<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
-----------------------
(Mark One):
__X__ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the fiscal year ended December 31, 1995.
OR
_____ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from____________________ to ____________________
Commission file number: 0-1502
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
AMERICAN GREETINGS RETIREMENT
PROFIT SHARING AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
AMERICAN GREETINGS CORPORATION
ONE AMERICAN ROAD
CLEVELAND, OHIO 44144
-----------------------
REQUIRED INFORMATION
The following financial statements are being furnished for the American
Greetings Retirement Profit Sharing and Savings Plan (the "Plan") filed herewith
as Exhibit 13:
1. Audited statements of net assets available for benefits
as of December 31, 1995 and 1994.
<PAGE> 2
2. Audited statements of changes in net assets available for
benefits for the years ended December 31, 1995 and 1994.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN GREETINGS RETIREMENT
PROFIT SHARING AND SAVINGS PLAN
June 27, 1996 By: /s/ Harvey Levin
------------------------------
Name: Harvey Levin
Title: Senior Vice-President
-2-
<PAGE> 3
EXHIBIT INDEX
Exhibit
- -------
13 The following financial statements are being furnished for the American
Greetings Retirement Profit Sharing and Savings Plan (the "Plan")
filed herewith as Exhibit 13:
1. Audited statements of net assets available for benefits
as of December 31, 1995 and 1994.
2. Audited statements of changes in net assets available for
benefits for the years ended December 31, 1995 and 1994.
23 Consent of Independent Auditors
<PAGE> 1
Audited Financial Statements and
Supplemental Schedules
AMERICAN GREETINGS RETIREMENT
PROFIT SHARING AND SAVINGS PLAN
Years ended December 31, 1995 and 1994
with Report of Independent Auditors
<PAGE> 2
American Greetings Retirement
Profit Sharing and Savings Plan
Financial Statements
and Supplemental Schedules
Years Ended December 31, 1995 and 1994
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors .................................................................. 1
Audited Financial Statements
Statements of Net Assets Available for Benefits.................................................. 2
Statements of Changes in Net Assets Available for Benefits....................................... 4
Notes to the Financial Statements ............................................................... 6
Supplemental Schedules
Form 5500, Item 27a - Schedule of Assets Held for Investment Purposes............................ 12
Form 5500, Item 27d - Schedule of Reportable Transactions ....................................... 13
Form 5500, Item 27b - Schedule of Loans or Fixed Income Obligations.............................. 14
</TABLE>
<PAGE> 3
Report of Independent Auditors
Administrative Committee of the Retirement
Profit Sharing and Savings Plan
American Greetings Corporation
Cleveland, Ohio
We have audited the accompanying statements of net assets available for benefits
of American Greetings Retirement Profit Sharing and Savings Plan as of December
31, 1995 and 1994, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1995 and 1994, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1995 and reportable transactions
for the year then ended are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the financial statements. The fund information in the statement of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
June 21, 1996
Cleveland, Ohio
<PAGE> 4
American Greetings Retirement Profit Sharing and Savings Plan
Statement of Net Assets Available for Benefits
<TABLE>
<CAPTION>
December 31, 1995
---------------------------------------------------------------------------------------
INDEX 500 MONEY MARKET
PORTFOLIO PRIMECAP WELLINGTON RESERVES PRIME
TOTAL FUND FUND FUND PORTFOLIO
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Index 500 Portfolio Fund $ 68,137,655 $ 68,137,655
PrimeCap Fund 84,509,585 $ 84,509,585
Wellington Fund 29,224,713 $ 29,224,713
Money Market Reserves Prime
Portfolio 31,317,919 $ 31,201,217
Bond Index Fund 153,014,922
International Growth Portfolio 15,298
Common Stock of American Greetings
Corporation 34,464,619
Participant notes receivable 640,082
---------------------------------------------------------------------------------------
Total investments 401,324,793 68,137,655 84,509,585 29,224,713 31,201,217
Deposits with insurance companies 35,916,718
Receivables:
Employer's contribution 19,597,110 3,348,131 4,091,891 1,283,325 1,359,193
Participants' contributions 996,397 189,865 254,048 70,247 49,361
Other net receivables 40,568
Other 18,219 3,144 4,371 1,210 1,023
---------------------------------------------------------------------------------------
Total receivables 20,652,294 3,541,140 4,350,310 1,354,782 1,409,577
---------------------------------------------------------------------------------------
Total assets 457,893,805 71,678,795 88,859,895 30,579,495 32,610,794
---------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 457,893,805 $ 71,678,795 $ 88,859,895 $ 30,579,495 $ 32,610,794
=======================================================================================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
-------------------------------------------------------------------------------------------
BOND INTERNATIONAL COMPANY
INDEX/IC VANGUARD/WINDSOR WELLESLEY GROWTH STOCK PARTICIPANT
FUND II FUND FUND PORTFOLIO FUND LOAN FUND
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Index 500 Portfolio Fund
PrimeCap Fund
Wellington Fund
Money Market Reserves Prime
Portfolio $ 116,702
Bond Index Fund $ 153,014,922
International Growth Portfolio $ 15,298
Common Stock of American Greetings
Corporation 34,464,619
Participant notes receivable $ 640,082
-------------------------------------------------------------------------------------------
Total investments 153,014,922 15,298 34,581,321 640,082
Deposits with insurance companies 35,916,718
Receivables:
Employer's contribution 6,996,723 $ 204,247 $ 86,764 188,812 2,038,024
Participants' contributions 291,092 2,909 930 3,324 134,621
Other net receivables 40,568
Other 5,924 101 101 2,345
-------------------------------------------------------------------------------------------
Total receivables 7,293,739 207,257 87,795 192,136 2,215,558
-------------------------------------------------------------------------------------------
Total assets 196,225,379 207,257 87,795 207,434 36,796,879 640,082
-------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 196,225,379 $ 207,257 $ 87,795 $ 207,434 $ 36,796,879 $ 640,082
===========================================================================================
</TABLE>
See notes to financial statements.
2
<PAGE> 5
American Greetings Retirement Profit Sharing and Savings Plan
Statement of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31, 1994
----------------------------------------------------------------------------------------
INDEX 500 MONEY MARKET
PORTFOLIO PRIMECAP WELLINGTON RESERVES PRIME
TOTAL FUND FUND FUND PORTFOLIO
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Index 500 Portfolio Fund $ 40,255,607 $ 40,255,607
PrimeCap Fund 46,952,475 $ 46,952,475
Wellington Fund 13,979,573 $ 13,979,573
Money Market Reserves Prime
Portfolio 25,626,952 $ 25,379,588
Bond Index Fund 128,290,532
Common Stock of American Greetings
Corporation 42,646,797
Participant notes receivable 229,236
----------------------------------------------------------------------------------------
Total investments 297,981,172 40,255,607 46,952,475 13,979,573 25,379,588
Deposits with insurance companies 55,949,482
Receivables:
Employer's contribution 22,970,809 3,224,718 3,931,380 1,007,149 1,483,789
Participants' contributions 1,035,533 171,200 200,125 49,923 46,040
Accrued income 5,646 71
Other 7,201 956 1,338 178 408
----------------------------------------------------------------------------------------
Total receivables 24,019,189 3,396,874 4,132,843 1,057,250 1,530,308
----------------------------------------------------------------------------------------
Total assets 377,949,843 43,652,481 51,085,318 15,036,823 26,909,896
----------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 377,949,843 $ 43,652,481 $ 51,085,318 $ 15,036,823 $ 26,909,896
========================================================================================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1994
---------------------------------------------------
BOND COMPANY
INDEX/IC STOCK PARTICIPANT
FUND FUND LOAN FUND
----------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value:
Index 500 Portfolio Fund
PrimeCap Fund
Wellington Fund
Money Market Reserves Prime
Portfolio $ 247,364
Bond Index Fund $ 128,290,532
Common Stock of American Greetings
Corporation 42,646,797
Participant notes receivable $ 229,236
----------------------------------------------------
Total investments 128,290,532 42,894,161 229,236
Deposits with insurance companies 55,949,482
Receivables:
Employer's contribution 9,826,757 3,497,016
Participants' contributions 367,794 200,451
Accrued income 5,575
Other 3,450 871
----------------------------------------------------
Total receivables 10,203,576 3,698,338
----------------------------------------------------
Total assets 194,443,590 46,592,499 229,236
----------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 194,443,590 $ 46,592,499 $ 229,236
====================================================
</TABLE>
See notes to financial statements.
3
<PAGE> 6
American Greetings Retirement Profit Sharing and Savings Plan
Statement of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------------------------------------------------
INDEX 500 MONEY MARKET
PORTFOLIO PRIMECAP WELLINGTON RESERVES PRIME
TOTAL FUND FUND FUND PORTFOLIO
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Net realized and unrealized
appreciation of investments $ 52,634,613 $ 15,393,719 $ 16,946,748 $ 4,601,252
Interest and dividend income 20,610,306 1,493,484 2,489,874 1,311,039 $ 1,722,083
Dividends from American Greetings
Corporation common stock 817,365
Other receipts 20,690 4,663 67,300 62,289 487
Contributions:
Participants 14,794,451 2,598,543 3,442,535 921,941 925,894
Rollover 591,048 123,367 152,426 97,641 97,275
Employer 19,604,565 3,348,869 4,093,099 1,284,211 1,360,701
-----------------------------------------------------------------------------------------
Total additions 109,073,038 22,962,645 27,191,982 8,278,373 4,106,440
DEDUCTIONS FROM NET ASSETS ATTRIBUTED
TO
Benefits paid to participants 29,043,117 2,105,177 2,722,106 640,521 3,401,396
Administrative expenses 85,959 10,633 13,005 2,896 5,636
-----------------------------------------------------------------------------------------
Total deductions 29,129,076 2,115,810 2,735,111 643,417 3,407,032
-----------------------------------------------------------------------------------------
Net increase (decrease) prior to
interfund transfers 79,943,962 20,846,835 24,456,871 7,634,956 699,408
Interfund transfers--net 7,179,479 13,317,706 7,907,716 5,001,490
-----------------------------------------------------------------------------------------
Net increase (decrease) 79,943,962 28,026,314 37,774,577 15,542,672 5,700,898
Net assets available for benefits at
beginning of year 377,949,843 43,652,481 51,085,318 15,036,823 26,909,896
-----------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 457,893,805 $ 71,678,795 $ 88,859,895 $ 30,579,495 $ 32,610,794
=========================================================================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------------------------------------------------------------
BOND COMPANY
INDEX/IC VANGUARD/WINDSOR WELLESLEY INTERNATIONAL STOCK PARTICIPANT
FUND II FUND FUND GROWTH PORT. FUND LOAN FUND
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Net realized and unrealized
appreciation of investments $ 14,112,807 $ 1,580,087
Interest and dividend income 13,551,264 $ 2 8,527 $ 34,033
Dividends from American Greetings
Corporation common stock 817,365
Other receipts (117,819) 3,770
Contributions:
Participants 4,593,422 $ 2,909 $ 930 3,324 2,304,953
Rollover 56,947 63,392
Employer 6,999,081 204,247 86,764 188,812 2,038,781
------------------------------------------------------------------------------------------
Total additions 39,195,702 207,156 87,694 192,138 6,816,875 34,033
DEDUCTIONS FROM NET ASSETS ATTRIBUTED
TO
Benefits paid to participants 18,030,741 2,104,996 38,180
Administrative expenses 42,355 11,434
------------------------------------------------------------------------------------------
Total deductions 18,073,096 2,116,430 38,180
------------------------------------------------------------------------------------------
Net increase (decrease) prior to
interfund transfers 21,122,606 207,156 87,694 192,138 4,700,445 (4,147)
Interfund transfers--net (19,340,817) 101 101 15,296 (14,496,065) 414,993
------------------------------------------------------------------------------------------
Net increase (decrease) 1,781,789 207,257 87,795 207,434 (9,795,620) 410,846
Net assets available for benefits at
beginning of year 194,443,590 46,592,499 229,236
------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $196,225,379 $ 207,257 $ 87,795 $ 207,434 $ 36,796,879 $ 640,082
==========================================================================================
</TABLE>
See notes to financial statements.
4
<PAGE> 7
American Greetings Retirement Profit Sharing and Savings Plan
Statement of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1994
-----------------------------------------------------------------------------------------
INDEX 500 MONEY MARKET
PORTFOLIO PRIMECAP WELLINGTON RESERVES PRIME
TOTAL FUND FUND FUND PORTFOLIO
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Net realized and unrealized
(depreciation) appreciation of
investments $ (20,695,241) $ 764,106 $ 2,564,675 $ (425,863)
Interest and dividend income 16,216,606 757,037 1,056,245 250,808 $ 284,660
Dividends from American Greetings
Corporation common stock 761,552
Contributions:
Participants 14,640,336 1,285,153 1,385,914 207,995 190,913
Rollover 509,184 110,857 108,043 78,878 39,988
Employer 22,970,809 3,224,718 3,931,380 1,007,149 1,483,789
-----------------------------------------------------------------------------------------
Total additions 34,403,246 6,141,871 9,046,257 1,118,967 1,999,350
DEDUCTIONS FROM NET ASSETS ATTRIBUTED
TO
Benefits paid to participants 24,748,586 643,897 671,415 44,542 1,675,175
Administrative expenses 1,062,477 4,705 5,049 539 701
-----------------------------------------------------------------------------------------
Total deductions 25,811,063 648,602 676,464 45,081 1,675,876
-----------------------------------------------------------------------------------------
Net increase (decrease) prior to
interfund transfers 8,592,183 5,493,269 8,369,793 1,073,886 323,474
Interfund transfers--net 6,307,799 10,864,175 13,962,937 26,586,422
Net assets transferred between trusts 31,851,413 31,851,350
-----------------------------------------------------------------------------------------
Net increase (decrease) 8,592,183 43,652,481 51,085,318 15,036,823 26,909,896
Net assets available for benefits at
beginning of year 369,357,660
-----------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 377,949,843 $ 43,652,481 $ 51,085,318 $ 15,036,823 $ 26,909,896
=========================================================================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1994
----------------------------------------------------------------------------------------
BOND COMPANY FIXED
INDEX/IC STOCK PARTICIPANT COMMON INCOME
FUND FUND LOAN FUND FUND FUND
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Net realized and unrealized
(depreciation) appreciation of
investments $ (4,039,357) $ (6,813,454) $ (4,808,344) $ (7,937,004)
Interest and dividend income 8,319,620 34,380 $ 5,733 460,311 5,047,812
Dividends from American Greetings
Corporation common stock 761,552
Contributions:
Participants 3,722,748 2,891,598 1,722,683 3,233,332
Rollover 97,763 73,655
Employer 9,826,757 3,497,016
----------------------------------------------------------------------------------------
Total additions 17,927,531 444,747 5,733 (2,625,350) 344,140
DEDUCTIONS FROM NET ASSETS ATTRIBUTED
TO
Benefits paid to participants 10,787,147 1,558,982 7,745 1,496,481 7,863,202
Administrative expenses 27,397 19,321 500,300 504,465
----------------------------------------------------------------------------------------
Total deductions 10,814,544 1,578,303 7,745 1,996,781 8,367,667
----------------------------------------------------------------------------------------
Net increase (decrease) prior to
interfund transfers 7,112,987 (1,133,556) (2,012) (4,622,131) (8,023,527)
Interfund transfers--net (55,182,153) 5,791,045 163,082 2,812,690 (11,305,997)
Net assets transferred between trusts 242,512,756 (63,702,763) (242,512,756)
----------------------------------------------------------------------------------------
Net increase (decrease) 194,443,590 4,657,489 161,070 (65,512,204) (261,842,280)
Net assets available for benefits at
beginning of year 41,935,010 68,166 65,512,204 261,842,280
----------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $194,443,590 $ 46,592,499 $ 229,236 $ 0 $ 0
========================================================================================
</TABLE>
See notes to financial statements.
5
<PAGE> 8
American Greetings Retirement Profit Sharing and Savings Plan
Notes to Financial Statements
Years Ended December 31, 1995 and 1994
A. DESCRIPTION OF THE PLAN
The following description of the American Greetings Retirement Profit Sharing
and Savings Plan (the "Plan") provides only general information. Participants
should refer to the Plan agreement, copies of which are available from the
Administrative Committee, for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering substantially all full-time
employees of American Greetings Corporation (the "Corporation") and domestic
subsidiaries who are not covered under another defined contribution or defined
benefit plan. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
The Corporation contributes 8% of its consolidated domestic pretax profits,
excluding dividends and gains and losses from capital assets and foreign
currency transactions, to the Plan. Additional amounts may be contributed at the
option of the Corporation's Board of Directors.
Additionally, participants may contribute 2% to 15% of pretax annual
compensation (401(k) contributions), as defined in the Plan. The Corporation may
restrict individual contributions below 15% in order to meet certain
governmental limitations. The Corporation contributes 25% of the first 6% of
annual compensation that a participant contributes to the Plan, provided that
the Corporation achieves certain financial goals. Such contributions are
invested in accordance with the participants' investment elections.
The Plan was amended to permit rollover contributions effective June 30, 1994.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's 401(k)
contributions and allocations of the Corporation's profit sharing contribution
and 401(k) match, and Plan earnings; allocations are based on participant
compensation, participant elections, and account balances, respectively.
Individuals who have retired or terminated employment with the Corporation do
not participate in the Corporation's contribution to the Plan. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant's account. Participants are fully vested in their respective account
balances.
6
<PAGE> 9
American Greetings Retirement Profit Sharing and Savings Plan
Notes to Financial Statements--Continued
A. DESCRIPTION OF THE PLAN--CONTINUED
INVESTMENT OPTIONS
Participants direct the investment of their accounts, together with their share
of the Corporation's annual contribution, in increments of 10% to any of the
investment options offered under the Plan.
Prior to June 30, 1994, the trustee of the Plan was National City Bank (NCB).
Assets held by NCB were invested in the following funds:
Common Fund - The assets of this fund were invested in various stocks of
U.S. companies to obtain long-term capital appreciation.
Fixed Income Fund - The assets of this fund were invested in a combination
of contracts with banks and insurance companies that have a fixed rate
of interest, U.S. Government Securities, and other investment grade
securities.
Company Stock Fund - The assets of this fund were invested in the Common
Stock of American Greetings Corporation.
Effective June 30, 1994, the trustee of the Plan was changed and assets were
transferred to The Vanguard Group of Investment Companies (Vanguard). Further,
the Plan was amended to change the investment options offered to Plan
participants. The Company maintains the following investment options under its
Plan:
Index Trust 500 Portfolio Fund - The assets of this fund are invested
primarily in common stocks to reflect the compositions of Standard &
Poor's 500 Composite Stock Price Index (Index). The fund holds
virtually all of the 500 stocks in the Index in proportion to their
relative weight in the index.
PRIMECAP Fund - The assets of this fund are invested primarily in common
stocks of less than 100 large, established companies.
Wellington Fund - The assets of this fund are invested primarily in a
diversified portfolio of equity securities and fixed income
securities.
7
<PAGE> 10
American Greetings Retirement Profit Sharing and Savings Plan
Notes to Financial Statements--Continued
A. DESCRIPTION OF THE PLAN--CONTINUED
Money Market Reserves Prime Portfolio - The assets of this fund are
invested in high-quality money market instruments that mature in one
year or less. These include negotiable certificates of deposit,
banker's acceptance, commercial paper, and other short-term corporate
obligations.
Bond Index/IC Fund - The assets of this fund are invested primarily in
shares of the Vanguard Bond Index Fund and investment contracts with
insurance companies. The Vanguard Bond Index Fund invests in bonds
from a variety of industries attempting to match the unmanaged Lehman
Brothers Aggregate Bond Index.
Vanguard Windsor II Fund - The assets of this fund are invested primarily
in a diversified portfolio of common stocks of large, established
companies.
Wellesley Fund - The assets of this fund are invested primarily in a
broadly diversified portfolio of U.S. Government Securities,
high-quality corporate bonds and common stocks of large companies.
International Growth Portfolio - The assets of this fund are invested in
the common stocks of foreign companies.
Company Stock Fund - The assets of this fund are invested in the common
stock of American Greetings Corporation.
PARTICIPANT NOTES RECEIVABLE
Effective June 30, 1994, the Plan was amended to permit Participants to borrow,
against their elected deferred contributions or rollover contributions, a
minimum of $1,000 up to a maximum of $50,000 or 50% of their account balance.
Loan transactions are treated as a transfer from (to) the investment fund to
(from) the loan fund. Loan terms range from six to sixty months. The loans are
secured by the balance in the participant's account and bear interest at a rate
of prime plus one percent at the time of the loan origination. Principal and
interest are paid ratably through monthly payroll deductions.
8
<PAGE> 11
American Greetings Retirement Profit Sharing and Savings Plan
Notes to Financial Statements--Continued
A. DESCRIPTION OF THE PLAN--CONTINUED
PAYMENT OF BENEFITS
At the time of a participant's retirement or termination of service the
participant may elect to purchase an annuity contract, receive a lump sum
payment or be paid in installments.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Corporation has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination, the
assets of the Plan will be distributed to the participants on the basis of
individual account balances at the date of termination. Benefit payments within
the Participant Loan Fund represent terminated employees' loan balances which
are recognized as distributions at termination.
B. SUMMARY OF ACCOUNTING POLICIES
The financial statements of the Plan are presented on the accrual basis of
accounting. All the funds of the Plan are accounted for by the Trustee.
Securities traded on a national securities exchange are valued at the last
reported sales price on the last business day of the Plan year. Securities
traded in the over-the-counter market and listed securities for which no sale
was reported on that date are valued at the last reported bid price.
The value of deposits with insurance companies represents contributions made to
deposit contracts plus interest at the contract rate, less funds transferred to
the Trustee to pay retirement benefits and the insurance companies'
administrative expenses.
Audit and legal fees are paid by the Corporation. All other expenses of the Plan
are paid by the Plan. Investment advisory fees for portfolio management of
Vanguard Funds are paid directly from fund earnings.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
9
<PAGE> 12
American Greetings Retirement Profit Sharing and Savings Plan
Notes to Financial Statements--Continued
C. INVESTMENTS
The fair value of individual investments that represented 5% or more of the fair
value of Plan net assets are as follows:
<TABLE>
<CAPTION>
1995 1994
-------------------------------------------
<S> <C> <C>
Common Stock of American Greetings
Corporation $ 34,464,619 $ 42,646,797
Vanguard Index 500 Portfolio Fund 68,137,655 40,255,607
Vanguard PrimeCap Fund 84,509,585 46,952,475
Vanguard Wellington Fund 29,224,713 13,979,573
Vanguard Money Market Reserves
Prime Portfolio 31,317,919 25,626,952
Vanguard Bond Index Fund 153,014,922 128,290,532
Metropolitan Life Insurance Company,
May 22, 1995, 9.46% 22,761,666
</TABLE>
During the years ended December 31, 1995 and 1994 the Plan's investments
(including investments bought, sold and held during the year) appreciated
(depreciated) in fair value as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
-------------------------------------------
<S> <C> <C>
Investments at fair value as determined by quoted
market price:
Vanguard Index 500 Portfolio Fund $ 15,393,719 $ 764,106
Vanguard PrimeCap Fund 16,946,748 2,564,675
Vanguard Wellington Fund 4,601,252 (425,863)
Vanguard Bond Index Fund 14,112,807 (4,039,357)
Common stock of American Greetings Corporation 1,580,087 (6,813,454)
Common stocks (4,808,344)
US Government securities and
corporate obligations (7,937,004)
-------------------------------------------
$ 52,634,613 $ (20,695,241)
===========================================
</TABLE>
10
<PAGE> 13
American Greetings Retirement Profit Sharing and Savings Plan
Notes to Financial Statements--Continued
C. INVESTMENTS--CONTINUED
The Plan held 107,238 Class A shares and 1,140,350 Class B shares of American
Greetings Corporation common stock at December 31, 1995 (439,161 and 1,140,350
shares, respectively at December 31, 1994). Class B shares are not publicly
traded.
D. INCOME TAX STATUS
The Internal Revenue Service has issued a favorable determination letter
indicating the Plan qualifies under Section 401(a) of the Internal Revenue Code
(the "Code") and, therefore, is not subject to tax under present income tax
laws. The Plan is required to operate in conformity with the Code to maintain
its qualification. The Plan administrator is not aware of any course of action
or series of events that might adversely affect the Plan's qualified status.
11
<PAGE> 14
American Greetings Corporation
Employees' Retirement Profit Sharing Plan
EIN: 34-0065325
Form 5500, Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1995
<TABLE>
<CAPTION>
Col. (b) Col. (c) Col. (d) Col. (e)
Description of Investment Including
Identity of Issue, Borrower, Lessor or Maturity Date, Rate of Interest, Par or
Similar Party Maturity Value Cost Current Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST IN REGISTERED INVESTMENT COMPANIES
*Vanguard Index 500 Portfolio Fund 1,182,945 shares $ 53,082,018 $ 68,137,655
*Vanguard PrimeCap Fund 3,221,868 shares 66,980,567 84,509,585
*Vanguard Wellington Fund 1,196,263 shares 25,215,064 29,224,713
*Vanguard Money Market Reserves Prime Portfolio 31,317,919 shares 31,317,919 31,317,919
*Vanguard Bond Index Fund 17,840,570 shares 142,654,328 153,014,922
*Vanguard International Growth Portfolio 1,018 shares 15,296 15,298
--------------------------------------
TOTAL ASSETS IN REGISTERED INVESTMENT COMPANIES $ 319,265,192 $ 366,220,092
======================================
EMPLOYER-RELATED INVESTMENTS
*American Greetings Corp. Class A 107,238 shares $ 2,557,845 $ 2,962,450
*American Greetings Corp. Class B 1,140,350 shares 22,976,475 31,502,169
--------------------------------------
TOTAL CORPORATE COMMON STOCK $ 25,534,320 $ 34,464,619
======================================
INSURANCE CONTRACTS
Pacific Mutual G-25755.02 9.40%, Matures 1-2-96 $ 15,347,945 $ 15,347,945
CNA Insurance Co. 9.85%, Matures 5-24-96 18,591,952 18,591,952
Mutual Benefit Life GA-4207 5.10%, Matures 12-31-03 1,306,468 1,306,468
Mutual Benefit Life GA-64207 3.55%, Matures 12-31-03 670,353 670,353
--------------------------------------
TOTAL INSURANCE CONTRACT ASSETS $ 35,916,718 $ 35,916,718
======================================
*LOANS TO PARTICIPANTS 8.0% to 10.0%, matures 1 to 5 years $ 640,082 $ 640,082
======================================
</TABLE>
*Party in interest of the Plan.
12
<PAGE> 15
American Greetings Retirement Profit Sharing and Savings Plan
Form 5500, Item 27d--Schedule of Reportable Transactions
Year Ended December 31, 1995
CATEGORY (iii)
Transactions in a plan year concerning a series of the same issue which when
sales and purchases are aggregated involve an amount in excess of 5% of the fair
value of plan assets on January 1, 1995.
<TABLE>
<CAPTION>
Purchases Sales Total
------------------------------------------------------------ Gain
Description No. Amount No. Amount No. Amount (Loss)
- -------------------------------------------------- ------------------------------------------------------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
American Greetings Company Stock Fund 140 $ 9,161,481 241 $ 19,027,244 381 $ 28,188,725 $ 4,399,084
Vanguard Bond Index Fund 245 34,136,989 252 43,476,711 497 77,613,700 808,716
Vanguard Money Market Reserves Prime Portfolio 226 19,890,547 206 14,339,998 432 34,230,545
Vanguard Index 500 Portfolio 238 19,033,615 217 6,407,807 455 25,441,422 953,539
Vanguard Prime Cap Fund 248 29,815,917 207 9,098,851 455 38,914,768 1,777,011
There were no category (i), (ii) or (iv) reportable transactions during the year ended December 31, 1995.
</TABLE>
13
<PAGE> 16
American Greetings Corp.
Retirement Profit Sharing and Savings Plan
Form 5500, Item 27b--Schedule of Loans or Fixed Income Obligations
<TABLE>
<CAPTION>
Amount Received
Original During Reported Year Unpaid
Identity and Address Amount --------------------------- Balance at
of Obligor of Loan Principal Interest End of Year
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Douglas, Lola $ 1,530.00 $ $ $ 1,530.00
303 E. Hale Avenue
Osceola, AR 72370
Emrich, Kimberly $ 1,469.34 $ $ $ 1,469.34
1229 Forest Circle Drive
Corbin, KY 40701
Griffin, Sharlene $ 1,045.95 $ $ $ 1,045.95
PO Box 152
McKinney, KY 40448
Lambert, Alan $ 1,886.36 $ $ $ 1,886.36
PO Box 496
Keiser, AR 72351
</TABLE>
<TABLE>
<CAPTION>
Detailed Description of Loan
Including Rate, Type, and Value Amount Overdue
Identity and Address Of Collateral, and Other --------------------------------
of Obligor Material Items Principal Interest
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Douglas, Lola Issue Date: 6/27/95 $ 175.01 $ 36.24
303 E. Hale Avenue Maturity Date: 9/13/97
Osceola, AR 72370 Rate: 10.0%
Colateral: Participant account balance
Emrich, Kimberly Issue Date: 8/7/95 $ 97.98 $ 60.20
1229 Forest Circle Drive Maturity Date: 7/30/2000
Corbin, KY 40701 Rate: 10.0%
Collateral: Participant account balance
Griffin, Sharlene Issue Date: 9/8/95 $ 119.66 $ 24.77
PO Box 152 Maturity Date: 9/27/97
McKinney, KY 40448 Rate: 10.0%
Collateral: Participant account balance
Lambert, Alan Issue Date: 9/1/95 $ 454.14 $ 41.94
PO Box 496 Maturity Date: 9/21/96
Keiser, AR 72351 Rate: 10.0%
Collateral: Participant account balance
</TABLE>
The above loans were deemed delinquent by the Plan as of December 31, 1995
14
<PAGE> 1
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in the registration Statement No.
33-45673 on Form S-8 pertaining to the American Greetings Retirement Profit
Sharing and Savings Plan of our report dated June 21, 1996, with respect to the
financial statements and schedules of the American Greetings Retirement Profit
Sharing and Savings Plan included in this Annual Report on Form 11-K for the
year ended December 31, 1995.
/s/ ERNST & YOUNG LLP
Cleveland, Ohio
June 25, 1996
