**Exhibit 10.2**     [FORM OF] CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”)dated as of April 26, 2006, between Michaels Stores, Inc., a Delawarecorporation (the “Company”), and [NAME] (the “Executive”).          WHEREAS the Executive is a skilled and dedicated employee of the Company who has importantmanagement responsibilities and talents that benefit the Company;          WHEREAS the Board of Directors of the Company (the “Board”) considers it essential tothe best interests of the Company and its stockholders to assure that the Company and itssubsidiaries will have the continued dedication of the Executive, notwithstanding the possibility,threat or occurrence of a Change in Control (as defined below); and          WHEREAS the Board believes that it is imperative to diminish the distraction of the Executiveby virtue of the uncertainties and risks created by the circumstances surrounding a Change inControl and to ensure the Executive’s full attention to the Company and its subsidiaries duringsuch a period of uncertainty;          NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants containedherein, and intending to be legally bound hereby, the parties hereto agree as follows:          SECTION 1. Definitions. For purposes of this Agreement, the following terms shallhave the meanings set forth below:     (a) “280G Gross-Up Payment” shall have the meaning set forth in Section 7(a).     (b) “409A Gross-Up Payment” shall have the meaning set forth in Section 13.     (c) “Accounting Firm” shall have the meaning set forth in Section 7(b).     (d) “Accrued Rights” shall have the meaning set forth in Section 6(a).     (e) “Affiliate(s)” means, with respect to any specified Person, any other Person that,directly or indirectly, through one or more intermediaries, controls, is controlled by, or is undercommon control with, such specified Person.     (f) “Annual Base Salary” shall have the meaning set forth in Section 4(a).     (g) “Annual Bonus” shall have the meaning set forth in Section 4(b).     (h) “Average Annual Incentive Award” means, as of the Termination Date, the averageannual incentive award payable or actually paid to the Executive in respect of the three fiscalyears preceding the Termination Date; provided, however, that (i) for any fiscalyear during which an annual incentive award that was paid or is payable to the Executive wasprorated because of less than a full fiscal year of plan participation or employment, such awardshall be annualized and (ii) if the Executive was not employed during any of the three fiscal yearsimmediately preceding the Termination Date or otherwise was not eligible to receive an

 

2annual incentive award for such fiscal year, the Average Annual Incentive Award shall bedetermined on the basis of the number of fiscal years during such period with respect to which theExecutive was eligible to receive such an award.     (i) “Cause” means the occurrence of any one of the following:     (i) the Executive is convicted of, or pleads guilty or nolo contendere to, afelony involving moral turpitude or that involves misappropriation of the assets of theCompany or a Subsidiary;     (ii) the Executive commits one or more acts or omissions constituting fraud or willfulmisconduct that have a material detrimental effect on the Company; or     (iii) the Executive’s willful and continued failure to perform substantially theExecutive’s employment duties in any material respect (other than as a result of incapacitydue to physical or mental illness or after delivery by the Executive of a Notice ofTermination for Good Reason) after a written demand for substantial performance is deliveredto the Executive that specifically identifies the manner in which the Company believes theExecutive has failed to perform his or her duties, and after the Executive has failed toresume substantial performance of the Executive’s duties on a continuous basis within 30days of receiving such demand.               For purposes of this provision, no act or failure to act on the part of the Executive shall beconsidered “willful” unless it is done, or omitted to be done, by the Executive in bad faith orwithout reasonable belief that the Executive’s action or omission was in the best interests of theCompany. The termination of employment of the Executive for Cause shall not be effective unlessand until there shall have been delivered to the Executive a copy of a resolution duly adopted bythe affirmative vote of not less than three-fourths of the entire membership of the Board(excluding the Executive) at a meeting of the Board called and held for such purpose (afterreasonable notice is provided to the Executive and the Executive is given an opportunity, togetherwith counsel, to be heard before the Board), finding that, in the good faith opinion of the Board,the Executive is guilty of the conduct described in clause (i), (ii) or (iii) above and specifyingthe particulars thereof in detail.     (j) “Change in Control” means the occurrence of any of the following:     (i) individuals who, as of the date of this Agreement, were members of the Board (the“Incumbent Directors”) cease for any reason to constitute at least a majority of theBoard; provided, however, that any individual becoming a director subsequentto the date of this Agreement whose election, or nomination for election, by the Company’sstockholders was approved by a vote of at least a majority of the Incumbent Directors shallbe considered as though such individual were an Incumbent Director, but excluding, forpurposes of this proviso, any such individual whose assumption of office after the date ofthis Agreement occurs as a result of an actual or threatened proxy contest with respect toelection or removal of directors or other actual or threatened solicitation of proxies orconsents by or on behalf of a “person” (as such term is used in Section 13(d) of theExchange Act) (each, a “Person”), other than the Board;

 

3     (ii) the consummation of (A) a merger, consolidation, statutory share exchange orsimilar form of corporate transaction involving (x) the Company or (y) any of itsSubsidiaries, but in the case of this clause (y) only if Company Voting Securities (asdefined below) are issued or issuable (each of the events referred to in this clause (A)being hereinafter referred to as a “Reorganization”) or (B) a sale or otherdisposition of all or substantially all the assets of the Company (a “Sale”),unless, immediately following such Reorganization or Sale, (1) all or substantially all theindividuals and entities who were the “beneficial owners” (as such term is defined in Rule13d-3 under the Exchange Act (or a successor rule thereto)) of shares of the Company’scommon stock or other securities eligible to vote for the election of the Board outstandingimmediately prior to the consummation of such Reorganization or Sale (such securities, the“Company Voting Securities”) beneficially own, directly or indirectly, more than 60%of the combined voting power of the then outstanding voting securities of the corporation orother entity resulting from such Reorganization or Sale (including a corporation or otherentity that, as a result of such transaction, owns the Company or all or substantially allthe Company’s assets either directly or through one or more subsidiaries) (the“Continuing Entity”) in substantially the same proportions as their ownership,immediately prior to the consummation of such Reorganization or Sale, of the outstandingCompany Voting Securities (excluding any outstanding voting securities of the ContinuingEntity that such beneficial owners hold immediately following the consummation of theReorganization or Sale as a result of their ownership prior to such consummation of votingsecurities of any corporation or other entity involved in or forming part of suchReorganization or Sale other than the Company or a Subsidiary), (2) no Person (excluding anyemployee benefit plan (or related trust) sponsored or maintained by the Continuing Entity orany corporation or other entity controlled by the Continuing Entity) beneficially owns,directly or indirectly, 20% or more of the combined voting power of the then outstandingvoting securities of the Continuing Entity and (3) at least a majority of the members of theboard of directors or other governing body of the Continuing Entity were Incumbent Directorsat the time of the execution of the definitive agreement providing for such Reorganizationor Sale or, in the absence of such an agreement, at the time at which approval of the Boardwas obtained for such Reorganization or Sale;     (iii) the stockholders of the Company approve a plan of complete liquidation ordissolution of the Company; or     (iv) any Person, corporation or other entity or group (within the meaning of Section13(d)(3) or 14(d)(2) of the Exchange Act) becomes the beneficial owner, directly orindirectly, of securities of the Company representing 20% or more of the combined votingpower of the Company Voting Securities; provided, however, that for purposesof this subparagraph (iv), the following acquisitions shall not constitute a Change inControl: (A) any acquisition directly from the Company, (B) any acquisition by the Companyor any Subsidiary, (C) any acquisition by any employee benefit plan (or related trust)sponsored or maintained by the Company or any Subsidiary, (D) any acquisition by anunderwriter temporarily holding such Company Voting Securities pursuant to an offering ofsuch securities or (E) any acquisition pursuant to a Reorganization or Sale that does notconstitute a Change in Control for purposes of Section 1(j)(ii).

 

4     (k) “COBRA” shall have the meaning set forth in Section 6(b)(iii).     (l) “Code” means the Internal Revenue Code of 1986, as amended from time to time, andthe regulations promulgated thereunder.     (m) “Company Voting Securities” shall have the meaning set forth in Section 1(j)(ii).     (n) “Continuing Entity” shall have the meaning set forth in Section 1(j)(ii).     (o) “Disability” shall have the meaning set forth in Section 6(c)(ii).     (p) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended fromtime to time, and the regulations promulgated thereunder.     (q) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time totime, or any successor statute thereto.     (r) “Excise Tax” means the excise tax imposed by Section 4999 of the Code, togetherwith any interest or penalties imposed with respect to such tax.     (s) “Extension Date” shall have the meaning set forth in Section 24.     (t) “Good Reason” means, without the Executive’s express written consent, theoccurrence of any one or more of the following at any time during the Retention Period:     (i) any failure by the Company to comply with the provisions of Section 3 of thisAgreement, including the assignment to the Executive of duties and responsibilities that arematerially inconsistent with the Executive’s status, offices, titles and reportingrelationships as in effect immediately prior to the Retention Start Date (but in no eventprior to the date of this Agreement), but excluding for this purpose an isolated,insubstantial and inadvertent action not taken in bad faith and which is remedied by theCompany within ten business days after receipt of notice thereof given by the Executive;     (ii) any failure by the Company to comply with any of the provisions of Section 4 or 5of this Agreement, other than an isolated, insubstantial and inadvertent failure notoccurring in bad faith and which is remedied by the Company within ten business days afterreceipt of notice thereof given by the Executive;     (iii) a change of the Executive’s principal place of employment to a location more than50 miles from the Executive’s principal place of employment immediately prior to theRetention Start Date;     (iv) any failure of the Company to pay the Executive any compensation when due (otherthan an inadvertent failure that is remedied within ten business days after receipt ofnotice thereof given by the Executive);     (v) delivery by the Company or any Subsidiary of a notice to the Executive of theintent to terminate the Executive’s employment for any reason, other than for Cause or

 

5Disability, in each case in accordance with this Agreement, regardless of whether suchtermination is intended to become effective during or after the Retention Period; or     (vi) any failure by the Company to comply with and satisfy Section 14(c) of thisAgreement.          The Executive’s right to terminate employment for Good Reason shall not be affected by theExecutive’s incapacity due to physical or mental illness. A termination of employment by theExecutive for Good Reason for purposes of this Agreement shall be effectuated by giving the Companywritten notice (“Notice of Termination for Good Reason”) of the termination setting forthin reasonable detail the specific conduct of the Company that constitutes Good Reason and thespecific provision(s) of this Agreement on which the Executive relied. Unless the parties agreeotherwise, a termination of employment by the Executive for Good Reason shall be effective on the30th day following the date when the Notice of Termination for Good Reason is given, unless thenotice sets forth a later date (which date shall in no event be later than 60 days after the noticeis given); provided, however, that so long as an event that constitutes Good Reasonoccurs during the Retention Period and the Executive delivers the Notice of Termination for GoodReason at any time prior to the expiration of the Retention Period, for purposes of the payments,benefits and other entitlements set forth in Section 6(b), the termination of the Executive’semployment pursuant thereto shall be deemed to be a resignation for Good Reason during theRetention Period. If the Company disputes the existence of Good Reason, the Company shall have theburden of proof to establish that Good Reason does not exist. If the Executive continues toprovide services to the Company after one of the events giving rise to Good Reason has occurred,the Executive shall not be deemed to have consented to such event or to have waived the Executive’sright to terminate his or her employment at any time during the Retention Period for Good Reason inconnection with such event.     (u) “Incumbent Directors” shall have the meaning set forth in Section 1(j)(i).     (v) “Notice of Termination for Good Reason” shall have the meaning set forth inSection 1(t).     (w) “Payment” means any payment, benefit or distribution (or combination thereof) bythe Company, any of its Affiliates or any trust established by the Company or its Affiliates, to orfor the benefit of the Executive, whether paid, payable, distributed, distributable or providedpursuant to this Agreement or otherwise, including any payment, benefit or other right thatconstitutes a “parachute payment” within the meaning of Section 280G of the Code.     (x) “Person” shall have the meaning set forth in Section 1(j)(i).     (y) “Reimbursement Period” shall have the meaning set forth in Section 9.     (z) “Release Effective Date” shall have the meaning set forth in Section 6(b)(i).     (aa) “Reorganization” shall have the meaning set forth in Section 1(j)(ii).     (bb) “Retention Period” means the period commencing on the Retention Start Date andending on the earlier of (i) the second anniversary of the Retention Start Date and (ii) the

 

6Termination Date. For the avoidance of doubt, in the event that the Retention Period ends onthe Termination Date, the Retention Period shall be deemed (including for purposes of Section 6(b))to include the Termination Date.     (cc) “Retention Start Date” means the date on which a Change in Control occurs duringthe Term; provided, however, that if, prior to the date on which such Change inControl occurs, the Executive’s employment with the Company or its Subsidiaries is terminated bythe Company or its Subsidiaries other than for Cause or Disability and such termination took place(i) at the request or direction of a third party who took action that caused, or is involved in orforms a part of, a Change in Control or (ii) in contemplation of an event that would constitute orgive rise to a Change in Control, the Retention Start Date shall be deemed to have occurredimmediately prior to the Termination Date.     (dd) “Retirement Plan” means any “employee pension benefit plan” within the meaning ofSection 3(2) of ERISA, including any tax-qualified, nonqualified, excess benefit and supplementaldefined benefit and defined contribution plan.     (ee) “Sale” shall have the meaning set forth in Section 1(j)(ii).     (ff) “Section 409A Tax” shall have the meaning set forth in Section 13.     (gg) “Subsidiary” means any entity in which the Company, directly or indirectly,possesses 50% or more of the total combined voting power of all classes of its stock.     (hh) “Successor” shall have the meaning set forth in Section 14(c).     (ii) “Term” shall have the meaning set forth in Section 24.     (jj) “Termination Date” means the date on which the termination of the Executive’semployment is effective, in accordance with the terms of this Agreement.     (kk) “Underpayment” shall have the meaning set forth in Section 7(b).               SECTION 2. Continued Employment. The Company hereby agrees to continue, or to causeits Subsidiaries to continue, the Executive’s employment and the Executive hereby agrees to remainin the employ of the Company or its Subsidiaries during the Retention Period. Notwithstanding theforegoing, this Agreement does not alter the status of the Executive as an at-will employee, andnothing herein shall reduce or eliminate the right of the Company and its Subsidiaries to terminatethe Executive’s employment at any time for any reason or the right of the Executive to resign atany time for any reason, in each case, subject to the terms, conditions and obligations set forthin this Agreement.               SECTION 3. Position and Duties. During the Retention Period, the Executive’s status,offices, titles and reporting relationships with the Company and its Subsidiaries shall becommensurate with those in effect immediately prior to the Retention Start Date. The duties andresponsibilities assigned to the Executive may be increased, decreased or otherwise changed duringthe Retention Period, provided that the duties and responsibilities assigned to theExecutive at any given time are not materially inconsistent with the Executive’s status, offices,titles and reporting relationships as in effect immediately prior to the Retention Start Date.

 

7               SECTION 4. Compensation and Benefits During the Retention Period. (a) AnnualBase Salary. During the Retention Period, the Executive shall be paid an annual base salary(“Annual Base Salary”), in equal biweekly installments, at least equal to the annual rateof base salary being paid to the Executive by the Company and its Subsidiaries as of the RetentionStart Date. The Annual Base Salary shall be reviewed at least annually and shall be increasedduring the Retention Period in a manner that is substantially consistent with increases in basesalary generally awarded to other peer executives of the Company and its Subsidiaries. Annual BaseSalary shall not be reduced after any such increase, and the term “Annual Base Salary” as used inthis Agreement shall refer to Annual Base Salary as so increased.     (b) Annual Bonus. For each fiscal year ending during the Retention Period, theExecutive shall be awarded an annual cash bonus (“Annual Bonus”) that is equal to orgreater than the annual incentive award paid or payable to the Executive with respect to the fiscalyear preceding the fiscal year in which the Retention Start Date occurs. Each such Annual Bonusshall be paid no later than the date that is two and a half months following the end of the fiscalyear for which the Annual Bonus is awarded.     (c) Long-Term Incentive Compensation. During the Retention Period, the Executiveshall be entitled to participate in all long-term incentive compensation plans, practices, policiesand programs applicable generally to other peer executives of the Company and its Subsidiaries, butin no event shall such plans, practices, policies and programs provide the Executive with long-termincentive opportunities and potential benefits, both as to amount and percentage of compensation(but without regard to transfer restrictions or other limits on resale that may be applicable ifthe common stock of the Company ceases to be publicly traded), that are less favorable, in theaggregate, than the opportunities and benefits provided by the Company and its Subsidiaries to theExecutive under the Company’s equity-compensation and other long-term incentive compensation plans(including stock options, stock appreciation rights, restricted stock awards, restricted stockunits, performance shares and performance units) as in effect immediately prior to the RetentionStart Date or, if more favorable to the Executive, those provided generally at any time after theRetention Start Date to other peer executives of the Company and its Subsidiaries.     (d) Savings and Retirement Plan Benefits. During the Retention Period, the Executiveshall be entitled to participate in all savings and retirement plans, practices, policies andprograms applicable generally to other peer executives of the Company and its Subsidiaries, but inno event shall such plans, practices, policies and programs provide the Executive with savingsopportunities and retirement benefit opportunities, in each case, that are less favorable (withoutregard to whether Company stock is available as an investment alternative), in the aggregate, thanthe opportunities provided by the Company and its Subsidiaries to the Executive immediately priorto the Retention Start Date or, if more favorable to the Executive, those provided generally at anytime after the Retention Start Date to other peer executives of the Company and its Subsidiaries.     (e) Welfare and Fringe Benefits. During the Retention Period, the Executive or theExecutive’s family, as the case may be, shall be eligible to participate in, and shall receive allbenefits under, the welfare benefit and fringe benefit plans, practices, policies and programsprovided by the Company and its Subsidiaries (including medical, executive medical, executivephysical examination, prescription drug, dental, vision, short-term disability, long-term

 

8disability, salary continuance, paid vacation and time-off, employee life, group life,executive life, accidental death and dismemberment and business travel accident insurance plans,practices, policies and programs) to the extent applicable generally to other peer executives ofthe Company and its Subsidiaries, but in no event shall such plans, practices, policies andprograms provide the Executive with benefits less favorable, in the aggregate, than the benefits ineffect for the Executive immediately prior to the Retention Start Date or, if more favorable to theExecutive, those provided generally at any time after the Retention Start Date to other peerexecutives of the Company and its Subsidiaries.               SECTION 5. Impact of a Change in Control on Long-Term Incentive Compensation Awards.In the event of a Change in Control during the Term, notwithstanding any provision to the contraryin any of the Company’s equity-based, equity-related or other long-term incentive compensationplans, practices, policies and programs (including the Company’s Amended and Restated 1997 StockOption Plan, the Company’s Second Amended and Restated 2001 General Stock Option Plan, theCompany’s Second Amended and Restated 2001 Employee Stock Option Plan and the Company’s 2005Incentive Compensation Plan) or any award agreements thereunder, (a) all outstanding stock options,stock appreciation rights and similar rights and awards then held by the Executive that areunexercisable or otherwise unvested shall automatically become fully vested and immediatelyexercisable, as the case may be, (b) all outstanding equity-based, equity-related and otherlong-term incentive awards then held by the Executive that are subject to performance-based vestingcriteria shall automatically become fully vested and earned at a deemed performance level equal tothe maximum performance level with respect to such awards and (c) all other outstandingequity-based, equity-related and long-term incentive awards, to the extent not covered by theforegoing clause (a) or (b), then held by the Executive that are unvested or subject torestrictions or forfeiture shall automatically become fully vested and all restrictions andforfeiture provisions related thereto shall lapse.               SECTION 6. Termination of Employment. (a) Termination by the Company for Cause;Voluntary Resignation by the Executive without Good Reason. If, during the Retention Period,the Executive’s employment is terminated either by the Company or its Subsidiaries for Cause or byresignation of the Executive without Good Reason, the Executive shall not be entitled to anycompensation or benefits hereunder other than (i) payment of any unpaid annual base salary, annualbonus or other amount accrued through the Termination Date and for payment of any unreimbursedbusiness expenses incurred through the Termination Date, (ii) as explicitly set forth in any otherbenefit plans, practices, policies and programs in which the Executive participates, (iii) asotherwise expressly required by applicable law and (iv) any payments the Company is or becomesobligated to make pursuant to Sections 7, 8, 9, 11, 13 or 16 (the amounts described in clauses (i),(ii), (iii) and (iv) of this Section 6(a) are referred to herein as the “Accrued Rights”).     (b) Termination During the Retention Period by the Company Without Cause or by theExecutive for Good Reason. Subject to Section 6(b)(vii), if the Executive’s employment isterminated either by the Company or its Subsidiaries other than for Cause or Disability or byresignation of the Executive with Good Reason, in each case during the Retention Period, then, inaddition to the Accrued Rights, the Executive shall be entitled to the following payments andbenefits:

 

9               (i) Severance Pay. The Company shall pay the Executive an amount equal to [MULTIPLE]1 times the sum of (A) the Executive’s Annual Base Salary in effect on the TerminationDate (without regard to any reduction giving rise to Good Reason) and (B) the greater of theAverage Annual Incentive Award and the target Annual Bonus in effect as of the Termination Date, ina lump-sum payment payable on the tenth business day after the date the release described inSection 6(b)(vii) becomes effective and irrevocable (the “Release Effective Date”);provided, however, that such amount shall be paid in lieu of, and the Executivehereby waives the right to receive, any other cash severance payment relating to salary or bonuscontinuation the Executive is otherwise eligible to receive upon termination of employment underany severance plan, practice, policy or program of the Company or any Subsidiary, other than theExecutive’s rights under the Change in Control Bonus Program or any other change in control orother retention bonus plan, practice, policy or program of the Company or any Subsidiary.               (ii) Prorated Annual Bonus. The Company shall pay the Executive an amount equal tothe product of (A) the Executive’s target Annual Bonus in effect as of the Termination Date and (B)a fraction, the numerator of which is the number of days in the current fiscal year through theTermination Date, and the denominator of which is 365, in a lump-sum payment on the tenth businessday after the Release Effective Date. Provided that the Release Effective Date has occurred, inthe event that the Company or its Subsidiaries make payments under the annual incentive plan inwhich the Executive participates immediately prior to the Termination Date to participants whoremain actively employed by the Company or its Subsidiaries throughout the remainder of the fiscalyear in which the Termination Date occurs at a level that exceeds the target level for suchparticipants, the Company shall make an additional payment to the Executive (such payment, an“Additional Annual Bonus Payment”), in an amount equal to the product of (1) the excess of(x) the Annual Bonus the Executive would have received during such fiscal year had he or sheremained actively employed and been paid at the same level as such other participants over (y) theExecutive’s target Annual Bonus in effect as of the Termination Date and (2) a fraction, thenumerator of which is the number of days in the year of termination through the Termination Date,and the denominator of which is 365, in a lump sum at the time payments under such plan are made tosuch other participants.               (iii) Continued Welfare and Fringe Benefits. Commencing on the Release Effective Dateand for [MULTIPLE] 1 years thereafter (such period, the “Continuation Period”),the Company shall continue to provide welfare benefits and fringe benefits to the Executive and theExecutive’s spouse and dependents at least equal to the levels described in Section 4(e);provided, however, that (A) if the Executive becomes reemployed with anotheremployer and is eligible to receive medical or other welfare benefits under anotheremployer-provided plan, the medical and other welfare benefits described herein shall be secondaryto those provided under such other plan during such applicable period of eligibility and (B) to theextent that it is commercially impracticable for the Company to continue to provide the Executivewith any of the benefits described in Section 4(e) at the level described in Section 4(e) followingtermination of the Executive’s employment, the Company shall instead be permitted to make alump-sum 1 For the President and Chief Financial Officerand the President and Chief Operating Officer, the Multiple will be 3. Foreach of the other Executives, the Multiple will be 2. A list of Executives whohave entered into Change in Control Severance Agreements is attached asSchedule A hereto.

 

10cash payment to the Executive in an amount equal to the Company’s aggregate cost of providingsuch benefit at such level to a similarly situated active employee of the Company or any Subsidiaryduring the Continuation Period. Nothing in this Section 6(b)(iii) shall operate to reduce, or beconstrued as reducing, the Executive’s group health plan continuation rights under the ConsolidatedOmnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), in any manner and, uponthe end of the Continuation Period, the Executive, if otherwise eligible, shall be entitled toelect COBRA continuation coverage for the full period applicable as if the last date of theContinuation Period were the date of the Executive’s termination of employment.               (iv) Long-Term Incentive Compensation Awards. Notwithstanding any provision to thecontrary in any of the Company’s or any of its Affiliate’s equity-based, equity-related or otherlong-term incentive compensation plans, practices, policies and programs or any award agreementsthereunder, upon the Release Effective Date, (A) all outstanding stock options, stock appreciationrights and similar rights and awards then held by the Executive that are unexercisable or otherwiseunvested shall automatically become fully vested and immediately exercisable, as the case may be,and all stock options and stock appreciation rights then held by the Executive (whether vested orunvested as of immediately prior to the Release Effective Date) shall remain exercisable until theearlier of the end of the maximum period of time permissible without the imposition of the Section409A Tax and their originally scheduled expiration dates, (B) all outstanding equity-based,equity-related and other long-term incentive awards then held by the Executive that are subject toperformance-based vesting criteria shall automatically become fully vested and earned at a deemedperformance level equal to the maximum performance level with respect to such awards and (C) allother outstanding equity-based, equity-related and long-term incentive awards, to the extent notcovered by the foregoing clause (A) or (B), then held by the Executive that are unvested or subjectto restrictions or forfeiture shall automatically become fully vested and all restrictions andforfeiture provisions related thereto shall lapse.               (v) Savings and Retirement Plan Benefits. For purposes of computing the Executive’saccrued benefits under any Retirement Plan that is a defined benefit plan, the Company shall creditthe Executive with [MULTIPLE] 2 years of participation in the Retirement Plan and[MULTIPLE] 2 years of age, in addition to the actual years of participation and agecredited to the Executive under such Retirement Plan as of the Termination Date. For purposes ofcomputing the Executive’s accrued benefits under any Retirement Plan that is a defined contributionplan, the Company shall credit the Executive with additional Company contributions to suchRetirement Plan in an amount that would be equal to the amount of Company contributions theExecutive would have been entitled to receive pursuant to such Retirement Plan (or any successorplan) in accordance with Section 4(d) if the Executive (A) had remained an active participant insuch Retirement Plan during the Continuation Period and (B) had made pre-tax and after-taxcontributions at the highest rate permitted by the applicable Retirement Plan. In the event thatthe Company is prohibited under the terms of a Retirement Plan or under applicable law (includingERISA or the Code) from crediting the Executive with additional accrued benefits pursuant to anysuch Retirement Plan as required pursuant to this 2 For the President and Chief Financial Officerand the President and Chief Operating Officer, the Multiple will be 3. Foreach of the other Executives, the Multiple will be 2. A list of Executives whohave entered into Change in Control Severance Agreements is attached asSchedule A hereto.

 

11Section 6(b)(v), the Company shall instead make a lump-sum cash payment to the Executive onthe tenth business day following the Release Effective Date in an amount equal to the value of (1)the actuarial equivalent of such additional benefits, if such Retirement Plan is a defined benefitplan, or (2) the amount of any such Company contributions, if such Retirement Plan is a definedcontribution plan.               (vi) Outplacement Counseling. The Executive shall be entitled to reimbursement fromthe Company, upon the Executive’s presentation to the Company of a written invoice from theapplicable vendor requesting payment, for the cost of executive level outplacement services offeredby a reputable and experienced vendor selected by the Executive (including Right ManagementConsultants), provided that (A) the cost of such services shall not exceed $50,000 and (B) theExecutive commences such services not later than six months following the Release Effective Date.               (vii) Release of Claims. Notwithstanding any provision of this Agreement to thecontrary, the Company shall not be obligated to make any payments or provide any benefits describedin this Section 6(b), other than payments or benefits in respect of the Accrued Rights, unless anduntil such time as the Executive has executed a Separation Agreement and Release substantially inthe form of Exhibit A hereto and such release has become effective and irrevocable in accordancewith its terms.     (c) Termination on Account of Death or Disability. (i) The Executive’s employmentshall terminate automatically upon the Executive’s death or Disability. In the event of atermination as a result of death or Disability, the Executive shall not be entitled to anyadditional payments from the Company, other than payments with respect to the Accrued Rights.               (ii) For purposes of this Agreement, the Executive shall be deemed to have a“Disability” in the event of the Executive’s absence for a period of 180 consecutivebusiness days as a result of incapacity due to a physical or mental condition, illness or injurywhich is determined to be total and permanent by a physician mutually acceptable to the Company andthe Executive or the Executive’s legal representative (such acceptance not to be unreasonablywithheld) after such physician has completed an examination of the Executive. The Executive agreesto make himself available for such examination upon the reasonable request of the Company.               SECTION 7. Certain Additional Payments by the Company.(a) Notwithstanding anything in this Agreement to the contrary and except as set forth below,in the event it shall be determined that any Payment that is paid or payable during the Term wouldbe subject to the Excise Tax, the Executive shall be entitled to receive an additional payment (a“280G Gross-Up Payment”) in an amount such that, after payment by the Executive of alltaxes (and any interest or penalties imposed with respect to such taxes), including any income andemployment taxes (and any interest and penalties imposed with respect thereto) and Excise Taxesimposed upon the 280G Gross-Up Payment, the Executive retains an amount of the 280G Gross-UpPayment equal to the Excise Tax imposed upon such Payments. The Company’s obligation to make 280GGross-Up Payments under this Section 7 shall not be conditioned upon the Executive’s termination ofemployment and shall survive and apply after the Executive’s termination of employment.

 

12     (b) Subject to the provisions of Section 7(c), all determinations required to be made underthis Section 7, including whether and when a 280G Gross-Up Payment is required, the amount of such280G Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shallbe made in accordance with the terms of this Section 7 by a nationally recognized certified publicaccounting firm that shall be designated by the Executive (the “Accounting Firm”). TheAccounting Firm shall provide detailed supporting calculations both to the Company and theExecutive within 15 business days of the receipt of notice from the Executive that there has been aPayment or such earlier time as is requested by the Company. For purposes of determining theamount of any 280G Gross-Up Payment, the Executive shall be deemed to pay Federal income tax at thehighest marginal rate applicable to individuals in the calendar year in which any such 280GGross-Up Payment is to be made and deemed to pay state and local income taxes at the highestmarginal rates applicable to individuals in the state or locality of the Executive’s residence orplace of employment in the calendar year in which any such 280G Gross-Up Payment is to be made, netof the maximum reduction in Federal income taxes that can be obtained from deduction of state andlocal taxes, taking into account limitations applicable to individuals subject to Federal incometax at the highest marginal rate. All fees and expenses of the Accounting Firm shall be bornesolely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7, shall bepaid by the Company to the Executive within 5 business days of the receipt of the Accounting Firm’sdetermination. If the Accounting Firm determines that no Excise Tax is payable by the Executive,it shall so indicate to the Executive in writing. Any determination by the Accounting Firm shallbe binding upon the Company and the Executive. As a result of the uncertainty in the applicationof the Excise Tax, at the time of the initial determination by the Accounting Firm hereunder, it ispossible that the amount of the 280G Gross-Up Payment determined by the Accounting Firm to be dueto the Executive, consistent with the calculations required to be made hereunder, will be lowerthan the amount actually due (an “Underpayment”). In the event the Company exhausts itsremedies pursuant to Section 7(c) and the Executive thereafter is required to make a payment of anyExcise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurredand any such Underpayment shall be paid by the Company to the Executive within 5 business days ofthe receipt of the Accounting Firm’s determination.     (c) The Executive shall notify the Company in writing of any written claim by the InternalRevenue Service that, if successful, would require the payment by the Company of a 280G Gross-UpPayment. Such notification shall be given as soon as practicable, but no later than 10 businessdays after the Executive is informed in writing of such claim. Failure to give timely notice shallnot prejudice the Executive’s right to 280G Gross-Up Payments and rights of indemnity under thisSection 7. The Executive shall apprise the Company of the nature of such claim and the date onwhich such claim is requested to be paid. The Executive shall not pay such claim prior to theexpiration of the 30-day period following the date on which the Executive gives such notice to theCompany (or such shorter period ending on the date that any payment of taxes with respect to suchclaim is due). If the Company notifies the Executive in writing prior to the expiration of suchperiod that the Company desires to contest such claim, the Executive shall (i) give the Company anyinformation reasonably requested by the Company relating to such claim, (ii) take such action inconnection with contesting such claim as the Company shall reasonably request in writing from timeto time, including accepting legal representation with respect to such claim by an attorneyreasonably selected by the Company, (iii) cooperate with the Company in good faith in ordereffectively to contest such claim and (iv) permit the Company to participate in any proceedingsrelating to such claim; provided, however, that the Company shall

 

13bear and pay directly all costs and expenses (including additional income taxes, interest andpenalties) incurred in connection with such contest, and shall indemnify and hold the Executiveharmless, on an after-tax basis, for any Excise Tax or income tax (including interest or penalties)imposed as a result of such representation and payment of costs and expenses. Without limitationon the foregoing provisions of this Section 7(c), the Company shall control all proceedings takenin connection with such contest, and, at its sole discretion, may pursue or forgo any and alladministrative appeals, proceedings, hearings and conferences with the applicable taxing authorityin respect of such claim and may, at its sole discretion, either direct the Executive to pay thetax claimed and sue for a refund or contest the claim in any permissible manner, and the Executiveagrees to prosecute such contest to a determination before any administrative tribunal, in a courtof initial jurisdiction and in one or more appellate courts, as the Company shall determine;provided, however, that (A) if the Company directs the Executive to pay such claimand sue for a refund, the Company shall advance the amount of such payment to the Executive, on aninterest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis,from any Excise Tax or income tax (including interest or penalties) imposed with respect to suchadvance or with respect to any imputed income in connection with such advance and (B) if suchcontest results in any extension of the statute of limitations relating to payment of taxes for thetaxable year of the Executive with respect to which such contested amount is claimed to be due,such extension must be limited solely to such contested amount. Furthermore, the Company’s controlof the contest shall be limited to issues with respect to which the 280G Gross-Up Payment would bepayable hereunder, and the Executive shall be entitled to settle or contest, as the case may be,any other issue raised by the Internal Revenue Service or any other taxing authority.     (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant toSection 7(c), the Executive becomes entitled to receive any refund with respect to such claim, theExecutive shall (subject to the Company’s complying with the requirements of Section 7(c)) promptlypay to the Company the amount of such refund received (together with any interest paid or creditedthereon after taxes applicable thereto). If, after the receipt by the Executive of an amountadvanced by the Company pursuant to Section 7(c), a determination is made that the Executive shallnot be entitled to any refund with respect to such claim and the Company does not notify theExecutive in writing of its intent to contest such denial of refund prior to the expiration of the30-day period after such determination, then such advance shall be forgiven and shall not berequired to be repaid and the amount of such advance shall offset, to the extent thereof, theamount of 280G Gross-Up Payment required to be paid.               SECTION 8. No Mitigation or Offset; Enforcement of this Agreement. (a) The Company’sobligation to make the payments provided for in this Agreement and otherwise to perform itsobligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense orother claim, right or action which the Company may have against the Executive or others. In noevent shall the Executive be obligated to seek other employment or take any other action by way ofmitigation of the amounts payable to the Executive under any of the provisions of this Agreementand, except as otherwise expressly provided for in this Agreement, such amounts shall not bereduced whether or not the Executive obtains other employment.     (b) The Company shall reimburse, upon the Executive’s demand, any and all reasonable legalfees and expenses that the Executive may incur as a result of any contest, dispute or proceeding(regardless of whether formal legal proceedings are ever commenced and

 

14regardless of the outcome thereof and including all stages of any contest, dispute orproceeding) by the Company, the Executive or any other Person with respect to the validity orenforceability of, or liability under, any provision of this Agreement or any guarantee ofperformance thereof (including as a result of any contest by the Executive regarding the amount ofany payment owed pursuant to this Agreement), and shall indemnify and hold the Executive harmless,on an after-tax basis, for any tax (including Excise Tax) imposed on the Executive as a result ofpayment by the Company of such legal fees and expenses.               SECTION 9. Other Expenses. The Company shall (a) reimburse, upon the Executive’sdemand, any and all reasonable fees and expenses (whether advisory or otherwise) actually incurredby the Executive during the Term in connection with a Change in Control or a potential Change inControl that arise from or relate to (i) the review, negotiation, amendment, modification ortermination of any existing employment, employment-related or compensation (whether cash, equity,incentive, deferred or otherwise) agreement, plan or other arrangement between the Executive, onthe one hand, and the Company or a Subsidiary, on the other hand, including the rollover,assumption, substitution or other treatment of existing equity compensation awards, or (ii) thenegotiation, preparation or review of, or the entry into, any new employment, consulting or otherservice-related or other compensation (whether cash, equity, incentive, deferral or otherwise)agreement, plan or other arrangement with any Person, corporation or other entity or group (withinthe meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) that is or is proposed to be aparty to, or expresses in writing to the Company an intention to take any action that would resultin, a Change in Control (including the Company and its Subsidiaries and any Affiliate of suchPerson, corporation, other entity or group), provided that, in each case, such amended,modified, terminated or new agreements, plans or other arrangements are in connection with orrelate to the Executive’s continued services with the Company or its Subsidiaries or with suchPerson, corporation, other entity or group following the occurrence of such Change in Control, and(b) indemnify and hold the Executive harmless, on an after-tax basis, for any tax (including ExciseTax) imposed on the Executive as a result of payment by the Company of such fees and expenses. Forthe avoidance of doubt, the Executive’s rights under this Section 9 shall become effectiveimmediately upon entry into this Agreement, shall remain in effect for the duration of the Term andare not contingent upon the occurrence of the Retention Start Date or the consummation of a Changein Control. In the event that the Executive’s employment with the Company or its Subsidiariesterminates for any reason prior to the Retention Start Date, the Executive shall only be entitledto reimbursement under this Section 9 for fees and expenses incurred prior to the date that theExecutive’s employment terminated.               SECTION 10. Non-Exclusivity of Rights. Except as specifically provided in Section6(b)(i), nothing in this Agreement shall prevent or limit the Executive’s continuing or futureparticipation in any plan, practice, policy or program provided by the Company or a Subsidiary forwhich the Executive may qualify, nor shall anything in this Agreement limit or otherwise affect anyrights the Executive may have under any contract or agreement with the Company or a Subsidiary.Vested benefits and other amounts that the Executive is otherwise entitled to receive under anyincentive compensation (including any equity award agreement), deferred compensation or other plan,practice, policy or program of, or any contract or agreement with, the Company or a Subsidiaryshall be payable in accordance with the terms of each such plan, practice, policy, program,contract or agreement, as the case may be, except as explicitly modified by this Agreement.

 

15               SECTION 11. Insurance and Indemnification. Commencing upon the Retention Start Dateand for so long thereafter as the Executive could be subject to liability, the Company shall keepin place a directors’ and officers’ liability insurance policy (or policies) providingcomprehensive coverage to the Executive for claims relating to the Executive’s service as anemployee, officer or director of the Company or its Subsidiaries, at a level that is no lessfavorable to the Executive (e.g., with respect to scope, amounts and deductibles) than thelevel in effect with respect to the Executive at the Retention Start Date or, if more favorable tothe Executive, the level provided to then-current officers and directors of the Company and itsSubsidiaries. The Company shall indemnify the Executive to the fullest extent permitted by theCompany’s Restated Certificate of Incorporation and Amended and Restated Bylaws, any officerindemnification agreement between the Executive and the Company and the general laws of the Stateof Delaware and shall provide indemnification expenses in advance to the extent permitted thereby.The indemnification and advance of expenses provided by the Company pursuant to this Agreementshall not be deemed exclusive of any other rights to which the Executive may be entitled under anylaw (common or statutory), or any agreement, vote of stockholders or disinterested directors orother provision that is consistent with law, both as to action in his or her official capacity andas to action in another capacity while holding office or while employed or acting as agent for theCompany, and such rights shall continue in respect of all events occurring while the Executive wasa director of or employed by the Company that continue after the Executive has ceased to be adirector of or employed by the Company, and shall inure to the benefit of the estate, heirs,executors and administrators of the Executive.               SECTION 12. Withholding. The Company may deduct and withhold from any amounts payableunder this Agreement such Federal, state, local, foreign or other taxes as are required to bewithheld pursuant to any applicable law or regulation.               SECTION 13. Section 409A. It is the intention of the Company and the Executive thatthe provisions of this Agreement comply with Section 409A of the Code, and all provisions of thisAgreement shall be construed and interpreted in a manner consistent with Section 409A of the Code.To the extent necessary to avoid imposition of any additional tax or interest penalties underSection 409A (such tax and interest penalties, a “Section 409A Tax”), notwithstanding thetiming of payment provided in any other Section of this Agreement, the timing of any payment,distribution or benefit pursuant to this Agreement shall be subject to a six-month delay in amanner consistent with Section 409A(a)(2)(B)(i) of the Code, provided that (a) theExecutive shall be credited with interest in respect of such payment, distribution or benefitduring such six-month period at the rate set forth in Section 16 and (b) if the Executive diesduring such six-month period, any such delayed payments shall not be further delayed, and shall beimmediately payable to the Executive’s devisee, legatee or other designee or, should there be nosuch designee, to the Executive’s estate in accordance with the applicable provisions of thisAgreement. From and after the Retention Start Date and for the remainder of the Term, (i) theCompany shall administer and operate this Agreement and any “nonqualified deferred compensationplan” (as defined in Section 409A of the Code) (and any other arrangement that could reasonably beexpected to constitute such a plan) in which the Executive participates and the Executive’s rightsand benefits hereunder and thereunder in compliance with Section 409A of the Code and any rules,regulations or other guidance promulgated thereunder as in effect from time to time, (ii) in theevent that the Company determines that any provision of this Agreement or any such plan orarrangement does not comply with Section 409A of the Code or any such rules, regulations orguidance and that the Executive may become subject to a Section

 

16409A Tax, the Company and the Executive shall negotiate in good faith to amend or modify suchprovision to avoid the application of such Section 409A Tax, provided that such amendmentor modification shall not (and the Executive shall not be obligated to consent to any suchamendment or modification that would) reduce the economic value to the Executive of such provision,and (iii) in the event that, notwithstanding the foregoing, the Executive is subject to a Section409A Tax with respect to any such provision, then except to the extent such Section 409A Tax isattributable to the Executive’s breach of the Executive’s obligations under clause (ii) above, theExecutive shall be entitled to receive an additional payment from the Company (a “409A Gross-UpPayment”) in an amount such that, after payment by the Executive of all taxes (and any interestor penalties imposed with respect to such taxes), including any income and employment taxes (andany interest and penalties imposed with respect thereto) and any Section 409A Tax imposed upon the409A Gross-Up Payment, the Executive retains an amount of the 409A Gross-Up Payment equal to theSection 409A Tax imposed with respect to such provision. The provisions of Sections 7(c) and (d)shall apply mutatismutandis to any claim by the Internal Revenue Service that, ifsuccessful, would give rise to a 409A Gross-Up Payment by the Company.               SECTION 14. Assignment. (a) This Agreement is personal to the Executive and, withoutthe prior written consent of the Company, shall not be assignable by the Executive otherwise thanby will or the laws of descent and distribution, and any assignment in violation of this Agreementshall be void.     (b) Notwithstanding the foregoing Section 14(a), this Agreement and all rights of theExecutive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personalor legal representatives, executors, administrators, successors, heirs, distributees, devisees andlegatees. If the Executive should die while any amounts would still be payable to him or herhereunder if he or she had continued to live, all such amounts, unless otherwise provided herein,shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee orother designee or, should there be no such designee, to the Executive’s estate.     (c) The Company shall require any successor (whether direct or indirect, by purchase, merger,consolidation or otherwise) to all or substantially all of the business or assets of the Company (a“Successor”) to assume and agree to perform this Agreement in the same manner and to thesame extent that the Company would have been required to perform it if no such succession had takenplace. As used in this Agreement, the term “Company” shall mean the Company as hereinbeforedefined and any Successor and any permitted assignee to which this Agreement is assigned.               SECTION 15. Dispute Resolution. (a) Except as otherwise specifically providedherein, the Executive and the Company each hereby irrevocably submit to the exclusive jurisdictionof the United States District Court for the Northern District of Texas (or, if subject matterjurisdiction in that court is not available, in any state court located within the city of Dallas,Texas) over any dispute arising out of or relating to this Agreement. Except as otherwisespecifically provided in this Agreement, the parties undertake not to commence any suit, action orproceeding arising out of or relating to this Agreement in a forum other than a forum described inthis Section 15(a); provided, however, that nothing herein shall preclude theCompany or the Executive from bringing any suit, action or proceeding in any other court for the

 

17purposes of enforcing the provisions of this Section 15 or enforcing any judgment obtained bythe Company or the Executive.     (b) The agreement of the parties to the forum described in Section 15(a) is independent of thelaw that may be applied in any suit, action or proceeding and the parties agree to such forum evenif such forum may under applicable law choose to apply non-forum law. The parties hereby waive, tothe fullest extent permitted by applicable law, any objection that they now or hereafter have topersonal jurisdiction or to the laying of venue of any such suit, action or proceeding brought inan applicable court described in Section 15(a), and the parties agree that they shall not attemptto deny or defeat such personal jurisdiction by motion or other request for leave from any suchcourt. The parties agree that, to the fullest extent permitted by applicable law, a final andnon-appealable judgment in any suit, action or proceeding brought in any applicable court describedin Section 15(a) shall be conclusive and binding upon the parties and may be enforced in any otherjurisdiction.     (c) The parties hereto irrevocably consent to the service of any and all process in any suit,action or proceeding arising out of or relating to this Agreement by the mailing of copies of suchprocess to such party at such party’s address specified in Section 22.     (d) Each party hereto hereby waives, to the fullest extent permitted by applicable law, anyright it may have to a trial by jury in respect of any suit, action or proceeding arising out of orrelating to this Agreement. Each party hereto (i) certifies that no representative, agent orattorney of any other party has represented, expressly or otherwise, that such party would not, inthe event of any suit, action or proceeding, seek to enforce the foregoing waiver and (ii)acknowledges that it and the other parties hereto have been induced to enter into this Agreementby, among other things, the mutual waiver and certifications in this Section 15(d).               SECTION 16. Default in Payment. Any payment not made within ten business days afterit is due in accordance with this Agreement shall thereafter bear interest, compounded annually, atthe prime rate in effect from time to time at Citibank, N.A., or any successor thereto.               SECTION 17. **GOVERNING LAW.****THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN THE STATE OFTEXAS, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALLRESPECTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO ITS PRINCIPLES OFCONFLICTS OF LAW.**               SECTION 18. Amendment; No Waiver. No provision of this Agreement may be amended,modified, waived or discharged except by a written document signed by the Executive and a dulyauthorized officer of the Company. The failure of a party to insist upon strict adherence to anyterm of this Agreement on any occasion shall not be considered a waiver of such party’s rights ordeprive such party of the right thereafter to insist upon strict adherence to that term or anyother term of this Agreement. No failure or delay by either party in exercising any right or powerhereunder will operate as a waiver thereof, nor will any single or partial exercise of any suchright or power, or any abandonment of any steps to enforce such right or power, preclude any otheror further exercise thereof or the exercise of any other right or power. No agreements orrepresentations, oral or otherwise, express or implied, with respect to the

 

18subject matter hereof have been made by either party, which are not set forth expressly inthis Agreement.               SECTION 19. Severability. If any term or provision of this Agreement is invalid,illegal or incapable of being enforced by any applicable law or public policy, all other conditionsand provisions of this Agreement shall nonetheless remain in full force and effect so long as theeconomic and legal substance of the transactions contemplated by this Agreement is not affected inany manner materially adverse to any party. Upon any such determination that any term or otherprovision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate ingood faith to modify this Agreement so as to effect the original intent of the parties as closelyas possible in a mutually acceptable manner in order that the transactions contemplated hereby beconsummated as originally contemplated to the fullest extent possible.               SECTION 20. Entire Agreement. This Agreement sets forth the entire agreement of theparties hereto in respect of the subject matter contained herein and supersedes all prioragreements, promises, covenants, arrangements, communications, representations or warranties,whether oral or written, by any officer, employee or representative of any party hereto, and anyprior agreement of the parties hereto in respect of the subject matter contained herein is herebyterminated and canceled. None of the parties shall be liable or bound to any other party in anymanner by any representations and warranties or covenants relating to such subject matter except asspecifically set forth herein.               SECTION 21. Survival. The rights and obligations of the parties under the provisionsof this Agreement, including Sections 6, 7, 8, 9, 11, 13, 14, 15 and 16, shall survive and remainbinding and enforceable, notwithstanding the expiration of the Retention Period or the Term, thetermination of this Agreement, the termination of the Executive’s employment with the Company forany reason or any settlement of the financial rights and obligations arising from the Executive’semployment hereunder, to the extent necessary to preserve the intended benefits of such provisions.               SECTION 22. Notices. All notices or other communications required or permitted bythis Agreement will be made in writing and all such notices or communications will be deemed tohave been duly given when delivered or (unless otherwise specified) mailed by United Statescertified or registered mail, return receipt requested, postage prepaid, addressed as follows:   If to the Company: Michaels Stores, Inc.  8000 Bent Branch Drive  Irving, Texas 75063     Attention: (1) SVP, General Counsel and Secretary                    (2) SVP — Human Resources     Fax: (1) 972-409-1965         (2) 972-409-1772  If to the Executive: To the Executive’s address asmost recently supplied to the