<PAGE>
As filed with the Securities and Exchange Commission on June 17, 1997.
Registration No. 333-______
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
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.)
8000 Bent Branch Drive
Irving, Texas 75063
P.O. Box 619566
DFW, Texas 75261-9566
(972) 409-1300
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------------
R. Michael Rouleau
Chief Executive Officer
Michaels Stores, Inc.
8000 Bent Branch Drive
Irving, Texas 75063
(972) 409-1300
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
----------------
With copies to:
Mark V. Beasley, Esq. Robert L. Estep, Esq.
Michaels Stores, Inc. Jones, Day, Reavis & Pogue
8000 Bent Branch Drive 2300 Trammell Crow Center
Irving, Texas 75063 2001 Ross Avenue
(972) 409-1300 Dallas, Texas 75201
(214) 220-3939
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 of the 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/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / __________.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price per Offering Registration
be Registered Registered (1) Share (2) Price (2) Fee (2)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.10 per share . . . . . 1,500,000 $20.75 $23,059,979 $6,988
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Represents shares issuable upon exercise of options previously granted
under the Michaels Stores, Inc. Amended and Restated 1992 Non-Statutory
Stock Option Plan (the "Plan"), and shares issuable in connection with
future grants of options under the Plan. Pursuant to Rule 416, there are
also registered hereunder such indeterminate number of additional shares as
may become subject to awards under the Plan as a result of the antidilution
provisions contained therein.
2. The registration fee with respect to these shares has been computed in
accordance with paragraphs (c) and (h) of Rule 457, based upon, in the case
of options previously granted, the stated exercise price of such options,
and, in the case of options still available for grant, the average of the
reported high and low sale prices of shares of the Common Stock on the
Nasdaq National Market System on June 13, 1997.
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.
IN ACCORDANCE WITH RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
THE PROSPECTUS CONTAINED HEREIN ALSO RELATES TO 3,000,000 SHARES OF REGISTRANT'S
COMMON STOCK COVERED BY REGISTRATION STATEMENT NO. 33-67804.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
Subject to Completion, Dated June 17, 1997
PROSPECTUS
4,500,000 SHARES
MICHAELS STORES, INC.
Common Stock
This Prospectus relates to the offer and sale by Michaels Stores, Inc.
("Michaels" or the "Company") of up to 4,500,000 shares (the "Shares") of the
Company's common stock, par value $0.10 per share (the "Common Stock"),
issuable by the Company upon the exercise of options ("Options") granted or to
be granted from time to time to eligible persons pursuant to the provisions of
the Michaels Stores, Inc. Amended and Restated 1992 Non-Statutory Stock
Option Plan (the "Plan") and which may be offered and sold from time to time
by certain of such persons or permitted transferees (collectively, the "Selling
Stockholders"). This Prospectus also relates to such indeterminate number of
additional shares of Common Stock as may become subject to awards under the
Plan as a result of the antidilution provisions contained therein.
Sales by the Selling Stockholders may be made through the Nasdaq
National Market System, on one or more exchanges, in the over the counter
market, or in negotiated transactions, in each case at prices and at terms
then prevailing or at prices related to the then current market price or at
negotiated prices and terms. Upon any sale of the Shares offered hereby, the
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 may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution."
The Common Stock is quoted on the Nasdaq National Market System under
the symbol "MIKE." On June 16, 1997, the closing price of the Common Stock
on the Nasdaq National Market System was $20.625. The Company will pay all
expenses in connection with this offering, which are estimated to be
approximately $26,000.
--------------------
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 June , 1997.
<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 Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the public reference facilities
maintained by the Commission at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can also be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission and that is
located at http://www.sec.gov. The Company's Common Stock is quoted on the
Nasdaq National Market. Copies of such reports and other information can also
be inspected at the offices of the Nasdaq National Market, 1735 K Street, N.W.,
Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act relating to the securities
issuable pursuant to the Plan offered hereby. This Prospectus omits certain of
the information contained in the Registration Statement, and reference is hereby
made to the Registration Statement and to the exhibits relating thereto for
further information with respect to the Company and the securities offered
hereby. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and in each instance reference is made to
the copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus (i)
the Company's Annual Report on Form 10-K for the fiscal year ended February 1,
1997, (ii) the Company's Quarterly Report on Form 10-Q for the period
ended May 3, 1997, and (iii) the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-A (Commission
File No. 0-11822), filed August 30, 1991.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
made hereby, shall be deemed incorporated by reference in this Prospectus and to
be a part of this Prospectus from the date of the filing of such reports.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests
should be directed to the General Counsel of the Company at 8000 Bent Branch
Drive, Irving, Texas 75063 (telephone: (972) 409-1300).
2
<PAGE>
THE COMPANY
The Company is the nation's largest retailer dedicated to serving the arts,
crafts and decorative items marketplace. The Company's Michaels stores offer a
wide selection of competitively priced items, including general crafts, home
decor items, picture framing materials and services, art and hobby supplies,
party supplies, silk and dried flowers, wearable art and seasonal and holiday
merchandise. Since March 1995, when the Company acquired Aaron Brothers
Holdings, Inc., the Company has also operated the Aaron Brothers specialty
framing and art supply stores located primarily in California. The Company's
principal executive offices are located at 8000 Bent Branch Drive, Irving, Texas
75063, and the Company's telephone number at such address is (972) 409-1300.
USE OF PROCEEDS
The proceeds from the issuance of the Shares upon exercise of Options will
be added to the Company's funds and used for general corporate purposes. The
Company will not receive any of the proceeds from the sale of Shares by the
Selling Stockholders.
SELLING STOCKHOLDERS
This Prospectus covers the purchase from the Company of an aggregate of up
to 4,500,000 Shares, plus such indeterminate number of additional shares of
Common Stock as may become subject to awards under the Plan as a result of the
antidilution provisions contained therein, by the holders of Options upon the
exercise thereof in accordance with their terms and the subsequent offer and
resale of Shares previously acquired or to be acquired by certain holders of
Options upon exercise thereof.
Pursuant to the provisions of the Plan, the Board of Directors of the
Company (the "Board") and/or the 1992 Non-Statutory Plan Committee of the Board
(the "1992 Non-Statutory Plan Committee") will, among other things, determine
from time to time (i) the individuals, from among the full-time employees and
key advisors, including directors, of the Company, to whom Options will be
granted, (ii) the number of shares of Common Stock to be covered by each Option,
and (iii) the purchase price of Common Stock subject to each Option, which may
be equal to, less than or greater than the fair market value of the Common Stock
on the date of grant. Unless sooner terminated by action of the Board, the Plan
terminates on August 31, 2002, and no Options may be granted pursuant to the
Plan after such date.
The following table sets forth certain information as of May 31, 1997,
with respect to Selling Stockholders who currently hold Options to purchase
Shares, including any positions, offices or other material relationships of
certain Selling Stockholders with the Company. The Company is unaware of
whether the Selling Stockholders listed below presently intend to sell the
Shares they may acquire upon exercise of Options. The Company in the future
may grant additional Options to the persons listed below and to persons other
than those listed below whose subsequent sale of Shares will be covered by
this Prospectus, which, in such case, will be supplemented.
3
<PAGE>
<TABLE>
COMMON STOCK NUMBER OF COMMON STOCK
OWNERSHIP SHARES OF OWNERSHIP AFTER
PRIOR TO OFFERING (1)(2) COMMON STOCK OFFERING (2)
--------------------------- -------------- ------------------------
NAME AND POSITION NUMBER PERCENTAGE OFFERED HEREBY NUMBER PERCENTAGE
----------------- ------ ---------- -------------- ------ ----------
<S> <C> <C> <C> <C> <C>
Sam Wyly(3) 2,565,238 9.6% 633,333 1,931,905 7.4%
Chairman of the Board of Directors
Charles J. Wyly, Jr.(4) 2,214,274 8.4% 316,667 1,897,607 7.3%
Vice Chairman of the Board of
Directors
Evan A. Wyly(5) 85,875 * 30,000 55,875 *
Managing Director
Donald R. Miller, Jr.(6) 174,366 * 129,250 45,116 *
Managing Director and Vice
President - Market Development
Michael C. French(7) 26,200 * 25,000 1,200 *
Managing Director
Dr. F. Jay Taylor(8) 36,440 * 15,000 21,440 *
Director
Richard E. Hanlon(9) 32,600 * 20,000 12,600 *
Director
Bryan M. DeCordova(10) 75,000 * 75,000 -0- *
Executive Vice President -
Chief Financial Officer
Lawrence H. Fine(11) 75,000 * 75,000 -0- *
Executive Vice President -
General Merchandise Manager
Duane Hiemenz(12) 81,500 * 80,000 1,500 *
Executive Vice President -
Store Operations
James Tucker(13) 75,000 * 75,000 -0- *
Executive Vice President -
Chief Information Officer
Kristen L. Magnuson(14) 28,323 * 27,500 823 *
Vice President - Finance and
Planning
Douglas B. Sullivan(15) 287,083 1.1% 80,000 207,083 *
Executive Vice President - Development
</TABLE>
- ------------------------
* Less than 1% of class.
(1) Based on ownership as of May 31, 1997. Persons holding shares of Common
Stock pursuant to the Michaels Stores, Inc. Employees 401(k) Plan (the
"401(k) Plan") generally have sole voting power and investment power with
respect to such shares.
(2) Based on 26,045,753 shares of Common Stock issued and outstanding as of
May 31, 1997.
(3) Includes 633,333 Shares to be acquired upon exercise of Options granted
under the Plan, all of which are presently exercisable. Also includes
1,074,536 shares of Common Stock held of record by Tallulah, Ltd., a
limited partnership of which Mr. Wyly is a general partner; 541,533 shares
of Common Stock held of record by family trusts of which Mr. Wyly is
trustee; 300,000 shares of Common Stock held of record by Maverick
Entrepreneurs Fund, Ltd. ("Maverick"), a limited partnership of which
Mr. Wyly is a general partner; and 15,836 shares of Common Stock held of
record by Mr. Wyly's adult children, who have given him the power to
vote such shares.
(4) Includes 316,667 Shares to be acquired upon exercise of Options granted
under the Plan, all of which are presently exercisable. Also includes
755,000 shares of Common Stock held of record by Brush Creek, Ltd., a
limited partnership of which Mr. Wyly is a general partner; 842,233 shares
of Common Stock held
4
<PAGE>
of record by family trusts of which Mr. Wyly is trustee; 300,000 shares
held of record by Maverick, of which Mr. Wyly is a general partner; and
374 shares held of record by Mr. Wyly's adult children, who have given
him the power to vote such shares.
(5) Includes 30,000 Shares to be acquired upon exercise of Options granted
under the Plan, all of which are presently exercisable.
(6) Includes 129,250 Shares to be acquired upon exercise of Options granted
under the Plan, 69,250 of which are presently exercisable and 60,000 of
which become exercisable on August 29, 1997, and 30,000 Shares to be
acquired upon exercise of options granted under other stock option plans of
the Company. Also includes 187 Shares held of record by Mr. Miller's wife
and 10,929 shares of Common Stock held pursuant to the 401(k) Plan.
(7) Consists of 25,000 Shares to be acquired upon exercise of Options granted
under the Plan, 16,666 of which are presently exercisable and 8,334 of
which become exercisable on April 1, 1998. Also includes 1,200 shares of
common stock held in a retirement account directed by Mr. French.
(8) Includes 15,000 Shares to be acquired upon exercise of Options granted
under the Plan, 7,500 of which are presently exercisable and 7,500 of which
become exercisable on August 29, 1997.
(9) Includes 20,000 Shares to be acquired upon exercise of Options granted
under the Plan, 10,000 of which are presently exercisable and 10,000 of
which become exercisable on August 28, 1997. Also includes 10,000 shares
to be acquired upon exercise of options granted under other stock option
plans of the Company.
(10) Consists of 75,000 Shares to be acquired upon exercise of Options granted
under the Plan, 25,000 of which are presently exercisable and 25,000 of
which become exercisable on each of February 24, 1998 and February 24,
1999.
(11) Consists of 75,000 Shares to be acquired upon exercise of Options granted
under the Plan, 25,000 of which are presently exercisable and 25,000 of
which become exercisable on each of December 2, 1997 and December 2, 1998.
(12) Includes 80,000 Shares to be acquired upon exercise of Options granted
under the Plan, 26,666 of which are presently exercisable, 10,000 of which
become exercisable on each of June 28, 1997 and June 28, 1998 and 16,667 of
which become exercisable on each of August 5, 1997 and August 5, 1998.
(13) Includes 75,000 Shares to be acquired upon exercise of Options granted
under the Plan, 25,000 of which are presently exerciseable and 25,000 of
which become exercisable on each of May 14, 1998 and May 14, 1999.
(14) Includes 27,500 Shares to be acquired upon exercise of Options granted
under the Plan, all of which are presently exercisable. Also includes
823 shares of Common Stock held pursuant to the 401(k) Plan.
(15) Includes 80,000 Shares to be acquired upon exercise of Options granted
under the Plan, 40,000 of which are presently exercisable and 40,000 of
which become exercisable on August 29, 1997. Also includes 173,250 shares
to be acquired upon exercise of options granted under other stock option
plans of the Company and 7,083 shares of Common Stock held pursuant to the
401(k) Plan.
5
<PAGE>
1992 NON-STATUTORY STOCK OPTION PLAN
GENERAL
A copy of the Plan has been filed as an exhibit to the Registration
Statement of which this Prospectus constitutes a part. The summaries of certain
provisions of the Plan do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the Plan,
including the definitions therein of certain terms. Copies of the Plan and
additional information regarding the Plan and the Plan's administrators may be
obtained by contacting the Company. See "Incorporation of Certain Documents by
Reference." Capitalized terms not otherwise defined below or elsewhere in this
Prospectus have the meanings given to such terms in the Plan.
PURPOSE AND ADOPTION
The Plan is intended to provide employees and key advisors with a
proprietary interest in the Company in order to (a) increase the interest in the
Company's welfare of those employees and key advisors who share primary
responsibility for the management, growth and protection of the business of the
Company, (b) recognize the contributions made by certain employees and key
advisors to the Company's growth during its development stage, (c) furnish an
incentive to such employees and key advisors to continue their services for the
Company, and (d) provide a means through which the Company may attract able
persons to engage as employees and key advisors. The Board adopted the Plan
effective as of August 1, 1992. The Plan was amended effective as of March 4,
1996, and amended and restated effective as of September 17, 1996.
SHARES COVERED
As of June 12, 1997, the total number of shares of Common Stock available
for issuance under the Plan was 4,500,000 and Options exercisable for
4,259,012 of such shares had been granted, resulting in Options for 240,988
shares being available for grant as of such date.
OPTIONS
The Plan authorizes the grant of Options to purchase shares of Common Stock
that are not intended to qualify as incentive stock options under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), and which permit a
participant to benefit from increases in the value of shares of Common Stock
above a predetermined purchase price per share. Options are more fully
described under "- Description of Awards" below.
ADMINISTRATION
The Plan is administered by the 1992 Non-Statutory Plan Committee and the
Board, which have the authority to determine from time to time the individuals
to whom Options will be granted; to determine the number of shares to be covered
by each Option; to determine the time or times at which Options will be granted;
to interpret the provisions of the Plan; to make, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
instruments by which Options will be evidenced; and to make all other
determinations necessary or advisable for the administration of the Plan. All
of the members of the 1992 Non-Statutory Plan Committee, which may not be
comprised of less than two members, are intended to qualify as "Non-Employee
Directors" within the meaning of Rule 16b-3 under the Exchange Act.
Any determination or interpretation by the 1992 Non-Statutory Plan
Committee or the Board, as applicable, will be final and conclusive; PROVIDED
that in the event the 1992 Non-Statutory Plan Committee and the Board
disagree with respect to such interpretation or determination, the Board's
interpretation or determination will be final and conclusive.
6
<PAGE>
ELIGIBILITY
Full-time employees and key advisors, including directors, of the Company
are eligible to receive grants of Options.
TRANSFERABILITY
Options granted under the Plan may be transferred by the holder thereof
upon five days prior written notice to the Company, subject to such transfer
restrictions, if any, as may be set forth in the individual option agreement
pursuant to a determination of the 1992 Non-Statutory Plan Committee or the
Board, as applicable.
ADJUSTMENTS
The 1992 Non-Statutory Plan Committee or the Board may adjust the number of
shares available for Options, the number of shares of Common Stock subject to
and the exercise price of Options granted under the Plan to effect a change in
capitalization of the Company, such as a stock dividend, stock split, reverse
stock split, share combination, exchange of shares, merger, consolidation,
reorganization, liquidation or the like, of or by the Company.
NONQUALIFIED AND UNFUNDED
The Plan is unfunded and does not give participants any rights that are
superior to those of the Company's general creditors. The Plan is not subject
to the provisions of ERISA and is not qualified under Section 401(a) of the
Code.
CONTINUATION AND TERMINATION OF EMPLOYMENT OR ADVISOR RELATIONSHIP
The Plan and any Option granted under the Plan do not confer upon any Plan
participant any right to be employed or to continue employment in the Company.
TERMINATION AND AMENDMENT
Unless sooner terminated by action of the Board, the Plan will terminate on
July 31, 2002. The Plan may be amended, altered or discontinued by the Board
without approval of the Company's shareholders. In the event any law, or any
rule or regulation issued or promulgated by the Internal Revenue Service, the
Commission, the National Association of Securities Dealers, Inc., any stock
exchange upon which the Common Stock is listed for trading, or any other
governmental or quasi-governmental agency having jurisdiction over the Company,
the Common Stock or the Plan requires the Plan to be amended, the Plan will be
amended at that time and all Options then outstanding will be subject to such
amendment. The Board in its discretion may amend the Plan in accordance with
any applicable rules and regulations at any time subsequent to the promulgation
or issuance thereof.
DESCRIPTION OF AWARDS
The Plan does not specify a maximum term for Options granted thereunder.
The maximum aggregate fair market value (determined at the time the Option is
granted) of the Common Stock for which any Plan participant may be granted
Options in any calendar year shall be determined by the Board or the 1992
Non-Statutory Plan Committee, as applicable, in its discretion.
The purchase price of Common Stock subject to an Option granted pursuant to
the Plan shall be determined by the Board or the 1992 Non-Statutory Plan
Committee, as applicable, on the date of grant and may be equal to, less than or
greater than the fair market value of the Common Stock on the date of grant.
Payment for Common Stock purchased upon the exercise of an Option may be made in
cash, in shares of Common Stock then owned by the Plan participant, with a
promissory note, or in any other form of valid consideration, or a combination
of any of the foregoing, as required or approved by the Board or the 1992
Non-Statutory Plan Committee, as applicable, in its discretion.
7
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
The following summary of certain federal income tax consequences of the
grant or award of Options under the Plan is based on the Code, as amended to
date, applicable proposed and final Treasury Regulations, judicial authority and
current administrative rulings and practice, all of which are subject to change.
This summary does not attempt to describe all of the possible tax consequences
that could result from the acquisition, holding, exercise or disposition of an
Option or the shares of Common Stock purchased thereunder.
Options granted under the Plan are intended to be nonqualified stock
options. Nonqualified stock options generally will not result in any taxable
income to the optionee at the time of the grant, but the holder thereof will
realize ordinary income at the time of exercise of the Options if the shares are
not subject to any substantial risk of forfeiture (as defined in Section 83 of
the Code). Under such circumstances, the amount of ordinary income is measured
by the excess of the fair market value of the optioned shares at the time of
exercise over the exercise price. An optionee's tax basis in shares acquired
upon the exercise of nonqualified stock options is generally equal to the
exercise price plus any amount treated as ordinary income. If the exercise
price of a nonqualified stock option is paid for, in whole or in part, by the
delivery of shares of Common Stock previously owned by the optionee ("Previously
Acquired Shares"), no gain or loss will be recognized on the exchange of the
Previously Acquired Shares for a like number of shares of Common Stock. The
optionee's basis in the number of optioned shares received equal to the number
of Previously Acquired Shares surrendered would be the same as the optionee's
basis in the Previously Acquired Shares. However, the optionee would be treated
as receiving ordinary income equal to the fair market value (at the time of
exercise) of the number of shares of Common Stock received in excess of the
number of Previously Acquired Shares surrendered, and the optionee's basis in
such excess shares would be equal to their fair market value at the time of
exercise.
SPECIAL RULES APPLICABLE TO INSIDERS. In limited circumstances where the
sale of shares of Common Stock that are received as the result of the exercise
of an Option could subject an officer or director to suit under Section 16(b) of
the Exchange Act, the tax consequences to the officer or director may differ
from the tax consequences described above. In these circumstances, unless a
special election has been made, the principal difference usually will be to
postpone valuation and taxation of the stock received so long as the sale of the
shares received could subject the officer or director to suit under Section
16(b) of the Exchange Act, but not longer than six months.
GENERAL MATTERS APPLICABLE TO THE COMPANY. To the extent that an optionee
recognizes ordinary income in the circumstances described above, the Company
would be entitled to a corresponding deduction, provided in general that (i) the
amount is an ordinary and necessary business expense and such income meets the
test of reasonableness, (ii) the deduction is not disallowed pursuant to the
annual compensation limit set forth in Section 162(m) of the Code and (iii)
certain statutory provisions relating to so-called "excess parachute payments"
do not apply.
BECAUSE THE TAX CONSEQUENCES TO A PLAN PARTICIPANT MAY VARY DEPENDING ON
HIS OR HER INDIVIDUAL CIRCUMSTANCES, EACH PLAN PARTICIPANT SHOULD CONSULT HIS
OR HER PERSONAL TAX ADVISOR REGARDING THE FEDERAL AND ANY STATE, LOCAL OR
FOREIGN TAX CONSEQUENCES TO HIM OR HER.
PLAN OF DISTRIBUTION
The Shares may be issued to the Selling Stockholders from time to time by
the Company upon exercise of Options. The Shares may be sold or otherwise
disposed of from time to time by any of the Selling Stockholders in one or more
transactions through any one or more of the following: (i) to purchasers
directly, (ii) in ordinary brokerage transactions and transactions in which the
broker solicits purchasers, (iii) through underwriters or dealers who may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholders or from the purchasers of the Shares
for whom they may act as agent, (iv) the pledge of the Shares as security for
any loan or obligation, including pledges to brokers or dealers who may, from
time to time, themselves effect distributions of the Shares or interests
therein, (v) purchases by a broker or dealer as principal and resale by such
broker or dealer for its own account pursuant to this Prospectus, (vi) a block
trade in which the broker or dealer so engaged will attempt to sell the Shares
8
<PAGE>
as agent but may position and resell a portion of the block as principal to
facilitate the transaction and (vii) an exchange distribution in accordance with
the rules of such exchange, or in transactions in the over the counter market
including, without limitation, the Nasdaq National Market System. Such sales
may be made at prices and at terms then prevailing or at prices related to the
then current market price or at negotiated prices and terms. In effecting
sales, brokers or dealers may arrange for other brokers or dealers to
participate. The Selling Stockholders or such successors in interest, and any
underwriters, brokers, dealers or agents that participate in the distribution of
the Shares, may be deemed to be "underwriters" within the meaning of the
Securities Act, and any profit on the sale of the Shares by them and any
discounts, commissions or concessions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting commissions or
discounts under the Securities Act. In addition, any of the Shares covered by
this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
The Company will pay all of the expenses incident to the offering hereby
and sale of the Shares to the public other than underwriting discounts or
commissions, 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 Common Stock
offered hereby have been passed upon for the Company by Jones, Day, Reavis &
Pogue, Dallas, Texas. Michael C. French, a consultant to Jones, Day, Reavis &
Pogue, 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
February 1, 1997, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon incorporated by reference therein and
incorporated by reference herein. 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.
FORWARD-LOOKING INFORMATION
Certain statements contained in this Prospectus (including the documents
incorporated by reference herein) which are not historical facts are forward-
looking statements that involve risks and uncertainties, including, but not
limited to, customer demand and trends in the arts, crafts and decorative items
industry, related inventory risks due to shifts in customer demand, the effect
of economic conditions, the impact of competitors' locations and pricing, the
availability of acceptable real estate locations for new stores, difficulties
with respect to new technologies such as point-of-sale systems, supply
constraints or difficulties, the results of financing efforts, the effect of the
Company's accounting policies and other risks detailed in this Prospectus
(including the documents incorporated by reference herein).
9
<PAGE>
NO PERSON HAS BEEN AUTHORIZED IN
CONNECTION WITH THE OFFERING HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN 4,500,000 SHARES
AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES TO ANY PERSON OR MICHAELS STORES, INC.
BY ANYONE IN ANY JURISDICTION WHERE
SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER COMMON STOCK
SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF. -----------------
----------------- PROSPECTUS
TABLE OF CONTENTS -----------------
PAGE
----
Available Information. . . . . . . . . 2 JUNE , 1997
Incorporation of Certain
Documents by Reference. . . . . . . 2
The Company. . . . . . . . . . . . . . 3
Use of Proceeds. . . . . . . . . . . . 3
Selling Stockholders . . . . . . . . . 3
1992 Non-Statutory Stock Option Plan . 6
Plan of Distribution . . . . . . . . . 8
Legal Matters. . . . . . . . . . . . . 9
Experts. . . . . . . . . . . . . . . . 9
Forward-Looking Information. . . . . . 9
<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 the Registrant, are as follows:
Registration Fee . . . . . . . . . . . . . . . . . . . . . . $ 6,988
Printing, Engraving and Filing Expenses. . . . . . . . . . . $ 3,000
Accounting Fees and Expenses . . . . . . . . . . . . . . . . $ 5,000
Legal Fees and Expenses. . . . . . . . . . . . . . . . . . . $10,000
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . $ 1,012
-------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . $26,000
=======
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 a
corporation's certificate of incorporation, bylaws, any agreement or otherwise.
Reference is made to Article Nine of the Company's Restated Certificate of
Incorporation, as amended, which appears as Exhibit 4.1 to this Registration
Statement, which provides for indemnification of directors and officers.
Reference is made to Article IX of the Company's amended Bylaws which
appear as Exhibit 4.2 to this Registration Statement, which provides for
indemnification of directors and officers.
In addition, the Company has entered into Indemnity Agreements with
certain of its executive officers and directors.
The Company 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 Company against certain liabilities incurred by them in the
discharge of their functions as directors and officers except for liabilities
arising from their own malfeasance.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
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
------- ----------------------
4.1 Restated Certificate of Incorporation of the Registrant. (1)
4.2 Bylaws of the Registrant, as amended and restated. (2)
II-1
<PAGE>
Exhibit
Number Description of Exhibit
------- ----------------------
4.3 Form of Common Stock Certificate. (2)
5.1 Opinion of Jones, Day, Reavis & Pogue. (3)
23.1 Consent of Ernst & Young LLP. (3)
23.2 Consent of Jones, Day, Reavis & Pogue is contained in the
opinion filed as Exhibit 5.1 hereto.
24.1 Power of attorney. (Included on Signature Page hereof.)
99.1 Michaels Stores, Inc. Amended and Restated 1992 Non-Statutory
Stock Option Plan (4)
- -------------
(1) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-8 (No. 33-54726) and incorporated herein by reference.
(2) Previously filed as an Exhibit to the Registrant's Annual Report on Form
10-K for the year ended January 30, 1994 and incorporated herein by
reference.
(3) Filed herewith.
(4) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-8 (No. 333-21407) and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
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;
(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. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of a
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) of this Section 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 Exchange
Act that are incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities
II-2
<PAGE>
offered therein, and the offering of such securities at that time shall
be deemed to be the initial BONA FIDE offering thereof; and
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
undersigned Company's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act that is incorporated by reference in this 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer, or controlling person of the Company 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 Company 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 Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irving, State of Texas on June 17, 1997.
MICHAELS STORES, INC.
By: /s/ Bryan M. DeCordova
---------------------------------
Bryan M. DeCordova
Executive Vice President -
Chief Financial Officer
Each person whose signature appears below authorizes R. Michael Rouleau,
Bryan M. DeCordova and Mark V. Beasley to execute in the name of each such
person who is then an officer or director of the Registrant and to file any
amendments to this Registration Statement necessary or advisable to enable the
Registrant to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
respect thereof, in connection with the registration of the securities which are
the subject of this Registration Statement, which amendments may make such
changes in the Registration Statement as such attorney may deem appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated.
Signatures Title
---------- -----
Chairman of the June 17, 1997
- --------------------------- Board of Directors
Sam Wyly
/s/ Charles J. Wyly, Jr. Vice Chairman of the June 17, 1997
- --------------------------- Board of Directors
Charles J. Wyly, Jr.
/s/ R. Michael Rouleau President and Chief Executive June 17, 1997
- --------------------------- Officer (Principal Executive
R. Michael Rouleau Officer)
/s/ Bryan M. DeCordova Executive Vice President - June 17, 1997
- --------------------------- Chief Financial Officer
Bryan M. DeCordova (Principal Financial and
Accounting Officer)
/s/ Evan A. Wyly Managing Director June 17, 1997
- ---------------------------
Evan A. Wyly
/s/ Donald R. Miller, Jr. Managing Director and Vice June 17, 1997
- --------------------------- President - Market Development
Donald R. Miller, Jr.
/s/ Michael C. French Managing Director June 17, 1997
- ---------------------------
Michael C. French
/s/ Dr. F. Jay Taylor Director June 17, 1997
- ---------------------------
Dr. F. Jay Taylor
/s/ Richard E. Hanlon Director June 17, 1997
- ---------------------------
Richard E. Hanlon
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
------- ----------------------
4.1 Restated Certificate of Incorporation of the Registrant. (1)
4.2 Bylaws of the Registrant, as amended and restated. (2)
4.3 Form of Common Stock Certificate. (2)
5.1 Opinion of Jones, Day, Reavis & Pogue. (3)
23.1 Consent of Ernst & Young LLP. (3)
23.2 Consent of Jones, Day, Reavis & Pogue is contained in the
opinion filed as Exhibit 5.1 hereto.
24.1 Power of attorney. (Included on Signature Page hereof.)
99.1 Michaels Stores, Inc. Amended and Restated 1992
Non-Statutory Stock Option Plan (4)
- -------------
(1) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-8 (No. 33-54726) and incorporated herein by reference.
(2) Previously filed as an Exhibit to the Registrant's Annual Report on Form
10-K for the year ended January 30, 1994 and incorporated herein by
reference.
(3) Filed herewith.
(4) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-8 (No. 333-21407) and incorporated herein by reference.
II-5
<PAGE>
EXHIBIT 5.1
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
June 17, 1997
Michaels Stores, Inc.
8000 Bent Branch Drive
Irving, Texas 75063
Re: REGISTRATION ON FORM S-3 OF 1,500,000 SHARES OF COMMON STOCK,
PAR VALUE $0.10 PER SHARE, OF MICHAELS STORES, INC.
Ladies and Gentlemen:
We are acting as counsel to Michaels Stores, Inc., a Delaware
corporation (the "Company"), in connection with the registration pursuant to the
Company's Registration Statement on Form S-3 (the "Registration Statement") of
(i) the offer and sale by the Company of 1,500,000 shares (the "Shares") of
Common Stock, par value $0.10 per share, of the Company upon exercise of options
granted or to be granted pursuant to the Company's Amended and Restated 1992
Non-Statutory Stock Option Plan (the "Plan") and (ii) the subsequent offer and
resale by certain holders of options granted pursuant to the Plan of the Shares
acquired or to be acquired by such holders upon exercise of such options.
We have examined such documents, records, and matters of law as we
have deemed necessary for purposes of this opinion. Based on such examination
and on the assumptions set forth below, we are of the opinion that the Shares
are duly authorized and, when issued and delivered in accordance with the
provisions of the Company's Amended and Restated 1992 Non-Statutory Stock Option
Plan (the "Plan") against payment of the consideration therefor as provided in
the Plan and having a value not less than the par value thereof, will be validly
issued, fully paid, and nonassessable.
In rendering the foregoing opinion, we have relied as to certain
factual matters upon certificates of officers of the Company and public
officials, and we have not independently checked or verified the accuracy of the
statements contained therein. In addition, our examination of matters of law
has been limited to the General Corporation Law of the State of Delaware and the
federal laws of the United States of America, in each case as in effect on the
date hereof.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to us in the Prospectus under the
caption "Legal Matters."
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference of our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus for the registration of
1,500,000 shares of its common stock pertaining to the Michaels Stores, Inc.
Amended and Restated 1992 Non-Statutory Stock Option Plan and to the
incorporation by reference therein of our report dated March 12, 1997, with
respect to the consolidated financial statements of Michaels Stores, Inc.
incorporated by reference in its Annual Report (Form 10-K) for the year ended
February 1, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
---------------------------------------
Ernst & Young LLP
Dallas, Texas
June 12, 1997
