Exhibit 10.23
Compensation Committee
of the Board of Directors
Jo-Ann Stores, Inc.
February 28, 2006
Alan Rosskamm
re: Change in Status
Dear Alan:
As we have previously advised, the Board of Directors of Jo-Ann Stores, Inc. has
determined to change its search for a new President and Chief Executive Officer
to a search for a new Chairman, President and Chief Executive Officer. The
purpose of this letter is to confirm that you will continue to serve as
Chairman, President and Chief Executive Officer through the date on which those
positions are assumed by another individual (the “Transition Date”), to
acknowledge that you will cease to hold those positions from and after the
Transition Date, and to set forth the compensation the Company will pay and
provide to you both through and after the Transition Date.

1.   Continuing Employment. Until the Transition Date, the Agreement entered
into between you and the Company on October 21, 2005 (the “Employment
Agreement”) will continue in full force and effect. Until the Transition Date,
your base salary and benefits will remain at their current levels.   2.  
Transition. Effective on the Transition Date, without any further action on your
part or on the part of the Company, you will cease to hold the positions of
Chairman, President and Chief Executive Officer and your status will thereafter
be that of an outside director of the Company.   3.   Compensation after
Transition Date. Assuming you continue as Chairman, President and Chief
Executive Officer through the Transition Date:

  a.   Continuing Effectiveness of Employment Agreement. All of the terms of the
Employment Agreement will apply, treating your change in status on that date as
a termination by you for Good Reason (as defined in the Employment Agreement).  
  b.   Lump Sum Payment. The Company will pay to you, in a single lump sum
payment to be made within 10 days of the Transition Date, the sum of $1,800,000,
net of applicable withholding.     c.   Reimbursement of Legal Fees. The Company
will reimburse you for up to $75,000 of legal fees actually incurred by you in
connection with the transition upon presentation of invoices from your legal
counsel to you.     d.   Waiver of Director’s Fees. In light of the continuation
of base salary under the Employment Agreement, you hereby waive any right you
might otherwise have to receive fees or stock or options commonly provided to
outside directors for any period ending on or before the third anniversary of
the Transition Date.     e.   Mutual Release. As a condition precedent to the
payment of the compensation provided for in Sections 3a and 3b above, you and
the Company will exchange mutual releases in form and substance satisfactory
both to you and to the Company.

 

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Alan Rosskamm
February 28, 2006
Page 2

4.   Continued Rights with respect to Existing Stock Options and Restricted
Stock. We confirm that, pursuant to the terms of the Company’s incentive
compensation plan under which you have received both options to purchase Company
Common Shares and restricted Company Common Shares, your service as an outside
director after the Transition Date will constitute continuing service for
purposes of the vesting and exercise of those shares and options.

Alan, the Board appreciates your long and dedicated service to the Company and
your continuing professionalism through the difficult portions of this
transition. To indicate your agreement to the foregoing, please countersign both
original copies of this letter on the space provided below and return one fully
executed copy to me for the Company’s records.
Best regards,

      /s/ Frank Newman           Frank A. Newman     Chairman, Compensation
Committee    

Agreed in all respects on this 28th day of February, 2006.

     
 
  /s/ Alan Rosskamm
 
   
 
  Alan Rosskamm