iPhoto events showing a grayed out palm tree

Using iPhoto 9.4.3 on a MacBook Pro under ML version 10.8.4.

My wife created several events and the result were placeholder photos of a grayed out palm tree and the photo count was 0. However, when I clicked on the event it opened and several pictures were present. This happened to several events that she created.

Question: how do I remove the grayed out palm tree and replace it with a proper key photo?

Thanks