8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): July 12, 2006

American Greetings Corporation

(Exact Name of Registrant as Specified in its Charter)

Ohio	1-13859	34-0065325
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

One American Road Cleveland, Ohio	44144
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (216) 252-7300

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On July 12, 2006, the Compensation and Management Development Committee of the Board of Directors of American Greetings Corporation approved an amendment to the compensation arrangements for non-employee directors of American Greetings. The principal changes to the arrangements, which will be effective as of June 1, 2006, are as follows:

• An increase in the annual stock option grant from options to purchase 6,000 Class A common shares to 7,000 Class A common shares per fiscal year; and

• An increase in the annual retainer fee for serving on the Board of Directors from $35,000 to $40,000.

A description of the compensation policy for non-employee directors, as so amended, is included as Exhibit 10.1, and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

c) Exhibits.

Exhibit 10.1 - Description of Compensation Payable to Non-Employee Directors

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

American Greetings Corporation
(Registrant)
By:	/s/ Catherine M. Kilbane
	Catherine M. Kilbane, Senior Vice President, General Counsel and Secretary

Date: July 14, 2006

EX-10.1

Exhibit 10.1

DESCRIPTION OF COMPENSATION PAYABLE TO NON-EMPLOYEE DIRECTORS

On July 12, 2006, the Compensation and Management Development Committee of American Greetings Corporation (“American Greetings”) approved the following compensation to each non-employee director of the Board of Directors with respect to his or her service on the Board, which arrangements will be effective as of June 1, 2006:

• An annual retainer fee of $40,000;

• $1,500 for each Board or committee meeting attended, with the members of the Audit Committee to receive an additional $500 (for a total of $2,000) for attending each Audit Committee meeting (including from time to time for conferences with management regarding Board or committee related matters);

• 75% of applicable meeting fee for each telephonic meeting attended (including from time to time for conferences with management regarding Board or committee related matters);

• Options to purchase 7,000 Class A common shares per fiscal year;

• The respective Chairs of the Nominating and Governance and Compensation and Management Development Committees to be paid an annual retainer fee of $7,000, and the Chair of the Audit Committee to be paid an annual retainer fee of $10,000; and

• Reimbursement of expenses related to attending Board and Committee meetings.

Pursuant to the American Greetings Corporation 1995 Director Stock Plan, non-employee directors may make an election prior to the beginning of each fiscal year to receive American Greetings’ Class A and/or Class B common shares in lieu of all or a portion of the fees due to such Director as compensation for serving on the Board of Directors. For purposes of determining the number of shares to be issued in lieu of such fees, the shares are valued based on the closing price of the American Greetings Class A common shares on the last trading day of the calendar quarter prior to the payment of such fees.