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Exhibit 10.3
 
      1)
    
    Your employment will commence on July 31, 2006.2)
    
    Your annual base salary will be $475,000 paid in bi-weekly installments of $18,269.23 with an
annual review in February or March of each year.3)
    
    For FY08, you will participate in our Management Incentive Plan (MIP) which has a cash bonus
of 50% of your base salary upon achieving the budgeted (target) financial performance for the
fiscal year, as approved by the board of directors annually. You will be guaranteed a FY08
bonus of not less than 25% of earned salary for the year. For the current fiscal year ending
January 31, 2007 your MIP bonus will be guaranteed at $200,000 and will be payable in March
2007.4)
    
    Beginning in fiscal year 2008, you will participate in the Jo-Ann Stores, Inc. long-term
incentive plan at a level commensurate with your position relative to other executive
officers. Annual grants under this plan are determined by the board of directors based on
peer incentive compensation levels and the specific needs and circumstances of the Company.
In addition, on the first Friday following your start date you will receive:
 a)
    
    A grant of 40,000 shares of Jo-Ann Stores, Inc. common stock These shares will vest
25% annually on the first four anniversaries of your start date.b)
    
    A grant of 50,000 non-qualified options to purchase shares of Jo-Ann Stores, Inc.
common stock. These options will vest 25% annually on the first four anniversaries of your
start date and be exercisable for seven years from date of issuance. These options will be
priced at the closing price of Jo-Ann Stores common stock on the day of the grant.




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5)
    
    We will provide a car allowance in the amount of $1,300 per month. This allowance is
intended to cover all costs, which include, but is not limited to the purchase or lease price of
a vehicle, insurance, registration, maintenance, gasoline, taxes, etc. The allowance will be
included in your paycheck on the first pay period of the month. The car allowance, for tax
purposes, is treated as ordinary income and will be taxed accordingly.6)
    
    You will be immediately eligible for twenty-seven days of Paid Time Off (PTO) annually.7)
    
    You will be eligible to participate in the Companys Group Benefit Plan. Your benefits will
become effective ninety (90) days from your start date. Please note that our medical plan
carries a $25,000 per person limit for the first year of coverage.8)
    
    You will participate in our Salary Continuation plan. This plan pays you one hundred percent
(100%) of your salary for up to ninety (90) days for any illness or disability.9)
    
    As a member of our Leadership Group, you will be required to participate in the Companys
Long-Term Disability plan. The plan pays you a benefit equal to sixty percent (60%) of your
salary up to a maximum of $18,000 per month should you become disabled. Additionally, Jo-Ann
will provide you with a supplemental long-term disability plan that will provide an additional
maximum monthly benefit of up to $7,000 for a total monthly benefit of $25,000. This
supplemental coverage is subject to all underwriting provisions of the insurance carrier.10)
    
    You will be eligible to participate in our Deferred Compensation Plan, provided you enroll
within 30 days from your start date.11)
    
    You will be eligible to participate in the Companys SERP after one (1) year of employment
with a maximum benefit of $600,000 subject to the terms of the plan.12)
    
    You are also eligible to participate in all other benefits provided to senior officers
including: an annual executive physical, tax and financial planning assistance, etc.13)
    
    In order to facilitate your relocation to the Cleveland, Ohio area, the Company will assume
the full cost of moving your household goods. Our relocation representative will contact you
to initiate this process upon your acceptance of this offer. In addition, should it be
required, the Company will provide you with temporary accommodation for up to 90 days. Should
it become necessary, the Company will also reimburse you for duplicate mortgage payments,
including your tax liability, at a rate equal to the lower of the two mortgages, for a period
of up to six months.
 The Company will reimburse you for up to six (6) round trips between Portland and Cleveland
during the period until your relocation is completed and for expenses associated with up to
three (3) house-hunting trips for you and your wife. In addition, on your start date the
Company will make a lump-sum payment to you of $150,000, less applicable taxes, to cover any
incidental relocation costs not otherwise reimbursed.
 14)
    
    The Company will enter into a separate agreement with you covering severance in the event
that your employment is terminated by the Company without cause or by you or the Company as a
result of a Change in Control.




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/s/
    
    Darrell WebbDarrell WebbChairman, President, & CEO
 th
 /s/
    
    Travis SmithTravis Smith