Exhibit 10.5

FOURTH AMENDMENT
TO THE
MICHAELS STORES, INC. EMPLOYEES 401(k) PLAN
(As Amended and Restated Effective August 1, 1999)

      Michaels Stores, Inc., a Delaware corporation, pursuant to authority of
the Board of Directors, adopts the following amendments to the Michaels Stores,
Inc. Employees 401(k) Plan (the “Plan”), effective as of January 1, 2004:

      1. Section 3.1 of the Plan (“Salary Reduction Contributions”) is amended
by the addition of the following new subsection thereto:

(g) Effective as soon as the Administration Committee determines it is
administratively feasible to implement the provisions of this subsection, a
Participant who will attain age 50 by the close of a Plan Year shall be eligible
to make catch-up Salary Reduction Contributions for such Plan Year in accordance
with, and subject to the limitations of, Code Section 414(v). Such catch-up
Salary Reduction Contributions shall not be taken into account for purposes of
the provisions of the Plan implementing the required limitations of Code
Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the
provisions of the Plan implementing the requirements of Code Sections 401(k)(3),
401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, solely
because of such catch-up Salary Reduction Contributions.

      2. Subsection (b) of Section 4.1 of the Plan (“Employer Matching
Contributions”) is amended in its entirety by adding the following provision
thereto:

Each Employer shall also make an additional Employer Matching Contribution with
respect to each Participant for whom Salary Reduction Contributions made during
the Plan Year and designated as catch-up Salary Reduction Contributions when
made are determined not to be catch-up Salary Reduction Contributions. The
additional Employer Matching Contribution will be the amount necessary to cause
the Employer Matching Contributions for such Participant for the Plan Year to be
equal to the amount required by Section 4.1(a) calculated as if such
recharacterized Salary Reduction Contributions had been taken into account in
the pay period in which they were made.

      3. Section 4.1 of the Plan is further amended by the addition of a new
subsection (c) thereto to read as follows:

(c) For purposes of determining Employer Matching Contributions under
Sections 4.1(a) and 4.1(b) above, catch-up Salary Reduction Contributions made
pursuant to Section 3.1(g) shall not be taken into account.

 

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      4. Section 4.2 of the Plan is amended in its entirety to read as follows:

4.2 Timing of Employer Matching Contributions. With respect to Employer Matching
Contributions made pursuant to Sections 4.1(a) and 4.1(b), each Employer shall
forward Employer Matching Contributions to the Trustee for investment in the
Trust Fund as soon as administratively feasible after determining the amount of
the Employer Matching Contributions for the applicable pay period and Plan Year,
respectively.

      Executed this 1st day of April, 2004.

            MICHAELS STORES, INC.
      By:   /s/ Sue Elliott         Name:   Sue Elliott        Title:   SVP -
Human Resources     

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