<PAGE>
As filed with the Securities and Exchange Commission on February 7, 1997.
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM S-8
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)
MICHAELS STORES, INC.
AMENDED AND RESTATED 1992 NON-STATUTORY
STOCK OPTION PLAN
(Full title of the plan)
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
_______________
CALCULATION OF REGISTRATION FEE
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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)
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Common Stock, par
value $0.10 per
share............ 1,500,000 $13.48 $20,223,077 $6,132
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1. Represents shares issuable upon exercise of options granted or to be
granted under the Michaels Stores, Inc. Amended and Restated 1992
Non-Statutory Stock Option 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 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 February 4, 1997.
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<PAGE>
EXPLANATORY NOTE
The information called for by Part I of Form S-8 is included in the
description of the Michaels Stores, Inc. Amended and Restated 1992 Non-Statutory
Stock Option Plan (the "Plan") to be delivered to persons purchasing shares
pursuant to the Plan. Pursuant to the Note to Part I of Form S-8, this
information is not being filed with or included in this Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission") by Michaels Stores, Inc. (the
"Company") are incorporated by reference, as of their respective dates, in
this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
January 28, 1996 as amended by the Company's Form 10K/A (Amendment
No. 1) to such annual report;
(b) The Company's Prospectus, dated June 18, 1996, filed pursuant to
rule 424(b) under the Securities Act of 1933, as amended (the
"Securities Act");
(c) The Company's Quarterly Reports on Form 10-Q for the periods ended
April 28, 1996, July 28, 1996 and October 28, 1996;
(d) The Company's Current Reports on Form 8-K dated June 20, 1996,
September 30, 1996 and January 22, 1997; and
(e) The description of the Company's common stock, par value $0.10 per
share (the "Common Stock"), contained in the Company's Registration
Statement on Form 8-A (Commission File No. 0-11822), filed August 30,
1991.
In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold, shall be deemed to
be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for all
purposes of this Registration Statement to the extent that a statement
contained herein or therein or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
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.
II-1
<PAGE>
ITEM 6. 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 3.2 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 3.1 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 8. EXHIBITS.
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-8, including those incorporated herein by
reference.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
-------- ----------------------
4.1 Form of Common Stock Certificate. (1)
4.2 Restated Certificate of Incorporation of the Registrant. (2)
II-2
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
-------- ----------------------
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 (3)
- ---------------
(1) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-1 (No. 2-89370) and incorporated herein by reference.
(2) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-8 (No. 33-54726) and incorporated herein by reference.
(3) Filed herewith.
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act;
II-3
<PAGE>
(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 (A)(1)(i) and (A)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the 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 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.
B. 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.
C. 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-4
<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-8 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 February 6, 1997.
MICHAELS STORES, INC.
By: /s/ SAM WYLY
--------------------------------
Sam Wyly
Chairman of the Board
Each person whose signature appears below authorizes R. Don Morris and
Mark V. Beasley, each of whom may act without joinder of the other, 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
---------- -----
/s/ SAM WYLY
--------------------------- Chairman of the February 6, 1997
Sam Wyly Board of Directors
/s/ CHARLES J. WYLY, JR.
--------------------------- Vice Chairman of the February 6, 1997
Charles J. Wyly, Jr. Board of Directors
/s/ R. MICHAEL ROULEAU
--------------------------- Chief Executive Officer February 6, 1997
R. Michael Rouleau (Principal Executive
Officer)
/s/ R. DON MORRIS
--------------------------- Executive Vice President February 6, 1997
R. Don Morris and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ EVAN A. WYLY
--------------------------- Vice President and Director February 6, 1997
Evan A. Wyly
/s/ DONALD R. MILLER, JR.
--------------------------- Vice President and Director February 6, 1997
Donald R. Miller, Jr.
/s/ MICHAEL C. FRENCH
--------------------------- Director February 6, 1997
Michael C. French
/s/ DR. F. JAY TAYLOR
--------------------------- Director February 6, 1997
Dr. F. Jay Taylor
--------------------------- Director February , 1997
Richard E. Hanlon
II-5
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
-------- ----------------------
4.1 Form of Common Stock Certificate. (1)
4.2 Restated Certificate of Incorporation of the Registrant. (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 (3)
- ---------------
(1) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-1 (No. 2-89370) and incorporated herein by reference.
(2) Previously filed as an Exhibit to the Registrant's Registration Statement
on Form S-8 (No. 33-54726) and incorporated herein by reference.
(3) Filed herewith.
II-6
<PAGE>
Exhibit 5.1
JONES, DAY, REAVIS & POGUE
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
February 6, 1997
Michaels Stores, Inc.
8000 Bent Branch Drive
Irving, Texas 75063
Re: Registration on Form S-8 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 of 1,500,000
shares (the "Shares") of Common Stock, par value $0.10 per share, of the Company
pursuant to the Company's Registration Statement on Form S-8 (the "Registration
Statement").
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.
Very truly yours,
/s/ JONES, DAY, REAVIS & POGUE
Jones, Day, Reavis & Pogue
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Michaels Stores, Inc.
Amended and Restated 1992 Non-Statutory Stock Option Plan of our report dated
March 6, 1996, with respect to the consolidated financial statements of
Michaels Stores, Inc. included in its Annual Report (Form 10-K) for the year
ended January 28, 1996, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
---------------------------------------
Ernst & Young LLP
Dallas, Texas
February 5, 1997
<PAGE>
EXHIBIT 99.1
MICHAELS STORES, INC.
AMENDED AND RESTATED
1992 NON-STATUTORY STOCK OPTION PLAN
1. PURPOSE. The purpose of this 1992 Non-Statutory Stock Option
Plan, as amended and restated, of Michaels Stores, Inc. (the "Plan") is to
provide employees and key advisors with a proprietary interest in Michaels
Stores, Inc., a Delaware corporation (the "Company"), through the granting of
options ("Option" or "Options") to purchase shares of the Company's
authorized Common Stock, par value $0.10 per share ("Common Stock"), 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.
2. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board of Directors" or "Board") and by a Stock
Option Committee (the "Committee") of not less than two directors of the
Company appointed by the Board of Directors. All of the members of the
Committee are intended at all times to qualify as "Non-Employee Directors"
within the meaning of Rule 16b-3 under Section 16 of the Securities Exchange
Act of 1934, as amended; provided however, that the failure of a member of
the Committee to so qualify shall not be deemed to invalidate any Option
granted by the Committee.
The Board and the Committee shall have full and final authority and
discretion, subject to the provisions of the Plan, to determine from time to
time the individuals to whom Options shall be granted and the number of
shares to be covered by each Option; to determine the time or times at which
Options shall 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 shall be
evidenced; and to make all other determinations necessary or advisable for
the administration of the Plan.
Any determination or interpretation by the Board or the Committee, as
applicable, made pursuant to this Section 2 shall be final and conclusive;
provided, that in the event the Committee and the Board shall disagree with
respect to such interpretation or determination, the Board's interpretation
or determination shall be final and conclusive.
3. PARTICIPANTS. The Board or the Committee may, from time to time,
select particular full-time employees and key advisors, including directors,
of the Company, to whom Options are to be granted, and upon the grant of such
Options, the selected employees and key advisors shall become Participants in
the Plan. As used herein, the term "Participant" means an employee or key
advisor who accepts an Option, or the estate, personal representative or
beneficiary thereof having the right to exercise an Option pursuant to its
terms.
<PAGE>
4. SHARES SUBJECT TO THE PLAN. The shares of Common Stock subject to
Options granted pursuant to the Plan shall be either shares of authorized but
unissued Common Stock or shares of Common Stock reacquired by the Company.
The maximum aggregate number of shares of Common Stock that may be issued
from time to time pursuant to the Plan shall be 4,500,000. Shares that by
reason of the expiration of an Option, or for any other reason, are no longer
subject to purchase pursuant to an Option granted under the Plan, and shares
from time to time rendered in payment of the exercise price of Options, may
be made subject to additional Options granted pursuant to the Plan. The
Board or the Committee, as applicable, may adjust the number of shares
available for Options, the number of shares subject to and the exercise price
of Options granted hereunder 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.
5. GRANT OF OPTIONS. Options granted hereunder shall be evidenced by
written stock option agreements containing such terms and provisions as are
recommended and approved from time to time by the Board or the Committee, as
applicable, but subject to and not more favorable than the terms of the Plan.
The Board or the Committee, as applicable, may from time to time require
additional terms which the Board deems necessary or advisable. The Company
shall execute stock option agreements upon instruction from the Board or the
Committee, as applicable.
6. MAXIMUM AMOUNT OF STOCK SUBJECT TO OPTIONS. The maximum aggregate
fair market value (determined at the time the Option is granted) of the
Common Stock for which any Participant may be granted Options in any calendar
year shall be determined by the Board or the Committee, as applicable, in its
discretion.
7. OPTION EXERCISE PRICE. The purchase price of Common Stock subject
to an Option granted pursuant to the Plan shall be determined by the Board or
the 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.
8. RESTRICTIONS. The Board or the Committee, as applicable, may, but
need not, at the time of granting of an Option or at any subsequent time
impose such restrictions, if any, on issuance, voluntary disposition and
release from escrow of any Options including, without limitation, permitting
exercise of Options only in installments over a period of years.
9. PAYMENT. Full payment for Common Stock purchased upon the exercise
of an Option shall be made at the time of exercise. No Common Stock shall be
issued until full payment has been made and a Participant shall have none of
the rights of a shareholder until shares of Common Stock are issued to him.
Any federal, state or local taxes required to be paid or withheld at the time
of exercise shall also be paid or withheld in full prior to any delivery of
shares of Common Stock upon exercise. Payment may be made in cash, in shares
of Common Stock then owned by the 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 Committee, as
applicable, in its discretion. Shares of Common Stock tendered in payment of
the exercise price of any Options may be reissued to the Participant who
tendered the shares of Common Stock as part of the shares of Common Stock
issuable upon exercise of other Options granted from time to time pursuant to
the Plan.
10. TRANSFERABILITY OF OPTIONS. Options granted under the Plan may be
transferred by the holder thereof upon five days prior written notice to the
Company.
11. TIME OF GRANTING OF AN OPTION. The grant of an Option pursuant to
the Plan shall occur only when a written option agreement shall have been
duly executed and delivered by or on behalf of the Company to the Participant.
12. RIGHTS IN EVENT OF DEATH OF PARTICIPANT. If a Participant dies
prior to the termination of his right to exercise an Option in accordance
with the provisions of the option agreement without having exercised his
Option as to all shares of Common Stock covered thereby, the Option may be
exercised to the extent of the
<PAGE>
shares of Common Stock with respect to which the Option could have been
exercised on the date of the Participant's death at any time prior to the
Option expiration date.
13. STOCK PURCHASED FOR INVESTMENT. At the discretion of the Board,
any option agreement may provide that the Option holder shall, by accepting
an Option, represent and agree on behalf of himself and his transferees by
will or the laws of descent and distribution that all shares of Common Stock
purchased upon the exercise of the Option will be acquired for investment and
not for resale or distribution, and that upon each exercise of any portion of
an Option, the person entitled to exercise the same shall furnish evidence
satisfactory to the Company (including a written and signed representation)
to the effect that the shares of Common Stock are being acquired in good
faith and for investment and not for resale or distribution.
14. TERMINATION OF OPTION RIGHTS AND AWARDS. The Board or the
Committee, as applicable, may provide for the immediate termination of
Options granted hereunder for any reason.
15. AMENDMENT OR DISCONTINUATION. The Plan may be amended, altered or
discontinued by the Board without approval of the shareholders. In the event
any law, or any rule or regulation issued or promulgated by the Internal
Revenue Service, Securities and Exchange Commission, National Association of
Securities Dealers, Inc., any stock exchange upon which the Common Stock is
listed for trading or other governmental or quasi-governmental agency having
jurisdiction over the Company, its 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.
16. EMPLOYMENT. This Plan and any Option granted under this Plan do
not confer upon the Participant any right to be employed or to continue
employment in the Company.
17. NO OBLIGATION TO EXERCISE OPTION. The granting of an Option
pursuant to the Plan shall not impose any obligation upon the Participant to
exercise such Option.
18. TERMINATION. Unless sooner terminated by action of the Board, the
Plan shall terminate on July 31, 2002, and no Options may be granted pursuant
to the Plan after such date.
19. USE OF PROCEEDS. The proceeds derived from the sale of stock
pursuant to Options granted under the Plan shall constitute general funds of
the Company.
MICHAELS STORES, INC.
By: /s/ R. Michael Rouleau
-----------------------------------
R. Michael Rouleau
CHIEF EXECUTIVE OFFICER
Dated: As of September 17, 1996
