Document:

Exhibit 10.2

MICHAELS STORES, INC.

FORM OF
STOCK OPTION AGREEMENT

 

	
  

  	
  Optionee:

  	
   

  	
   

  

 

	
  

  	
  No. of Shares:

  	
   

  	
   

  

 

	
  

  	
  Grant Date:

  	
   

  	
   

  

 

	
  

  	
  Expiration Date:

  	
   

  	
   

  

 

This
Option and any securities issued upon exercise of this Option are subject to
restrictions on voting and transfer and other provisions as set forth in the
Amended and Restated Stockholders Agreement among Michaels Stores, Inc. and
certain investors, originally dated as of October 31, 2006, as amended and
restated on February 16, 2007, and amended from time to time thereafter (the “Stockholders
Agreement”), and the terms of the Registration Rights Agreement referred to
therein (the “Registration Rights Agreement”). 
This Option and any securities issued upon exercise of this Option
constitute an Option and Shares, respectively, as defined in the Stockholders
Agreement.

This
Stock Option Agreement (this “Agreement”) is hereby entered into between
Michaels Stores, Inc., a Delaware corporation (the “Company”), and the Optionee
named above pursuant to the Company’s 2006 Equity Incentive Plan, as amended
from time to time (the “Plan”).  For the
purpose of this Agreement, the “Grant Date” shall mean February 16, 2007.

1.                                      Grant of Option.  This Agreement evidences the grant by the
Company on the Grant Date to the Optionee of an option (the “Option”) to
purchase, in whole or in part, on the terms provided herein and in the Plan, a
total of            
shares of Common Stock of the Company, par value $.10 per share (the “Shares”),
at the following prices per Share:

(a)                                  _____
Shares at $15.00 per Share (the “Tranche 1 Option”);

(b)                                 _____
Shares at $22.50 per Share (the “Tranche 2 Option”);

(c)                                  _____
Shares at $30.00 per Share (the “Tranche 3 Option”);

(d)                                 _____
Shares at $37.50 per Share (the “Tranche 4 Option”);

(e)                                  _____
Shares at $45.00 per Share (the “Tranche 5 Option”); and

(f)                                    _____
Shares at $52.50 per Share (the “Tranche 6 Option”).

The Option evidenced by this Agreement is not intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code (the “Code”).

2.                                      Vesting.  During the Optionee’s Employment, the Option
will vest and become exercisable (i) with respect to 20% of the Shares subject
to each of the Tranche 1 Option, Tranche 2 Option, Tranche 3 Option, Tranche 4
Option, Tranche 5 Option and Tranche 6 

Option on each of
the first through fifth anniversaries of the Grant Date or (ii) if earlier,
with respect to any unvested portion of the Option, upon a Change of Control
(as defined in the Stockholders Agreement).

3.                                      Exercise
of Option.

(a)                                  Details
of Exercise.  Each election to
exercise this Option shall be subject to the terms and conditions of the Plan
and shall be in writing, signed by the Optionee or by his or her executor or
administrator or by the Person or Persons to whom this Option is transferred by
will or the applicable laws of descent and distribution (the “Legal
Representative”), and made pursuant to and in accordance with the terms and
conditions set forth in the Plan.  The
latest date on which this Option may be exercised (the “Final Exercise Date”)
is the date which is the eighth (8th) anniversary of the Grant Date, subject to
earlier termination in accordance with the terms and provisions of the Plan and
this Agreement.

(b)                                 Payment
of Exercise Price.  The following are permitted forms of payment
for the exercise of this Option and for the remittance of withholding taxes
pursuant to Section 8: (a) cash or check acceptable to the Administrator,
(b) actual or constructive transfer to the Company of shares of Stock
owned by the Optionee for at least six months (or, with the consent of the
Administrator, for less than six months) having an aggregate Fair Market Value
at the date of exercise equal to the aggregate exercise price of the Award, (c)
authorization by the Optionee of the Company to withhold a number of shares of
Stock otherwise issuable to the Optionee under this Option having an aggregate
Fair Market Value on the date of exercise equal to the aggregate exercise price
of this Option and, if applicable, the amount of any withholding tax, (d) at
such time, if any, as the Stock is publicly traded through a broker-assisted “cashless”
exercise program acceptable to the Administrator, and (e) by a combination
of such methods of payment.

4.                                      Effect of Certain Transactions.  In the event of a Corporate Transaction (as
defined in the Plan) or a Change of Control, the terms of Article 7 of the Plan
shall control.

5.                                      Representations
and Warranties of Optionee.

Optionee represents and warrants that:

(a)                                  Authorization.  Optionee has full legal capacity, power, and
authority to execute and deliver this Agreement and to perform the Optionee’s obligations
hereunder.  This Agreement has been duly
executed and delivered by the Optionee and is the legal, valid, and binding
obligation of the Optionee enforceable against the Optionee in accordance with
the terms hereof.

(b)                                 No Conflicts.  The execution, delivery, and performance by
the Optionee of this Agreement and the consummation by the Optionee of the
transactions contemplated hereby will not, with or without the giving of notice
or lapse of time, or both (i) violate any provision of law, statute, rule
or regulation to which the Optionee is subject, (ii) violate any order,
judgment or decree applicable to the 

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Optionee, or (iii) conflict with, or result in a breach of default
under, any term or condition of any agreement or other instrument to which the
Optionee is a party or by which the Optionee is bound.

(c)                                  Thorough Review,
etc.  Optionee has thoroughly
reviewed the Plan, this Agreement, the Stockholders Agreement and the
Registration Rights Agreement in their entirety.  Optionee has had an opportunity to obtain the
advice of counsel (other than counsel to the Company or its Affiliates) prior
to executing this Agreement, and fully understands all provisions of the Plan
and this Agreement.

(d)                                 Knowledge.  Optionee has been advised that neither this
Option or the Shares received upon this Option’s exercise have been registered
under the Securities Act or any state securities laws and, therefore, none of
those securities can be resold unless they are registered under the Securities
Act and applicable state securities laws or unless an exemption from such
registration requirements is available. 
Except to the extent provided in the Stockholders Agreement and the
Registration Rights Agreement, the Optionee is aware that the Company is under
no obligation to effect any such registration with respect to any such
securities or to file for or comply with any exemption from registration.  Optionee is acquiring and holding the Option
and any Shares received upon the Option’s exercise for its own account and not
with a view to, or for resale in connection with, the distribution thereof in
violation of the Securities Act. 
Optionee is either an “accredited investor” as defined in Regulation D
under the Securities Act or possesses such knowledge and experience in financial
and business matters that he or she is capable of evaluating the merits and
risks of an investment in the securities of the Company described in this
Agreement.

6.                                      Other
Agreements.

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

(b)                                 Vesting.  Optionee acknowledges and agrees that,
notwithstanding the terms of any Change in Control Severance Plan, Change in
Control Severance Agreement (including, without limitation, Section 6(b)(iv) of
the Change in Control Severance Agreement dated April 26, 2006 between the
Company and the Optionee or, as applicable, the Company’s Change in Control
Severance Plan adopted April 26, 2006) or any other agreement that is in effect
on the date hereof to which the Optionee is a party or under which the Optionee
has any rights, the Options received by the Optionee under this Agreement will
vest only in accordance with the terms and provisions of this Agreement, and
any option 

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vesting acceleration provisions contained in any such agreements shall
not apply to the Option.

7.                                      Legends.  Certificates evidencing any Shares issued
upon exercise of the Option granted hereby may bear the following legends, in
addition to any legends which may be required by the Stockholders Agreement or
by the Registration Rights Agreement:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE
WERE ISSUED IN A PRIVATE PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT
COVERING THE TRANSFER OR AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER,
THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.”

8.                                      Withholding.  No Shares will be issued, sold or transferred
pursuant to the exercise of this Option unless and until the Person exercising
this Option shall have remitted to the Company an amount sufficient to satisfy
any federal, state, or local withholding tax requirements, or shall have made
other arrangements satisfactory to the Company with respect to such taxes.

9.                                      Nontransferability
of Option.  This Option is not
transferable by the Optionee other than by will or the applicable laws of
descent and distribution, and is exercisable during the Optionee’s lifetime
only by the Optionee.

10.                               Status
Change.  Upon the termination of
the Optionee’s Employment, this Option shall continue or terminate as, and to
the extent, provided in the Plan.

11.                               Effect
on Employment.  Neither the grant
of this Option, nor the issuance of Shares upon exercise of this Option, will
give the Optionee any right to be retained in the employ of the Company or its
Affiliates, affect the right of the Company or its Affiliates to discharge or
discipline the Optionee at any time, or affect any right of the Optionee to
terminate his or her Employment at any time.

12.                               Indemnity.  Optionee hereby indemnifies and agrees to
hold the Company harmless from and against all losses, damages, liabilities and
expenses (including without limitation reasonable attorneys fees and charges)
resulting from any breach of any representation, warranty, or agreement of the
Optionee in this Agreement or any misrepresentation of the Optionee in this
Agreement.

13.                               Provisions
of the Plan.  This Agreement is
subject in its entirety to the provisions of the Plan, which are incorporated
herein by reference.  A copy of the Plan
as in effect on the Grant Date has been furnished to the Optionee.  By exercising all or any part of this Option,
the Optionee agrees to be bound by the terms of the Plan and this
Agreement.  In the event of any conflict
between the terms of this Agreement and the Plan, the terms of this Agreement
shall control.

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14.                               Definitions.  Initially capitalized terms not otherwise
defined herein have the meaning provided in the Plan.

15.                               General.  For purposes of this Agreement and any
determinations to be made by the Administrator hereunder, the determinations by
the Administrator shall be binding upon the Optionee and any transferee.

IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized officer.

DATED:  February 16, 2007

	
  

  	
   

  	
   

  	
  MICHAELS STORES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jeffrey N. Boyer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  President and Chief Financial Officer

  	
   

  

 

The
undersigned acknowledges and agrees to the terms of this Stock Option Agreement
and acknowledges and agrees that by the undersigned’s execution below, the
undersigned is also joining and becoming a party to the Amended and Restated
Stockholders Agreement and the Registration Rights Agreement.

	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [Name of Optionee]

  	
   

  

 

 5Exhibit
10.1

 

	
  

  	
   

  	
  GE Capital

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GE Capital Services Pte Ltd

  
	
   

  	
   

  	
  6 Temasek Boulevard #35-01

  
	
   

  	
   

  	
  Suntec Tower Four

  
	
   

  	
   

  	
  Singapore 038986

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  T +65 6226 3822

  
	
   

  	
   

  	
  F +65 6222 3681

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Co. No. 199307961G

  

 

 

 

20 November 2006

 

CombinatoRx (Singapore) Pte. Ltd.

11 Biopolis Way

Helios #08-05

Singapore 138667

Attn:                               Mr.
Ralf Marius Altmeyer

Director

Dear Sir,

We refer to your
application and are pleased to offer you the following Facility on the terms
and conditions herein:

	
  Facility

  	
  :

  	
  Term Loan (“Loan”)

  
	
   

  	
   

  	
   

  
	
  Purpose

  	
  :

  	
  To finance the purchase of Equipment as approved by
  GE Capital Services Pte Ltd or one of its affiliates (hereinafter called
  “GE”)

  
	
   

  	
   

  	
   

  
	
  Equipment

  	
  :

  	
  New laboratory and scientific equipment

  
	
   

  	
   

  	
  New computer hardware

  
	
   

  	
   

  	
  General office equipment and furniture

  
	
   

  	
   

  	
  Various soft costs such as software and tenant
  improvements

  
	
   

  	
   

  	
  (hereinafter called the “Equipment”)

  
	
   

  	
   

  	
   

  
	
  Loan limit

  	
  :

  	
  USD2,100,000 (United States Two Millions and One
  Hundred Thousand Only) or equivalent Singapore Dollar with the following sub
  limit:

  
	
   

  	
   

  	
  Up to 70% of loan limit - new laboratory and
  scientific equipment

  
	
   

  	
   

  	
  Up to 8% of loan limit - new computer hardware

  
	
   

  	
   

  	
  Up to 5% of loan limit - general office equipment
  and furniture

  
	
   

  	
   

  	
  Up to 17% of loan limit - various soft costs

  
	
   

  	
   

  	
   

  
	
  Tenure

  	
  :

  	
  48 months for all new laboratory and scientific
  equipment

  
	
   

  	
   

  	
  36 months for all other Equipment

  
	
   

  	
   

  	
   

  
	
  Interest Rate

  	
  :

  	
  5.44% + COF, (the COF is defined as USA Dollar GE
  Treasury Cost Of Fund, as of November, 2006 are 5.3959% for 48 months COF and
  5.4253% for 36 months COF)

  
	
   

  	
   

  	
   

  
	
  Repayment

  	
  :

  	
  Monthly installments will be payable during the
  period of financing, the first of which is due and payable on the
  commencement of the Loan and thereafter, on the first day of each succeeding
  month until the whole of the Loan has been paid in full. Monthly installments
  shall be deducted through the interbank GIRO.

  
	
   

  	
   

  	
   

  
	
  Pre-payment

  	
  :

  	
  No prepayment is allowed in the first 12 months. A
  pre-payment fee on the outstanding amount shall be payable upon early retirement
  of the Loan as follows:

  
	
   

  	
   

  	
  a)

  	
  6.0% flat within 24 months from disbursement

  
	
   

  	
   

  	
  b)

  	
  5.0% flat within 36 months from disbursement

  
	
   

  	
   

  	
  c)

  	
  4.0% flat within 48 months from disbursement

  
	
   

  	
   

  	
   

  	
   

  
	
  Processing Fee

  	
  :

  	
  USD 15,750, half shall be earned by GE as a
  non-recurring upfront due diligence and processing fee and the remainder
  applied to the initial payment(s) on a pro rata basis

  

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  with any unutilized Deposit remaining at the end of
  the Anticipated Funding Period to be retained by GE as a non-utilization fee.
  GE acknowledges that it has received the processing fee.

  
	
   

  	
   

  	
   

  
	
  Validity

  	
  :

  	
  Valid until November 30, 2007, after which any
  undrawn portion of the Loan shall be cancelled unless a request for extension
  is approved by us.

  
	
   

  	
   

  	
   

  
	
  Securities

  	
  :

  	
  The Loan shall be secured by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  i)

  	
  A debenture taking a first fixed charge over the
  Equipment to be executed in favour of GE; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ii)

  	
  corporate guarantee by CombinatoRx, Incorporated.

  

 

Conditions:

1)                                                 All
Equipment must be acceptable to GE and located at Company owned or leased
facilities. All collateral shall be free and clear of all liens, claims and
encumbrances.

2)                                                 You
shall arrange acceptable insurance for the Equipment in favour of GE as Chargee
and Loss Payee.

3)                                                 You
shall not create further mortgage, debenture, charge or lien whether fixed or
floating over the financed Equipment.

4)                                                 You
shall keep proper records of accounts at all times to enable our auditors to
inspect and take extracts from your books and records of accounts at all
reasonable times, subject to obligations of confidentiality.

5)                                                 You
shall bear all expenses including but not limited to stamp fees (penalty or
otherwise), legal costs (including abortive costs), documentation fees, out of
pocket fees, inspection and appraisal fees and any other costs reasonably
incurred by us in relation to the Loan, which fees shall not excess USD 7,000
for two debentures. If you require more than two debentures under the Loan, you
shall bear all expenses as listed above.

6)                                                 In
the event that you fail to make payment on due date of any sum, whether
principal, interest, fees or otherwise, payable under the facility or a demand
is made on the occurrence of any event of default mentioned in the Debenture
and you fail to make repayment, additional interest at an interest rate of 18%
per annum on the amount due to us, shall be payable by you. You shall pay an
administrative charge of $30 for any late payment and $20 for any returned
cheque or rejected direct debit authorization.

7)                                                 GE
reserves the right at any time to call the Loan if there is any material
adverse change in your and/or the guarantors’ financial or operating condition
or in the value of the security or any other factors materially affecting the
Loan.

8)                                                 Until
the execution of definitive documents, GE reserves the right to vary any of the
above terms and conditions (including without limitation any suspension,
variation, termination of the Facilities or any part thereof) from time to time
at our discretion and without advance notice to you and the availability of the
Facilities is subject to there being no circumstances which in our sole opinion
could affect our decision or willingness to offer or continue to grant the
Facilities.

9)                                                 Without
prejudice to our right to demand for repayment of all liabilities under the
Loan at any time upon a material adverse change, GE may declare the whole of
the liabilities or the balance thereof, remaining

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                                                           unpaid
and interest charges and all other monies due and owing to be due and payable;
and all security interests held by us shall become enforceable on the
occurrence of any of the events of default in the Loan Agreement/Debenture or
any other security document or documents.

Your right to draw down
the Loan shall be subject to the conditions precedent that there shall have
been previously delivered to us, the following documents in form and substance
satisfactory to us.

1)                                                 Duplicate
copy of this Letter of Offer duly stamped and signed by your Director(s).

2)                                                 A
certified copy of your Directors’ resolution (specimen attached) accepting all
the terms and conditions contained herein.

3)                                                 Continuing
Guarantee (enclosed herewith) duly executed (in duplicate) by CombinatoRx,
Incorporated together with a certified true copy the Directors’ resolution.

4)                                                 The
latest copy of the Memorandum and Articles of Association bearing a
certification by the Secretary of the Company as the copy consisting all the
terms and conditions now subsisting.

5)                                                 Certified
true copies of the NRIC/Passport of all authorised signatures.

6)                                                 Deed
of Debenture duly executed in duplicate by your Directors in the presence of a
Solicitor.

We look forward to
receiving the above as soon as possible.

Kindly call Ms Anita
Wibisono at telephone no. 64319312 if you have any enquiries pertaining to this
letter of offer.

Yours faithfully,

 

	
  /s/ Arie Hendradjat

  	
   

  	
  /s/ Evelyn Chia

  	
   

  
	
  Arie Hendradjat

  	
   

  	
  Evelyn Chia

  
	
  Senior Risk Manager

  	
   

  	
  Chief Risk Officer

  

 

/ss

encl.

To: GE CAPITAL SERVICES
PTE LTD

We accept and agree to
the foregoing terms and conditions stated herein this Letter of Offer.

For And On Behalf Of

COMBINATORX (SINGAPORE) PTE. LTD.

	
  

  	
   

  	
   

  
	
  /s/ Ralf Altmeyer

  	
   

  	
  28 Nov 2006

  	
   

  
	
  Authorised signature and company’s stamp

  	
   

  	
  Date

  	
   

  
					

 

 3

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