Exhibit 10.1
SPLIT DOLLAR
INSURANCE AGREEMENT
THIS AGREEMENT made this 15
th of October 2008 , by and between
JO-ANN STORES, INC., an Ohio corporation (the
“Company”) and Kenneth Haverkost (the
“Employee”),
W I T N E S S E T
H:
WHEREAS, the Employee has performed
his duties in a capable and efficient manner and is a valued
employee of the Company and has indicated his intention to continue
such services, and the Company desires that he do so; and
WHEREAS, in the continuation of such
relationship, the parties desire to establish an arrangement in
order to provide insurance protection for the benefit of the
Employee;
NOW, THEREFORE, in consideration of
the services rendered and to be rendered by the Employee and of the
mutual covenants contained herein, the parties hereto agree as
follows:
1. Purchases of
Insurance . The Company shall maintain life insurance
policies acquired by the Company on the life of the Employee (the
“Policies”) from insurance companies selected by the
Company (the “Insurance Companies”), shall pay the
premiums on the policies when due, and shall be designated as sole
owner of the policies subject to the conditions hereafter set
forth.
2. Allocation of
Premiums Between Company and Employee . The Company will
pay the entirety of the Premiums due on the Policies and shall
annually furnish the Employee a statement of the amount of income
reportable by the Employee for Federal and State income tax
purposes, if any, as a result of its payment of such premiums.
3. Payment of
Proceeds . Upon the death of the Employee while this
Agreement remains in effect, the proceeds of the Policies shall be
paid as follows:
(a) To the
Employee’s beneficiary or beneficiaries designated in
accordance with paragraph 4 hereof, the amount of Six Hundred
Thousand ($600,000) Dollars.
(b) To the
Company, an amount equal to the balance, if any, of the proceeds of
the Policies, and of any paid-up additional insurance purchased
through dividend reinvestment, if any, after payment of the
applicable amount to the Employee’s beneficiary or
beneficiaries pursuant to subparagraph (a) of this paragraph
3.
4. Ownership .
The Employee shall have the right to designate the beneficiary or
beneficiaries to receive payment of any proceeds of the Policies
which might become payable pursuant to the provisions of paragraph
3(a) hereof. Each and every other right of ownership of the
Policies shall be reserved to the Company even though the exercise
of such right or rights would adversely affect or extinguish the
payment of any benefits pursuant to Paragraph 3(a) hereof or the
existence thereafter of the right reserved to the Employee pursuant
to the first se
