PROSPECTUS SUPPLEMENT File Pursuant To Rule 424(B)(3)
(TO PROSPECTUS DATED OCTOBER 22, 2001) Registration No. 333-68526
AMERICAN GREETINGS CORPORATION
175,000,000 PRINCPAL AMOUNT OF 7.00% CONVERTIBLE
SUBORDINATED NOTES DUE JULY 15, 2006
AND
12,590,655 CLASS A COMMON SHARES ISSUABLE
UPON CONVERSION OF THE NOTES
This Prospectus Supplement (the "Supplement") supplements the
Prospectus dated October 22, 2001 contained in the Registration Statement on
Form S-3 (Commission File No. 333-68526) and relates to the resale by the
Selling Securityholders named herein under the heading "Selling Securityholders"
(the "Selling Securityholders") of (i) up to $90,486,000 aggregate principal
amount of 7.00% Convertible Subordinated Notes due 2006 (the "Notes") of
American Greetings Corporation (the "Company"), originally issued in a private
placement on June 29, 2001 and July 20, 2001 and (ii) up to 6,510,521 Class A
Common Shares (the "Class A Common Shares") of the Company (and such
indeterminate number of additional shares as may be issued pursuant to
antidilution adjustments). This Supplement should be read in conjunction with
the Prospectus, dated October 22, 2001 (the "Prospectus"), to be delivered with
this Supplement. All capitalized terms used but not defined in this Supplement
shall have the meanings given them in the Prospectus.
The Class A Common Shares of the Company are traded on the New York
Stock Exchange under the symbol "AM." On December 17, 2001, the last reported
sale price for the Class A Common Shares was $14.20 per share.
The Notes are not listed on any securities exchange or included in any
automated quotation system. The Notes are currently designated for trading in
the Private Offerings, Resale and Trading through Automatic Linkages (PORTAL)
Market of the National Association of Securities Dealers, Inc.
The Notes are unsecured obligation of the Company, are subordinate in
right of payment to all current and future senior debt of the Company. As of
September 30, 2001, the Company had $867.4 million of senior debt outstanding
and its subsidiaries had $204.7 million of outstanding debt and other
liabilities (including trade payables). The Indenture permits the incurrance of
additional indebtedness or other liabilities by the Company or its subsidiaries
in the future.
The date of this Prospectus Supplement is December 19, 2001.
SELLING SECURITYHOLDERS
The following table sets forth information concerning the aggregate
principal amount of Notes beneficially owned by each Selling Securityholder, as
of December 4, 2001, and the number of Class A Common Shares issuable upon
conversion of Notes held thereby, which may be offered from time to time
pursuant to this Supplement. Other than their ownership of the Company's
securities, none of the Selling Securityholders has had any material
relationship with the Company within the past three years, other than an
affiliate of Goldman Sachs & Company which, during such period, has acted as an
Initial Purchaser of the Notes and the Company's 11.75% Senior Subordinated
Notes due 2008 and as a financial advisor for the Company. The table below has
been prepared on the basis of information furnished to the Company by or on
behalf of the Selling Securityholders. The information below supplements the
information contained in the Prospectus under the caption "Selling
Securityholders." Because any or all of the Notes or Class A Common Shares
listed below may be offered for sale by the Selling Securityholders from time to
time, no estimate can be given as to the percentage of Notes or Class A Common
Shares that will be held by the Selling Securityholders upon termination of
sales pursuant to this Supplement.
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
NAME (1) PRINCIPAL AMOUNT PERCENTAGE OF UNDERLYING CLASS A PERCENTAGE OF CLASS A
OF NOTES NOTES COMMON SHARES THAT MAY COMMON SHARES
BENEFICIALLY OUTSTANDING BE SOLD (2) OUTSTANDING AFTER THE
OWNED THAT MAY OFFERING (3)
BE SOLD
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Alexandra Global Investment Fund 2,000,000 1.14% 143,893 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Bancroft Convertible Fund, Inc. 1,250,000 * 89,933 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Barclays Capital Securities Limited (198) 12,000,000 6.86 863,352 1.36%
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Bear, Stearns & Co. Inc. 2,750,000 1.57 197,853 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Credit Suisse First Boston Corp. 750,000 * 53,960 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Deutsche Banc Alex Brown Inc. 13,250,000 7.57 953,292 1.50
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Ellsworth Convertible Growth and Income Fund, Inc. 1,250,000 * 89,933 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
First Union Securities Inc. 3,150,000 1.80 226,632 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Goldman Sachs and Company 6,086,000 3.48 437,867 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
KBC Financial Products USA Inc. 10,000,000 5.71 719,466 1.13
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Morgan Stanley & Co. 6,000,000 3.43 431,680 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Paloma Securities LLC 18,000,000 10.29 1,295,039 2.02
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
R2 Investments, LDC 10,000,000 5.71 719,466 1.13
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Shepherd Investments International, Ltd. 800,000 * 57,557 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Stark International 1,200,000 * 86,336 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
Whitebox Convertible Arbitrage Partners LP 2,000,000 1.14 143,893 *
-------------------------------------------------- ------------------ --------------- ----------------------- ----------------------
2
----------
* Less than 1%
(1) The Selling Securityholders and the amount of Notes held by them are
set forth herein as of December 4, 2001 and will be updated as
required.
(2) Assumes conversion of the full amount of Notes held by such holder at
the initial rate of 71.9466 Class A Common Shares per $1,000 principal
amount of Notes. The conversion rate and the number of Class A Common
Shares issuable upon conversion of the Notes is subject to adjustment
under certain circumstances. See "Description of Notes -- Conversion
Rights" in the Prospectus. Accordingly, the number of Class A Common
Shares issuable upon conversion of the Notes may increase or decrease
from time to time. Under the terms of the Indenture, fractional shares
will not be issued upon conversion of the Notes; cash will be paid in
lieu of fractional shares, if any.
(3) Based upon 62,758,273 Class A Common Shares outstanding as of September
30, 2001, treating as outstanding the total number of Class A Common
Shares shown as being issuable upon the assumed conversion by the named
Selling Securityholder of the full amount of such Selling
Securityholder's Notes but not assuming the conversion of the Notes of
any other Selling Securityholder.
3