-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NwpaV8cknW4xGB088CekYAzElEnQ4zR1fXQFjp5/mJj6e/TrB9B4frNmM7Rq5p7Y yVDJDVKuD0JXy3ZujjdUqA== 0000912057-97-003721.txt : 19970211 0000912057-97-003721.hdr.sgml : 19970211 ACCESSION NUMBER: 0000912057-97-003721 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970207 EFFECTIVENESS DATE: 19970207 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICHAELS STORES INC CENTRAL INDEX KEY: 0000740670 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-HOBBY, TOY & GAME SHOPS [5945] IRS NUMBER: 751943604 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-21407 FILM NUMBER: 97521153 BUSINESS ADDRESS: STREET 1: 5931 CAMPUS CIRCLE DR CITY: IRVING STATE: TX ZIP: 75063 BUSINESS PHONE: 2147147000 MAIL ADDRESS: STREET 1: PO BOX 619566 CITY: DFW STATE: TX ZIP: 75261 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on February 7, 1997. Registration No. 333-_________ - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 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 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 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) - ------------------------------------------------------------------------------ Common Stock, par value $0.10 per share............ 1,500,000 $13.48 $20,223,077 $6,132 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 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. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 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 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 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 (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 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 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 EX-5.1 2 EXHIBIT 5.1 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 EX-23.1 3 EXHIBIT 23.1 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 EX-99.1 4 EXHIBIT 99.1 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. 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 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 -----END PRIVACY-ENHANCED MESSAGE-----