8-K

UNITED STATES

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): September 21, 2012

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 September 21, 2012, American Greetings Corporation (“American Greetings”) amended its Amended and Restated Receivables Purchase Agreement, dated as of October 24, 2006, among AGC Funding Corporation, a Delaware corporation and wholly-owned consolidated subsidiary of American Greetings, American Greetings, as Servicer, members of the various Purchaser Groups from time to time party thereto (the “Purchasers”), and PNC Bank, National Association, as Administrator and LC Bank (the “Agreement”). The amendment decreases the amount of available financing under the Agreement from $70 million to $50 million and extends the Agreement for an additional three years. The Agreement, which was scheduled to expire on September 21, 2012, will now extend until October 1, 2015; provided, however, that in addition to customary termination provisions, the Agreement will terminate upon the termination of the liquidity commitments obtained by the Purchasers from third party liquidity providers. Such commitments may be made available to the Purchasers for one-year periods only, and there can be no assurances that the third party liquidity providers will renew or extend their commitments to the Purchasers in which case the Agreement will terminate and American Greetings will not receive the benefit of the entire three year term of the Agreement.

PNC Bank and its affiliates have provided, from time to time, and may continue to provide, investment banking, commercial banking, trustee, financial and other services to American Greetings, including letters of credit, depository and account processing services, and underwriting in connection with American Greetings recent sale of its 7.375% Senior Notes due 2021, in any such case for which American Greetings has paid and intends to pay customary fees.

The foregoing description of the amendment to the Amended and Restated Receivables Purchase Agreement is qualified in its entirety by reference to the copy of the amendment attached hereto as Exhibit 10.1, and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On September 26, 2012, American Greetings issued a press release announcing receipt of a “going private” proposal. A copy of this press release is attached hereto as Exhibit 99.1.

The information in Item 7.01 of this Current Report on Form 8-K (including exhibit 99.1 attached hereto) is being furnished under Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

d) Exhibits.

Exhibit	Description
Exhibit 10.1	Seventh Amendment to Amended and Restated Receivables Purchase Agreement, dated as of September 21, 2012, among AGC Funding Corporation, American Greetings Corporation, in its capacity as Servicer, PNC Bank, National Association, in its individual capacity, as purchaser agent for Market Street Funding LLC, as Administrator for each Purchaser Group and as issuer of Letters of Credit, and Market Street Funding LLC, as a Conduit Purchaser and as a Related Committed Purchaser.
Exhibit 99.1	Press release announcing receipt of a “going private” proposal.

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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 thereunto duly authorized.

American Greetings Corporation
(Registrant)
By:	/s/ Gregory M. Steinberg
	Gregory M. Steinberg
	Treasurer and Executive Director,
	Investor Relations

Date: September 26, 2012

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EX-10.1

Exhibit 10.1

SEVENTH AMENDMENT TO AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENT

THIS SEVENTH AMENDMENT TO AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this “Amendment”) dated as of September 21, 2012 is entered into among AGC FUNDING CORPORATION (the “Seller”), AMERICAN GREETINGS CORPORATION, in its capacity as servicer (in such capacity, together with its successors and permitted assigns in such capacity, the “Servicer”), PNC BANK, NATIONAL ASSOCIATION (in its individual capacity, “PNC”), as purchaser agent for Market Street Funding LLC, as Administrator for each Purchaser Group (in such capacity, the “Administrator”) and as issuer of Letters of Credit (in such capacity, together with its successors and permitted assigns in such capacity, the “LC Bank”) and MARKET STREET FUNDING LLC (in its individual capacity, “Market Street”), as a Conduit Purchaser and as a Related Committed Purchaser.

RECITALS

1. The Seller, the Servicer, the Administrator, PNC, Market Street and the LC Bank are parties to the Amended and Restated Receivables Purchase Agreement dated as of October 24, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”); and

2. The parties hereto desire to amend the Agreement as set forth herein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Certain Defined Terms. Capitalized terms that are used herein without definition and that are defined in Exhibit I to the Agreement shall have the same meanings herein as therein defined.

2. Amendments to Agreement. The Agreement is hereby amended as follows:

(a) The amount specified as the “Commitment” with respect to Market Street in its capacity as a Related Committed Purchaser and as set forth below its Purchaser Agent’s signature to the Agreement is hereby amended and restated in its entirety as set forth below its Purchaser Agent’s signature hereto.

(b) The amount specified as the “Commitment” for PNC in its capacity as LC Bank and as set forth below its signature in such capacity to the Agreement is hereby amended and restated in its entirety as set forth below its signature in such capacity hereto.

(c) Clause (a) of the definition of “Eligible Receivable” set forth in Exhibit I to the Agreement is replaced in its entirety with the following:

(a) the Obligor of which is (i) a United States resident or an Eligible Foreign Obligor, (ii) not subject to any action of the type described in paragraph (f) of Exhibit V to the Agreement, (iii) not an Excluded Obligor, (iv) not an Affiliate of Greetings and (v) not Schurman Fine Papers or any Subsidiary thereof; it being understood and agreed that any Pool Receivable (and the origination, sale or servicing thereof) with respect to which Schurman Fine Papers or any Subsidiary thereof is the Obligor shall be excluded from the calculation of (x) “Days’ Sales Outstanding,” “Delinquency Ratio,” “Dilution Ratio,” “Dilution Reserve,” “Dilution Reserve Percentage,” “Disputed Default Ratio,” “Everyday Default Ratio,” “Loss Reserve,” “Loss Reserve Percentage,” “Receivables Based Loss Reserve Percentage,” “Sales Based Loss Reserve Percentage,” “Seasonal Default Ratio,” “Total Reserve,” “Yield Reserve” and “Yield Reserve Percentage,” and (y) any components of the calculations and terms described in clause (x), in each case, for all purposes of this Agreement and each of the other Transaction Documents on and after the date on which the Servicer first delivers an Information Package hereunder that reflects such exclusion,

(d) The definition of “Everyday Default Ratio” set forth in Exhibit I to the Agreement is hereby replaced in its entirety with the following:

“Everyday Default Ratio” means the ratio (expressed as a percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each calendar month by dividing: (a) the aggregate Outstanding Balance of all Pool Receivables identified by the Seller or the Servicer on the most recent Information Package as Receivables relating to SBT invoices, everyday invoices and manual invoices that became Defaulted Receivables during such month by (b) the aggregate credit sales other than Seasonal Sales made by the Originators during the month that is six months before such month.

(e) Clause (a) of the definition of “Facility Termination Date” set forth in Exhibit I to the Agreement is hereby amended by deleting the date “September 21, 2012” therein and substituting the date “October 1, 2015” therefor.

(f) The definition of “Purchase Limit” set forth in Exhibit I to the Agreement is hereby amended by deleting the amount “$70,000,000” therein and substituting the amount “$50,000,000” therefor.

(g) The definition of “Seasonal Sales” set forth in Exhibit I to the Agreement is hereby replaced in its entirety with the following:

“Seasonal Sales” means those amounts identified by the Seller or Servicer on the periodic Information Packages as invoices (other than SBT invoices) related to specific seasonal shipments.

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(h) Section 2(a) of Exhibit II to the Agreement is hereby replaced in its entirety with the following:

(a) in the case of each Funded Purchase and each issuance of a Letter of Credit, each of the following conditions shall be satisfied unless waived in writing by the Administrator following the Administrator’s receipt of the applicable completed purchase notice: (i) the Servicer shall have delivered to the Administrator and each Purchaser Agent on or before such purchase or issuance, as the case may be, in form and substance satisfactory to the Administrator and such Purchaser Agent, a completed pro forma Information Package to reflect the level of Investment, the LC Amount and related reserves and the calculation of the Purchased Interest after such subsequent purchase or issuance, as the case may be, and a completed purchase notice in the form of Annex B, (ii) if no Information Package has been delivered to the Administrator and the Purchaser Agents during the preceding 90-days due to the proviso to Section 2(i)(iii) of Exhibit IV, then the Administrator shall have performed an audit of the Servicer, Greetings and/or the Seller in accordance with the provisions of Section 1(h) and/or 2(f) of Exhibit IV within [60] days of such Funded Purchase or issuance and (iii) the Servicer shall have delivered to the Administrator and each Purchaser Agent on or before such purchase or issuance, as the case may be, each Information Package that was not previously delivered due to the proviso to Section 2(i)(iii) of Exhibit IV; and

(i) Section 2(i)(iii) of Exhibit IV to the Agreement is hereby replaced in its entirety with the following:

(iii) as to the Servicer only, as soon as available and in any event not later than two Business Days prior to the Settlement Date, an Information Package as of the last day of such month or, within 10 Business Days of a request by the Administrator or any Purchaser Agent, an Information Package for such periods as is specified by the Administrator or such Purchaser Agent (including on a semi-monthly, weekly or daily basis); provided, however, unless otherwise required pursuant to Section 2(a) of Exhibit II to the Agreement in connection with any Funded Purchase or issuance of any Letters of Credit, the Servicer shall not be obligated to deliver any Information Package in accordance with this Section 2(i)(iii) on any day when the sum of (A) the Aggregate Investment, plus (B) the LC Amount, equals zero;

(j) Clause (d) of the definition of “Termination Event” set forth in Exhibit V to the Agreement is hereby replaced in its entirety with the following:

(d) the Seller or the Servicer shall fail to deliver an Information Package pursuant to the Agreement at any time when (i) the sum of (A) the Aggregate Investment, plus (B) the LC Amount, exceeds (ii) zero, and such failure shall remain unremedied for two Business Days;

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3. Representations and Warranties. Each of the Seller and the Servicer hereby represents and warrants to each Purchaser and the Administrator as follows:

(a) Representations and Warranties. The representations and warranties of such Person contained in Exhibit III of the Agreement are true and correct in all material respects as of the date hereof (except to the extent that such representations and warranties relate expressly to an earlier date, and in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

(b) Enforceability. The execution and delivery by such Person of this Amendment, and the performance of each of its obligations under this Amendment and the Agreement, as amended hereby, are within each of its organizational powers and have been duly authorized by all necessary organizational action on its part. This Amendment and the Agreement, as amended hereby, are such Person’s valid and legally binding obligations, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws from time to time in effect affecting the enforcement of creditors’ rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

(c) No Default. Both before and immediately after giving effect to this Amendment and the transactions contemplated hereby, no Termination Event or Unmatured Termination Event exists or shall exist.

4. Effect of Amendment. All provisions of the Agreement, as expressly amended and modified by this Amendment, shall remain in full force and effect. After this Amendment becomes effective, all references in the Agreement (or in any other Transaction Document) to “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Agreement shall be deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Agreement other than as set forth herein.

5. Effectiveness. This Amendment shall become effective as of the date hereof upon receipt by PNC of (i) counterparts of this Amendment executed by each of the other parties hereto, (ii) counterparts of that certain Purchaser Group Fee Letter, dated as of the date hereof (the “Fee Letter”), executed by the Seller, the Servicer, PNC and Market Street, in each case in form and substance satisfactory to the Administrator in its sole discretion and (iii) the “Amendment Fee” (under and as defined in the Fee letter) in accordance with the terms of the Fee Letter.

6. Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument. Delivery of an executed counterpart hereof by facsimile or by email of a .pdf copy thereof shall be effective as delivery of an originally executed counterpart hereof.

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7. Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York (including for such purpose Sections 5-1401 and 5-1402 of the general obligations law of the State of New York).

8. Section Headings. The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of this Amendment, the Agreement or any provision hereof or thereof.

(continued on following page)

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

AGC FUNDING CORPORATION, as Seller
By:	/s/ Gregory M. Steinberg
Name:	Gregory M. Steinberg
Title:	Vice President and Treasurer
AMERICAN GREETINGS CORPORATION, as Servicer
By:	/s/ Gregory M. Steinberg
Name:	Gregory M. Steinberg
Title:	Treasurer

S-1

PNC BANK, NATIONAL ASSOCIATION, as Administrator
By:	/s/ William P. Falcon
Name:	William P. Falcon
Title:	Vice President
PNC BANK, NATIONAL ASSOCIATION, as Purchaser Agent for Market Street Funding LLC
By:	/s/ William P. Falcon
Name:	William P. Falcon
Title:	Vice President
Commitment: $50,000,000
PNC BANK, NATIONAL ASSOCIATION, as LC Bank
By:	/s/ William P. Falcon
Name:	William P. Falcon
Title:	Vice President
Commitment:$50,000,000

S-2

MARKET STREET FUNDING LLC, as a Conduit Purchaser and as a Related Committed Purchaser
By:	/s/ Doris J. Hearn
Name:	Doris J. Hearn
Title:	Vice President

S-3

EX-99.1

Exhibit 99.1

American Greetings Announces Receipt of “Going Private” Proposal at $17.18 Per Share

Cleveland (September 26, 2012)—American Greetings Corporation (NYSE:AM) (the “Company” or “American Greetings”) announced that its Board of Directors has received a non-binding proposal dated September 25^th, 2012 from Zev Weiss, its Chief Executive Officer, and Jeffrey Weiss, its 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 and Class B common shares of American Greetings not currently owned by the them for $17.18 per share. A copy of the proposal letter is set forth as Exhibit A.

The Company expects that its Board of Directors will form a special committee of independent directors to consider the proposal. This special committee would then be authorized to retain independent financial advisors and legal counsel to assist it in its work. The Company’s shareholders and others considering trading in its securities are cautioned that it has only received the proposal and that no decision has been made with respect to the Company’s response to the proposal. In addition, there can be no assurance that any definitive, binding offer will be made, that any agreement will be executed or that the transaction contemplated in the proposal or any other transaction will be approved or consummated. The Company does not anticipate making any further public statements about this matter or the activities of the special committee unless and until either it enters into a definitive agreement for a transaction or the special committee determines that no such transaction will be effected.

About American Greetings Corporation

For more than 100 years, American Greetings Corporation (NYSE: AM) has been a creator and manufacturer of innovative social expression products that assist consumers in enhancing their relationships to create happiness, laughter and love. The Company’s major greeting card lines are American Greetings, Carlton Cards, Gibson, Recycled Paper Greetings and Papyrus, and other paper product offerings include

DesignWare party goods and American Greetings and Plus Mark gift-packaging and boxed cards. American Greetings also has one of the largest collections of greetings on the Web, including greeting cards available at Cardstore.com and electronic greeting cards available at AmericanGreetings.com. In addition to its product lines, American Greetings creates and licenses popular character brands through the American Greetings Properties group. Headquartered in Cleveland, Ohio, American Greetings generates annual revenue of approximately $1.7 billion, and its products can be found in retail outlets worldwide. For more information on the Company, visit http://corporate.americangreetings.com.

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CONTACT:

Gregory M. Steinberg

Treasurer and Executive Director of Investor Relations

American Greetings Corporation

216-252-4864

investor.relations@amgreetings.com

Forward Looking Statement Disclosure

The statements contained in this release that are not historical facts may be deemed to constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results might differ materially from those projected in such statements due to a number of factors. These factors include the uncertainties set forth in this press release regarding whether an acquisition of the Company will be consummated upon the terms proposed in the attached letter or at all. The forward looking statements contained herein are also subject to other risks and uncertainties that are described in the Company’s reports filed with the Securities and Exchange Commission, including without limitation the risk factors described in the Company’s most recent annual report on Form 10-K.

Exhibit A

September 25, 2012

Board of Directors

Ladies and Gentlemen:

Since its founding over a century ago, the descendants of Jacob Sapirstein, and now the Weiss family, have guided American Greetings, including after it became a publicly traded company in 1958. After careful consideration, we have concluded that the best course of action is for American Greetings to return to its roots. Accordingly, on behalf of certain of the family-owned Series B shareholders, we propose to acquire American Greetings at $17.18 per share, net to the seller in cash.

We believe that $17.18 per share is a compelling price and that American Greetings public shareholders will find this proposal attractive. This proposed price represents a premium of approximately 20% over the price for the Class A common shares as of September 25^th at approximately 2:30 pm. It also provides the public stockholders of the company with liquidity and certain value in a highly volatile period in the equity markets.

We presently expect that the various foundations and related entities and certain members of the family associated with the company would reinvest or rollover all or substantially all of their shares in the acquiring entity, and that we would obtain debt financing to fund the balance of the transaction. We anticipate maintaining intact American Greetings employee base, which we view as its most important asset, and current senior management. At this time, we have not secured binding commitments for the required financing. We are, however, confident that such financing can be arranged based on current market conditions. We are informing you of our thinking at this time so that all shareholders are aware of it as we seek to finalize these arrangements and you have ample time to consider it.

We recognize that the independent directors will need to separately review this proposal under such process as they determine to be appropriate. We will keep you apprised of material developments and cooperate with you in this regard. As you consider this proposal, you should know that the Series B shareholders on behalf of whom this proposal is made believe that their ownership in the company is a strategic investment and have no current intention to sell all or any significant portion of their shares.

This proposal is subject to the finalization of financing, including the entry into definitive agreements by the sponsoring shareholders and arranging and entering into definitive

debt financing documents, the determination by independent directors that the proposal is fair and the negotiation and execution of definitive transaction documents. As we trust you will appreciate, given among other things the volatility of the capital markets, we reserve the right to withdraw or modify this proposal.

Thank you in advance for your consideration of this matter.

Very truly yours,

/s/ Jeff Weiss	/s/ Zev Weiss
Jeff Weiss	Zev Weiss