Exhibit 10.18


 


SEPARATION AGREEMENT AND RELEASE


 


I.  Release.  For good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the undersigned, with
the intention of binding himself, his heirs, executors, administrators and
assigns, does hereby release and forever discharge Michaels Stores, Inc.,
a Delaware corporation (the “Company”), and its present and former
parent, officers, directors, executives, agents, employees, affiliated
companies, subsidiaries, successors, predecessors and assigns (collectively,
the “Released Parties”), from any and all claims, complaints, actions,
causes of action, demands, rights, damages, debts, accounts, suits, expenses,
attorneys’ fees and liabilities of whatever kind or nature in law, equity, or
otherwise, whether now known or unknown (collectively, the “Claims”),
which the undersigned now has, owns or holds, or has at any time heretofore
had, owned or held against any Released Party, arising out of or in any way
connected with the undersigned’s employment relationship with the Company, its
subsidiaries, predecessors or affiliated entities, or the termination thereof,
under any Federal, state or local statute, rule, or regulation, or principle of
common, tort or contract law, including but not limited to, Title VII of
the Civil Rights Act of 1964, as  amended, 42 U.S.C. §§ 2000e
et  seq., the Age Discrimination in Employment Act of 1967, as
amended, 29 U.S.C. §§ 621 et  seq., the Americans with
Disabilities Act of 1990, as  amended, 42 U.S.C. §§ 12101, et
seq., and any other equivalent or similar Federal, state, or local
statute; provided, however, that nothing herein shall release the
Company of its obligations under that certain Change in Control Severance
Agreement (the “Change in Control Severance Agreement”) in which the
undersigned participates and pursuant to which this Separation Agreement and
Release is being executed and delivered. 
The undersigned understands that, as a result of executing this
Separation Agreement and Release, he will not have the right to assert that the
Company or any other Released Party unlawfully terminated his employment or
violated any of his rights in connection with his employment or otherwise.


 


The undersigned affirms that he has not
filed, caused to be filed, or presently is a party to any Claim against any
Released Party in any forum or form and that he knows of no facts which may
lead to any Claim being filed against any Released Party in any forum by the
undersigned or by any agency or group. 
Except for his final paycheck, the undersigned further affirms that he
has been paid and/or has received all leave (paid or unpaid), compensation,
wages, bonuses, commissions, and/or benefits to which he may be entitled and
that no other leave (paid or unpaid), compensation, wages, bonuses, commissions
and/or benefits are due to him from any Released Party, except as specifically
provided in this Separation Agreement and Release.  The undersigned furthermore affirms that he
has no known workplace injuries or occupational diseases and has been provided
and/or has not been denied any leave requested under the FMLA.  If any court assumes jurisdiction of any such
Claim against any Released Party on behalf of the undersigned, the undersigned
will request such court to withdraw the matter.


 


The undersigned further declares and
represents that he has carefully read and fully understands the terms of this
Separation Agreement and Release; that he has been advised and had the
opportunity to seek the advice and assistance of counsel with regard to this
Separation Agreement and Release; that he may take up to and including
twenty-one (21) calendar days from receipt of this Separation Agreement
and Release to consider whether to sign it; that he may revoke this Separation
Agreement and Release within seven (7) calendar days after signing it by
delivering to the Company written notification of revocation; and that he
knowingly and 


 

















 


voluntarily, of his own free will, without
any duress, being fully informed and after due deliberate action, accepts the
terms of and signs the same as his own free act.


 


II.  Resignation
and Severance Compensation. The termination of the undersigned is effective
April 4, 2008 (“Termination Date”). 
Accordingly, the undersigned hereby irrevocably and unconditionally
resigns from any officer position he holds within Michaels or any of its
subsidiaries or divisions effective on the Termination Date.  It is stipulated and agreed that the
undersigned’s resignation from the Company is for “Good Reason” (as that term
is defined in Section 1(t) of the Severance Agreement), and that the
undersigned is not obligated to comply with the notice provisions set forth in Section 1(t) of
the Change in Control Severance Agreement. It is further stipulated and agreed
that the Company shall pay, provide and/or grant the undersigned all
compensation and benefits set forth under Section 6(b) of the Change
in Control Severance Agreement.


 


III.  Severance Pay.  Pursuant to Section 6(b)(i) of the
Change in Control Severance Agreement, the Company shall pay a lump-sum payment
in the gross amount of Three Million, Two Hundred Sixty Seven Thousand, One
Hundred Eighty-Nine Dollars and 74/100 ($3,267,189.74), subject to all
applicable or customary tax withholding requirements.


 


IV.  Prorated
Annual Bonus. Pursuant to Section 6(b)(ii) of the Change in
Control Severance Agreement, the Company shall pay a lump-sum payment in the
gross amount of Seventy Six Thousand, One Hundred Seventy-Three Dollars and
00/100 ($76,173.00), subject to all applicable or customary tax withholding
requirements.


 


V. Continued Welfare and Fringe Benefits.  The undersigned’s welfare and fringe benefits
will continue in accordance with Section 6(b)(iii) of the Change in
Control Severance Agreement.  The
undersigned agrees that he will notify the Company within seven calendar days
of becoming eligible under another employer’s medical and/or welfare benefits
plan.  The Company will make a lump-sum
payment in the amount of One Thousand Five Hundred Thirty-Two Dollars and 16/100
($1,532.16) which is the equivalent of certain welfare benefits that are
unavailable to the undersigned after the Termination Date.  Further, the Company will make an additional
lump sum payment in the amount of Three Thousand Five Hundred Dollars and
00/100 ($3,500.00) (in addition to transferring title of the Company-leased
vehicle explained in Section XII of this Agreement) which is equal to the
remaining value owed to the undersigned pursuant to the Compensation Policy
Regarding Company Cars, adopted on August 1, 2007.


 


VI.  Savings
and Retirement Plan Benefits. 
Pursuant to Section 6(b)(v) of the Change in Control Severance
Agreement, the Company will pay a lump-sum payment in the gross amount of One
Hundred Thousand, Three Hundred Dollars and 88/100 ($100,300.88), subject to
all applicable or customary tax withholding requirements.


 


VII.  Outplacement
Services.  Pursuant to Section 6(b)(vi) of
the Change in Control Severance Agreement, the Company agrees to reimburse him,
or directly pay expenses, for outplacement services up to $50,000; provided he
commences such services no later than six months following the Release
Effective Date and stops using these services within one year after the
Termination Date.


 


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VIII.  Protected
Rights.  The Company and the
undersigned agree that nothing in this Separation Agreement and Release is
intended to or shall be construed to affect, limit or otherwise interfere with
any non-waivable right of the undersigned under any Federal, state or local
law, including the right to file a charge or participate in an investigation or
proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”)
or to exercise any other right that cannot be waived under applicable law.  The undersigned is releasing, however, his
right to any monetary recovery or relief should the EEOC or any other agency
pursue Claims on his behalf.  Further,
should the EEOC or any other agency obtain monetary relief on his behalf, the
undersigned assigns to the Company all rights to such relief.


 


IX.  Nonsolicitation/Non-Interference
with Business Relationships.  The
undersigned further agrees that for one-year after the Termination Date, he
will not, directly or indirectly, (i) solicit, recruit or hire any person
who is at such time, or who at any time during the six-month period prior to
such solicitation or hiring had been, an employee of, or exclusive consultant
then under contract with, the Company, its subsidiaries, affiliates or divisions
without the Company’s prior written consent; (ii) solicit or encourage any
employee of the Company or its subsidiaries, affiliates and divisions to leave
the employment of the Company or its subsidiaries; (iii) intentionally
interfere with the relationship of the Company or any of its subsidiaries with
any employee of, or exclusive consultant then under contract with, the Company
or any such subsidiary; or (iv) intentionally interfere with, disrupt or
attempt to disrupt any past, present or prospective relationship, contractual
or otherwise, between the Company or any of its subsidiaries, on the one hand,
and any of their respective customers or suppliers, on the other hand.


 


X.  Equitable
Remedies.  The undersigned
acknowledges that a violation by the undersigned of any of the covenants
contained in Section IX would cause irreparable damage to the Company and
its subsidiaries in an amount that would be material but not readily
ascertainable, and that any remedy at law (including the payment of damages)
would be inadequate.  Accordingly, the
undersigned agrees that, notwithstanding any provision of this Separation
Agreement and Release to the contrary, the Company shall be entitled (without
the necessity of showing economic loss or other actual damage) to injunctive
relief (including temporary restraining orders, preliminary injunctions and/or
permanent injunctions) in any court of competent jurisdiction for any actual or
threatened breach of any of the covenants set forth in Section IX in
addition to any other legal or equitable remedies it may have.


 


XI.  Third-Party
Litigation.  The undersigned agrees
to be available to the Company, its affiliates and their attorneys on a
reasonable basis in connection with any pending or threatened claims, charges
or litigation in which the Company or any of its affiliates is now or may
become involved, or any other claims or demands made against or upon the
Company or any of its affiliates, regardless of whether or not the undersigned
is a named defendant in any particular case.


 


XII.  Return
of Property.  Unless expressly stated
otherwise herein, the undersigned shall return to the Company on or before the
Termination Date, all property of the Company in the undersigned’s possession
or subject to the undersigned’s control, including without limitation any keys,
credit cards, and files, including all copies. 
The undersigned shall not alter any of the Company’s records or computer
files in any way after the Termination Date. 
The Company is allowing the undersigned to keep his cellular phone and 


 


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laptop computer, except that all company
files on such computer must be returned to the Company on or before the
Termination Date.  Further, and in
accordance with the Compensation Policy Regarding Company Cars, the Company
will purchase the vehicle currently leased by the undersigned for his use and
transfer title to him.


 


XIII.  Confidential
Information.  The undersigned agrees
to hold confidential, and not to disclose to any person, firm, corporation,
partnership or agency, any trade secret or Confidential Information (as defined
below) gained in the course of the undersigned’s employment with the Company
concerning the Company, its subsidiaries, affiliates, divisions, or employees except
if such disclosure is required by law or legal process. “Confidential
Information” shall include, without limitation, information concerning
financial affairs, business plans or strategies, product pricing information,
operating policies and procedures, vendor information and proprietary
statistics or reports.  The undersigned
agrees not to remove any Confidential Information from the Company, not to
request that others do so on the undersigned’s behalf, and to return any
Confidential Information currently in the undersigned’s possession or control
to the Company.


 


XIV.  Stock
Options.  In accordance with the
Company’s 2006 Equity Incentive Plan, upon the Termination Date, all unvested
stock options granted to the undersigned by the Company will be forfeited
without further action on the part of any party.


 


XV.  Severability.  If any term or provision of this Separation
Agreement and Release is invalid, illegal or incapable of being enforced by any
applicable law or public policy, all other conditions and provisions of this
Separation Agreement and Release shall nonetheless remain in full force and
effect so long as the economic and legal substance of the transactions
contemplated by this Separation Agreement and Release is not affected in any
manner materially adverse to any party.


 


[Remaining portion intentionally left black]


 


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XVI.  GOVERNING LAW.  THIS SEPARATION AGREEMENT AND RELEASE SHALL
BE DEEMED TO BE MADE IN THE STATE OF TEXAS, AND THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECTS SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICTS OF LAW.


 


Effective on the eighth
calendar day following the date set forth below.


 


 


	
   

  	
  MICHAELS STORES, INC.,

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  /s/ Shawn Hearn

  
	
   

  	
   

  	
   Name: Shawn Hearn 

  
	
   

  	
   

  	
   Title:
  Senior Vice President - HR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey N. Boyer

  
	
   

  	
   

  	
   Jeffrey
  N. Boyer

  
	
   

  	
   

  	
   Date
  Signed:

  	
  4/9/08

  



 


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ACKNOWLEDGMENTS


 


	
  STATE OF TEXAS

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  COUNTY
  OF DALLAS

  	
  )

  	
   

  	
   

  



 


BEFORE ME, the
undersigned authority, on this day personally appeared SHAWN HEARN,
Senior Vice President – Human Resources of MICHAELS STORES, INC. a Delaware
corporation, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity therein stated
and as the act and deed of said corporation.


 


GIVEN MY HAND
AND SEAL this 10th day of April, 2008.


 


 


	
   

  	
   

  	
  /s/ Deborah L. Wade

  
	
   

  	
   

  	
  Notary
  Public in and for the

  
	
   

  	
   

  	
  State of
  Texas

  
	
  [NOTARY SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Deborah L. Wade

  
	
   

  	
   

  	
  Notary’s
  Printed Name and

  
	
   

  	
   

  	
  Commission
  Expiration

  



 


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  STATE OF
  CALIFORNIA

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )ss

  
	
   

  	
   

  	
   

  
	
  COUNTY OF
  CONDRA COSTA

  	
   

  	
  )

  



 


On April 9th, 2008, before me, Lisa A.
Hulse, Notary Public, personally appeared Jeffrey N. Boyer, who proved to me on
the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.


 


I certify
under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.


 


WITNESS my
hand and official seal.


 


 


	
   

  	
   

  	
  /s/ Lisa A.
  Hulse

  
	
   

  	
   

  	
   (Signature
  of Notary Public)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [NOTARY SEAL]

  	
   

  	
   

  



 


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