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JO-ANN STORES, INC.
 DEFERRED COMPENSATION PLAN




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TABLE OF CONTENTS
 PageARTICLE I. TITLE AND DEFINITIONS
    
    
    11.1.
    
    Definitions
    
    
    1ARTICLE II. PARTICIPATION
    
    
    62.1.
    
    Requirements for Participation
    
    
    62.2.
    
    Affiliate Participation
    
    
    6ARTICLE III. CONTRIBUTION CREDITS
    
    
    63.1.
    
    Elections to Defer Compensation
    
    
    63.2.
    
    Irrevocability of Deferral Elections.
    
    
    73.3.
    
    Company Contribution Credits
    
    
    83.4.
    
    Investment Elections
    
    
    83.5.
    
    Automatic Suspension of Deferrals.
    
    
    9ARTICLE IV. DEFERRAL ACCOUNTS
    
    
    94.1.
    
    Deferral Accounts
    
    
    94.2.
    
    Company Discretionary Contribution Account
    
    
    104.3.
    
    Excess 401(k) Contribution Account
    
    
    10ARTICLE V. VESTING
    
    
    105.1.
    
    Deferral Account
    
    
    105.2.
    
    Company Discretionary Contribution Account
    
    
    115.3.
    
    Excess 401(k) Contribution Account
    
    
    115.4.
    
    Death, Disability or Age 65
    
    
    11ARTICLE VI. DISTRIBUTIONS
    
    
    116.1.
    
    Distribution of Company Contribution Account
    
    
    116.2.
    
    Distribution of Deferral Account
    
    
    136.3.
    
    Distribution Upon Death or Disability
    
    
    166.4.
    
    Hardship Distribution
    
    
    166.5.
    
    Inability to Locate Team Member
    
    
    17ARTICLE VII. ADMINISTRATION
    
    
    177.1.
    
    Advisory Committee
    
    
    177.2.
    
    Advisory Committee Action
    
    
    177.3.
    
    Powers and Duties of the Advisory Committee
    
    
    177.4.
    
    Construction and Interpretation
    
    
    187.5.
    
    Information
    
    
    187.6.
    
    Compensation, Expenses and Indemnity
    
    
    187.7.
    
    Quarterly Statements; Delegation of Administrative Functions
    
    
    197.8.
    
    Disputes
    
    
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PageARTICLE VIII. MISCELLANEOUS
    
    
    208.1.
    
    Unsecured General Creditor
    
    
    208.2.
    
    Insurance Contracts or Policies
    
    
    218.3.
    
    Restriction Against Assignment
    
    
    218.4.
    
    Withholding
    
    
    218.5.
    
    Amendment, Modification, Suspension or Termination
    
    
    218.6.
    
    Governing Law
    
    
    228.7.
    
    Receipt or Release
    
    
    228.8.
    
    Payments on Behalf of Persons Under Incapacity
    
    
    228.9.
    
    Limitation of Rights and Employment Relationship
    
    
    228.10.
    
    Headings
    
    
    228.11.
    
    Trust Information
    
    
    22




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JO-ANN STORES, INC.
DEFERRED COMPENSATION PLAN
     ARTICLE I.  TITLE AND DEFINITIONS
 Definitions




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3




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4




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5




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ARTICLE II.  PARTICIPATION
 Requirements for Participation
 Affiliate Participation
 ARTICLE III.  CONTRIBUTION CREDITS
 Elections to Defer Compensation
 Initial Election Period.
  6




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Annual Election Period
 Irrevocability of Deferral Elections.
   7




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Company Contribution Credits
 Discretionary Contribution Credits
 Excess 401(k) Contribution Credits
 Investment Elections
  8




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Automatic Suspension of Deferrals.
 ARTICLE IV.  DEFERRAL ACCOUNTS
 Deferral Accounts
    9




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Company Discretionary Contribution Account
   Excess 401(k) Contribution Account
   10




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ARTICLE V.  VESTING
 Deferral Account
 Company Discretionary Contribution Account
 Excess 401(k) Contribution Account
 Years of Service
    
    Percent Vested1
    
    
    0
    %2
    
    
    33
    %3
    
    
    67
    %4 or more
    
    
    100
    %
 Death, Disability or Age 65
 ARTICLE VI.  DISTRIBUTIONS
 Distribution of Company Contribution Account
 Form of Distribution
    11




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Timing of Payment
   12




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Subsequent Elections as to Form of Distribution
      6.2. Distribution of Deferral Account
 Payment Date
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Form of Distribution
     Timing of Payment
   14




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Subsequent Elections as to Time of Distribution
       15




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Distribution Upon Death or Disability
 Hardship Distribution
       16




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Inability to Locate Team Member
 ARTICLE VII.  ADMINISTRATION
 Advisory Committee
 Advisory Committee Action
 Powers and Duties of the Advisory Committee
     17




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Construction and Interpretation
 Information
 Compensation, Expenses and Indemnity
    18




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Quarterly Statements; Delegation of Administrative Functions
   Disputes
 Claim
  Claim Decision
   19




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Request For Review
  Review of Decision
  Legal Action
  ARTICLE VIII.  MISCELLANEOUS
 Unsecured General Creditor
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Insurance Contracts or Policies
 Restriction Against Assignment
 Withholding
 Amendment, Modification, Suspension or Termination
  21




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Governing Law
 Receipt or Release
 Payments on Behalf of Persons Under Incapacity
 Limitation of Rights and Employment Relationship
 Headings
 Trust Information
  JO-ANN STORES, INC.By:
    
    /s/ Darrell WebbName:
    
    Darrell WebbTitle:
    
    Chairman of the Board
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