This Stock Option Agreement involves
Title: JO-ANN STORES, INC.
1996 STOCK OPTION PLAN FOR
Industry: Retail (Specialty) Sector: Services
JO-ANN STORES, INC.
1996 STOCK OPTION PLAN FOR
EFFECTIVE: JUNE 12, 1996
1. PURPOSE. This 1996 Stock Option Plan for Non-Employee
Directors (the "Plan") is designed to enable Fabri-Centers of America, Inc. (the
"Company"), through the grant of options, to continue to attract and retain
highly qualified non-employee directors and to provide additional incentive to
those directors through increased stock ownership. The Plan, upon becoming
effective by reason of its approval by the Company's shareholders, replaces the
1988 Stock Option Plan for Non-Employee Directors (the "Predecessor Plan")
except any option previously granted under the Predecessor Plan will remain
available for exercise under the terms of the Predecessor Plan.
2. ADMINISTRATION. The Plan shall be administered by a
committee consisting of not less than two directors of the Company (the
"Committee"), to be appointed by, and to serve during the pleasure of, the Board
of Directors of the Company. No non-employee director may be appointed or serve
as a member of the Committee. Subject to the terms of the Plan, the Committee
shall have full power and authority to interpret the provisions and supervise
the administration of the Plan. All decisions by the Committee pursuant to the
provisions of the Plan shall be final.
3. PARTICIPATION IN THE PLAN. Each director of the Company who
is not an employee of the Company or any of its subsidiaries shall be a
participant in the Plan.
Each newly elected non-employee director of the Company shall
automatically be granted, on the date of his or her election to the Board of
Directors, an option to purchase 7,500 Class A shares and 7,500 Class B shares
of the Company's Common Stock at the option price set forth in Section 5.
Each continuing non-employee director of the Company shall
automatically be granted, upon approval of this Plan and at the end of each Year
(as defined herein) thereafter, an option to purchase the number of Class A
shares and Class B shares of the Company as follows:
(i) 2,000 Class A shares for each continuous Year of service
as a non-employee director completed through and including February 1, 1997 less
the number of shares of the Company's Common Stock originally purchasable upon
exercise of any options awarded to such director for continuous service under
the Predecessor Plan and the Plan; and
(ii) 1,500 Class A shares and 1,500 Class B shares for each
continuous Year of service as a non-employee director completed after February
1, 1997 less the number of shares of the Company's Common Stock originally
purchasable upon exercise of any options awarded to such director for continuous
service under the Plan.
The option price for any option granted pursuant to the
immediately preceding sentence shall be as set forth in Section 5.
For purposes of this paragraph a Year shall be the period
beginning on the date of each Annual Meeting of Shareholders held on or after
June 5, 1989 and ending on the date of the next succeeding Annual Meeting of
Shareholders; provided, however, that the last such period shall constitute a
Year of Service only if the director is re-elected, if his term expired, at the
Annual Meeting of Shareholders held on the last day of such period.
The number of shares to be granted to each non-employee
director and the timing of the grants set forth in this Section 3, and the
option price set forth in Section 5, shall not be amended more than once every
six months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder.
4. SHARES SUBJECT TO THE PLAN. The shares subject to the Plan
shall be shares of the Company's Common Stock, without par value, and may be
authorized but unissued shares or treasury shares. The total number of shares
that may be delivered upon the exercise of all options granted under the Plan
may not exceed 124,000 Class A shares and 100,000 Class B shares subject,
however, to adjustment as provided in Section 11.
5. OPTION PRICE. The option price shall be 100% of the fair
market value of the shares on the date the option is granted. In no event may
previously unissued shares be issued at a price less than that
permitted by the Ohio General Corporation Law. For purposes of this Plan, the
"fair market value" of shares on any date shall be the mean between the high and
low sale prices of the shares as reported for New York Stock Exchange-Composite
Transactions on that date or, if no shares are traded on that date, the next
preceding date on which trading occurred. In the event that the shares cease to
be traded on the New York Stock Exchange, the "fair market value" of the shares
shall be determined in the manner prescribed by the Committee.
6. EXERCISE OF OPTIONS. Except as otherwise provided in
Section 7, an option may be exercised only while the optionee remains a director
of the Company. No option granted under the Plan may be exercised prior to the
completion of one year of continuous service as director of the Company after
the date of grant, unless an option is accelerated as provided in this section,
nor, under any circumstances, later than the expiration date of the option.
Options granted under the Plan shall become exercisable in increments of
one-fourth of the total shares subject to the option upon completion of each of
four successive one-year periods of continuous service after the date of grant.
If a one-fourth 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. Each
option shall terminate on the date that is ten years following the date of
In the event of a Change in Control (as defined below), any
outstanding option or any portion of an outstanding option shall become
immediately exercisable. The Board shall give the optionee written notice of
such acceleration and the reasons therefor.
For purposes of this Agreement, a Change in Control shall have
occurred if at any time any of the following events occurs: (a) a report if
filed with the Securities and Exchange Commission (the "SEC") on Schedule 13D or
Schedule 14D-1 (