Document:

EX-10.1

Exhibit 10.1

Summary of Compensation for Named Executive Officers

Chairman and Vice Chairman, President and Chief Executive Officer

The Compensation Committee of the Board sets the base salaries and performance bonus criteria of
the Executive Officers in Table I on an annual basis. For the Company’s fiscal year 2006 (ending on
September 30, 2006), the Compensation Committee approved the salaries and bonus criteria as set
forth below in Table I. For the 2006 fiscal year, the Compensation Committee did not change the
salary or change the bonus performance criteria or related bonus percentages applicable to Mr.
Horton or to Mr. Tomnitz beyond what was approved at the beginning of the prior fiscal year.

Table I

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Performance Bonus
	 	 	 	 	 	 	Under the 2000
	 	 	 	 	 	 	Incentive Bonus
	 	 	 	 	Annual Base Salary	 	Plan
	Name	 	Office	 	(2006 Fiscal Year)	 	(2006 Fiscal Year)
	

Donald R. Horton

	 	

Chairman of the Board
	 	

$400,000
	 	

See Note 1-A
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Donald J. Tomnitz

	 	Vice Chairman, President and CEO
	 	 $300,000
	 	See Note 1-A
	 

	 	 
	 	 
	 	 

Note 1-A: Under the Amended and Restated 2000 Incentive Bonus Plan, Mr.
Horton and Mr. Tomnitz will each receive a bonus payment based upon achieving certain
performance goals with respect to quarterly consolidated pre-tax income and the other
criteria that are factored into determining pre-tax income and performance of the Company.
These goals are set by the Compensation Committee and ratified and approved by the Board of
Directors at the beginning of each fiscal year.

In addition, Mr. Horton and Mr. Tomnitz may participate in two separate deferred
compensation plans. The first plan allows the executive to make voluntary income deferrals.
The second plan is a promise by the Company to pay retirement benefits to the executive. If
the executive is employed by the Company on the last day of the current fiscal year (for
example, September 30, 2006), then the Company will establish a liability to him equal to
10% of his annual base salary as of the first day of the current fiscal year (for example,
October 1, 2005). This liability will accrue earnings in future years at a rate established
by the administrative committee, which administers this second plan.

Other Named Executive Officers

The other named executive officers of the Company for our last fiscal year are listed in Table II
below. For the Company’s 2006 fiscal year (ending on September 30, 2006), the Compensation
Committee approved and the Board of Directors ratified annual base salaries and discretionary bonus
criteria for the other executive officers listed in Table II.

1

Table II

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Performance Bonus
	 	 	 	 	 	 	Under the 2000
	 	 	 	 	 	 	Incentive Bonus
	 	 	 	 	Annual Base Salary	 	Plan
	Name	 	Office	 	(2006 Fiscal Year)	 	(2006 Fiscal Year)
	

Thomas F. Noon

	 	

Executive Vice President &

COO — Western US Operations
	 	

$175,000
	 	

See Note 1-B
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Gordon D. Jones

	 	Executive Vice President &

COO – Central US Operations
	 	

$175,000
	 	

See Note 1-B
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	George W. Seagraves

	 	Executive Vice President &

COO – Eastern US Operations
	 	

$175,000
	 	

See Note 1-B
	 

	 	 
	 	 
	 	 

Note 1-B: Under the Amended and Restated 2000 Incentive Bonus Plan, Mr. Noon,
Mr. Jones and Mr. Seagraves will each receive a bonus payment based upon achieving certain
performance goals with respect to quarterly consolidated pre-tax income and the other
criteria that are factored into determining pre-tax income as related to the performance of
their respective operating regions. These goals are set by the Compensation Committee and
ratified and approved by the Board of Directors at the beginning of each fiscal year.

In addition, Mr. Noon, Mr. Jones, and Mr. Seagraves may participate in two separate deferred
compensation plans. The first plan allows the executive to make voluntary income deferrals.
The second plan is a promise by the Company to pay retirement benefits to the executive. If
the executive is employed by the Company on the last day of the current fiscal year (for
example, September 30, 2006), then the Company will establish a liability to such officer
equal to 10% of his annual base salary as of the first day of the current fiscal year (for
example, October 1, 2005). This liability will accrue earnings in future years at a rate
established by the administrative committee, which administers this second plan.

2EX-10.2

Exhibit 10.2

Summary of Compensation for Directors

Summary of Compensation for Non-Management Directors

On November 17, 2005, the Board of Directors of the Company approved an increase in director fees,
committee member fees and chairperson fees paid to non-management directors of the Company
beginning with the next board meeting following November 18, 2005. Director fees, committee fees
and chairperson fees are only paid to non-management directors as summarized below:

Each non-management director will receive a director fee of $10,000 per Board meeting attended in
person or by tele-conference, paid quarterly and not to exceed $40,000 per year.

Each non-management director who serves on a committee of the Board of Directors will receive an
annual fee of $5,000 per committee, paid quarterly.

Each non-management director who serves as the chairperson of a committee of the Board of Directors
will receive an annual fee of $2,500 per committee, paid quarterly.

Summary of Compensation for Management Directors

Our three management directors are Mr. Donald R. Horton, Mr. Donald J. Tomnitz and Mr. Bill W.
Wheat. These three management directors do not receive any director fees for serving as directors
of the Company. The compensation for the 2006 fiscal year for Mr. Horton and Mr. Tomnitz, as
executive officers of the Company, is set forth on Exhibit 10.1 attached to this Form 8-K and
incorporated by reference herein. The compensation for the 2006 fiscal year for Mr. Wheat, as an
executive officer and the chief financial officer of the Company, comprises of a salary of $200,000
and a discretionary bonus to be determined. Mr. Wheat also has the opportunity to participate in
the Company’s other long-term benefit programs such as the SERP 2 plan and the Company’s 401(k)
program. The SERP 2 plan is a promise by the Company to pay retirement benefits to the participant.
If Mr. Wheat is employed by the Company on the last day of the current fiscal year (for example
September 30, 2006), then the Company will establish a liability to him equal to 10% of his annual
base salary as of the first day of the current fiscal year (for example October 1, 2005). This
liability will accrue earnings in future years at a rate established by the administrative
committee, which governs the SERP 2 plan.EX-10.1

Exhibit 10.1

RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT, is made as of November 18, 2005, and is between JO-ANN STORES, INC., an Ohio
corporation (the “Company”), and (the “Employee”).

1. Award of Restricted Stock. Pursuant to the terms of the Company’s 1998 Incentive
Compensation Plan (the “Plan”), the Employee is hereby granted a Restricted Stock Award with
respect to Common Shares, without par value, of the Company (the “Shares”).

2. Restrictions. The Employee hereby accepts the Restricted Stock Award and agrees
that the Shares shall be subject to the following restrictions:

	 	a.	 	The Employee shall not sell, assign, transfer, pledge,
hypothecate, or otherwise dispose of the Shares until the restrictions lapse;
and

	 	b.	 	The Employee shall forfeit all of his or her right to the
Shares and shall deliver to the Company the certificate(s) representing the
Shares unless the Employee remains in the continuous employment of the Company
or any of its subsidiaries (as defined in the Plan) until the restrictions
lapse; provided, however, that the foregoing restrictions may lapse or be
removed before such date in accordance with the provisions of Sections III (6)
and III (7) of the Committee Rules for the Plan. The Employee acknowledges
and agrees that the certificates representing the shares shall bear a legend
referring to the foregoing restrictions. Upon the lapse of the restrictions
in accordance with the Plan, the Company will cause new certificates without
such legend to be issued to the employee in exchange for the certificates that
bear the legend.

Page Two of Two

	 	c.	 	Your restricted stock has the following vesting schedule:

One-half will vest – March 1, 2007

One-half will vest – March 1, 2008

3. Other Terms and Conditions of the Award. The Employee acknowledges receipt of a
copy of the Plan Prospectus and the Committee Rules and agrees that the Restricted Stock Award made
hereby shall be subject to all of the provisions of the Plan.

4. Parties Bound. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators, and successors.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer and the Employee has hereunto set his or her hand as of the date first above
written.

JO-ANN STORES, INC.

BY:EX-10.2

Exhibit 10.2

NOTICE OF GRANT OF NON-QUALIFIED STOCK OPTION

TO:

We are pleased to notify you that, by action of the Compensation Committee of the Board of
Directors on 11-18-05, you have been granted a non-qualified stock option to purchase Jo-Ann
Stores, Inc. Common Shares at an option price of $12.42 per share. The stock option is subject to
the terms of the Company’s 1998 Incentive Compensation Plan and the Committee Rules implementing
the Plan.

At this time, we wish to call your attention to several of the important aspects of the stock
option granted to you. This summary is not intended to be a complete explanation of your rights or
the grants and is qualified in its entirety by reference to the Plan and the Committee Rules.

This stock option shall be exercisable as to one-half of the shares on March 1, 2009 and
one-half of the shares on March 1, 2010. Please refer to Section II(6) of the Committee Rules for
a description of the limited circumstances in which your stock option may be exercised after you
terminate employment.

You will not realize any income from the grant of this stock option; however, upon payment of
the option price in cash, the excess of the fair market value of the shares on the date of exercise
will be taxed as compensation to you. Payment of the option price with Common Shares will also
result in income taxable to you in an amount equal to the difference between the fair market value
of the additional shares received and the cash, if any, paid as part of the option price.

If a one-half installment of the number of shares subject to the option would otherwise
include a fraction of a share, that installment (unless it is the last installment) shall be
rounded up to the next larger number of full shares.

You are not permitted to sell or assign this stock option to anyone other than your spouse,
your children, other lineal descendants, or a trust for their benefit. The option will terminate,
and your right to purchase shares of Common Stock shall expire on 11-18-2012.

This stock option may only be exercised by delivery to the Supervisor, Financial Services of
the Company a signed copy of the Election to Exercise Stock Option form attached to this Notice.
Please note that full payment of the option price must accompany the Election to Exercise Stock
Option.

As stated above, this grant of a stock option is further subject to all the terms and
conditions of the Plan and the Committee Rules.

JO-ANN STORES, INC.

By:

DATE OF

NOTICE: 11-18-2005

The undersigned hereby accepts the stock option referenced to above in accordance with the
terms of this Notice.

Date:  , 2005 By:

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