**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,DC  20549**

----

**FORM 10-Q/A**

(Amendment No. 1)

**(MarkOne)**

**x        QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the quarterly period ended October 28, 2006**

**OR**

**o        TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the transition period from                to                **

**Commissionfile number 001-09338 **

----

**MICHAELSSTORES, INC.**(Exact name of registrant as specified in its charter)

| **Delaware**                                                     |   | **75-1943604**                           |
|------------------------------------------------------------------|--------|------------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |   | (I.R.S. employer  identification number) |

 

**8000Bent Branch DriveIrving, Texas 75063P.O. Box 619566DFW, Texas 75261-9566** (Address of principal executive offices,including zip code)

**(972)409-1300**(Registrant’s telephone number, including area code)

----

Indicate by check markwhether the Registrant: (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the Registrant was required to filesuch reports),and (2) has been subject to such filing requirements for the past90 days. Yes x No o

Indicate by check mark whetherthe Registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

| Large accelerated filer x |   | Accelerated  filer o |   | Non-accelerated  filer o |
|---------------------------|--------|----------------------|--------|--------------------------|

 

Indicate by check markwhether the Registrant is a shell company (as defined in Rule 12b-2 of theExchange Act). Yes o No x

Indicate the number of sharesoutstanding of each of the Registrant’s classes of Common Stock, as of thelatest practicable date.

| **Title**                               |   | **Shares  Outstanding as of October 31, 2006** |
|-----------------------------------------|--------|-----------------------------------------------------|
| Common Stock,  par value $.10 per share |   | 137,147,914                                         |

 

 

----

**MICHAELS STORES, INC.FORM 10-Q/A**

**EXPLANATORY NOTE**

This Amendment No. 1 onForm 10-Q/A to the Michaels Stores, Inc. Quarterly Report on Form 10-Qfor the quarterly period ended October 28, 2006 (the “Original Filing”) isbeing filed to include Item 4 of Part II, which item wasinadvertently omitted in the Original Filing. The Original Filing, as amended hereby, continues to speak as of thedate of the Original Filing and no disclosure in the Original Filing has beenupdated to speak to any later date.

**PART IIOTHER INFORMATION**

**Item 4.    Submission ofMatters to a Vote of Security Holders.**

** **A special meeting of ourstockholders was held on October 5, 2006 to consider and vote on the adoptionof the Agreement and Plan of Merger (the “Merger Agreement”), dated as of June30, 2006, as amended, among Bain Paste Mergerco, Inc., Blackstone PasteMergerco, Inc., Bain Paste Finco, LLC, Blackstone Paste Finco, LLC and MichaelsStores, Inc.

A total of105,246,803 shares of our common stock were present or represented by proxy atthe special meeting, which shares represented approximately 79% of the133,326,962 shares of our common stock outstanding as of the record dateestablished for the special meeting.  TheMerger Agreement was approved by the following vote:
| Votes For:        |   | 104,953,432 |   |
|-------------------|--------|-------------|--------|
| Votes Against:    |   | 202,822     |   |
| Votes to Abstain: |   | 90,549      |   |

 

## **Item 6.    Exhibits.**

| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                                                                                                                               | ** ** |
|-----------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|            |       |                                                                                                                                                                                                                                                                                     |       |
| 3.1             |       | Amended and Restated  Certificate of Incorporation of Michaels Stores, Inc. (previously filed as  Exhibit 3.1 to Form 8-K filed by Registrant on November 6, 2006, SEC File No.  001-09338).                                                                                             |       |
|            |       |                                                                                                                                                                                                                                                                                     |       |
| 3.2             |       | Amended and Restated  Bylaws of Michaels Stores, Inc. (previously filed as Exhibit 3.2 to Form 8-K  filed by Registrant on November 6, 2006, SEC File No. 001-09338).                                                                                                                    |       |
|            |       |                                                                                                                                                                                                                                                                                     |       |
| 4.1             |       | Senior Indenture, dated  as of October 31, 2006, among Michaels Stores, Inc., the guarantors named  therein and Wells Fargo Bank, National Association, as trustee. *                                                                                                                    |       |
|            |       |                                                                                                                                                                                                                                                                                     |       |
| 4.2             |       | Senior Subordinated  Indenture, dated as of October 31, 2006, among Michaels Stores, Inc., the  guarantors named therein and Wells Fargo Bank, National Association, as  trustee. *                                                                                                      |       |
|            |       |                                                                                                                                                                                                                                                                                     |       |
| 4.3             |       | Subordinated Discount  Indenture, dated as of October 31, 2006, among Michaels Stores, Inc., the  guarantors named therein and Wells Fargo Bank, National Association, as  trustee. *                                                                                                    |       |
|            |       |                                                                                                                                                                                                                                                                                     |       |
| 4.4             |       | Registration Rights  Agreement for the Senior Notes, dated as of October 31, 2006, among Michaels  Stores, Inc., the guarantors named therein and Deutsche Bank Securities Inc.,  J.P. Morgan Securities Inc., Banc of America Securities LLC and Credit Suisse  Securities (USA) LLC. * |       |

 

2

----

 
| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|-----------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 4.5             |       | Registration Rights  Agreement for the Senior Subordinated Notes, dated as of October 31, 2006,  among Michaels Stores, Inc., the guarantors named therein and Deutsche Bank  Securities Inc., J.P. Morgan Securities Inc., Banc of America Securities LLC  and Credit Suisse Securities (USA) LLC. *                                                                                                                                                                                                                                                        |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 4.6             |       | Registration Rights  Agreement for the Subordinated Discount Notes, dated as of October 31, 2006,  among Michaels Stores, Inc., the guarantors named therein and Deutsche Bank  Securities Inc., J.P. Morgan Securities Inc., Banc of America Securities LLC  and Credit Suisse Securities (USA) LLC. *                                                                                                                                                                                                                                                      |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 4.7             |       | Registration Rights  Agreement, dated as of October 31, 2006, among Michaels Stores, Inc. and  certain stockholders thereof. *                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 10.1            |       | Stockholders Agreement,  dated as of October 31, 2006, among Michaels Stores, Inc. and certain  stockholders thereof. *                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 10.2            |       | Management Agreement,  dated as of October 31, 2006, among Michaels Stores, Inc., Bain Capital  Partners, LLC and Blackstone Management Partners V LLC. *                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 10.3            |       | Management Agreement,  dated as of October 31, 2006, between Michaels Stores, Inc. and Highfields  Capital Management LP. *                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 10.4            |       | Credit Agreement, dated  as of October 31, 2006, among Michaels Stores, Inc., as lead borrower, the  facility guarantors named therein, Bank of America, N.A., as administrative  agent and collateral agent, Deutsche Bank Securities Inc., as syndication  agent, Credit Suisse, JPMorgan Chase Bank, N.A., Wells Fargo Retail Finance,  LLC, as co-documentation agents, the lenders named therein, and Banc of  America Securities LLC, Deutsche Bank Securities Inc. and J.P. Morgan  Securities Inc., as joint lead arrangers and joint bookrunners. * |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 10.5            |       | Credit Agreement, dated  as of October 31, 2006, among Michaels Stores, Inc., Deutsche Bank AG New  York Branch, as administrative agent, the other lenders named therein,  JPMorgan Chase Bank, N.A., as syndication agent, and Bank of America, N.A.  and Credit Suisse, as co-documentation agents, and Deutsche Bank Securities  Inc., J.P. Morgan Securities Inc. and Banc of America Securities LLC as  co-lead arrangers and joint bookrunners. *                                                                                                     |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 31.1            |       | Certifications of  Jeffrey N. Boyer pursuant to §302 of the Sarbanes-Oxley Act of 2002 (Form  10-Q). *                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 31.2            |       | Certifications of  Gregory A. Sandfort pursuant to §302 of the Sarbanes-Oxley Act of 2002 (Form  10-Q). *                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 31.3            |       | Certifications of  Jeffrey N. Boyer pursuant to §302 of the Sarbanes-Oxley Act of 2002  (Amendment No. 1, Form 10-Q/A) (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 31.4            |       | Certifications of  Gregory A. Sandfort pursuant to §302 of the Sarbanes-Oxley Act of 2002  (Amendment No. 1, Form 10-Q/A) (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 32.1            |       | Certification pursuant  to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley  Act of 2002 (Form 10-Q). *                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 32.2            |       | Certification pursuant  to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley  Act of 2002 (Amendment No. 1, Form 10-Q/A) (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                   |   |

----

*                    Previouslyfiled as a like-numbered exhibit to the Registrant’s Form 10-Q filed onDecember 7, 2006, SEC File No. 001-09338.

 

3

----

**MICHAELSSTORES, INC.FORM 10-Q/A**

**SIGNATURES**

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.
|                                      | MICHAELS STORES, INC. |
|--------------------------------------|-----------------------|
|                                 |                  |   |
|                                 | By:                   | /s/ Jeffrey N. Boyer |
|                                 |                  | Jeffrey N. Boyer |
|                                 |                  | President and Chief Financial Officer |
|                                 |                  | (Principal Financial Officer) |
|                                 |                  |   |
| Dated:  December 15,  2006 |                  |   |
|                                 |                  |   |

 

4

----

**INDEXTO EXHIBITS**
| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | ** ** |
|-----------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| 3.1             |       | Amended and Restated  Certificate of Incorporation of Michaels Stores, Inc. (previously filed as  Exhibit 3.1 to Form 8-K filed by Registrant on November 6, 2006, SEC File No.  001-09338).                                                                                                                                                                                                                                                                                                                                                                 |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 3.2             |       | Amended and Restated  Bylaws of Michaels Stores, Inc. (previously filed as Exhibit 3.2 to Form 8-K  filed by Registrant on November 6, 2006, SEC File No. 001-09338).                                                                                                                                                                                                                                                                                                                                                                                        |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 4.1             |       | Senior Indenture, dated  as of October 31, 2006, among Michaels Stores, Inc., the guarantors named  therein and Wells Fargo Bank, National Association, as trustee. *                                                                                                                                                                                                                                                                                                                                                                                        |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 4.2             |       | Senior Subordinated  Indenture, dated as of October 31, 2006, among Michaels Stores, Inc., the  guarantors named therein and Wells Fargo Bank, National Association, as  trustee. *                                                                                                                                                                                                                                                                                                                                                                          |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 4.3             |       | Subordinated Discount  Indenture, dated as of October 31, 2006, among Michaels Stores, Inc., the  guarantors named therein and Wells Fargo Bank, National Association, as  trustee. *                                                                                                                                                                                                                                                                                                                                                                        |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 4.4             |       | Registration Rights  Agreement for the Senior Notes, dated as of October 31, 2006, among Michaels  Stores, Inc., the guarantors named therein and Deutsche Bank Securities Inc.,  J.P. Morgan Securities Inc., Banc of America Securities LLC and Credit Suisse  Securities (USA) LLC. *                                                                                                                                                                                                                                                                     |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 4.5             |       | Registration Rights  Agreement for the Senior Subordinated Notes, dated as of October 31, 2006,  among Michaels Stores, Inc., the guarantors named therein and Deutsche Bank  Securities Inc., J.P. Morgan Securities Inc., Banc of America Securities LLC  and Credit Suisse Securities (USA) LLC. *                                                                                                                                                                                                                                                        |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 4.6             |       | Registration Rights  Agreement for the Subordinated Discount Notes, dated as of October 31, 2006,  among Michaels Stores, Inc., the guarantors named therein and Deutsche Bank  Securities Inc., J.P. Morgan Securities Inc., Banc of America Securities LLC  and Credit Suisse Securities (USA) LLC. *                                                                                                                                                                                                                                                      |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 4.7             |       | Registration Rights  Agreement, dated as of October 31, 2006, among Michaels Stores, Inc. and  certain stockholders thereof. *                                                                                                                                                                                                                                                                                                                                                                                                                               |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 10.1            |       | Stockholders Agreement,  dated as of October 31, 2006, among Michaels Stores, Inc. and certain  stockholders thereof. *                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 10.2            |       | Management Agreement,  dated as of October 31, 2006, among Michaels Stores, Inc., Bain Capital  Partners, LLC and Blackstone Management Partners V LLC. *                                                                                                                                                                                                                                                                                                                                                                                                    |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 10.3            |       | Management Agreement,  dated as of October 31, 2006, between Michaels Stores, Inc. and Highfields  Capital Management LP. *                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 10.4            |       | Credit Agreement, dated  as of October 31, 2006, among Michaels Stores, Inc., as lead borrower, the  facility guarantors named therein, Bank of America, N.A., as administrative  agent and collateral agent, Deutsche Bank Securities Inc., as syndication  agent, Credit Suisse, JPMorgan Chase Bank, N.A., Wells Fargo Retail Finance,  LLC, as co-documentation agents, the lenders named therein, and Banc of  America Securities LLC, Deutsche Bank Securities Inc. and J.P. Morgan  Securities Inc., as joint lead arrangers and joint bookrunners. * |       |   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |   |
| 10.5            |       | Credit Agreement, dated  as of October 31, 2006, among Michaels Stores, Inc., Deutsche Bank AG New  York Branch, as administrative agent, the other lenders named therein,  JPMorgan Chase Bank, N.A., as syndication agent, and Bank of America, N.A.  and Credit Suisse, as co-documentation agents, and Deutsche Bank Securities  Inc., J.P. Morgan Securities Inc. and Banc of America Securities LLC as  co-lead arrangers and joint bookrunners. *                                                                                                     |       |   |

 

5

----

 
| Exhibit  Number | ** ** | **Description of Exhibit**                                                                                                                                                 |   |
|-----------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 31.1            |       | Certifications of  Jeffrey N. Boyer pursuant to §302 of the Sarbanes-Oxley Act of 2002 (Form  10-Q). *                                                                |   |
|            |       |                                                                                                                                                                       |   |
| 31.2            |       | Certifications of  Gregory A. Sandfort pursuant to §302 of the Sarbanes-Oxley Act of 2002 (Form  10-Q). *                                                             |   |
|            |       |                                                                                                                                                                       |   |
| 31.3            |       | Certifications of  Jeffrey N. Boyer pursuant to §302 of the Sarbanes-Oxley Act of 2002  (Amendment No. 1, Form 10-Q/A) (filed herewith).                              |   |
|            |       |                                                                                                                                                                       |   |
| 31.4            |       | Certifications of  Gregory A. Sandfort pursuant to §302 of the Sarbanes-Oxley Act of 2002  (Amendment No. 1, Form 10-Q/A) (filed herewith).                           |   |
|            |       |                                                                                                                                                                       |   |
| 32.1            |       | Certification pursuant  to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley  Act of 2002 (Form 10-Q). *                                   |   |
|            |       |                                                                                                                                                                       |   |
| 32.2            |       | Certification pursuant  to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley  Act of 2002 (Amendment No. 1, Form 10-Q/A) (filed herewith). |   |

----

*                                         Previouslyfiled as a like-numbered exhibit to the Registrant’s Form 10-Q filed onDecember 7, 2006, SEC File No. 001-09338.

6

----