JO-ANN STORES INC
EXHIBIT 10.2.1
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<TYPE>EX-10.2.1
<SEQUENCE>7
<FILENAME>l00050bexv10w2w1.txt
<DESCRIPTION>EXHIBIT 10.2.1
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                                                                  EXHIBIT 10.2.1

                        SPLIT -DOLLAR INSURANCE AGREEMENT

                  THIS AGREEMENT is made this 27th day of May, 1994, by and
among FABRI-CENTERS OF AMERICA, INC., an Ohio corporation ("FCA "), ALAN
ROSSKAMM, an individual residing in the State of Ohio ("Rosskamm"), and DAVID J.
HOOKER, an individual residing in the State of Ohio (the "Trustee"), acting in
his capacity as trustee of the trust created under the Alan D. Rosskamm
Irrevocable Trust Agreement dated May 23, 1994 (the "Trust").

                  WHEREAS, Rosskamm is employed by FCA as its Chairman,
President, and Chief Executive Officer;

                  WHEREAS, Rosskamm desires to provide for the receipt of life
insurance proceeds by the beneficiaries of the Trust following the death of the
last to die of Rosskamm and his wife, Barbara Rosskamm ("Barbara");

                  WHEREAS, the Compensation Committee of the Board of Directors
of FCA has determined that it is appropriate to enter into this Agreement as
part of the overall compensation and benefits to be provided to Rosskamm by FCA
for his services to FCA and has authorized the participation by FCA in the split
dollar arrangement documented by this Agreement, contingent upon Rosskamm's
effective waiver of all rights under the Supplemental Retirement Plan dated
April 1, 1979, that has heretofore been in effect for the benefit of Rosskamm;
and

                  WHEREAS, the Trustee desires to enter into this Agreement,

                  NOW, THEREFORE, in consideration of the services rendered and
to be rendered by Rosskamm to FCA and of the mutual covenants contained herein,
the parties hereto agree as follows:

         1. Purchase of Insurance. The Trustee shall purchase from New York Life
Insurance Company (the "Insurance Company") a Survivor Joint Life policy of
insurance with the face amount of $2,500,000 (the "Base Face Amount"), the
proceeds of which will be payable upon the death of the second to die of
Rosskamm and Barbara (the "Policy"). The Trustee shall be the sole owner of the
Policy, subject only to such rights as may be granted to FCA under the
collateral assignment of the Policy as contemplated in Section 5, below.

                  2. Premium Payments. Unless the proceeds of the Policy have
earlier become payable by reason of the death of the last to die of Rosskamm and
Barbara, the Company shall pay at least ten annual premiums on the Policy. The
Company may have to pay more than ten annual premiums on the Policy if, on or
after the tenth anniversary of the effective date of the Policy (the "Effective
Date"), the cash surrender value test specified in Section 2.2 has not been met.

                  2.1 FCA's Share of the Premiums for the First Ten Years of the
Policy. On the Effective Date and, unless the proceeds of the Policy have
earlier become payable by reason of the death of the last to die of Rosskamm and
Barbara, on each of the first through the ninth anniversaries of the Effective
Date, FCA shall pay, as its share of the annual premiums on the Policy, a sum
equal to (a) $44,726 minus (b) the Trustee's share of the premiums for that year
determined as provided in Section 2.3, below (so that the aggregate amount of
premiums paid by FCA pursuant to this Section 2.1 through the ninth anniversary
of the Effective Date will be $447,260 minus the aggregate amount of the
Trustee's share of the premiums for that same period).

                  2.2 FCA's Share of the Premiums After the First Ten Years of
the Policy. Thirty days in advance of the tenth anniversary of the Effective
Date a determination shall be made as to whether, based upon the Insurance
Company's then-current illustrations and without regard to any further premium
payments to be made on the Policy, it appears that the cash surrender value of
the Policy on the fifteenth anniversary of the Effective Date will be
sufficient:

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                  (a) to allow for a withdrawal from the Policy on the fifteenth
              anniversary of the Effective Date of an amount equal to the
              aggregate amount of FCA' s share of the premiums theretofore paid
              on the Policy, and

                  (b) to provide for the continuation of the Policy with a death
              benefit at least equal to the Base Face Amount, from the date of
              the withdrawal contemplated by (a), through May 30, 2045, without
              borrowing against the Policy and without any partial surrender of
              the Policy.

         If it appears that the cash surrender value is so sufficient, FCA shall
         not make any further payments of premiums on the Policy (other than on
         behalf of the Trustee pursuant to Section 2.3, below). If, however, it
         appears that the cash surrender value is not so sufficient, FCA shall
         pay, on the tenth anniversary of the Effective Date, as its share of
         another annual premium on the Policy, a sum equal to $44,726 minus the
         Trustee's share of the premiums for that additional year (determined as
         provided in Section 2.3, below). If FCA is obligated to make a payment
         on the tenth anniversary of the Effective Date, then the determination
         described in the first sentence of this Section 2.2 shall be made
         again, 30 days in advance of the eleventh anniversary of the Effective
         Date but substituting "eleventh" and "sixteenth" for "tenth" and
         "fifteenth" each place those words appear and if the cash surrender
         value is again found not to be sufficient, FCA shall pay, on the
         eleventh anniversary of the Effective Date, as its share of another
         annual premium on the Policy, a sum equal to $44,726 minus the
         Trustee's share of the premiums for that additional year (determined as
         provided in Section 2.3, below). This process shall be repeated on each
         anniversary of the Effective Date until it is determined, on one such
         anniversary, that the cash surrender value, as projected five years
         into the future, will be sufficient, after which determination FCA
         shall make no further payments of premiums on the Policy (other than on
         behalf of the Trustee pursuant to Section 2.3, below).

                  2.3 The Trustee's Share of the Premiums. In addition to paying
         its own share of the premiums as provided in Section 2.1, FCA shall
         pay, as of the Effective Date and on each anniversary of the Effective
         Date while this Agreement remains in effect, for the account of the
         Trustee, the Trustee's share of the premiums for each year during which
         this Agreement is in effect. At the time of each premium payment by
         FCA, the Trustee shall reimburse FCA for the Trustee's share of the
         premiums. The Trustee's share of the premiums for each year shall be an
         amount equal to the economic benefit of the life insurance protection
         provided to the Trustee under this Agreement for that year. The value
         of that economic benefit shall be calculated by using the Appropriate
         Rates for insurance coverage with a death benefit equal to the amount
         of the proceeds that would be distributable to the Trustee pursuant to
         Section 6 hereof if the proceeds of the Policy became payable by reason
         of the death of the last to die of Rosskamm and Barbara in that year
         (i.e., the amount by which the Policy's current death benefit exceeds
         the aggregate amount of FCA' s share of the premiums paid by FCA
         through the end of that year). For these purposes, the "Appropriate
         Rates" (a) will be the so called U.S. Life Table 38, joint lives, last
         to die formula rates for so long as both Rosskamm and Barbara survive,
         and (b) will be the lower of the P.S. 58 rates or the Insurance
         Company's published yearly renewable term rates for any period during
         which only one of Rosskamm and Barbara survives.

                  3. Term of Agreement, Termination, "Repayment Anniversary".
This Agreement shall be immediately effective when executed by all of the
parties hereto and, unless both Rosskamm and Barbara have earlier died, shall
remain in effect until after the cash surrender value test specified in 3(a),
below, has been met and the Company has thereafter received repayment of all of
its share of the premiums. Assuming the survival of at least one of Rosskamm and
Barbara, the repayment to the Company will be made shortly after the fifteenth
anniversary of the Effective Date if (i) the cash surrender value test specified
in Section 2.2 was earlier met as of the tenth anniversary of the Effective Date
and (ii) the cash surrender value test specified in 3(a), below, is met as of
the fifteenth anniversary of the Effective Date. If either the cash surrender
value test specified in Section 2.2 was not met as of the tenth anniversary of
the Effective Date or the cash surrender value test specified in (a), below, is
not met as of the fifteenth anniversary of the Effective Date, the repayment to
the Company will be delayed for at least one and perhaps more years as provided
below in this Section 3. Assuming the survival of at least one of Rosskamm and
Barbara, the repayment to the Company shall be made shortly after that
anniversary of the Effective Date:

                           (a) which is not earlier than five years after that
                  anniversary of the Effective Date on which the cash surrender
                  value test specified in Section 2.2 was first met, and

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                           (b) on which, based upon the Insurance Company's
                  then-current illustrations and without regard to any further
                  premium payments to be made on the Policy, it appears that the
                  cash surrender value of the Policy is sufficient:

                           (i) to allow for a withdrawal from the Policy of the
                  aggregate amount of FCA' s share of the premiums theretofore
                  paid by on the Policy, and

                           (ii) to provide for the continuation of the Policy
                  with a death benefit at least equal to the Base Face Amount,
                  from the date of the withdrawal contemplated by (a), through
                  May 30, 2045 without borrowing against the Policy and without
                  any partial surrender of the Policy.

If at least one of Rosskamm and Barbara survive through an anniversary of the
Effective Date on which clauses (a) and (b) above are satisfied, that
anniversary shall be designated, for purposes of this Agreement, as the
"Repayment Anniversary" and, unless neither Rosskamm nor Barbara thereafter
survives through the date the repayment referred to in Section 7 (the
"Repayment") is made to FCA, this Agreement shall terminate on the date the
Repayment is made. If both Rosskamm and Barbara die before the date the
Repayment is made, this Agreement shall terminate upon the payment of all of the
proceeds of the Policy in accordance with Section 6 hereof.

                        4. Dividends. The Policy shall provide that dividends
payable with respect to the Policy shall be applied to purchase paid-up
additional insurance protection.

                        5. Collateral Assignment. To secure the repayment to
FCA of its share of the premiums, the Trustee has assigned the Policy to FCA as
collateral by execution of an assignment substantially in the form of the
Collateral Assignment form attached to this Agreement as Exhibit A.

                        6. Payment of Proceeds. Upon the death of the last to
die of Rosskamm and Barbara while this Agreement remains in effect, the proceeds
of the Policy shall be paid as follows:

                        6.1 To FCA, an amount equal to the aggregate amount of
FCA' s share of the premiums paid by FCA through the date on which the proceeds
of the Policy become payable; and

                        6.2 To the beneficiary or beneficiaries designated by
the Trustee, the balance of the proceeds of the Policy and of any additional
insurance purchased pursuant to Section 4 hereof, after payment of the
applicable amount to FCA pursuant to Section 6.1.

                  7. Repayment of Premiums to FCA. Not earlier than 30 days nor
more than 60 days after the occurrence of the Repayment Anniversary, as defined
in Section 3, above, the Trustee shall repay FCA an amount equal to the
aggregate amount of FCA's share of the premiums theretofore paid on the Policy,
except that if the last to die of Rosskamm and Barbara dies before the repayment
is made, this Section 7 shall not apply and the proceeds of the Policy shall be
paid as provided in Section 6, above.

                  8. Waiver of Rights Under SRP. Rosskamm, for himself and his
heirs, assigns, and beneficiaries, hereby unconditionally waives all rights
under the Supplemental Retirement Plan that has heretofore been in effect for
the benefit of Rosskamm (the "SRP") and acknowledges that no payments will ever
be made by FCA under the SRP to or with respect to Rosskamm.

                  9. Liability of Insurance Company. Each of the parties to this
Agreement hereby acknowledges that in issuing any Policy of insurance pursuant
to this Agreement, the Insurance Company shall have no liability except as set
forth in the Policy. The Insurance Company shall not be bound to inquire into or
take notice of any of the covenants herein contained as to the Policy or as to
the application of the proceeds of the Policy. Rights under the Policy may be
exercised during the life of the last to die of Rosskamm and Barbara pursuant to
the provisions of the Policy. Upon the death of the last to die of Rosskamm and
Barbara, the Insurance Company shall be discharged from all liability on payment
of the proceeds in accordance with the Policy provisions without regard to this
Agreement or any amendment thereof .

                  10. Amendment. This Agreement may not be amended or (except as
provided in the last two sentences of Section 3) terminated, without the express
written consent of FCA, the Trustee, and Rosskamm (or, in the case of Rosskamm,
his legal representative).

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                  11. Binding Nature. This Agreement shall bind and inure to the
benefit of FCA and its successors and assigns; Rosskamm and his heirs,
executors, administrators, and assigns; the Trustee; and any Policy beneficiary.
This Agreement does not constitute an employment agreement between the Company
and Rosskamm and neither Rosskamm nor the Company shall have any obligations to
the other by reason of or arising out of this Agreement except as is expressly
set forth in this Agreement. All of the obligations of the parties under this
Agreement (including, without limitation, FCA's obligation to make premium
payments at the times and in the amounts specified above) shall continue in
effect whether or not Rosskamm continues to be employed by FCA during the term
of this Agreement.

                  IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first above written.


                                       Fabri-Centers of America, Inc.

                                       By: /s/ ROBERT L. NORTON
                                           -------------------------------



                                       /s/ DAVID J. HOOKER
                                       -----------------------------------
                                       David J. Hooker, Trustee
                                       U/A May 23, 1994



                                       /s/ ALAN ROSSKAMM
                                       -----------------------------------
                                       ALAN ROSSKAMM

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                                    EXHIBIT A

                              COLLATERAL ASSIGNMENT

                ASSIGNMENT OF LIFE INSURANCE POLICY AS COLLATERAL

A. For Value Received the undersigned hereby assigns, transfers, and sets over
to FABRI-CENTERS OF AMERICA, INC., an Ohio corporation (the" Assignee"), Policy
No. 45219541 issued by New York Life Insurance Company (the " Insurance
Company") and any supplementary contracts issued in connection therewith (the
"Policy"), upon the lives of Alan Rosskamm and his wife, Barbara Rosskamm, of
Pepper Pike, Ohio, and all claims, options, privileges, rights, and title
inherent therein and thereunder (except as provided in Paragraph C hereof)
subject to all the terms and conditions of the Policy and to all superior liens,
if any, which the Insurance Company may have against the Policy. The undersigned
by this instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.

B. Without detracting from the generality of the foregoing, the following
specific rights are included in this assignment and pass by virtue hereof:

         1. The sole right to collect from the Insurance Company the net
         proceeds of the Policy when it becomes a claim by death or maturity;

         2. The sole right to surrender the Policy and receive the surrender
         value thereof at any time provided by the terms of the Policy and at
         such other times as the Insurance Company may allow;

         3. The sole right to obtain one or more loans or advances on the
         Policy, either from the Insurance Company or, at any time, from other
         persons, and to pledge or assign the Policy as security for such loans
         or advances;

         4. The sole right to collect and receive all distributions or shares of
         surplus, dividend deposits, or additions to the Policy now or hereafter
         made or apportioned thereto, and to exercise any and all options
         contained in the Policy with respect thereto; provided, that unless and
         until the Assignee shall notify the Insurance Company in writing to the
         contrary, the distributions or shares of surplus, dividend deposits and
         additions shall continue on the plan in force at the time of this
         assignment; and

         5. The sole right to exercise all nonforfeiture rights permitted by the
         terms of the Policy or allowed by the Insurance Company and to receive
         all benefits and advantages derived therefrom.

C. The following specific rights, so long as the Policy has not been
surrendered, are reserved and excluded from this assignment and do not pass by
virtue hereof:

         1. The right to designate and change the beneficiary;

         2. The right to elect any optional mode of settlement permitted by the
         Policy or allowed by the Insurance Company;

but the reservation of these rights shall in no way impair the right of the
Assignee to surrender the Policy completely with all its incidents or impair any
other right of the Assignee hereunder, and any designation or change of
beneficiary or election of a mode of settlement shall be made subject to this
assignment and to the rights of the Assignee hereunder.

D. This assignment is made and the Policy is to be held as collateral security
for the liabilities of the undersigned to the Assignee pursuant to the
Split-Dollar Insurance Agreement entered into on May 27, 1994, by and among the
Assignee Alan Rosskamm, and the undersigned (the "Liabilities").

E. The Assignee covenants and agrees with the undersigned as follows:

         1. That any balance of sums received hereunder from the Insurance
         Company remaining after payment of the then existing Liabilities shall
         be paid by the Assignee to the persons entitled thereto under the terms
         of the Policy had this assignment not been executed;



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         2. That the Assignee will not exercise either the right to surrender
         the Policy or the right to obtain Policy loans from the Insurance
         Company, until there has been default in the Liabilities or a failure
         by the undersigned to pay any premium when due, nor until 45 days after
         the Assignee shall have mailed, by first class mail, to the undersigned
         at the address last supplied in writing to the Assignee specifically
         referring to this assignment, notice of intention to exercise such
         right, and then only to the extent necessary to satisfy the Liabilities
         or pay the unpaid premiums that the undersigned is obligated to pay
         under the Split-Dollar Agreement referred to above, and

         3. That the Assignee will upon request forward without unreasonable
         delay to the Insurance Company the Policy for endorsement of any
         designation or change of beneficiary or any election of an optional
         mode of settlement.

F. The Insurance Company is hereby authorized to recognize the Assignee's claims
to rights hereunder without investigating the reason for any action taken by the
Assignee, or the validity or the amount of the Liabilities or the existence of
any default therein, or the giving of any notice under Paragraph D(2) above or
otherwise, or the application to be made by the Assignee of any amounts to be
paid to the Assignee. The sole signature of the Assignee shall be sufficient for
the exercise of any rights under the Policy assigned hereby and the sole receipt
of the Assignee for any sums received shall be a full discharge and release
therefor to the Insurance Company. Checks for all or any part of the sums
payable under the Policy and assigned herein, shall be drawn to the exclusive
order of the Assignee if, when, and in such amounts as may be, requested by the
Assignee.

G. The exercise of any right, option, privilege or power given herein to the
Assignee shall be at the option of the Assignee, but (except as restricted by
Paragraph E(2) above) the Assignee may exercise any such right, option,
privilege or power without notice to, or assent by, or affecting the liability
of, or releasing any interest hereby assigned by the undersigned.

H. The Assignee may take or release other security, may release any party
primarily or secondarily liable for any of the Liabilities, may grant
extensions, renewals or indulgences with respect to the Liabilities, or may
apply to the Liabilities in such order as the Assignee shall determine, the
proceeds of the Policy hereby assigned or any amount received on account of the
Policy by the exercise of any right permitted under this assignment, without
resorting or regard to other security .

I. In the event of any conflict between the provisions of this assignment and
provisions of the note or other evidence of any Liability, with respect to the
Policy or rights of collateral security therein, the provisions of this
assignment shall prevail.

J. The undersigned declares that no proceedings in bankruptcy are pending
against him and that his property is not subject to any assignment for the
benefit of creditors.

                  IN WITNESS WHEREOF, the Assignor and the Assignee have
executed this Assignment on the date first above written.

                                              /s/ DAVID J. HOOKER
                                              ------------------------
                                              David J. Hooker, Trustee
                                              May 23, 1994

                                              Fabri-Centers of America, Inc.

                                              By: /s/ ROBERT L. NORTON
                                                  --------------------



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