Exhibit
10.3


 


Name of Employee


 


MICHAELS STORES, INC.


2006 EQUITY INCENTIVE PLAN


 


Restricted Stock Award Agreement


 


Michaels
Stores, Inc.


8000
Bent Branch Drive


Irving,
Texas 75063


 


Attn:


 


Ladies
and Gentlemen:


 


The
undersigned (i) acknowledges that [he/she] has received an award (the “Award”)
of restricted stock from Michaels Stores, Inc. (the “Company”) under the
Michaels Stores, Inc. 2006 Equity Incentive Plan (the “Plan”), subject to
the terms set forth below and in the Plan; (ii) further acknowledges receipt
of a copy of the Plan as in effect on the date hereof; and (iii) agrees
with the Company as follows:


 


1.               Effective
Date.  This
Agreement shall take effect as of             ,
20    , which is the date of grant of the Award.


 


2.               Shares
Subject to Award.  The Award
consists of                   
shares (the “Shares”) of common stock of the Company (“Stock”).  The undersigned’s rights to the Shares are
subject to the restrictions described in this Agreement and the Plan (which is
incorporated herein by reference with the same effect as if set forth herein in
full) in addition to such other restrictions, if any, as may be imposed by law.


 


3.               Meaning
of Certain Terms.  Except as
otherwise expressly provided, all terms used herein shall have the same meaning
as in the Plan.  The term “vest” as used
herein with respect to any Share means the lapsing of the restrictions
described herein with respect to such Share.


 


4.               Nontransferability
of Shares.  The Shares
acquired by the undersigned pursuant to this Agreement shall not be sold,
transferred, pledged, assigned or otherwise encumbered or disposed of except as
provided below and in the Plan.


 


5.               Vesting
of Shares.  The shares
acquired hereunder shall vest in accordance with the provisions of this
Paragraph 5 and applicable provisions of the Plan, as follows:                    
Shares on         , 20    ,
                  
Shares on         , 20    ,
                
Shares on           , 20    ,
                  
Shares on           , 20    ,
and                   
on and after           , 20    .  Notwithstanding the foregoing, no shares
shall vest on any vesting date specified above unless the undersigned is then,
and since the date of grant has continuously been, employed by the Company or
its subsidiaries.   In the event that the
undersigned’s employment is terminated due to her death, by the Company other
than for “Cause” or for “Disability,” all then outstanding and unvested Shares
acquired by the undersigned hereunder shall automatically and immediately vest.  “Cause” shall mean the following events or
conditions, as determined by the Board in its 


 

















 


reasonable judgment: (i) the undersigned’s refusal or failure to
perform (other than by reason of disability), or material negligence in the
performance of, her duties and responsibilities to the Company or any of its
Affiliates, or refusal or failure to follow or carry out any reasonable
direction of the Board, and the continuance of such refusal, failure or
negligence for a period of ten (10) days after notice to the undersigned; (ii) the
material breach by the undersigned of any provision of any material agreement
between the undersigned and the Company or any of its Affiliates; (iii) fraud,
embezzlement, theft or other dishonesty by the undersigned with respect to the
Company or any of its Affiliates; (iv) the conviction of, or a plea of nolo contendere by, the undersigned to any felony or any
other crime involving dishonesty or moral turpitude; and (v) any other
conduct that involves a breach of fiduciary obligation on the part of the undersigned.  “Disability” shall mean that the undersigned becomes
disabled during her employment hereunder through any illness, injury, accident
or condition of either a physical or psychological nature and, as a result, is unable
to perform substantially all of her duties and responsibilities hereunder,
notwithstanding the provision of any reasonable accommodation, for one hundred
and eighty (180) days during any period of three hundred and sixty-five (365)
consecutive calendar days.


 


6.               Forfeiture
Risk.  Except as
provided in Section 5 above, if the undersigned ceases to be employed by
the Company and its subsidiaries for any reason, any then outstanding and
unvested Shares acquired by the undersigned hereunder shall be automatically
and immediately forfeited.  The
undersigned hereby (i) appoints the Company as the attorney-in-fact of the
undersigned to take such actions as may be necessary or appropriate to
effectuate a transfer of the record ownership of any such shares that are
unvested and forfeited hereunder, (ii) agrees to deliver to the Company,
as a precondition to the issuance of any certificate or certificates with
respect to unvested Shares hereunder, one or more stock powers, endorsed in
blank, with respect to such Shares, and (iii) agrees to sign such other
powers and take such other actions as the Company may reasonably request to
accomplish the transfer or forfeiture of any unvested Shares that are forfeited
hereunder.


 


7.               Retention
of Certificates.  Any
certificates representing unvested Shares shall be held by the Company.  If unvested Shares are held in book entry
form, the undersigned agrees that the Company may give stop transfer
instructions to the depository to ensure compliance with the provisions hereof.


 


8.              Effect
of Certain Transactions.  In the event of a Change of Control (as
defined in the Stockholders Agreement), all then outstanding and unvested
Shares acquired by the undersigned hereunder shall automatically and
immediately vest.


 


9.               Joinder
to Agreements.  The
undersigned acknowledges and agrees that the Shares acquired hereunder will be
subject to the Stockholders Agreement and to the Registration Rights Agreement
and the transfer and other restrictions, rights, and obligations set forth in
those agreements.  By executing this
Agreement, the undersigned hereby becomes a party to and bound by the
Stockholders Agreement and the Registration Rights Agreement as a Manager (as
such term is defined in those agreements), without any further action on the part
of the undersigned, the Company or any other Person.


 


10.         Legend.  Any certificates representing unvested Shares
shall be held by the Company, and any such certificate shall contain a legend
substantially in the following form:


 


THE
TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY
ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE MICHAELS
STORES, INC. 2006 EQUITY 


 


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INCENTIVE
PLAN AND A RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED
OWNER AND MICHAELS STORES, INC.  COPIES
OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF MICHAELS STORES, INC.


 


As soon as practicable following the vesting of any such Shares the
Company shall cause a certificate or certificates covering such Shares, without
the aforesaid legend, to be issued and delivered to the undersigned.  If any Shares are held in book-entry form,
the Company may take such steps as it deems necessary or appropriate to record
and manifest the restrictions applicable to such Shares.


 


11.         Dividends, etc..  The undersigned shall be entitled to (i) receive
any and all dividends or other distributions paid with respect to those Shares
of which [he/she] is the record owner on the record date for such dividend or
other distribution, and (ii) vote any Shares of which [he/she] is the
record owner on the record date for such vote; provided,
however, that any property (other than cash) distributed with
respect to a share of Stock (the “associated share”) acquired hereunder,
including without limitation a distribution of Stock by reason of a stock
dividend, stock split or otherwise, or a distribution of other securities with
respect to an associated share, shall be subject to the restrictions of this
Agreement in the same manner and for so long as the associated share remains
subject to such restrictions, and shall be promptly forfeited if and when the
associated share is so forfeited;  and further provided, that the
Administrator may require that any cash distribution with respect to the Shares
other than a normal cash dividend be placed in escrow or otherwise made subject
to such restrictions as the Administrator deems appropriate to carry out the
intent of the Plan.  References in this Agreement
to the Shares shall  refer, mutatis mutandis, to any such restricted amounts.


 


12.         Sale of Vested Shares.  The undersigned understands
that [he/she] will be free to sell any Share once it has vested, subject to (i) satisfaction
of any applicable tax withholding requirements with respect to the vesting or
transfer of such Share; (ii) the completion of any administrative steps
(for example, but without limitation, the transfer of certificates) that the
Company may reasonably impose; (iii) applicable requirements of federal
and state securities laws, (iv) the Stockholders Agreement; and (v) the
Registration Rights Agreement.


 


13.         Certain Tax Matters.  The undersigned expressly acknowledges the
following:


 


a.               The undersigned has been
advised to confer promptly with a professional tax advisor to consider whether
the undersigned should make a so-called “83(b) election” with respect to
the Shares.  Any such election, to be
effective, must be made in accordance with applicable regulations and within
thirty (30) days following the date of this Award.  The Company has made no recommendation to the
undersigned with respect to the advisability of making such an election.


 


b.              The award or vesting of the
Shares acquired hereunder, and the payment of dividends with respect to such
Shares, may give rise to “wages” subject to withholding.  The undersigned expressly acknowledges and
agrees that her rights hereunder are subject to her promptly paying to the
Company in cash (or by such other means as may be acceptable to the Company in
its discretion, including, if the Administrator so determines, by the delivery
of previously acquired Stock or shares of Stock acquired hereunder or by the
withholding of amounts from any payment hereunder) all taxes required to be
withheld in connection with such award, vesting or payment.


 


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  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  
	
  The
  foregoing Restricted Stock

  	
   

  
	
  Award
  Agreement is hereby accepted:

  	
   

  
	
   

  	
   

  
	
  MICHAELS
  STORES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
				



 


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