharing contribution (the “restoration benefit”) based on a portion of the executive’s base salary that exceeds the statutory compensation limit. Both of these benefits were intended to enable officers to take full advantage of the ability to earn profit sharing contributions toward the executive’s retirement, and to save on a tax deferred basis and receive matching contributions, notwithstanding the limits imposed by the Internal Revenue Code on compensation that can be taken into account for purposes of determining contributions to a qualified retirement plan, such as our Retirement Profit Sharing and Savings Plan. As reflected in note 6 to the Fiscal 2012 Summary Compensation Table as well as in note 1 to the Fiscal 2012 Nonqualified Deferred Compensation Table below, based on the company’s financial performance in fiscal 2012, during fiscal 2013, we made profit sharing and matching contributions to our employees, together with the associated maximizer and restoration benefit, to the named executive officers.

Until January 1, 2012, executive officers, including the named executive officers, were also eligible to participate in our Executive Deferred Compensation Plan, where officers were entitled to defer compensation on a tax deferred basis. The cost of the benefit provided under the deferred compensation program was de minimis. Consequently, we generally have notFamily Shareholders considered the value of the deferred compensation program in calculating the total compensation provided to our named executive officers. These plans are described in more detail in the narrative accompanying the disclosure tables in the “Fiscal 2012 Information Concerning Executive Officers” section below. In an effort to eliminate compensation programs offered by the company that are not widely utilized, yet are administratively burdensome to operate, on December 8, 2011, the Compensation Committee determined to freeze the Executive Deferred Compensation Plan. Accordingly, participants are no longer permitted to make new deferral elections under the Executive Deferred Compensation Plan. Deferral elections made prior to December 8, 2011, however, will continue to be honored, and amounts previously deferred will remain deferred in accordance with existing deferral elections and may be re-deferred in accordance with the Executive Deferred Compensation Plan. In addition, executive officers were eligible to receive and did in fact

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receive amounts contributed by the company as additional matching and profit sharing contributions under the Executive Deferred Compensation Plan’s maximizer and restoration benefits based on our performance in the fiscal year ended February 29, 2012. The maximizer and restoration benefit, however, will not be provided for future years.

Our executive officers also participate in other benefit plans provided by American Greetings, including medical, dental and life insurance. Except as described below under “Perquisites and Other Benefits,” their participation is generally on the same terms as other employees.

Perquisites and Other Benefits

We provide our executive officers with certain personal benefits and perquisites. The value of personal benefits and perquisites, and the related incremental cost to American Greetings, has historically not been significant. The primary personal benefits and perquisites for our executive officers are:following:

Family LLC, Parent, Merger Sub and the Family Shareholders did not establish, and did not consider, a pre-merger public company going concern value of Class A common shares for the purposes of determining the per share merger consideration or the fairness of the per share merger consideration to the unaffiliated shareholders of the Company because, following the merger, the Company will have a significantly different capital structure. However, to the extent the pre-merger going concern value was reflected in the pre-announcement per share price of Class A common shares, the $18.20 per share merger consideration represented a premium to the going concern value of the Company. In addition, Family LLC, Parent, Merger Sub and the Family Shareholders did not consider the net book value of Class A common shares because they believe that net book value, which is an accounting concept, does not reflect, or have any meaningful impact on, either the market trading prices of Class A common shares or the Company’s value as a going concern. Family LLC, Parent, Merger Sub and the Family Shareholders did not consider liquidation value in determining the fairness of the merger to the unaffiliated shareholders of the Company because of their belief that liquidation sales generally result in proceeds substantially less than sales of a going concern, because of the impracticability of determining a liquidation value given the significant execution risk involved in any breakup, because they considered the Company to be a viable, going concern and because the Company is expected to continue to operate its business following the merger.

Family LLC, Parent, Merger Sub and the Family Shareholders believe that the merger is procedurally fair to the unaffiliated shareholders of the Company based upon the following:

have no financial interest in the merger that is different from, or in addition to, the interests of the unaffiliated shareholders generally, other than their receipt of board of directors and special committee fees (which are not contingent upon the consummation of the merger or the special committee’s or the Board’s recommendation or approval of the merger) and their interests described in the “Special Factors – Interests of the Company’s Directors and Executive Officers in the Merger” section beginning on page 62, was given exclusive authority to, among other things, review, evaluate and negotiate the terms of the proposed merger, to decide whether or not to engage in the merger and to coverconsider alternatives to the operating costsmerger;

While members of the Weiss Family are officers and directors of the Company, because of their participation in the transaction as described in the “Special Factors – Interests of the Company’s Directors and Executive Officers in the Merger” section beginning on page 62, they did not serve on the special committee, nor did they participate in, or vote in connection with, the special committee’s evaluation or recommendation of the merger agreement and the merger or the board’s approval of the merger agreement and the merger. For these reasons, the Weiss Family does not believe that their or any other Family Shareholders’ interests in the merger influenced the decision of the special committee or the board with respect to the merger agreement or the merger.

The foregoing discussion of the information and factors considered and given weight by Family LLC, Parent, Merger Sub and the Family Shareholders in connection with the fairness of the merger agreement and the merger is not intended to be exhaustive but is believed to include all material factors considered by them. Family LLC, Parent, Merger Sub and the Family Shareholders did not find it practicable to, and did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their position as to the fairness of the merger agreement and the merger. Rather, each of Family LLC, Parent, Merger Sub and the Family Shareholders made its fairness determination after considering all of the foregoing as a whole. Family LLC, Parent, Merger Sub and the Family Shareholders believe these factors provide a reasonable basis upon which to form their belief that the merger is fair to the unaffiliated shareholders of the Company. This belief should not, however, be construed as a recommendation to any Company shareholder to approve the merger or adopt the merger

agreement. None of Family LLC, Parent, Merger Sub or any Family Shareholder makes any recommendation as to how shareholders of the Company should vote their common shares relating to the merger.

Certain Effects of the Merger

If the Company shareholder approval and majority of the minority shareholder approval are obtained and the other conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the Company with the Company being the surviving corporation. If the merger is completed, all of our equity interests will be owned by Parent. Except for the Family Shareholders and any other person who may have a beneficial ownership interest in the Company as of the closing of the merger, through their interest in Parent, none of our current shareholders will have any ownership interest in, or be a shareholder of, the Company after the completion of the merger. As a result, our current shareholders (other than the Family Shareholders and any other person who may have an ownership interest in Parent) will no longer benefit from any increase in our value, nor will they bear the risk of any decrease in our value. Following the merger, Parent will benefit from any increase in our value and also will bear the risk of any decrease in our value.

Upon the consummation of the merger:

The Company does not expect to grant any equity awards under the existing Company equity plans following the closing of the merger.

Following the merger, all of the equity interests in the surviving corporation will ultimately be owned by Parent. If the merger is completed, the Weiss Family and the other beneficial owners of Parent will be the sole beneficiaries of our future earnings and growth, if any, and will be entitled to vote on corporate matters affecting the Company following the merger. Similarly, the Weiss Family and the other shareholders of Parent will also bear the risks of ongoing operations, including the risks of any decrease in our value after the merger and the operational and other risks related to the incurrence by the surviving corporation of additional debt as described below under “Special Factors – Financing” beginning on page 56.

If the merger is completed, the Company’s shareholders other than the Family Shareholders and any other person who may have a beneficial ownership interest in Parent will have no interest in the Company’s net book value or net earnings.

As a result of and upon consummation of the merger, the Company will be 100% owned by Parent. Following the merger, the Weiss Family and the other Family Shareholders will hold their interests in the Company indirectly through Family LLC, and Family LLC (and thereby indirectly the Family Shareholders) will own 100% of the common equity and voting equity of Parent. The following table sets forth, among other things, the percentage ownership of the Company by Family LLC and each of the Family Shareholders pre- and post-merger, as well as the interest in the net book value and net earnings of the Company of Family LLC and each of the Family Shareholders pre-and post-merger.

At the closing, Koch AG Investment will hold between $215.6 million and $254.8 million in aggregate stated value of non-voting preferred stock of Parent. The preferred stock is non-voting and does not include a right to any board seats in Parent or the Company, but does have limited consent rights with respect to certain significant corporate actions proposed to be taken by Parent and the Company. Subject to certain conditions, all or part of the preferred stock can be redeemed by the Family Shareholders, at their election, at any time and from time to time, by paying a specified preference amount. For more information, see “Special Factors—Financing—Koch AG Investment Non-Voting Preferred Equity Financing” beginning on page 57.

The primary benefit of the merger to the unaffiliated shareholders of the Company will be the right of those shareholders to receive a cash payment of $18.20, without interest, for each Class A common share held by those shareholders as described above, representing a premium of 26.9% to the closing price of the Class A common shares on September 25, 2012, the last trading day before the announcement by the Weiss Family of its proposal to acquire all outstanding common shares not owned by it, and a premium of approximately 27.5% over the average closing price of the Company’s Class A common shares for the 45 trading days prior to that date.

The primary detriments of the merger to the unaffiliated shareholders of the Company will include the lack of interest of such shareholders in our potential future earnings, growth or value. Additionally, the receipt of cash in exchange for common shares pursuant to the merger will generally be a taxable sale transaction for U.S. federal income tax purposes to many of our shareholders who surrender their common shares in the merger.

In connection with the merger, the Family Shareholders and their permitted assignees or designees will receive benefits and be subject to obligations that are different from, or in addition to, the benefits received by

our shareholders generally. The primary benefits of the merger to the Family Shareholders, based on their indirect ownership of all of the common equity interests in Parent, will include their interest in our potential future earnings and growth which, if they successfully execute their business strategies, could be substantial. Additionally, following the merger, we will be a private company, and as such will be relieved of the burdens imposed on companies with publicly traded equity, including the requirements and restrictions on trading that our directors, officers and beneficial owners of more than 10% of our common shares face as a result of the provisions of Section 16 of the Exchange Act and the requirement of furnishing a proxy statement in connection with shareholders’ meetings pursuant to Section 14(a) of the Exchange Act. Termination of registration of our common shares under the Exchange Act also will reduce substantially the information required to be furnished by the Company to our shareholders and the SEC; the Company expects, however, that it will continue to file reports with the SEC pursuant to requirements contained in the 2021 senior notes indenture. It is estimated that the Company will have reduced expenses of approximately $1.4 million per year as a result of no longer being a publicly traded company. Additionally, following the merger, the Weiss Family will control the surviving corporation. Additional anticipated benefits to the Weiss Family include receiving tax-free treatment with respect to the contribution of common shares in the transaction pursuant to the rollover and contribution agreement discussed under “Agreements Involving Common Shares – Rollover and Contribution Agreement” beginning on page 94.

The primary detriments of the merger to the Family Shareholders include that all of the risk of any possible decrease in our earnings, growth or value, and all of the risks related to our additional indebtedness, following the merger will be borne by Parent. Additionally, the investment by the Weiss Family and the other investors in Parent and the Company will not be liquid, with no public trading market for such securities, and the equity securities of Parent and the Company will be subject to contractual restrictions on transfer.

In connection with the merger, certain members of the Company’s management will receive benefits and be subject to obligations that are different from, or in addition to, the benefits and obligations of the Company’s shareholders generally, as described in more detail under “Special Factors – Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 62. Those incremental benefits are expected to include, among others, certain executive officers continuing as executive officers of the surviving corporation.

The Class A common shares and the Class B common shares are currently registered under the Exchange Act and the Class A common shares are quoted on the NYSE under the symbol “AM”. As a result of the merger, the Company will be a privately held corporation and there will be no public market for its shares. After the merger, the Class A common shares will cease to be quoted on the NYSE and price quotations with respect to sales of Class A common shares in the public market will no longer be available. In addition, registration of the Class A common shares and the Class B common shares under the Exchange Act will be terminated.

At the effective time of the merger, the articles of incorporation and code of regulations of the Company will be amended and restated to be in the form of (except with respect to the name of the Company) the articles of incorporation and code of regulations of Merger Sub, and, as so amended, will be the articles of incorporation and code of regulations of the Company following the merger until thereafter amended in accordance with their respective terms and Ohio law.

Parent anticipates that the Company’s executive officers as of the effective time of the merger will continue as the initial officers of the Company following the merger.

Projected Financial Information

As part of its annual financial planning process, the Company prepares management projections and budgets for its upcoming fiscal year and multi-year treasury models, which the Company then updates from time to time. At the time of its receipt of the Family Shareholders’ proposal in September 2012, the Company did not have a consolidated set of projections that would suit the needs of the special committee or its advisors or otherwise be useful for purposes of evaluating a potential transaction. Management does not generally update multi-year projections throughout the year, and the projections established earlier in the year were no longer accurate because of intervening significant changes resulting from the Company’s acquisition of the Clinton Cards business. The Company’s management determined that the treasury model was the most up to date and, together with PJSC, determined that it was the appropriate basis for preparing consolidated projections for purposes of the special

committee’s evaluation of a potential transaction. From October through the end of November 2012, the Company’s financial management worked to update the model for recent events, incorporate information from the Company’s fiscal 2013 operating and financial plan, and otherwise confirm that the various assumptions underlying the model were appropriate for purposes of presenting a consolidated set of projections useful for purposes of evaluating a potential transaction. The Company’s management also extended the model to five years from the previously existing three years. On November 30, 2012, the updated treasury model was provided to the special committee and its advisors, and the projections derived therefrom are included below. This updated treasury model was also provided to the advisors to the Family Shareholders and their potential financing sources. From November 2012 through February 2013, the Company’s management provided the special committee with information and estimates regarding developments with respect to fiscal 2013 that may affect PJSC’s analyses, which are reflected in the projections set forth below for fiscal 2013 EBITDA and EBIT and discussed in the accompanying footnote. All financial documentation and information referenced above also was provided to the special committee’s financial advisor, PJSC. The Company does not, as a matter of course, publicly disclose projected financial information.

We have included these projections solely for the purpose of giving our shareholders access to certain nonpublic information considered by the special committee in evaluating the merger. The projections are, in general, prepared solely for internal use in assessing strategic direction, related capital and resource needs and allocations and other management decisions. Projections of this type are based on estimates and assumptions that, in many cases, reflect subjective judgment, and which are subject to significant uncertainties and contingencies, including greeting card and other social expression industry performance, general business, economic, regulatory, market and financial conditions, as well as changes to the business, financial condition and results of operations of the Company. In addition, the Company’s financial results in recent years have been significantly affected by non-recurring, one-time and other special items, which makes it difficult to identify clear trends in the Company’s business and the Company’s financial future. These factors, which may prevent the financial projections or underlying assumptions from being realized, are difficult to predict, and many of them are beyond the Company’s control. Therefore, the projections are forward-looking statements and should be read with caution. See “Cautionary Statement Concerning Forward-Looking Information,” beginning on page 69.

The projections cover multiple years and such information is necessarily less predictive with each successive year. Consequently, there can be no assurance that the underlying assumptions will prove to be accurate, that the projected results will be realized or that actual results will not be significantly different than projected. These projections were prepared solely for internal use and not for publication or with a view toward complying with the published guidelines of the SEC regarding projections or with guidelines established by the American Institute of Certified Public Accountants or any other organization for preparation and presentation of prospective financial information. Our independent registered public accounting firm has not examined, compiled or otherwise applied procedures to the financial projections presented herein and, accordingly, has not, and does not, express an opinion or any other form of assurance with respect to them. The merger agreement includes no representations by the Company or its management as to this projected financial information. In light of the uncertainties inherent in projections of this type, neither the Company nor any other person has expressed any opinion or assurance to shareholders on this information or its achievability, and the inclusion of this information should not be regarded as an indication that the Company, the special committee, the Family Shareholders, any of their representatives or anyone who received this information then considered, or now considers, it necessarily to be predictive of actual future events.

The projections do not reflect any impact of the merger, nor do they take into account the effect of any failure of the merger to occur. None of the Company, the special committee, the Family Shareholders or any of their respective representatives intends to update or revise the summary projected financial information set forth below to reflect circumstances existing after the date when made, except as may be required by applicable securities laws.

Summary Projected Financial Performance

Financing

The Company and Parent estimate that the total amount of funds (including rollover equity) required to complete the merger and related transactions and pay related fees and expenses will be approximately $700 million. Parent expects this amount to be provided through a combination of the proceeds of:

together with cash of the Company at the closing of the merger.

Rollover Financing

On March 29, 2013, the Family Shareholders entered into the rollover and contribution agreement with Family LLC and Parent (the “rollover and contribution agreement”), pursuant to which the Family Shareholders collectively committed to contribute, immediately prior to the consummation of the merger, an aggregate amount of 2,311,499 Class A common shares and Class B common shares (including 30,432 Class A common shares and Class B common shares issued on May 2, 2013 and May 3, 2013, to Morry Weiss, Zev Weiss, Jeffrey Weiss and Gary Weiss in respect of 55,889 restricted stock units granted to them under the 2007 plan) to Family LLC (the equivalent of a $42,069,282 investment based on the $18.20 per share merger consideration) in exchange for certain

equity securities of Family LLC. Also pursuant to the rollover and contribution agreement, Family LLC agreed to contribute the shares described above to Parent, in exchange for all of the common shares of Parent.

The obligations of the Family Shareholders, Family LLC and Parent pursuant to the rollover and contribution agreement are conditioned upon the satisfaction or waiver of the conditions to the obligations of Parent, Merger Sub and the Company under the merger agreement described in the “Merger Agreement – Conditions to the Merger” section beginning on page 90. If the transactions provided for in the rollover and contribution agreement are consummated but the merger agreement is terminated in accordance with its terms as described in the “Merger Agreement – Termination” section beginning on page 91, then the transactions provided for in the rollover and contribution agreement will be void and deemed not to have occurred.

The Company is an express third-party beneficiary of the rollover and contribution agreement solely with respect to a right to seek specific performance of the rollover and contribution agreement by Parent if (i) the conditions to Parent’s and Merger Sub’s obligations under the merger agreement have been satisfied, (ii) the conditions to funding under each of the Non-Voting Preferred Equity Investment and the Debt Financing have been satisfied, (iii) Parent and Merger Sub fail to complete the closing of the merger in accordance with the merger agreement and (iv) the Company has irrevocably confirmed that if specific performance is granted and the Non-Voting Preferred Equity Investment and the Debt Financing is funded then the Company will take the actions required of it by the merger agreement to cause the closing of the merger to occur.

Koch AG Investment Non-Voting Preferred Equity Financing

On March 29, 2013, Koch AG Investment entered into a Series A Preferred Stock Purchase Agreement, which we refer to as the “Preferred Stock Purchase Agreement,” with Parent, and with Morry Weiss, Zev Weiss and Jeffrey Weiss as the guarantors of certain of Parent’s obligations thereunder and with Koch Industries, Inc. as the guarantor of certain of Koch AG Investment’s obligations thereunder. Pursuant to the Preferred Stock Purchase Agreement, Koch AG Investment committed to purchase, immediately prior to the consummation of the merger, between $215.6 million and $254.8 million of non-voting preferred equity securities of Parent. The amount of the non-voting preferred equity securities to be sold to Koch AG Investment will be elected at the discretion of Parent at least 15 days prior to the anticipated closing date of the merger, but in no event will be less than $215.6 million nor greater than $254.8 million without the consent of Koch AG Investment.

The obligations of Koch AG Investment and Parent to consummate the Non-Voting Preferred Equity Investment are subject to satisfaction or waiver by Koch AG Investment and Parent at or prior to the closing of the condition that no restraining order, preliminary or permanent injunction or other order, decision, opinion, decree or ruling issued by a court of competent jurisdiction or other governmental entity be in effect, and no laws have been enacted, entered or enforced since the date of the Preferred Stock Purchase Agreement, preventing, or making illegal, the issuance and sale of the non-voting preferred stock of Parent and the consummation of the other transactions contemplated by the Preferred Stock Purchase Agreement.

The obligation of Parent to consummate the transactions contemplated by the Preferred Stock Purchase Agreement is further subject to the satisfaction or waiver in writing by Parent at or prior to the closing of the following conditions:

warranties that are qualified by materiality, material adverse effect or words of universal life insurance premiums paid by us. Upon termination of employment, each officer may assume his or her insurance policy, including premium payment obligations, insimilar import, which case such officerrepresentations and warranties will be entitledtrue and correct in all respects) at and as of the date of the Preferred Stock Purchase Agreement and at and as of the closing date as though made at and as of the closing date, and Koch AG Investment will have delivered to any cash surrender value attributable toParent a certificate, dated as of the policy, whichclosing date and signed by its Chief Executive Officer or another senior executive officer of Koch AG Investment, certifying that this condition has historically been de minimis.satisfied; and

The obligation of Koch AG Investment to consummate the transactions contemplated by the Preferred Stock Purchase Agreement is further subject to the satisfaction or waiver in writing by Koch AG Investment at or prior to the closing of the following conditions:

The Preferred Stock Purchase Agreement will automatically terminate if the merger agreement is terminated in accordance with its terms as described in the “Merger Agreement – Termination” section beginning on page 91. In addition, the Preferred Stock Purchase Agreement may be terminated at any time prior to the closing:

Pursuant to the merger agreement and subject to certain additional terms and exceptions as further described in “Merger Agreement – Other Covenants and Agreements – Financing” beginning on page 87, each of Parent

and Merger Sub is obligated to use its reasonable best efforts to do all things reasonably necessary, proper or advisable to arrange and obtain the Non-Voting Preferred Equity Investment on the terms and conditions described in the Preferred Stock Purchase Agreement, and to (A) maintain in effect the Preferred Stock Purchase Agreement until the merger is consummated, (B) negotiate and enter into definitive agreements with respect to the Preferred Stock Purchase Agreement (where applicable) on the terms and conditions contemplated by the Preferred Stock Purchase Agreement subject to certain limitations, (C) satisfy on or prior to the closing all of the conditions precedent applicable to Parent in the Preferred Stock Purchase Agreement, (D) consummate the Non-Voting Preferred Equity Investment at or prior to the closing, (E) enforce the rights of Parent under the Preferred Stock Purchase Agreement and (F) comply in all material respects with Parent’s covenants and other obligations under the Preferred Stock Purchase Agreement.

Debt Financing

In connection with Parent’s entry into the merger agreement, Parent received a debt commitment letter, referred to as the “Debt Commitment Letter,” dated March 29, 2013, from Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., PNC Bank, National Association, PNC Capital Markets LLC, KeyBank National Association, Macquarie Capital (USA), Inc. and MIHI LLC, referred to, together, as the “Debt Commitment Parties.” The Debt Commitment Letter provides an aggregate of $600.0 million in debt financing to Merger Sub, consisting of a $400.0 million senior secured term loan facility (all of which is expected to be used for the merger) and a $200.0 million senior secured revolving credit facility (which may be used for the merger only in respect of Parent’s and Merger Sub’s obligation to pay certain contingent financing fees), referred to, together, as the “Senior Secured Facilities.”

The Debt Commitment Parties may invite other financial institutions to participate in the debt financing described in the Debt Commitment Letter and to undertake portions of the Debt Financing.

Interest under the senior term loan facility will be payable, at the option of the borrower, either at LIBOR (subject to a floor of 1.25%) plus an applicable margin rate of 3.75%, or at a base rate (based on the highest of the prime rate, the Federal Funds rate plus 0.50% and LIBOR plus 1.0%, in each case subject to a floor of 2.25%) plus an applicable margin rate of 2.75%. Interest under the senior revolving credit facility will be payable, at the option of the borrower, either at LIBOR plus an applicable margin rate of 3.5%, or at a base rate (based on the highest of the prime rate, the Federal Funds rate plus 0.50% and LIBOR plus 1.0%) plus an applicable margin rate of 2.5%. The borrower may select interest periods of one, two, three or six months for LIBOR borrowings.

The senior secured term loan facility will mature six years from the closing of the Senior Secured Facilities. The senior secured revolving credit facility will mature five years from the closing of the Senior Secured Facilities.

The borrower under the Senior Secured Facilities will be Merger Sub, and upon consummation of the merger, the Company. The Senior Secured Facilities will be guaranteed by Parent and each of the existing and future direct and indirect material domestic subsidiaries of Parent including, after the consummation of the merger, certain of the Company’s applicable subsidiaries. The Senior Secured Facilities will be secured by first-priority liens and security interests (subject to certain customary exceptions) in substantially all the assets of the borrowers and the guarantors.

The Debt Financing provided for by the Senior Secured Facilities is subject to the following conditions precedent:

The Debt Commitment Letter will expire on the earliest of (a) September 30, 2013, unless the closing date of the merger occurs on or prior thereto, (b) the closing of the merger and (c) the acceptance by Parent or the Company or any of their affiliates of an offer for all or any substantial part of the capital stock or property and assets of the Company other than as part of the merger and related transactions contemplated by the merger agreement.

Although the debt financing described in this proxy statement is not subject to due diligence or a “market out” provision, which allows lenders not to fund their commitments if certain conditions in the financial markets prevail, there is still a risk that such debt financing may not be funded when required. As of the date of this proxy statement, no alternative financing arrangements or alternative financing plans have been made in the event the debt financing described in this proxy statement is not available as anticipated.