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As filed with the Securities and Exchange Commission on August 27, 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
================================================================================
Proposed
Maximum Proposed
Offering Maximum
Title of Amount Price Aggregate Amount of
Securities to to be per Offering Registration
be Registered Registered (1) Share(2) Price (2) Fee (2)
================================================================================
Common Stock, par
value $0.10
per share.......... 2,450,000 $24.375 $59,718,750 $18,097
================================================================================
1. Represents shares issuable pursuant to the Company's Dividend Reinvestment
and Stock Purchase Plan (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 paragraph (c) of Rule 457, based upon the average of the
reported high and low sale prices of shares of the Common Stock on the
Nasdaq National Market System on August 25, 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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
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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 August 27, 1997
PROSPECTUS
2,450,000 SHARES
MICHAELS STORES, INC.
Dividend Reinvestment and Stock Purchase Plan
Michaels Stores, Inc. ("Michaels" or the "Company") hereby offers
participation in its Dividend Reinvestment and Stock Purchase Plan (the "Plan").
The Plan provides owners of shares of common stock, par value $.10 per share, of
Michaels ("Common Stock") and other interested investors with a convenient and
economical method to purchase Common Stock and to reinvest all or a portion of
their cash dividends, if any, in Common Stock. The Plan is also intended to
provide the Company with a cost-efficient and flexible mechanism to raise equity
capital because shares issuable under the Plan will be newly issued Common
Stock. A glossary of the defined terms used herein appears on pages 18-19.
Some of the significant features of the Plan are as follows:
- Participants may purchase Common Stock by making optional cash
investments of $100 to $2,500 in a given month.
- Persons who are not presently stockholders of the Company may purchase
Common Stock by making an initial optional cash investment of $500 to
$2,500. Optional cash investments of greater than $2,500 may be made
only with permission of the Company.
- Participants may purchase Common Stock by reinvesting on all or a
portion of cash dividends, if any.
THE COMPANY DOES NOT EXPECT TO PAY DIVIDENDS ON ITS COMMON STOCK.
THEREFORE, UNTIL THE COMPANY MODIFIES ITS POLICY OF NOT PAYING DIVIDENDS, THE
PROVISIONS OF THE PLAN WILL APPLY ONLY TO THE OPTIONAL CASH INVESTMENT FEATURE.
HOLDERS OF COMMON STOCK AND OTHER PROSPECTIVE PLAN PARTICIPANTS ARE CAUTIONED
THAT THE EXISTENCE OF THE PLAN IN NO WAY IMPLIES THAT THE COMPANY WILL MODIFY
ITS CURRENT POLICY OF NOT PAYING DIVIDENDS.
The price to be paid for shares of Common Stock purchased under the Plan
will be the average of the Daily Prices of shares of Common Stock for the ten
Trading Days ending immediately preceding the applicable Investment Date,
excluding from the average, in the case of purchases with optional cash
investments pursuant to a Request for Waiver in a given month, any Daily Price
which does not equal or exceed any applicable Threshold Price. The Company may
establish a Discount of 0% to 5% applicable to shares purchased under the Plan
pursuant to a Request for Waiver.
Optional cash investments in excess of $2,500 per month may be made only
pursuant to an accepted written Request for Waiver. At least three days prior
to the applicable Pricing Period, the Company (i) will determine whether to
establish a Threshold Price and, if a Threshold Price is established, its amount
and (ii) may establish a Discount from the market price applicable to shares
purchased under the Plan in connection with optional cash investments pursuant
to a Request for Waiver, which Discount may vary from month to month and may be
increased or decreased by the Company. These determinations will be made by the
Company in its sole discretion after a review of current market condition, the
level of participation in the Plan, and current and projected capital needs.
For each Trading Day of a Pricing Period in which the Threshold Price is not
satisfied or for each day on which no trades of shares of Common stock are
reported on the Nasdaq National Market System, one-tenth of the total amount of
any optional cash investment pursuant to a Request for Waiver will be returned
without interest.
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A broker, bank or other nominee may reinvest dividends and make optional
cash investments on behalf of Beneficial Owners. Optional cash investments
submitted by brokerage firms or other nominees on behalf of Participants will
be aggregated for purposes of determining whether the $2,500 limit would be
exceeded. Purchasers of shares (including brokers or dealers) under the Plan
who resell such shares, may be deemed to be underwriters.
The Common Stock is quoted on the Nasdaq National Market System under the
symbol "MIKE." On August 25, 1997, the closing price of the Common Stock on the
Nasdaq National Market System was $24 1/4. The Company will pay the costs of
administration of the Plan, except that Participants will bear the cost of
brokerage commissions for resale, certain service charges and fees and
applicable taxes.
This Prospectus contains a summary of the material provisions of the Plan
and should be retained by Participants in the Plan for future reference.
______________
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 September , 1997.
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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 by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated by reference into this Prospectus as of their respective filing
dates:
(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 this Prospectus or in a document incorporated
or deemed to be incorporated by reference in this Prospectus shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that any subsequently filed document which also is incorporated by reference
in this Prospectus modifies or supersedes such statement.
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 in this Prospectus, except for the exhibits to such
documents (other than the exhibits expressly incorporated in such documents
by reference). Requests should be directed to the Investor Relations
Department of the Company at 8000 Bent Branch Drive, Irving, Texas 75063
(telephone: (972) 409-1300).
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<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.
DESCRIPTION OF THE PLAN
The Michaels Stores Dividend Reinvestment and Stock Purchase Plan (the
"Plan") was approved by the Company's Board of Directors effective as of August
26, 1997. The following questions and answers explain and constitute the Plan.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide holders of Common Stock and
other interested investors with a convenient and economical method to
purchase Common Stock and to reinvest all or a portion of their cash
dividends in Common Stock, although the Company does not expect to pay
dividends on its Common Stock. In addition, the Plan will provide
Michaels Stores with a cost-efficient and flexible mechanism to raise
equity capital through sales of Common Stock under the Plan. Whether
significant additional capital is raised may be affected, in part, by
the Company's decision to waive the limitations applicable to optional
cash investments. See Question 13 regarding the Company's criteria
for granting a Request for Waiver.
HOLDERS OF COMMON STOCK AND OTHER PROSPECTIVE PLAN PARTICIPANTS ARE
CAUTIONED THAT THE EXISTENCE OF THE PLAN IN NO WAY IMPLIES THAT THE COMPANY WILL
MODIFY ITS CURRENT POLICY OF NOT PAYING DIVIDENDS.
PARTICIPATION OPTIONS
2. WHAT OPTIONS ARE AVAILABLE UNDER THE PLAN?
Registered holders or beneficial owners of Common Stock (each a
"Participant") and other interested investors may elect to participate
in the Plan. Participants may make optional cash investments to
purchase shares, subject to a minimum investment of $100 and a maximum
investment of $2,500 per month. Optional cash investments submitted
by brokerage firms or other nominees on behalf of Participants will be
aggregated for purposes of determining whether the $2,500 limit will
be exceeded. Interested investors that are not stockholders of the
Company may make an initial optional cash investment in Common Stock
of not less than $500 and not more than $2,500. In certain instances,
however, Michaels Stores may permit greater optional cash investments.
See Question 12 regarding optional cash investments and Question 13
regarding a Request for Waiver. Participants may also have cash
dividends, if any, on all or a portion of their shares which are
registered and are held by the Plan automatically reinvested in Common
Stock.
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3. WHAT ARE THE BENEFITS AND RESTRICTIONS OF THE PLAN?
BENEFITS
- Eligible stockholders may purchase Common Stock pursuant to
optional cash investments of not less than $100 and not more than
$2,500 (except with the consent of the Company) in any month.
Optional cash investments may be made occasionally or at regular
intervals, as each Participant desires. The Plan provides
Participants the opportunity to automatically reinvest cash
dividends, if any, on all or a portion of their Common Stock.
Participants may make optional cash investments even if
dividends, if any, on their shares of Common Stock are not being
reinvested under the Plan.
- Persons not presently stockholders of the Company may become
Participants by making an initial cash investment of not less
than $500 and not more than $2,500 (except with the consent of
the Company) to purchase Common Stock under the Plan.
- Shares of Common Stock purchased with optional cash investments
pursuant to a Request for Waiver, which, like all Plan shares,
will be purchased directly from the Company under the Plan, may
be issued at a Discount to the market price; such Discount may
vary each month between 0% and 5% and may be changed at the sole
discretion of the Company at any time.
- Participants will avoid the need for safekeeping of Common Stock
certificates credited to their Plan accounts and may submit for
safekeeping certificates held by them and registered in their
name. See Questions 15 and 16.
- Participants that are registered holders may direct the
Administrator to sell or transfer all or a portion of their
shares held in the Plan and therefore may find the Plan an
economical way to liquidate their holdings. See Question 17.
- Periodic statements reflecting all current activity in Plan
accounts, including purchases, sales and latest balances, will
simplify recordkeeping for registered holders. See Question 18.
RESTRICTIONS
- Participants may not be able to depend on the availability of a
market discount regarding shares acquired under the Plan in
connection with optional cash investments pursuant to a Request
for Waiver, and such optional cash investments may be subject to
the trading price for Common Stock satisfying a minimum price
condition. Any Discount established for the purchase of shares
pursuant to a Request for Waiver will not insure the availability
of a Discount or the same Discount in future months. Each month
the Company may establish a Discount, may not establish a
Discount and may change or eliminate the Discount or set any
minimum price condition without prior notice to Participants.
Discounts, if any, will not apply to the purchase of shares
pursuant to reinvestment of dividends nor to optional cash
investments of $2,500 or less (unless part of a larger optional
cash investment made pursuant to a Request for Waiver). See
Question 13.
- The purchase price per share will be an average price and,
therefore, may exceed the price at which shares are trading on
the Investment Date when the shares are issued. See Questions 11
and 12 regarding the purchase price of the shares and Question 13
regarding the establishment of a minimum price condition.
5
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- Execution of sales of shares held in the Plan may be subject to
delay. See Questions 12 and 17.
- No interest will be paid on funds held by the Company pending
reinvestment or investment. See Questions 12 and 13.
- Shares deposited in a Plan account may not be pledged until the
shares are withdrawn from the Plan. See Question 27.
4. WHO WILL ADMINISTER THE PLAN?
The Plan will be administered by Harris Trust and Savings Bank or
such successor administrator as the Company may designate (the
"Administrator"). The Administrator acts as agent for Participants,
keeps records of the accounts of Participants, sends regular account
statements to Participants, and performs other duties relating to the
Plan. Shares purchased for each Participant under the Plan will be
held by the Administrator and will be registered in the name of such
Participant unless and until a Participant requests that a stock
certificate for all or part of such shares be issued, as more fully
described in Question 15. Correspondence with the Administrator
should be sent to:
MICHAELS STORES DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
HARRIS TRUST AND SAVINGS BANK, ADMINISTRATOR
1601 ELM STREET
SUITE 2320
DALLAS, TEXAS 75201
TELEPHONE: 214-665-6033
FAX NUMBER: 214-969-1859
PARTICIPATION ELIGIBILITY
5. WHO IS ELIGIBLE TO PARTICIPATE?
A "registered holder" (which means a stockholder whose shares of
Common Stock are registered in the stock transfer books of Michaels
Stores in his or her name) or a "beneficial owner" (which means a
stockholder whose shares are registered in the stock transfer books of
Michaels Stores in a name other than his or her name, for example, in
the name of a broker, bank, or other nominee), may participate in the
Plan. A registered holder may participate in the Plan directly; a
beneficial owner must either become a registered holder by having such
shares transferred into his or her name or by making arrangements with
his or her broker, bank or other nominee to participate in the Plan on
the Participant's behalf. In addition, an interested investor that is
not a stockholder may participate in the Plan by making an initial
optional cash investment in shares of not less than $500 or more than
$2,500. In certain circumstances, however, the Company may permit
greater optional cash investments. See Question 6 regarding
enrollment and Question 13 regarding a Request for Waiver.
The right to participate in the Plan is not transferable to
another person apart from a transfer of the underlying shares. The
Company reserves the right to exclude from participation in the Plan
persons who use the Plan to engage in short-term trading activities
that cause aberrations in the trading volume of Common Stock. In
addition, the Company reserves the right to treat optional cash
investments submitted on forms reflecting Participants with the same
name, address or social security or taxpayer identification number as
a single investment for purposes of determining whether the $2,500
limit would be exceeded.
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Participants residing in jurisdictions in which their
participation in the Plan would be unlawful will not be eligible to
participate in the Plan.
ENROLLMENT
6. HOW DOES AN ELIGIBLE HOLDER OF COMMON STOCK OR ANY OTHER INTERESTED
INVESTOR ENROLL IN THE PLAN AND BECOME A PARTICIPANT?
Each eligible registered holder may enroll in the Plan and become
a Participant by completing and signing an Authorization and
Enrollment Form (enclosed herein) and returning it to the
Administrator at the address set forth in Question 4. An
Authorization and Enrollment Form may also be obtained at any time
upon request from the Administrator at the same address. If shares
are registered in more than one name (e.g., joint tenants, trustees),
all registered holders of such shares must sign the Authorization and
Enrollment Form exactly as their names appear on the account
registration.
Eligible beneficial owners must instruct their brokers, banks or
other nominees in whose name their shares are held to participate in
the Plan on their behalf. If a broker, bank or other nominee holds
shares of beneficial owners through a securities depository, such
broker, bank or other nominee may also be required to provide a Broker
and Nominee Form (a "B/N Form") to the Administrator in order to
participate in the optional cash investment portion of the Plan.
Optional cash investments submitted by brokerage firms or other
nominees on behalf of Participants, whether on the same B/N Form or
different B/N Forms, will be aggregated for purposes of determining
whether the $2,500 limit will be exceeded. See Questions 12 and 13.
An interested investor who is not presently a stockholder of the
Company, but desires to become a Participant by making an initial
investment in Common Stock, may join the Plan by signing an
Authorization and Enrollment Form and forwarding it, together with
such initial investment, to the Administrator at the address set forth
in Question 4. See Question 12 regarding initial optional cash
investments.
7. WHAT DOES THE AUTHORIZATION AND ENROLLMENT FORM PROVIDE?
The Authorization and Enrollment Form will appoint the
Administrator as agent for the Participant and direct the
Administrator to apply optional cash investments (transmitted with the
Authorization and Enrollment Form as well as optional cash investments
subsequently submitted) to the purchase on such Participant's behalf
of full and fractional shares of Common Stock in accordance with the
Plan.
With respect to dividends, the Authorization and Enrollment Form
will appoint the Administrator as agent for the Participant and direct
the Company to pay to the Administrator the Participant's cash
dividends, if any, on all or a specified number of shares of Common
Stock owned by the Participant on the applicable record date and
designated by the Participant to be included in the Plan and to
reinvest, at the Participant's discretion, cash dividends, if any, on
whole and fractional shares that have been credited to the
Participant's account pursuant to dividend reinvestment or optional
cash investment ("Plan Shares"). Cash dividends, if any, will
continue to be reinvested with respect to the number of shares of
Common Stock (including Plan Shares) designated on the Authorization
and Enrollment Form until the Participant specifies otherwise in
writing or terminates participation in the Plan or until the Plan is
terminated.
The Authorization and Enrollment Form provides for the purchase
of shares of Common Stock through the following investment options:
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(1) "FULL DIVIDEND REINVESTMENT"
This option directs the Administrator to invest in accordance
with the Plan all cash dividends, if any, on all shares of Common
Stock then or subsequently registered in the Participant's name.
This option also permits the Participant to make optional cash
investments and directs the Administrator to apply such
investments towards the purchase of Common Stock in accordance
with the Plan.
(2) "PARTIAL DIVIDEND REINVESTMENT"
This option directs the Administrator to invest in accordance
with the Plan all cash dividends, if any, on the specified number
of shares of Common Stock then registered in the Participant's
name and so designated in the appropriate space on the
Authorization and Enrollment Form. If this option is selected,
the Participant will continue to receive cash dividends, if any,
in the usual manner on all shares of Common Stock that have not
been designated for participation in the Plan. This option also
permits the Participant to make optional cash investments and
directs the Administrator to apply such investments towards the
purchase of Common Stock in accordance with the Plan.
(3) "OPTIONAL CASH INVESTMENTS ONLY"
This option permits a Participant to make optional cash
investments and directs the Administrator to apply such
investments towards the purchase of Common Stock in accordance
with the Plan. If this option is selected, unless the
Participant designates such additional shares for participation
in the Plan, the Participant will continue to receive cash
dividends, if any, on all shares registered in his or her name in
the usual manner, and the Administrator will apply only optional
cash investments received from the Participant towards the
purchase of Common Stock.
Any one of the above three options may be selected. In each case,
cash dividends, if any, will be reinvested on all shares designated
for participation in the Plan until the Participant specifies
otherwise or withdraws from the Plan altogether, or until the Plan is
terminated.
Any Participant who returns a properly executed Authorization and
Enrollment Form to the Administrator without electing an investment
option will be enrolled as having selected Full Dividend Reinvestment.
8. WHEN WILL PARTICIPATION IN THE PLAN BEGIN?
A Participant who has properly completed and submitted an
Authorization and Enrollment Form may submit an optional cash
investment to purchase shares under the Plan with such Authorization
and Enrollment Form. Thereafter, optional cash investments may be
made at any time, but not more frequently than once each month,
through the use of the appropriate forms sent to Participants with
each periodic statement. Payments received by the Administrator by
12:00 (Noon) Central Time on the last business day prior to the first
day of a Pricing Period (as defined in Question 11) will be used to
purchase shares on the Investment Date (as defined below) immediately
following such Pricing Period.
If a properly completed Authorization and Enrollment Form
requesting reinvestment of dividends is received by the Administrator
on or before the record date, if any, established by the Company's
Board of Directors for a particular cash dividend, that dividend will
be used to purchase shares of Common Stock for the Participant on the
next Investment Date applicable to optional cash investments following
the dividend payment date. If an
8
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Authorization and Enrollment Form is received from a Participant
after the record date established for a particular dividend, the
reinvestment of dividends will begin with respect to dividends paid
following the next dividend record date. For a discussion of the
price to Participants of the shares of Common Stock purchased under
the Plan and the limitations on optional cash investments, see
Questions 11 and 13, respectively.
The dates on which optional cash investments are to be invested
and any dividends are to be reinvested are herein collectively
referred to as the "Investment Dates." For optional cash investments,
the Investment Date will be the first Trading Day (as defined below)
subsequent to the Pricing Period. A "Trading Day" means a day on
which trades in Common Stock are reported on the Nasdaq National
Market System ("NASDAQ"). Please see Schedule A for information with
respect to Pricing Periods, Investment Dates and other information.
No interest will be paid on optional cash investments or cash
dividends pending investment in Common Stock.
Eligible stockholders and other interested investors may enroll
in the Plan at any time. Once enrolled, a Participant will remain
enrolled until the Participant discontinues participation or until the
Company terminates the Plan. See Question 19 regarding withdrawal
from the Plan and Question 26 regarding termination of the Plan.
PURCHASES
9. WHEN WILL SHARES BE ACQUIRED UNDER THE PLAN?
Dividends, if any, and optional cash investments will be
reinvested or invested, as the case may be, on the Investment Date.
10. WHAT IS THE SOURCE OF SHARES TO BE PURCHASED UNDER THE PLAN?
Optional cash investments and dividends reinvested through the
Plan will be used to purchase shares directly from Michaels Stores
either from treasury or authorized but unissued shares.
11. WHAT WILL BE THE PRICE TO THE PARTICIPANT OF SHARES PURCHASED UNDER
THE PLAN?
The price to Participants of shares purchased with optional cash
investments or with cash dividends will be the average of the Daily
Prices (defined below) of shares of Common Stock for the ten Trading
Days ending immediately preceding the applicable Investment Date,
excluding from the average, in the case of purchases with optional
cash investments pursuant to a Request for Waiver in a given month,
any Daily Price which does not equal or exceed any applicable
Threshold Price (defined below). The Company may establish a Discount
of 0% to 5% applicable to shares purchased under the Plan pursuant to
a Request for Waiver. The Discount will not apply to shares purchased
pursuant to the dividend reinvestment feature of the Plan or to
optional cash investments of $2,500 or less. See Question 13. The
period encompassing the first ten Trading Days of each calendar month
constitutes the relevant "Pricing Period" for that particular month.
The Daily Price for a Trading Day will be the average of the high and
low trading prices of the Common Stock on that day on NASDAQ, rounded
to three decimal places.
The Company may, in its sole discretion, establish for any given
Pricing Period a minimum price (the "Threshold Price") for optional
cash investments pursuant to a Request for Waiver. Any such Threshold
Price will be a stated dollar amount established by the Company at
least three Trading Days prior to the commencement of each Pricing
Period.
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12. HOW ARE OPTIONAL CASH INVESTMENTS MADE?
All registered holders, including brokers, banks and nominees
with respect to shares registered in their name on behalf of
beneficial owners, that have submitted signed Authorization and
Enrollment Forms are eligible to make optional cash investments at any
time.
A broker, bank or nominee, as holder on behalf of a beneficial
owner, may utilize an Authorization and Enrollment Form for optional
cash investments unless it holds the shares in the name of a
securities depository. In that event, the optional cash investment
must be accompanied by a Broker and Nominee Form ("B/N Form").
The B/N Form provides the sole means by which a broker, bank or
other nominee holding shares on behalf of beneficial owners in the
name of a securities depository may make optional cash investments on
behalf of such beneficial owners. In such case, the broker, bank or
other nominee must use a B/N Form for transmitting optional cash
investments on behalf of the beneficial owners. A B/N Form must be
delivered to the Administrator at the address specified in Question 4
each time that such broker, bank or other nominee transmits optional
cash investments on behalf of the beneficial owners. B/N Forms will
be furnished by the Administrator upon request.
Other interested investors that are not stockholders of the
Company are also eligible to make such an initial investment in Common
Stock through an optional cash investment by submitting Authorization
and Enrollment Forms and funds representing their desired initial
investment.
The Administrator will apply all optional cash investments, for
which good funds are received on or before 12:00 (Noon) Central Time
on the business day immediately preceding the first day of the
Pricing Period, to the purchase of shares of Common Stock on the next
following Investment Date. All optional cash investments are subject
to collection by the Administrator for full face value in U.S. dollars.
There is no obligation to make an optional cash investment at any
time, and the amount of such investments may vary from time to time.
Optional cash investments and initial cash investments must be
received by the Administrator no earlier than the 23rd day of the
calendar month immediately preceding the Investment Date and no later
than 12:00 (Noon) Central Time on the business day immediately
preceding the relevant Pricing Period in order to be invested on the
Investment Date. Optional cash investments exceeding $2,500 must be
received (together with the written approval of the Company waiving
the $2,500 limitation) by the Administrator not later than 12:00 (Noon)
Central Time on the business day immediately preceding the related
Pricing Period in order for such funds to be invested on the related
Investment Date. Otherwise, the optional cash investment or initial
cash investment amount will be returned automatically by the
Administrator to the participant as soon as is practicable.
Furthermore, upon a participant's written request received by the
Administrator no later than two business days prior to the Pricing
Period, a timely optional cash investment or initial cash investment
not already invested under the Plan will be cancelled or returned to
the participant, as appropriate. However, in the latter event, no
refund of a check or money order will be made until the funds have
been actually received by the Administrator. Accordingly, such
refunds may be delayed by up to three weeks.
No interest will be earned on optional cash investments or
dividends held pending investment nor on amounts to be refunded. The
Company suggests therefore that any optional
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cash investment a Participant wishes to make be sent so as to reach the
Administrator as close as possible to the first business day preceding
the first day of the Pricing Period for the next following Investment
Date. Any questions regarding these dates should be directed to the
Administrator at the address or telephone number set forth in
Question 4.
Participants should be aware that since investments under the
Plan are made as of specified dates, a Participant may lose any
advantage that otherwise might be available from being able to select
the timing of an investment. Neither the Company nor the
Administrator can assure a profit or protect against a loss on shares
purchased under the Plan.
All optional cash investments made by check should be made
payable to HARRIS BANK -- MICHAELS STORES DRSPP and mailed to the
Administrator at the address listed in Question 4. Any checks not
drawn on a United States bank or not payable in United States dollars
will be returned to Participant, as will any third party checks.
Other forms of payment, such as wire transfers, may be made, but only
if approved in advance by the Administrator. Inquiries regarding
other forms of payments and all other written inquiries should be
directed to the Administrator at the address listed in Question 4.
13. WHAT LIMITATIONS APPLY TO OPTIONAL CASH INVESTMENTS?
MINIMUM/MAXIMUM LIMITS. For any Investment Date, optional cash
investments made by stockholders of the Company are subject to a
minimum of $100 and a maximum of $2,500 (except as noted below), and
optional cash investments made by interested investors who are not
then stockholders of the Company are subject to a minimum initial
investment of $500 and a maximum of $2,500 (except as noted below).
See Question 8 regarding the determination of Investment Dates for
optional cash investments. Optional cash investments of less than the
allowable monthly minimum amount and that portion of any optional cash
investment that exceeds the allowable monthly maximum amount will be
returned, except as noted below, promptly to Participants, without
interest. Optional cash investments submitted by brokerage firms or
other nominees on behalf of Participants, whether on the same B/N Form
or different B/N Forms, will be aggregated for purposes of determining
whether the $2,500 limit will be exceeded. In addition, the Company
reserves the right to treat optional cash investments submitted on
forms reflecting Participants with the same name, address or social
security or taxpayer identification number as a single investor for
purposes of determining whether the $2,500 limit would be exceeded.
REQUEST FOR WAIVER. Optional cash investments in excess of
$2,500 per month may be made only pursuant to a request for waiver (a
"Request for Waiver") accepted by the Company. Participants who wish
to submit an optional cash investment in excess of $2,500 for any
Investment Date, including those whose proposed investments have been
aggregated so as to exceed $2,500 as described above, must obtain the
prior written approval of the Company and a copy of such written
approval must accompany any such optional cash investment. See
Question 12. A Request for Waiver should be directed to the Chief
Financial Officer of the Company at (972) 409-1581, or at such other
number as may be established by the Company from time to time. The
Company has sole discretion to grant any approval for optional cash
investments in excess of the allowable maximum amount. In deciding
whether to approve a Request for Waiver, the Company will consider
relevant factors including, but not limited to, the Company's need for
additional funds, the attractiveness of obtaining such additional
funds through the sale of Common Stock as compared to other sources of
funds, the purchase price likely to apply to any sale of Common Stock,
the Participant submitting the request, the extent and nature of such
Participant's prior participation in the Plan, the number of shares
held of record by such Participant and the aggregate amount of
optional cash investments in excess of $2,500 for which Requests for
Waiver have been submitted by all Participants. If Requests for
Waiver are submitted for any Investment Date for an aggregate amount
in excess of the
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amount the Company is then willing to accept, the Company may honor
such requests in order of receipt, pro rata or by any other method
that the Company determines, at its sole discretion, to be
appropriate. Upon granting any Request for Waiver, the Company may,
at its sole discretion, increase or reduce the Discount with respect
to the full amount of such optional cash investment, and the Company
may agree to different Discounts among persons to whom it has granted
a Request for Waiver.
Michaels Stores reserves the right to modify, suspend or
terminate participation in the Plan by otherwise eligible registered
holders or beneficial owners of Common Stock for any reason whatsoever
including elimination of practices that are not consistent with the
purposes of the Plan.
THRESHOLD PRICE WITH RESPECT TO OPTIONAL CASH INVESTMENTS MADE
PURSUANT TO REQUESTS FOR WAIVER. The Company may establish for any
Pricing Period a Threshold Price applicable to optional cash
investments made pursuant to Requests for Waiver. At least three
Trading Days prior to the first day of the applicable Pricing Period,
the Company will determine whether to establish a Threshold Price and
if a Threshold Price is established, its amount, and will so notify
the Administrator. This determination will be made by the Company in
its sole discretion after a review of current market conditions, the
level of participation in the Plan, and current and projected capital
needs. Participants may ascertain whether a Threshold Price has been
set or waived for any given pricing period by telephoning the Company
at 1-888-515-MIKE or at such other number as may be established by the
Company from time to time.
If established for any Pricing Period, the Threshold Price will
be stated as a dollar amount that the average of the high and low sale
prices of shares of the Common Stock on NASDAQ for each Trading Day of
the relevant Pricing Period must equal or exceed. In the event that
the Threshold Price is not satisfied for a Trading Day in the Pricing
Period, then that Trading Day will be excluded from the Pricing Period
with respect to optional cash investments made pursuant to Requests
for Waiver, and all trading prices for that day will be excluded from
the determination of the purchase price. A day will also be excluded
if no trades of Common Stock are made on NASDAQ for that day. For
example, if the Threshold Price is not satisfied for three of the ten
Trading Days in a Pricing Period, then the purchase price will be
based upon the remaining seven Trading Days in which the Threshold
Price was satisfied.
In addition, a portion of each optional cash investment made
pursuant to a Request for Waiver will be returned for each Trading Day
of a Pricing Period in which the Threshold Price is not satisfied or
for each day in which no trades of shares or Common Stock are reported
on NASDAQ. The returned amount will equal one-tenth of the total
amount of such optional cash investment (not just the amount exceeding
$2,500) for each Trading Day that the Threshold Price is not
satisfied. Thus, for example, if the Threshold Price is not satisfied
or no such sales are reported for three of the ten Trading Days in a
Pricing Period, 3/10ths (i.e., 30%) of such optional cash investment
will be returned to the Participant without interest.
The establishment of the Threshold Price and the possible return
of a portion of the investment applies only to optional cash
investments made pursuant to a Request for Waiver but applies to the
entire amount thereof, including the first $2,500. Setting a
Threshold Price for a Pricing Period shall not affect the setting of a
Threshold Price for any subsequent Pricing Period. For any particular
month, the Company may waive its right to set a Threshold Price.
Neither the Company nor the Administrator shall be required to provide
any written notice to Participants as to the Threshold Price for any
Pricing Period. Participants may, however, ascertain whether a
Threshold Price has been set or waived for any given Pricing Period by
telephoning the Company at 1-888-515-MIKE or at such other number as
may be established by the Company from time to time.
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DISCOUNT. Each month, at least three Trading Days prior to the
first day of the applicable Pricing Period, the Company may establish
a discount from the market price applicable to shares purchased under
the Plan in connection with optional cash investments made pursuant to
a Request for Waiver. Such discount (the "Discount") may be between
0% and 5% of the purchase price and may vary each month. The Discount
may be increased or decreased by the Company and the Company may agree
to different Discounts among persons to whom it has granted a Request
for Waiver. Any change in the Discount will be made in the Company's
sole discretion after a review of current market conditions, the level
of participation in the Plan, and current and projected capital needs.
Participants may obtain the Discount applicable to the next Pricing
Period by telephoning the Company at 1-888-515-MIKE or at such other
number as may be established by the Company from time to time.
Setting a Discount for a particular month shall not affect the setting
of a Discount for any subsequent month. Discounts apply only to
shares purchased in connection with optional cash investments made
pursuant to a Request for Waiver, but apply to the entire amount
thereof, including the first $2,500.
14. WHAT IF A PARTICIPANT HAS MORE THAN ONE ACCOUNT?
For the purpose of the limitations discussed in Question 13, the
Company reserves the right to aggregate all optional cash investments
for Participants with more than one account using the same name,
address or social security or taxpayer identification number. For
Participants unable to supply a social security or taxpayer
identification number, participation may be limited by the Company to
only one Plan account. Also for the purpose of such limitations, all
Plan accounts that the Company believes to be under common control or
management or to have common ultimate beneficial ownership may be
aggregated. In the event the Company exercises its right to aggregate
investments and the result would be an investment in excess of $2,500
without an approved Request for Waiver, the Company will return,
without interest, as promptly as practicable, any amounts in excess of
the investment limitations.
CERTIFICATES
15. WILL CERTIFICATES BE ISSUED FOR SHARE PURCHASES?
All shares purchased pursuant to the Plan will be held in "book
entry" form through accounts maintained by the Administrator. This
service protects against the loss, theft, or destruction of
certificates evidencing shares. Upon written request of a Participant
or upon withdrawal of a Participant from the Plan or upon the
termination of the Plan, the administrator will have certificates
issued and delivered for all full shares credited to that
Participant's account. Certificates will be issued only in the same
names as those enrolled in the Plan. In no event will certificates
for fractional shares be issued. See Questions 16 and 17.
16. MAY A PARTICIPANT ADD SHARES TO HIS OR HER ACCOUNT BY TRANSFERRING
SHARE CERTIFICATES THAT THE PARTICIPANT POSSESSES?
Any Participant may send to the Plan for safekeeping all Common
Stock certificates which such Participant holds. Certificates
forwarded to the Administrator by registered mail will be
automatically covered by an Administrator blanket bond up to the first
$250,000 of value. The safekeeping of shares offers the advantage of
protection against loss, theft or destruction of certificates as well
as convenience, if and when shares are sold through the Plan. All
shares represented by such certificates will be kept for safekeeping
in "book entry" form and combined with any full and fractional shares
then held by the Plan for the Participant.
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To deposit certificates for safekeeping under the Plan, a
Participant must be enrolled in the Plan. Stock certificates as well
as all written inquiries about the safekeeping service should be
directed to the Administrator at the address listed in Question 4.
Shares deposited for safekeeping may be withdrawn by the
Participant by submitting a written request to the Administrator.
SALE OF SHARES
17. CAN PARTICIPANTS SELL SHARES HELD UNDER THE PLAN?
Participants may request that all or a portion of the shares held
in their accounts by the Plan (including shares held for safekeeping)
be sold. Following receipt of written instructions from a
Participant, the Administrator will sell, through an independent
broker or institution, those shares as soon as practicable and will
remit a check for the proceeds of such sale, less applicable brokerage
charges, trading fees, service charges and any taxes. Shares to be
sold will be aggregated by the Administrator and generally sold once
per week at then current market prices in transactions carried out
through one or more brokerage firms. This procedure for selling
shares may be particularly attractive to holders of small amounts of
shares because the Plan can combine odd lots and small numbers of
shares into larger blocks to be sold, and thereby take advantage of
lower trading fees that otherwise might not be available to individual
Participants in the sale of their shares. The initial trading fee for
sales of shares will be $10.00 per transaction plus $.12 per share.
See Question 23.
REPORTS
18. WHAT REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
Unless a Participant participates in the Plan through a broker,
bank or nominee, each Participant will receive from the Administrator
a detailed statement of the Participant's account following each
dividend payment and account transaction. These detailed statements
will show total cash dividends received, if any, total optional cash
investments received, total shares purchased (including fractional
shares), price paid per share, and total shares held in the Plan.
These statements should be retained by the Participant to determine
the tax cost basis for shares purchased pursuant to the Plan. Any
Participant that participates in the Plan through a broker, bank or
nominee, should contact such party for such a statement.
WITHDRAWAL
19. HOW MAY PARTICIPANTS WITHDRAW FROM THE PLAN?
Except as set forth below, a Participant may terminate enrollment
in the Plan by giving written notice to the Administrator no later
than two days prior to the first day of the next Pricing Period, and
thereafter all cash dividends, if any, on shares owned by such
participant will be sent to the Participant. See Question 17. In the
event that a purchase of shares on behalf of a Participant pursuant to
the Plan is pending, such Participant may not terminate enrollment
until after the Investment Date relating to such Pricing Period. Any
fractional shares held in the Plan at the time of termination will be
converted to cash on the basis of the then current market price of the
Common Stock. If a Participant's Plan account balance falls below one
full share, the Administrator reserves the right to liquidate the
fraction and remit the proceeds, less any applicable fees, to the
Participant at its address of record.
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TAXES
20. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATING IN THE
PLAN?
The tax consequences resulting from optional cash investments are
unclear. Participants may be treated as having received a
distribution from the Company upon the purchase of shares pursuant to
the Plan with an optional cash investment in an amount equal to the
excess, if any, of the fair market value of the shares acquired on the
Investment Date over the optional cash investment. Any such deemed
distribution will be treated as a taxable dividend to the extent
attributable to current or accumulated earnings and profits of the
Company. The purchased shares will have a tax basis equal to the
amount of the optional cash investment plus the amount of the deemed
distribution, if any, which is treated as a dividend. The fair market
value of shares acquired on an Investment Date is likely to differ
from the amount of optional cash investment.
Participants will be treated as having received a distribution
from the Company equal to the fair market value on the Investment Date
of the shares, if any, acquired with reinvested dividends pursuant to
the Plan. Such distribution will be treated as a dividend to the
extent attributable to current or accumulated earnings and profits of
the Company. Any excess will first be treated as a tax-free return of
capital, causing a reduction in the basis of existing shares, and the
balance will be treated as capital gain recognized on a sale or
exchange. A Participant's tax basis in the dividend shares will equal
the fair market value of such shares on the Investment Date.
A Participant's holding period for shares acquired pursuant to
the Plan will begin on the day following the Investment Date. When a
Participant receives certificates for whole shares credited to the
Participant's account under the Plan, the Participant will not realize
any taxable income. However, a Participant that receives a cash
adjustment for a fraction of a share will realize a gain or loss with
respect to such fraction. A gain or loss also will be realized by the
Participant whenever whole shares are sold, either pursuant to the
Participant's request, upon withdrawal from the Plan or after
withdrawal from the Plan. The amount of such gain or loss will be the
difference between the amount that the Participant receives for the
shares or fraction of a share and the tax basis of the Participant in
the shares.
THE FOREGOING IS ONLY A SUMMARY OF THE FEDERAL INCOME TAX
CONSEQUENCES OF PARTICIPATION IN THE PLAN AND DOES NOT CONSTITUTE TAX
ADVICE. THIS SUMMARY DOES NOT REFLECT EVERY POSSIBLE OUTCOME THAT
COULD RESULT FROM PARTICIPATION IN THE PLAN AND, THEREFORE,
PARTICIPANTS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES APPLICABLE TO THEIR PARTICULAR
SITUATIONS.
OTHER PROVISIONS
21. WHAT HAPPENS IF A PARTICIPANT SELLS OR TRANSFERS SHARES OR ACQUIRES
ADDITIONAL SHARES?
If a Participant has elected to have dividends automatically
reinvested in the Plan and subsequently sells or transfers all or any
part of the shares registered in the Participant's name, automatic
reinvestment will continue as long as shares are registered in the
name of the Participant or held for the Participant by the
Administrator or until termination of enrollment. Similarly, if a
Participant has elected the "Full Dividend Reinvestment" option under
the Plan and subsequently acquires additional shares registered in the
Participant's name, dividends paid on such shares will automatically
be reinvested until termination of enrollment. If, however, a
Participant has elected the "Partial Dividend Reinvestment" option and
subsequently acquires additional shares that are registered in the
Participant's name, dividends paid on such shares will not be
automatically reinvested under the Plan. See Question 7.
Participants may,
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however, change their dividend reinvestment elections by submitting
new Authorization and Enrollment Forms.
22. HOW WILL A PARTICIPANT'S SHARES BE VOTED?
For any meeting of stockholders, each Participant will receive
proxy materials in order to vote all shares held by the Plan for the
Participant's account. All shares will be voted as designated by the
Participant or may be voted in person at the meeting of stockholders.
23. WHO PAYS THE EXPENSES OF THE PLAN?
There is no fee for enrolling in the program. Participation is
voluntary and a Participant may discontinue its participation at any
time. However, there are fees associated with the Plan and the
Administrator's services. Shares for the Plan will be purchased
directly from the Company, and therefore there will be no trading fees
or service charges in connection with purchases of shares.
Participants that request the sale of any of their shares held in the
Plan must pay a fee initially equal to $10.00 per transaction plus
$.12 per share plus any applicable taxes and brokerage charges. The
Administrator may effect any sales of shares for the Plan through a
broker-dealer, in which case such broker-dealer will receive a
commission for effecting such transactions. The Administrator may
also charge Participants for additional services not provided under
the Plan or where specified charges are indicated. Any fees may be
changed by the Administrator at any time, without notice to
Participants. Participants may obtain a current listing of all
applicable administrative fees by contacting the Administrator at the
address or telephone number listed in Question 4 above. Brokers or
nominees that participate on behalf of beneficial owners for whom they
are holding shares may also charge such beneficial owners fees in
connection with such participation, for which neither the
Administrator nor the Company will be responsible.
24. WHAT ARE THE RESPONSIBILITIES OF MICHAELS STORES OR THE ADMINISTRATOR
UNDER THE PLAN?
Neither Michaels Stores nor the Administrator will be liable for
any act done in good faith or for any good faith omission to act,
including, without limitation, any claims of liability arising out of
a failure to terminate a Participant's account upon such Participant's
death or adjudication of incompetence prior to the receipt of notice
in writing of such death or adjudication of incompetence, the prices
at which shares are purchased for the Participant's account, the times
when purchases are made or fluctuations in the market value of the
Common Stock. Neither Michaels Stores nor the Administrator has any
duties, responsibilities or liabilities except those expressly set
forth in the Plan.
The Participant should recognize that the Company cannot assure a
profit or protect against a loss on the shares purchased by a
Participant under the Plan.
25. WHAT HAPPENS IF THE COMPANY ISSUES A STOCK DIVIDEND OR DECLARES A
STOCK SPLIT?
Any shares distributed by the Company as a result of a stock
dividend or a stock split on shares held under the plan for a
Participant will be credited to the Participant's account.
26. IF THE COMPANY HAS A RIGHTS OFFERING RELATED TO THE COMMON STOCK, HOW
WILL A PARTICIPANT'S ENTITLEMENT BE COMPUTED?
A Participant's entitlement in a rights offering related to the
Common Stock will be based upon the number of whole shares credited to
the Participant's account. Rights based on a fraction of a share
credited to a Participant's Plan account will be sold for that account
and the net proceeds will be invested as an optional cash payment on
the next Investment
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Date. In the event of a rights offering, transaction processing may
be curtailed or suspended by the Administrator for a short period of
time following the record date for such action to permit the
Administrator to calculate the rights allocable to each account.
27. MAY SHARES IN A PARTICIPANT'S ACCOUNT BE PLEDGED?
No shares credited to a Participant's account may be pledged and
any such purported pledge will be void. If a Participant wishes to
pledge shares, those shares must be withdrawn from the Plan.
28. MAY A PARTICIPANT TRANSFER ALL OR A PART OF THE PARTICIPANT'S SHARES
HELD IN THE PLAN TO ANOTHER PERSON?
A Participant who is not an affiliate of Michaels stores may
transfer or give gifts of shares to anyone by contacting the
Administrator and requesting a Gift/Transfer Form. A notice
indicating the deposit of shares will be forwarded to the recipient.
A Participant who is not an affiliate of Michaels Stores may also
transfer all or a portion of his or her shares into an account
established for another person within the Plan. In order to effect
such a "book-to-book" transfer, the transferee must complete an
Authorization and Enrollment Form to open a new account within the
Plan. (See Question 7). The Authorization and Enrollment Form should
be sent to the Administrator along with a written request to effect
the "book-to-book" transfer indicating the number of shares to be
transferred to the new account.
Participants who are affiliates of Michaels Stores and who wish
to transfer shares in his or her account should call the General
Counsel of the Company at (972) 409-1300.
29. MAY THE PLAN BE CHANGED OR TERMINATED?
While the Plan is intended to continue indefinitely, the Company
reserves the right to amend, modify, suspend or terminate the Plan at
any time. Participants will be notified in writing of any
modifications made to the Plan.
USE OF PROCEEDS
The proceeds from the sale of the Common Stock offered pursuant to the Plan
will be added to the Company's funds and used for general corporate purposes.
PLAN OF DISTRIBUTION
The Common Stock acquired under the Plan is being sold directly by
Michaels. The Company may sell Common Stock to owners of shares (including
brokers or dealers) who, in connection with any resales of such shares, may
be deemed to be underwriters. Such shares, including shares acquired
pursuant to waivers granted with respect to the optional cash investment
feature of the Plan, may be resold in market transactions (including coverage
of short positions) on any national securities exchange on which shares of
Common Stock trade or in privately negotiated transactions. These exchanges
include the Nasdaq National Market System, the national exchange on which the
Common Stock is currently listed. The difference between the price such
owners pay to the Company for shares of Common Stock acquired under the Plan
after deduction of the applicable Discount, if any, and the price at which
such shares are resold, may be deemed to constitute underwriting commissions
received by such owners in connection with such transactions. The Company
does not have any formal or informal understanding with any such owners. The
Company reserves
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the right to exclude from participation in the Plan persons who use the Plan
to engage in short-term trading activities that cause alterations in the
trading volume of the Common Stock.
The Company will pay any expenses incurred in connection with purchases of
Common Stock under the Plan. Participants that request the sale of any of their
shares of Common Stock held in the Plan must pay a fee initially equal to $10.00
per transaction plus $.12 per share plus any applicable taxes and, if the sale
is effected through a broker-dealer, a commission.
Common Stock may not be available under the Plan in all states. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, any Common Stock or other securities in any state or any other
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction.
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).
GLOSSARY
"Administrator" Harris Trust and Savings Bank or such successor
administrator as the Company may designate.
"Beneficial owner" Stockholder whose shares of Common Stock are registered
in the stock transfer books of the Company in a name
other than his or her name.
"Business day" Any day other than Saturday, Sunday or a legal holiday on
which the NASDAQ is closed or on which the Administrator
is authorized or obligated by law to close.
"B/N Form" Broker and Nominee Form.
"Common Stock" Common stock, par value $.10 per share, of the Company.
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"Daily Prices" The average of the high and low trading prices of the
Common Stock on that day on NASDAQ, rounded to three
decimal places.
"Discount" Discount between 0% and 5% of the purchase price as
established, at the sole discretion of the Company, each
month at least three Trading Days prior to the first day
of the applicable Pricing Period.
"Investment Date" Dates on which optional cash investments are to be
invested and any dividends are to be reinvested.
"Participant" Registered holder or beneficial owner of Common Stock
under the Plan.
"Plan Shares" Shares of Common Stock that have been credited to the
Participant's account pursuant to dividend reinvestment
or optional cash investment.
"Pricing Period" Period encompassing the first ten Trading Days of each
calendar month.
"Registered holder" Stockholder whose shares of Common Stock are registered
in the stock transfer books of the Company in his or her
name.
"Request for Waiver" Request that the Company waive the maximum requirement
for optional cash investments of $2,500 per month.
"Threshold Price" Minimum price for optional cash investments pursuant to a
Request for Waiver.
"Trading Day" Day on which trades in Common Stock are reported on
NASDAQ.
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SCHEDULE A
IMPORTANT DATES FOR OPTIONAL CASH INVESTMENTS
(1997-1999)
<TABLE>
THRESHOLD PRICE
AND WAIVER DISCOUNT OPTIONAL CASH PAYMENT PRICING PERIOD
SET DATE DUE DATE COMMENCEMENT DATE INVESTMENT DATE
- ------------------- --------------------- ----------------- ---------------------
<S> <C> <C> <C>
September 25, 1997 September 30, 1997 October 1, 1997 October 15, 1997
October 28, 1997 October 31, 1997 November 3, 1997 November 17, 1997
November 24, 1997 November 28, 1997 December 1, 1997 December 15, 1997
December 26, 1997 December 31, 1997 January 2, 1998 January 16, 1998
January 27, 1998 January 30, 1998 February 2, 1998 February 16, 1998
February 24, 1998 February 27, 1998 March 2, 1998 March 16, 1998
March 26, 1998 March 31, 1998 April 1, 1998 April 16, 1998
April 27, 1998 April 30, 1998 May 1, 1998 May 15, 1998
May 26, 1998 May 29, 1998 June 1, 1998 June 15, 1998
June 25, 1998 June 30, 1998 July 1, 1998 July 16, 1998
July 28, 1998 July 31, 1998 August 3, 1998 August 17, 1998
August 26, 1998 August 31, 1998 September 1, 1998 September 16, 1998
September 25, 1998 September 30, 1998 October 1, 1998 October 15, 1998
October 27, 1998 October 30, 1998 November 2, 1998 November 16, 1998
November 24, 1998 November 30, 1998 December 1, 1998 December 15, 1998
December 28, 1998 December 31, 1998 January 4, 1999 January 19, 1999
January 26, 1999 January 29, 1999 February 1, 1999 February 16, 1999
February 23, 1999 February 26, 1999 March 1, 1999 March 15, 1999
March 26, 1999 March 31, 1999 April 1, 1999 April 16, 1999
April 27, 1999 April 30, 1999 May 3, 1999 May 17, 1999
May 25, 1999 May 28, 1999 June 1, 1999 June 15, 1999
June 25, 1999 June 30, 1999 July 1, 1999 July 16, 1999
July 27, 1999 July 30, 1999 August 2, 1999 August 16, 1999
August 26, 1999 August 31, 1999 September 1, 1999 September 16, 1999
September 27, 1999 September 30, 1999 October 1, 1999 October 15, 1999
October 26, 1999 October 29, 1999 November 1, 1999 November 15, 1999
November 24, 1999 November 30, 1999 December 1, 1999 December 15, 1999
</TABLE>
U.S. EQUITY MARKETS CLOSED
1997 1998 1999
------ ------ ------
New Year's Day -- 1/1 1/1
Martin Luther King, Jr. Day -- 1/19 1/18
President's Day -- 2/16 2/15
Good Friday -- 4/10 4/2
Memorial Day -- 5/25 5/31
Independence Day -- 7/3 *
Labor Day -- 9/7 9/6
Thanksgiving Day 11/27 11/26 11/25
Christmas Day 12/25 12/25 *
* Unknown at the date of this Prospectus. In 1999, Independence Day and
Christmas fall on a weekend.
A-1
<PAGE>
IMPORTANT TELEPHONE NUMBERS
TO OBTAIN CALL
--------- ----
Information Concerning Your Plan Account (214) 665-6033
Authorization and Enrollment Forms, B/N Forms and
Gift/Transfer Forms (214) 665-6033
Price and Discount Information 1-888-515-MIKE
Requests for Waiver (214) 409-1581
A-2
<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 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 BY ANYONE IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
_______________
TABLE OF CONTENTS
<TABLE>
PAGE 2,450,000 SHARES
----
<S> <C>
Available Information....................................... 3 MICHAELS STORES, INC.
Incorporation of Certain Documents by Reference............. 3
The Company................................................. 4 DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
Description of the Plan..................................... 4
Purpose................................................... 4
Participation Options..................................... 4
Participation Eligibility................................. 6 _______________
Enrollment................................................ 7
Purchases................................................. 9 PROSPECTUS
Certificates.............................................. 13 _______________
Sale of Shares............................................ 14
Reports................................................... 14
Withdrawal................................................ 14
Taxes..................................................... 15
Other Provisions.......................................... 15 SEPTEMBER __, 1997
Use of Proceeds............................................. 17
Plan of Distribution........................................ 17
Legal Matters............................................... 18
Experts..................................................... 18
Forward-Looking Information................................. 18
Glossary.................................................... 18
</TABLE>
<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........................................... $18,097
Printing, Engraving and Filing Expenses.................... $ 4,000
Accounting Fees and Expenses............................... $ 5,000
Legal Fees and Expenses.................................... $25,000
Miscellaneous.............................................. $ 7,903
-------
Total...................................................... $60,000
-------
-------
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)
II-1
<PAGE>
Exhibit
Number Description of Exhibit
-------- ----------------------
4.2 Bylaws of the Registrant, as amended and restated. (2)
4.3 Form of Common Stock Certificate. (3)
5.1 Opinion of Jones, Day, Reavis & Pogue. (4)
23.1 Consent of Ernst & Young LLP. (4)
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. Dividend Reinvestment and Stock Purchase
Plan. (5)
- -------------------
(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) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-3 (No. 333-29419) and incorporated herein by reference.
(4) Filed herewith.
(5) Included in Prospectus.
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.
II-2
<PAGE>
(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 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 August 27, 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
- -------------------------- Board of Directors
Sam Wyly
/s/ Charles J. Wyly, Jr. Vice Chairman of the August 27, 1997
- -------------------------- Board of Directors
Charles J. Wyly, Jr.
/s/ R. Michael Rouleau President and Chief August 27, 1997
- -------------------------- Executive Officer
R. Michael Rouleau (Principal Executive Officer)
/s/ Bryan M. DeCordova Executive Vice President -- August 27, 1997
- -------------------------- Chief Financial Officer
Bryan M. DeCordova (Principal Financial and
Accounting Officer)
/s/ Evan A. Wyly Managing Director August 27, 1997
- -------------------------
Evan A. Wyly
/s/ Donald R. Miller, Jr. Managing Director and August 27, 1997
- -------------------------- Vice President -- Market
Donald R. Miller, Jr. Development
/s/ Michael C. French Managing Director August 27, 1997
- -------------------------
Michael C. French
/s/ Dr. F. Jay Taylor Director August 27, 1997
- -------------------------
Dr. F. Jay Taylor
- ------------------------- Director
Richard E. Hanlon
<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. (3)
5.1 Opinion of Jones, Day, Reavis & Pogue. (4)
23.1 Consent of Ernst & Young LLP. (4)
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. Dividend Reinvestment and Stock Purchase
Plan. (5)
- -------------------
(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) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-3 (No. 333-29419) and incorporated herein by reference.
(4) Filed herewith.
(5) Included in Prospectus.
<PAGE>
EXHIBIT 5.1
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
August 27, 1997
Michaels Stores, Inc.
8000 Bent Branch Drive
Irving, Texas 75063
Re: REGISTRATION ON FORM S-3 OF 2,450,000 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
the offer and sale of 2,450,000 shares of common stock of the Company, par value
$.10 per share pursuant to the Company's Dividend Reinvestment and Stock
Purchase Plan.
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 Dividend Reinvestment and Stock Purchase 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 to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Michaels Stores,
Inc. for the registration of 2,450,000 shares of its common stock 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
August 25, 1997
