<PAGE>
As filed with the Securities and Exchange Commission on April 14, 1994
Registration No. 33-52311
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------
MICHAELS STORES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1943604
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5931 CAMPUS CIRCLE DRIVE
IRVING, TEXAS 75063
P.O. BOX 619566
DFW, TEXAS 75261-9566
(214) 580-8242
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
JACK E. BUSH
5931 CAMPUS CIRCLE DRIVE
IRVING, TEXAS 75063
(214) 580-8242
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
----------------
Copies to:
MARK V. BEASLEY, ESQ. CHARLES D. MAGUIRE, JR., ESQ.
MICHAELS STORES, INC. JACKSON & WALKER, L.L.P.
P.O. Box 619566 901 Main Street
Dallas, Texas 75261-9566 Suite 6000
Dallas, Texas 75202
----------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any securities being registered on this Form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
PROSPECTUS
280,000 Shares
MICHAELS STORES, INC.
Common Stock
This Prospectus relates to the offer and sale of an aggregate of 280,000
shares of common stock, par value $0.10 per share (the "Common Stock") of
Michaels Stores, Inc. (the "Company"), by certain stockholders of the Company
(the "Selling Stockholders"). The Selling Stockholders directly, through agents
designated from time to time, or through dealers or underwriters also to be
designated, may sell the Common Stock from time to time on terms to be
determined at the time of sale. To the extent required, the specific number of
shares of Common Stock to be sold, the names of the Selling Stockholders, the
purchase price, the public offering price, the names of any such agent, dealer
or underwriter, and any applicable commission or discount with respect to a
particular offer will be set forth in an accompanying Prospectus Supplement.
See "Plan of Distribution."
The Common Stock is quoted through the National Association of Securities
Dealers Automated Quotation ("NASDAQ") National Market System and may be sold
from time to time by the Selling Stockholders either directly in private
transactions, or through one or more brokers or dealers through NASDAQ at such
prices and upon such terms as may be obtainable.
Upon any sale of the Common Stock offered hereby, Selling Stockholders and
participating agents, brokers or dealers may be deemed to be underwriters as
that term is defined in the Securities Act of 1933, as amended (the "Securities
Act"), and commissions or discounts or any profit realized on the resale of such
securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The Company, however, understands that the
Selling Stockholders do not admit that they are underwriters within the meaning
of the Securities Act. The Company will not receive any of the proceeds from
the sales of the securities offered hereby.
No underwriter is being utilized in connection with this offering. The
Company will pay all expenses incurred in connection with this offering, which
are estimated to be approximately $43,000.
On April 12, 1994, the closing price of the Common Stock on NASDAQ
was $42 3/4.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is April , 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
in Chicago, Illinois (Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60604) and New York, New York (7 World Trade Center,
13th Floor, New York, New York 10007). Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
This Prospectus, which constitutes part of a Registration Statement filed
by the Company with the Commission under the Securities Act (the "Registration
Statement"), omits certain of the information contained in the Registration
Statement. Reference is made to the Registration Statement and to the exhibits
thereto for further information with respect to the Company and the Common Stock
offered hereby. Copies of such Registration Statement are available from the
Commission. Statements contained herein concerning the provisions of documents
filed herewith as exhibits are necessarily summaries of such documents, and each
such statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission.
The Company's principal executive offices are located at 5931 Campus Circle
Drive, Irving, Texas, its mailing address is P.O. Box 619566, DFW, Texas 75261-
9566, and its telephone number at such address is (214) 580-8242.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed with the Commission by the
Company, are incorporated herein by reference and made a part hereof: (i)
Annual Report on Form 10-K for the year ended January 31, 1993; (ii) definitive
proxy statement, dated April 29, 1993, relating to the Company's Annual Meeting
of Shareholders held on June 8, 1993; (iii) Quarterly Report on Form 10-Q for
the quarter ended May 2, 1993; (iv) Quarterly Report on Form 10-Q for the
quarter ended August 1, 1993; (v) Quarterly Report on Form 10-Q for the quarter
ended October 31, 1993 and (vi) Registration Statement on Form 8-A (No. 0-
11822) effective as of September 11, 1991.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of Common Stock to be made hereunder
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing thereof. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for all purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated herein or in the Registration
Statement by reference (other than
2
<PAGE>
exhibits and schedules thereto, unless such exhibits or schedules are
specifically incorporated by reference into the information that this Prospectus
incorporates). Written or telephonic requests for copies should be directed to
the Company's principal office: Michaels Stores, Inc., P.O. Box 619566, DFW,
Texas 75261-9566, Attention: Investor Relations, (214) 580-8242.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common Stock
offered hereby.
SELLING STOCKHOLDERS
This Prospectus covers the offer and resale from time to time by each
Selling Stockholder of the Common Stock owned by each such Selling Stockholder.
Set forth below are the names of each Selling Stockholder, the nature of any
position, office, or other material relationship that the Selling Stockholder
has had within the past three years with the Company or any of its predecessors
or affiliates, the number of shares of Common Stock owned as of February 14,
1994, by each Selling Stockholder, the number of shares of Common Stock that may
be offered and sold by such Selling Stockholder pursuant to this Prospectus and
the number of shares of Common Stock, the amount and (if one percent or more)
the percentage of Common Stock to be owned by each Selling Stockholder upon
completion of the offering if all such shares are sold. Any or all of the
shares of Common Stock listed below may be offered for sale by the Selling
Stockholders from time to time.
<TABLE>
<CAPTION>
Common Stock Beneficial
Beneficial Offered for Ownership of
Ownership of Selling Common Percent of
Common Stock Stockholders' Stock After Class after
Name Prior to Offering Account Offering Offering
- ---- ----------------- ------- -------- --------
<S> <C> <C> <C> <C>
Marc L. Abramowitz (1) 142,800 142,800 0 *
Matthew Abramowitz (2) 89,600 89,600 0 *
Edward K. Baker (3) 14,000 14,000 0 *
William T. Gilbert (4) 5,600 5,600 0 *
Michael F. Solomon 2,800 2,800 0 *
Marc L. Abramowitz
Irrevocable Trust
Number 5--Treasure
House Stores, Inc.
for His Children and
Their Descendants (5) 25,200 25,200 0 *
____________________________________
<FN>
*Indicates shares held are less than 1% of class.
</TABLE>
3
<PAGE>
<TABLE>
<C> <S>
(1) Former consultant and director of business planning and strategy for
Treasure House Stores, Inc., a Delaware corporation ("Treasure House"),
a recently acquired wholly owned subsidiary of the Company and former
holder of more than 10% of the then outstanding common stock of
Treasure House.
(2) Former director, vice president, assistant secretary and assistant
treasurer of Treasure House and former holder of more than 10% of the then
outstanding common stock of Treasure House.
(3) Former director, president and chief operating officer of Treasure House.
(4) Former director, chief financial officer, secretary and treasurer of
Treasure House.
(5) The Marc L. Abramowitz Irrevocable Trust Number 5 -- Treasure House
Stores, Inc. for His Children and Their Descendants (the "Trust") is a
trust formed under the laws of the District of Columbia; Michael F.
Solomon is the Trust's trustee, which is for the benefit of Marc L.
Abramowitz's children and their descendants.
</TABLE>
In February 1994, the Company acquired (the "Acquisition") all of the
outstanding stock of Treasure House. Pursuant to the Acquisition, each Selling
Stockholder, which prior to the Acquisition was a stockholder of Treasure House,
received the shares of Common Stock referred to in the table above. In
connection with the Acquisition, the Company has agreed to register for sale
under the Securities Act all shares of Common Stock acquired by the Selling
Stockholders pursuant to the Acquisition.
[Intentionally Left Blank]
4
<PAGE>
PLAN OF DISTRIBUTION
The Common Stock offered hereby may be sold from time to time to purchasers
directly by any of the Selling Stockholders. Alternatively, the Selling
Stockholders may from time to time offer the Common Stock through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of the Common Stock for whom they may act as agent. The Selling
Stockholders and any underwriters, dealers or agents that participate in the
distribution of the Common Stock may be deemed to be underwriters, and any
profit on the sale of the Common Stock by them and any discounts, commissions or
concessions received by any such underwriters, dealers or agents might be deemed
to be underwriting discounts and commissions under the Securities Act. The
Company, however, understands that the Selling Stockholders do not admit that
they are underwriters within the meaning of the Securities Act.
At the time a particular offer of the Common Stock is made, to the extent
required, a Prospectus Supplement will be distributed, which will set forth the
number of shares of Common Stock being offered and the terms of the offering,
including the name or names of any underwriters, dealers or agents, any
discounts, commissions and other items constituting compensation from the
Selling Stockholders and any discounts, commissions or concessions allowed or
reallowed or paid to dealers.
The Common Stock may be sold from time to time in one or more transactions
at fixed offering prices, which may be changed, or at varying prices determined
at the time of sale or at negotiated prices. The Company will pay all of the
expenses incident to the offering and sale of the Common Stock to the public
other than commissions and discounts of underwriters, dealers or agents,
brokers' fees and the fees and expenses of any counsel to the Selling
Stockholders related thereto.
LEGAL MATTERS
Certain legal matters in connection with the validity of the securities
offered hereby have been passed upon for the Company by Jackson & Walker,
L.L.P., Dallas, Texas. Michael C. French, a partner in Jackson & Walker,
L.L.P., is a director of the Company.
EXPERTS
The consolidated financial statements of Michaels Stores, Inc.,
incorporated by reference in the Company's Annual Report (Form 10-K) for the
year ended January 31, 1993 have been audited by Ernst & Young, independent
auditors, as set forth in their report thereon incorporated by reference therein
and incorporated herein by reference. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
5
<PAGE>
- -------------------------------------- -------------------------------------
- -------------------------------------- -------------------------------------
No person has been authorized to give
any information or to make any
representation other than those
contained in this Prospectus, and if
given or made, such information or
representations must not be relied upon.
This Prospectus does not constitute an
offer to sell or a solicitation of an
offer to buy any securities other than
registered securities to which it
relates, or an offer to or a
solicitation of any person in any
jurisdiction where such offer or
solicitation would be unlawful. The
delivery of this Prospectus at any time
does not imply that the information
herein is correct as of any date
subsequent to its date.
MICHAELS STORES, INC.
PROSPECTUS
_________________
April , 1994
TABLE OF CONTENTS
Page
Available Information. . . . . . . . 2
Incorporation of Certain
Documents by Reference . . . . . . 2
Use of Proceeds. . . . . . . . . . . 3
Selling Stockholders . . . . . . . . 3
Plan of Distribution . . . . . . . . 5
Legal Matters. . . . . . . . . . . . 5
Experts. . . . . . . . . . . . . . . 5
- -------------------------------------- -------------------------------------
- -------------------------------------- -------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be incurred in connection with the issuance and
distribution of the Common Stock covered by this Registration Statement, all of
which will be paid by Michaels Stores, Inc. (the "Registrant"), are as follows:
<TABLE>
<S> <C>
Registration Fees. . . . . . . . . . $ 3,344
Accounting Fees and Expenses . . . . 30,000
Legal Fees and Expenses. . . . . . . 5,000
Miscellaneous. . . . . . . . . . . . 4,656
-------
Total . . . . . . . . . . . . . . . $43,000
-------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a corporation
to indemnify its directors and officers or former directors or officers and to
purchase insurance with respect to liability arising out of their capacity or
status as directors and officers. Such law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's certificate of incorporation, bylaws, any agreement or otherwise.
Reference is made to Article Nine of the Registrant's Restated Certificate
of Incorporation, as amended, Exhibit 3.1 of this Registration Statement, which
provides for indemnification of directors and officers.
Reference is made to Article IX of the Registrant's Amended Bylaws, Exhibit
3.2 to this Registration Statement, which provides for indemnification of
directors and officers.
In addition, the Registrant has entered into Indemnity Agreements with
certain of its directors and executive officers.
The Registrant has procured insurance that purports (i) to insure it
against certain costs of indemnification that may be incurred by it pursuant to
the provisions referred to above or otherwise and (ii) to insure the directors
and officers of the Registrant against certain liabilities incurred by them in
the discharge of their functions as directors and officers except for
liabilities arising from their own malfeasance.
II-1
<PAGE>
ITEM 16. EXHIBITS.
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-3, including those incorporated herein by
reference.
Exhibit
Number Description of Exhibit
- -------- ----------------------
1 None.
2.1 Stock Purchase Agreement, dated as of February 16, 1994, among
Michaels Stores, Inc., Treasure House Stores, Inc. and the
stockholders of Treasure House Stores, Inc. (2)
2.2 Amendment No. 1 to Stock Purchase Agreement. (1)
3.1 Restated Certificate of Incorporation of Michaels Stores, Inc. (3)
3.2 Bylaws of Michaels Stores, Inc. as amended. (4)
4.1 Form of Common Stock Certificate. (5)
4.2 Common Stock and Warrant Agreement dated as of October 16, 1984
between Michaels Stores, Inc. and Peoples Restaurants, Inc.,
including form of Warrant. (6)
4.3 First Amendment to Common Stock and Warrant Agreement dated October
31, 1984 between The First Dallas Group, Ltd. and Michaels Stores,
Inc. (6)
4.4 Second Amendment to Common Stock and Warrant Agreement dated
November 28, 1984 between First Dallas Investments-Michaels I, Ltd.
and Michaels Stores, Inc. (6)
4.5 Third Amendment to Common Stock and Warrant Agreement dated February
27, 1985 between First Dallas Investments-Michaels I, Ltd., The
First Dallas Group, Ltd., Sam Wyly, Charles J. Wyly, Jr. and
Michaels Stores, Inc. (4)
4.6 Amendment to Common Stock and Warrant Agreement dated September 1,
1992 between Michaels Stores, Inc., The Andrew David Sparrow Wyly
Trust, Charles J. Wyly, Jr., The Martha Caroline Wyly Trust, The
Charles Joseph Wyly, III Trust, The Emily Ann Wyly Trust, The
Jennifer Lynn Wyly Trust, Donald R. Miller, Jr., Evan A. Wyly, The
Laurie Louise Wyly Trust, The Lisa Lynn Wyly Trust, The Sam Wyly and
Rosemary Wyly Children's Trust No. 1 of 1965 fbo Kelly Wyly and
Tallulah, Ltd. (3)
4.7 Michaels Stores, Inc. Key Employee Stock Compensation Program,
effective February 25, 1992. (3)
II-2
<PAGE>
5 Opinion of Jackson & Walker. (2)
8 None.
12 None.
15 None.
23.1 Consent of Ernst & Young. (1)
23.2 Consent of Jackson & Walker. (7)
26 None.
27 None.
28 None.
____________
(1) Filed herewith.
(2) Previously filed.
(3) Previously filed as an exhibit to the Registrant's Registration Statement
on Form S-8 (No. 33-54726) and incorporated herein by reference.
(4) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-1 (No. 33-9456) and incorporated herein by reference.
(5) Previously filed as an exhibit to the Registrant's Registration Statement
on Form S-1 (No. 2-89370) and incorporated herein by reference.
(6) Previously filed as an exhibit to the Registrant's Report on Form 10-K for
the year ended January 31, 1993 and incorporated herein by reference.
(7) Included in the opinion of Jackson & Walker, L.L.P., previously filed.
(8) Included in the signature pages hereto.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the
II-4
<PAGE>
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Irving, State of Texas on the 13th day of
April, 1994.
MICHAELS STORES, INC.
By: /s/ Jack E. Bush
-------------------------------
Name: Jack E. Bush
-------------------------------
Title: President and Chief
Operating Officer
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
Chairman of the
/s/ Sam Wyly* Board of Directors and April 13, 1994
- -------------------------- Chief Executive Officer
Sam Wyly (Principal Executive Officer)
/s/ Charles J. Wyly, Jr.* Vice Chairman of the
- -------------------------- Board of Directors April 13, 1994
Charles J. Wyly, Jr.
/s/ Jack E. Bush* President, Chief Operating
- -------------------------- Officer and Director April 13, 1994
Jack E. Bush
/s/ William O. Hunt*
- -------------------------- Director April 13, 1994
William O. Hunt
- -------------------------- Director , 1994
Richard E. Hanlon
II-7
<PAGE>
- -------------------------- Director , 1994
F. Jay Taylor
/s/ Michael C. French*
- -------------------------- Director April 13, 1994
Michael C. French
Vice President-
- -------------------------- Mergers and Investments, , 1994
Evan A. Wyly and Director
/s/ Donald R. Miller, Jr.* Vice President-
- -------------------------- Market Development, April 13, 1994
Donald R. Miller, Jr. and Director
Executive Vice President
/s/ R. Don Morris* and Chief Financial Officer
- -------------------------- (Principal Financial and April 13, 1994
R. Don Morris Accounting Officer)
*By: /s/ Mark V. Beasley
- --------------------------
Mark V. Beasley
Attorney-in-Fact
II-8
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
- ------- ----------------------
2.2 Amendment No. 1 to Stock Purchase Agreement.
23.1 Consent of Ernst & Young.
<PAGE>
EXHIBIT 2.2
Amendment No. 1 to Stock Purchase Agreement
<PAGE>
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (the
"Amendment"), dated as of February 22, 1994, among Treasure House
Stores, Inc., a Delaware corporation (the "Company"), the holders
of all of the outstanding capital stock of the Company
(collectively, the "Shareholders"), Michaels Stores, Inc., a
Delaware corporation ("Michaels") and THSI Acquisition
Corporation, a Delaware corporation and wholly-owned subsidiary
of Michaels ("Newco");
W I T N E S S E T H:
WHEREAS, the Company, the Shareholders and Michaels entered
into that certain Stock Purchase Agreement dated as of February
16, 1994 (the "Stock Purchase Agreement"); and
WHEREAS, Section 2.03 of the Stock Purchase Agreement
provides, in essence, that, at the reasonable request of the
Shareholders, so long as there is no adverse impact on Michaels,
the transaction contemplated by the Stock Purchase Agreement can
be effected by merger of a wholly-owned subsidiary of Michaels
with and into the Company in a transaction designed to qualify as
a tax free reorganization under Code Section 368; and
WHEREAS, Section 2.03 of the Stock Purchase Agreement
provides further, in essence, that, upon such request, the
parties will execute an amendment to the Stock Purchase Agreement
and such other documents as necessary to consummate the proposed
transaction as a merger; and
WHEREAS, the Shareholders have made such a request of
Michaels and Michaels has agreed to consummate the proposed
transaction as a merger and this Amendment is intended to amend
the Stock Purchase Agreement; and
WHEREAS, the Boards of Directors of the Company, Michaels
and Newco have determined that a business combination among the
Company and Newco is in the best interests of their respective
companies and stockholders upon the terms and subject to the
conditions set forth herein; and
WHEREAS, it is intended that for federal income tax
purposes, the Merger (as defined below shall qualify as a
reorganization within the meaning of Code Section 368; and
WHEREAS, the Board of Directors of the Company has directed
that this Amendment be submitted to the Shareholders for their
approval, and Michaels as sole stockholder of Newco has approved
this Agreement by written consent; and
WHEREAS, the Shareholders have approved the Merger, and have
agreed to vote their shares of capital stock in the Company in
favor of the Merger;
<PAGE>
NOW, THEREFORE, in consideration of the mutual representa-
tions, warranties and covenants herein contained, and on the
terms and subject to the conditions herein set forth, the parties
hereto hereby agree as follows:
1. DEFINED TERMS. Unless otherwise indicated herein, all
defined terms used in this Agreement shall have the same meaning
as set forth in the Stock Purchase Agreement.
2. AMENDMENT OF SECTION 1.01. DEFINITIONS. Section 1.01
of the Stock Purchase Agreement is hereby amended to add or
modify, as appropriate, the following definitions in the
appropriate locations:
"Certificate" shall have the meaning set forth in Section
2.08(c).
"DGCL" shall have the meaning set forth in Section 2.01.
"Effective Time" shall have the meaning set forth in Section
2.03.
"Exchange Agent" shall have the meaning set forth in
Section 2.09(a).
"Exchange Fund" shall have the meaning set forth in
Section 2.09(a).
"Expiration Date" shall have the meaning set forth in
Section 7.18.
"Merger" shall have the meaning set forth in Section 2.01.
"Surviving Corporation" shall have the meaning set forth in
Section 2.01.
3. AMENDMENT OF ARTICLE II PURCHASE AND SALE. Article II
of the Stock Purchase Agreement is hereby deleted in its entirety
and a new Article II is hereby added to the Stock Purchase
Agreement which shall read in full as follows:
SECTION 2.01. THE MERGER. Subject to the terms
and conditions of this Agreement, at the Effective Time
(as defined in Section 2.03), Newco shall be merged
with and into the Company in accordance with this
Agreement and the separate corporate existence of Newco
shall thereupon cease (the "Merger"). The Company
shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the
laws of the State of Delaware; the separate corporate
existence of the Company with all its rights,
privileges, powers, immunities, purposes and franchises
shall continue unaffected by the Merger, except as set
forth herein. The Merger shall have the effects
specified in the Delaware General Corporation Law
(the"DGCL").
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<PAGE>
SECTION 2.02. THE CLOSING. The Closing shall
take place on the Closing Date, or such other date as
the parties may mutually agree.
SECTION 2.03. EFFECTIVE TIME. If all the
conditions to the Closing set forth in Articles IX and
X shall have been fulfilled or waived in accordance
herewith and this Agreement shall not have been
terminated in accordance with Article XIV, the parties
hereto shall cause a Certificate of Merger meeting the
requirements of Section 251 of the DGCL to be properly
executed and filed in accordance with such Section on
the Closing Date. The Merger shall become effective at
the time of the filing of the Certificate of Merger in
accordance with the DGCL or at such later time which
the parties hereto have agreed upon and designated in
such filing as the effective time of the Merger (the
"Effective Time").
SECTION 2.04. CERTIFICATE OF INCORPORATION OF
SURVIVING CORPORATION. Effective at the Effective
Time, the Certificate of Incorporation of the Company
shall be the Certificate of Incorporation of the
Surviving Corporation.
SECTION 2.05. BYLAWS OF SURVIVING CORPORATION.
The Bylaws of Newco in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving
Corporation, until duly amended in accordance with
their terms and the DGCL.
SECTION 2.06. DIRECTORS OF THE SURVIVING
CORPORATION. The persons who are directors of Newco
immediately prior to the Effective Time shall, from and
after the Effective Time, be and become directors of
the Surviving Corporation until their successors have
been duly elected or appointed and qualified or until
their earlier death, resignation or removal in
accordance with the Surviving Corporation's Certificate
of Incorporation and Bylaws.
SECTION 2.07. OFFICERS OF THE SURVIVING
CORPORATION. The officers of Newco shall continue as
officers of the Surviving Corporation until their
resignation or removal.
SECTION 2.08. CONVERSION SHARES. The manner of
converting shares of the Company and Newco in the
Merger shall be as follows:
(a) At the Effective Time, each share of Stock
issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof,
be converted into the right to receive such number of
shares of Michaels Common Stock as set forth on Exhibit
A attached hereto. The total number of shares of
Michaels Common Stock to be issued as a result of this
Agreement is 280,000 shares (the "Michaels Stock
Consideration").
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<PAGE>
(b) As a result of the Merger and without any
action on the part of the holder thereof, all shares of
Stock shall cease to be outstanding and shall be
cancelled and retired and shall cease to exist, and
each holder of a certificate (a "Certificate")
representing any shares of Stock shall thereafter cease
to have any rights with respect to such shares of
Stock, except the right to receive, without interest,
the Michaels Common Stock in accordance with Section
2.08(a) upon the surrender of such Certificate.
(c) At the Effective Time, each share of common
stock, par value $.01 per share, of Newco issued and
outstanding immediately prior to the Effective Time as
a result of the Merger shall be converted and exchanged
for one newly and validly issued, fully paid and
nonassessable share of Common Stock of the Surviving
Corporation.
SECTION 2.09. EXCHANGE OF CERTIFICATES
REPRESENTING SHARES.
(a) As of the Effective Time, Michaels shall at
the expense of Michaels, make available, or shall cause
to be made available, with an exchange agent selected
by Michaels, which shall be Michaels' Transfer Agent
(the "Exchange Agent"), for the benefit of the
Shareholders, and in the amounts listed on Exhibit A,
certificates representing a sufficient number of shares
of Michaels Common Stock necessary for the Exchange
Agent to make deliveries pursuant to Section A hereof
(such certificates for shares of Michaels Common Stock,
together with the amount of any dividends or
distributions with respect thereto, being hereinafter
referred to as the "Exchange Fund") in exchange for
outstanding Shares.
(b) Promptly after the Effective Time, Michaels
shall cause the Exchange Agent to deliver to the
Shareholders shown on Exhibit A or their proxy, in
exchange for Certificates from such Shareholders and a
duly executed letter of transmittal in the form
attached hereto as Exhibit B, that number of shares of
Michaels Common Stock and unpaid dividends and
distributions, if any, which such holder has the right
to receive in respect of the Certificate surrendered
pursuant to the provisions of this Article II, after
giving effect to any required tax withholdings, and the
Certificate so surrendered shall forthwith be
cancelled. No interest will be paid or accrued on the
amount payable upon surrender of Certificates except in
the event of unreasonable delay by Michaels.
(c) Notwithstanding any other provisions of this
Agreement, no dividends on Michaels Common Stock shall
be paid with respect to any shares of Stock until the
Certificate representing such shares of Stock is
surrendered for exchange as provided herein. Subject to
the effect of applicable laws, following surrender of
any such Certificate, there shall be paid to the holder
of certificates representing shares of Michaels Common
Stock issued in exchange therefor,
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<PAGE>
without interest, (i) at the time of such surrender, the
amount of dividends or other distributions, if any, with
a record date after the Effective Time theretofore payable
with respect to such shares of Michaels Common Stock and
not paid, less the amount of any withholding taxes that
may be required thereon, and (ii) at the appropriate
payment date, the amount of dividends or other
distributions, if any, with a record date after the
Effective Time but prior to surrender thereof and a
payment date subsequent to surrender thereof payable
with respect to such shares of Michaels Common Stock,
less the amount of any withholding taxes which may be
required thereon.
(d) At or after the Effective Time, there shall
be no transfers on the stock transfer books of the
Company of shares of Stock that were outstanding
immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the
Surviving Corporation, they shall be cancelled and
exchanged for certificates for shares of Michaels
Common Stock in accordance with the procedures set
forth in this Article II.
(e) Any portion of the Exchange Fund (including
the proceeds of any investments thereof and any shares
of Michaels Common Stock) that is unclaimed by the
former stockholders of the Company during the one year
period after the Effective Time shall be delivered to
the Surviving Corporation. Any former stockholders of
the Company who have not theretofore complied with this
Article II shall thereafter look to the Surviving
Corporation only as general creditors for payment of
their shares of Michaels Common Stock, and unpaid
dividends and distributions on shares of Michaels
Common Stock, deliverable in respect of each share of
Stock such stockholder holds as determined pursuant to
this Agreement, in each case without any interest
thereon.
(f) None of the Company, Michaels, the Surviving
Corporation, Newco, the Exchange Agent or any other
person shall be liable to any former holder of shares
of Stock for any amount properly delivered to a public
official pursuant to applicable abandoned property,
escheat or similar laws.
(g) In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by
such person of a bond in such reasonable amount as the
Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to
such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate
shares of Michaels Common Stock, and unpaid dividends
and distributions on shares of Michaels Common Stock as
provided in Section 2.09(c), deliverable in respect
thereof pursuant to this Agreement.
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<PAGE>
SECTION 2.10. EXCHANGE OF CERTIFICATES
REPRESENTING SHARES. In the event that between the
date of this Agreement and the Effective Time, Michaels
changes the number of shares of Michaels Common Stock
issued and outstanding as a result of a stock split,
reverse stock split, stock dividend, recapitalization
or other similar transaction, the exchange amounts set
forth in Exhibit A shall be appropriately adjusted.
SECTION 2.11. SUBSEQUENT ACTIONS. If, at any
time after the Effective Time, the Surviving
Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any
other actions or things are necessary or desirable to
vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in,
to or under any of the rights, properties or assets of
any of the Company or Newco acquired or to be acquired
by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out
this Agreement, and to effect the cancellation of all
outstanding shares of Stock in return for the
consideration set forth in this Agreement, the officers
and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on
behalf of each of the Company, each of the Shareholders
and Newco or otherwise, to carry out all such deeds,
bills of sale, assignments and assurances and to take
and do, in the name and on behalf of each of the
Company and Newco or otherwise, all such other actions
and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and
interest in, to and under such rights, properties or
assets in the Surviving Corporation or otherwise to
carry out this Agreement.
4. ADDITION OF SECTION 7.17. REQUIREMENTS TO EFFECT
MERGER. A new Section 7.17 is hereby added to the Stock Purchase
Agreement, which shall read as follows:
SECTION 7.17. REQUIREMENTS TO EFFECT MERGER. The
Company and the Shareholders shall use their best
efforts to take, or cause to be taken, all actions
necessary to effect the Merger under the DGCL,
including without limitation the filing with the
Secretary of State of Delaware of a Certificate of
Merger in a form approved by counsel for the parties to
this Agreement.
5. ADDITION OF SECTION 7.18. VOTING OF SHARES; IRREVOCABLE
PROXY. A new Section 7.18 is hereby added to the Stock Purchase
Agreement, which shall read as follows:
SECTION 7.18. VOTING OF SHARES; IRREVOCABLE
PROXY. Each Shareholder agrees that until the earlier
of (i) the Effective Time and (ii) the termination of
the Stock Purchase Agreement (the earliest of such
dates being hereinafter referred to as the "Expiration
Date"), each Shareholder shall vote all shares of Stock
owned by the Shareholder at any meeting of the
Company's stockholders (whether annual or special and
whether or not an adjourned or postponed meeting), or,
if applicable, take action by written consent (x) for
adoption of the
6
<PAGE>
Stock Purchase Agreement, as hereby amended, and in
favor of the Merger and any other transactions
contemplated by the Stock Purchase Agreement, as hereby
amended and as such Stock Purchase Agreement may be
further modified or amended from time to time and
(y) against any action, omission or agreement which would
impede or interfere with, or have the effect of
discouraging, the Merger, including, without limitation,
any acquisition proposal other than the Merger. Any such
vote shall be cast or consent shall be given in accordance
with such procedures relating thereto as shall ensure that
it is duly counted for purposes of determining that a
quorum is present and for purposes of recording the results
of such vote or consent.
In the event that any Shareholder shall fail to
comply with the provisions of this Section 7.18 (as
determined by Michaels in its sole discretion), such
Shareholder hereby agrees that such failure shall
result, without any further action by the Shareholder,
in the irrevocable appointment of Michaels, until
termination of the Stock Purchase Agreement, as its
attorney and proxy pursuant to the provisions of
Section 212(e) of the DGCL, with full power of
substitution, to vote and otherwise act (by written
consent or otherwise) with respect to the Stock which
the Shareholder is entitled to vote at any meeting of
stockholders of the Company (whether annual or special
and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise, on
the matters and in the manner specified in this Section
7.18. EACH SHAREHOLDER ACKNOWLEDGES THAT THIS PROXY IS
COUPLED WITH AN INTEREST, AND CONSTITUTES, AMONG OTHER
THINGS, AN INDUCEMENT FOR THE BUYER TO ENTER INTO THE
STOCK PURCHASE AGREEMENT AND THIS AGREEMENT, IS
IRREVOCABLE AND SHALL NOT BE TERMINATED BY OPERATION OF
LAW UPON THE OCCURRENCE OF ANY EVENT, INCLUDING,
WITHOUT LIMITATION, THE DEATH OR INCAPACITY OF THE
SHAREHOLDER. Notwithstanding any provision contained
in such proxy, such proxy shall terminate upon the
Expiration Date.
6. ADDITION OF SECTION 8.03. REQUIREMENTS TO EFFECT
MERGER. A new Section 8.03 is hereby added to the Stock Purchase
Agreement, which shall read as follows:
SECTION 8.03. REQUIREMENTS TO EFFECT MERGER.
Michaels will use its best efforts to take, or cause to
be taken, all actions necessary to effect the Merger
under the DGCL, including without limitation the filing
with the Secretary of State of the State of Delaware of
a Certificate of Merger, in a form approved by counsel
for the parties to this Agreement.
7. ADDITION OF SECTION 9.10. SHAREHOLDER CONSENT. A new
Section 9.10 is hereby added to the Stock Purchase Agreement,
which shall read as follows:
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<PAGE>
SECTION 9.10. SHAREHOLDER CONSENT. The Merger
pursuant to this Agreement and this Agreement shall
have been approved in the manner required by law by the
Shareholders.
8. AMENDMENT OF PARAGRAPH 11.01(a). Paragraph 11.01(a) is
hereby deleted in its entirety (other paragraphs of Section 11.01
remain unchanged).
9. ADDITION OF SECTION 11.03. DELIVERIES OF NEWCO. A new
Section 11.03 is hereby added to the Stock Purchase Agreement,
which shall read as follows:
SECTION 11.03. DELIVERIES OF NEWCO. At the
Closing, Newco shall deliver the following to the
Company, the Shareholders or the appropriate party:
(a) a copy of the resolutions of the Board of
Directors of Newco authorizing the execution, delivery
and performance of this Agreement, and all related
documents and agreements, each certified by Newco's
Secretary as being true and correct copies of the
originals thereof subject to no modifications or
amendments;
(b) a certificate of the Secretary of Newco
certifying as to the incumbency of the directors and
officers of Newco and as to the signatures of such
directors and officers who have executed documents
delivered at the Closing on behalf of Newco; and
(c) the certificate of incorporation of Newco,
certified by the Secretary of State of Delaware.
10. AMENDMENT OF SECTION 12.01. INSTRUMENTS OF TRANSFER.
Section 12.01 is hereby deleted in its entirety and a new Section
12.01 is hereby added to the Stock Purchase Agreement, which
shall read in full as follows:
SECTION 12.01. FURTHER INSTRUMENTS OF TRANSFER.
Following the Closing, at the request of Michaels, the
Shareholders shall deliver any further instruments of
transfer and take all reasonable action as may be
necessary or appropriate to (i) consummate the Merger
and (ii) carry out more effectively the provisions of
this Agreement and to establish and protect the rights
created in favor of the parties hereunder or
thereunder.
11. AMENDMENT OF SECTION 12.02. REGISTRATION; RE-SALE OF
MICHAELS STOCK CONSIDERATION. Section 12.02 is hereby deleted
in its entirety and a new Section 12.02 is hereby added to the
Stock Purchase Agreement, which shall read in full as follows:
SECTION 12.02. REGISTRATION; RE-SALE OF MICHAELS
STOCK CONSIDERATION. As set forth in Section 8.02,
Michaels shall use reasonable efforts to file the
8
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Registration Statement with the SEC registering the
sale of the Michaels Stock Consideration by the
Shareholders from time to time in the open market. In
connection with the disposition of the Michaels Stock
Consideration under the Registration Statement, in
order for the Shareholders to dispose of Michaels Stock
Consideration with a prospectus that is a part of the
Registration Statement, the Shareholders must give
Michaels written notice of their intention to sell any
of the Michaels Stock Consideration at least two (2)
but not more than twenty (20) business days prior to
the date of the proposed sale(s), which notice shall
include the number of shares proposed to be disposed,
whether the shares are to be sold in an underwritten
offering and the time period during the forty-five (45)
business days following the date of such notice during
which the shares may be disposed (the "Sale Period"),
and the Shareholders agree that, during each Sale
Period, they shall not deliver any prospectus that is a
part of the Registration Statement in connection with
any disposition of Michaels Stock Consideration during
any period of time when, but only so long as, Michaels,
after receipt of the notice set forth above, notifies
the Shareholders (a "Delay Notice") that Michaels is in
possession of material non-public information that, in
the exercise of its reasonable judgment based on the
advice of its counsel, would be required to be
disclosed in the Registration Statement (or any
amendment, or post-effective amendment thereto) in
order to comply with SEC requirements, which material
information may relate, including, without limitation,
to a financing project or a pending acquisition, merger
or other material corporate reorganization to which
Michaels is or is expected to be a party; provided that
Michaels shall advise the Shareholders in writing as
soon as any such delay is no longer applicable;
provided further that the Shareholders shall only be
prevented from disposing Michaels Stock Consideration
with a prospectus under the Registration Statement for
up to 90 consecutive days (a "Delay Period") following
the receipt of a Delay Notice and any two Delay Periods
must be at least 30 days apart during which time the
Shareholders shall be permitted to dispose of Michaels
Stock Consideration with a prospectus under the
Registration Statement.
12. EFFECT OF AMENDMENTS. The Company, the Shareholders,
Michaels and Newco hereby agree that any and all of the terms and
provisions of the Stock Purchase Agreement, except as amended and
modified hereby, remain in full force and effect.
13. MULTIPLE COUNTERPARTS. This Amendment may be executed
in multiple counterparts, all of which, taken together, shall
constitute one document.
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IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be duly executed by their respective authorized
officer on the day and year first above written.
MICHAELS
--------
MICHAELS STORES, INC.
By:
-----------------------------
Its:
-----------------------------
NEWCO
-----
THSI ACQUISITION CORPORATION
By:
-----------------------------
Its:
-----------------------------
THE COMPANY
-----------
TREASURE HOUSE STORES, INC.
By:
------------------------------
Its:
------------------------------
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SHAREHOLDERS:
-------------
----------------------------------
Marc L. Abramowitz
Address:
-------------------------
----------------------------------
----------------------------------
Matthew Abramowitz
Address:
-------------------------
----------------------------------
----------------------------------
Edward K. Baker
Address:
-------------------------
----------------------------------
----------------------------------
William T. Gilbert
Address:
-------------------------
----------------------------------
----------------------------------
Michael F. Solomon
Address:
-------------------------
----------------------------------
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MARC L. ABRAMOWITZ IRREVOCABLE
TRUST NUMBER 5 - TREASURE
HOUSE STORES, INC. FOR HIS CHILDREN
AND THEIR DESCENDANTS
By:
------------------------------
Trustee
Address:
-------------------------
----------------------------------
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EXHIBIT 23.1
Consent of Ernst & Young
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption Experts
in Amendment No. 1 to the Registration Statement (Form S-3) and
related Prospectus of Michaels Stores, Inc. for the registration
of 280,000 shares of its common stock and to the incorporation by
reference therein of our report dated February 26, 1993, with
respect to the financial statements and our report dated April
29, 1993 with respect to the financial statement schedules of
Michaels Stores, Inc. included or incorporated by reference in
its Annual Report (Form 10-K) for the year ended January 31, 1993
filed with the Securities and Exchange Commission.
ERNST & YOUNG
Dallas, Texas
April 12, 1994
