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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 14, 2006
MICHAELS STORES, INC.
(Exact Name of Registrant as Specified in Charter)
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| Delaware
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001-09338
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75-1943604 |
| (State or Other Jurisdiction
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(Commission
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(IRS Employer |
| of Incorporation)
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File Number)
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Identification No.) |
8000 Bent Branch Drive
Irving, Texas 75063
P.O. Box 619566
DFW, Texas 75261-9566
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (972) 409-1300
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
Amendment of R. Michael Rouleau’s Employment Agreement
Effective as of March 15, 2006, in connection with his retirement from Michaels Stores, Inc.
(the “Company”) as described below, Mr. Rouleau, the Company’s Chief Executive Officer and
President, and the Company entered into an Amendment to Employment Agreement (the “Amendment”),
providing for the amendment of Mr. Rouleau’s Amended and Restated Employment Agreement.
Pursuant
to the Amendment, Mr. Rouleau will serve as Special Advisor to the Board of Directors
of the Company (the “Board”). Mr. Rouleau will continue to receive his
current base salary of $840,000 through January 31, 2008 and will receive a bonus for fiscal year
2006, prorated to March 31, 2006. Mr. Rouleau and his spouse will continue to participate
in the Company’s medical, dental and vision care plan on the same basis as that available from time
to time to senior executive officers of the Company and their eligible dependents, except as
otherwise provided by the Agreement and the Amendment. Mr. Rouleau’s current life insurance and
disability insurance benefits will continue in effect until January 31, 2008, including his Company-owned
whole life insurance policies which will be transferred to Mr. Rouleau on January 31, 2008. Mr.
Rouleau’s Company-paid automobile will be transferred to him in connection with his retirement and
the Company is to make a tax gross-up payment to Mr. Rouleau for the income tax effect of this
transfer. In addition, each outstanding option to purchase common stock of the Company granted to
Mr. Rouleau prior to August 5, 2005 became fully vested and exercisable, and the exercise period of
such options was extended to March 14, 2011. Options granted to
Mr. Rouleau after August 4, 2005
are to vest and expire in accordance with their terms.
The above summary of the Amendment is qualified in its entirety by reference to the full text
of the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K,
and the full text of Mr. Rouleau’s Amended and Restated Employment Agreement, a copy of which is
attached as Exhibit 10.1 to the Company’s Form 10-Q for the period ended July 31, 2004, filed by
the Company on September 1, 2004, SEC File No. 001-09338, and each is incorporated by reference
into this Item 1.01.
2006 Base Compensation and Bonus Plans
On March 14, 2006, the Compensation Committee of the Board (the “Compensation Committee”)
approved the following actions regarding the Company’s executive officers as set out below.
2006 Base Compensation Determination for Executive Officers
The Compensation Committee approved the annual base compensation rates, payable during
continued employment, of the Company’s executive officers, to be effective as of March 26, 2006.
The following table sets forth the annual base compensation of the Company’s executive officers for
2006 and 2005:
2
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Base |
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| Name and Position |
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Year |
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Compensation |
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Charles J. Wyly, Jr. |
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2006 |
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$ |
450,000
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Chairman of the Board of Directors |
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2005 |
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$ |
450,000 |
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Sam Wyly |
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2006 |
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$ |
225,000
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Vice Chairman of the Board of Directors |
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2005 |
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$ |
225,000 |
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R. Michael Rouleau |
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2006 |
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$ |
840,000
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President and Chief Executive Officer |
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2005 |
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$ |
808,100 |
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Jeffrey N. Boyer |
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2006 |
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$ |
390,000
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Executive Vice President – Chief |
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2005 |
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$ |
375,000 |
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Financial
Officer (effective March 15, 2006,
President and Chief Financial Officer) |
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Gregory A. Sandfort |
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2006 |
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$ |
310,000
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Executive Vice President – General |
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2005 |
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$ |
300,000 |
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Merchandise Manager (effective March
15, 2006, President and Chief
Operating Officer) |
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Edward F. Sadler |
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2006 |
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$ |
340,000
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Executive Vice President – |
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2005 |
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$ |
330,000 |
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Store Operations |
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Thomas C. DeCaro |
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2006 |
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$ |
284,000
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Executive Vice President – |
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2005 |
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$ |
275,000 |
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Supply Chain |
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Harvey S. Kanter |
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2006 |
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$ |
300,000
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President – Aaron Brothers (effective |
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2005 |
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$ |
290,750 |
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March 15, 2006, Executive Vice
President – Chief Merchant) |
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Thomas M. Bazzone |
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2006 |
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$ |
295,000
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President – Recollections and Star |
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2005 |
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$ |
285,000 |
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Decorators Wholesale (effective March
15, 2006, Executive Vice President –
Specialty Businesses) |
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Fiscal Year 2006 Bonus Plans
The Compensation Committee approved the Fiscal Year 2006 Bonus Plans for the following
executive officers of the Company:
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Position: |
R. Michael Rouleau
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President and Chief Executive Officer |
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Jeffrey N. Boyer
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Executive Vice President – Chief Financial Officer
(effective March 15, 2006, President and Chief
Financial Officer) |
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Gregory A. Sandfort
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Executive Vice President – General Merchandise
Manager (effective March 15, 2006, President and
Chief Operating Officer) |
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Edward F. Sadler
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Executive Vice President – Store Operations |
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Thomas C. DeCaro
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Executive Vice President – Supply Chain |
The Fiscal Year 2006 Bonus Plans for the Company’s executive officers are attached to this
Current Report on Form 8-K as Exhibits 10.2, 10.3, 10.4, 10.5 and 10.6, and each is incorporated by
reference into this Item 1.01.
Cash Bonus Awards Under 2005 Bonus Plans
On March 14, 2006, the Compensation Committee approved annual cash bonus awards earned during
2005 to be paid in 2006 to R. Michael Rouleau and Jeffrey N. Boyer in accordance with their
respective Fiscal Year 2005 Bonus Plans.1 In addition, discretionary bonus awards were
approved for the following executive officers of the Company in the following amounts:
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| Name and Position |
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2005 Bonus |
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Edward F. Sadler
Executive Vice President –
Store Operations |
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$ |
112,000 |
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Gregory A. Sandfort
Executive Vice President –
General Merchandise Manager (effective March 15, 2006, President and
Chief Operating Officer) |
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$ |
91,000 |
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Copies of Mr. Rouleau’s and Mr.
Boyer’s Fiscal Year 2005 Bonus Plans are attached as Exhibits 10.1 and
10.2, respectively, to the Company’s Form 8-K filed on April 13, 2005,
SEC File No. 001-09338. |
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Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Effective March 15, 2006, the Company and R. Michael Rouleau, the Chief Executive Officer and
President of the Company, entered into an amendment to Mr. Rouleau’s Amended and Restated
Employment Agreement. Effective as of that date, Mr. Rouleau retired from these offices and any
other offices he held with the Company or any of its subsidiaries or affiliates. Concurrent with
Mr. Rouleau’s retirement, the Board elected each of Jeffrey N. Boyer and Gregory A. Sandfort as
President of the Company, to serve as co-Presidents with the responsibilities of this office
divided between them. Mr. Boyer will continue to serve as the Company’s Chief Financial Officer and
Mr. Sandfort was also elected to the position of Chief Operating Officer. The Board determined
to leave the office of Chief Executive Officer vacant with the responsibilities of this office
being assumed by Mr. Boyer and Mr. Sandfort as co-Presidents. A description of Messrs. Boyer’s and
Sandfort’s biographical information is as follows:
Jeffrey N. Boyer, President; Age 47
Mr. Boyer became Executive Vice President—Chief Financial Officer in January 2003 and served
in that office until his promotion to President in March of 2006. Prior to joining the Company,
Mr. Boyer was Executive Vice President and Chief Financial Officer of Kmart Corporation from May
2001 until November 2001. In January 2002, Kmart Corporation filed a voluntary petition for
reorganization under Chapter 11 of the United States Bankruptcy Code. Prior to joining Kmart, he
held various positions with Sears, Roebuck and Co., where he served as Senior Vice President and
Chief Financial Officer from October 1999 to May 2001, Corporate Controller from June 1998 to
October 1999, and Vice President, Finance—Full Line Stores from June 1996 to June 1998. Prior
experience includes Vice President of Business Development at The Pillsbury Company from 1995 to
1996 and over six years with Kraft Foods, a unit of the Altria Group, in various senior financial
positions.
Gregory A. Sandfort, President; Age 50
Mr. Sandfort became Executive Vice President—General Merchandise Manager in January 2004 and
served in that office until his promotion to President and Chief Operating Officer in March of 2006. From September 2002 to
August 2003, Mr. Sandfort served as Vice Chairman and Co-CEO of Kleinert’s, Inc. (d/b/a Buster
Brown) where he was directly responsible for all merchandising and operational aspects of
Kleinert’s sleepwear, playwear, and retail divisions. In May 2003, Kleinert’s filed a voluntary
petition for reorganization under Chapter 11 of the United States Bankruptcy Code, which was
subsequently converted to a liquidation under Chapter 7. Prior to that, Mr. Sandfort served as Vice
President, General Merchandise Manager—Children’s Apparel, Furniture, Toys, and Electronic Games
for Sears, Roebuck and Co. for four years. While at Sears, Roebuck and Co., Mr. Sandfort was
directly responsible for the children’s division.
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Item 5.03. Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Effective March 15, 2006, the Board amended the Company’s Amended and Restated Bylaws to add
the following Section 17 to Article VI thereof:
“Section 17. SPLITTING
OFFICER FUNCTIONS. Any office provided
for in this Article VI may be split between two or more officers
with the same title by resolution of the Board of Directors, each
such officer to have the functions, responsibilities and title
provided for in such resolution.”
A copy of the Company’s Amended and Restated Bylaws adopted as of March 15, 2006 incorporating
the foregoing amendment is attached as Exhibit 3.1 to this Current Report on Form 8-K and is
incorporated by reference into this Item 5.03.
Item 8.01. Other Events.
On March 20, 2006, the Company issued a press release, a copy of which is attached as Exhibit
99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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| Exhibit |
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Description |
3.1
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Amended and Restated Bylaws of Michaels Stores, Inc. |
10.1
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Amendment to Employment Agreement, dated March 15, 2006, between
Michaels Stores, Inc. and R. Michael Rouleau |
10.2
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Fiscal Year 2006 Bonus Plan for R. Michael Rouleau |
10.3
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Fiscal Year 2006 Bonus Plan for Jeffrey N. Boyer |
10.4
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Fiscal Year 2006 Bonus Plan for Gregory A. Sandfort |
10.5
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Fiscal Year 2006 Bonus Plan for Edward F. Sadler |
10.6
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Fiscal Year 2006 Bonus Plan for Thomas C. DeCaro |
99.1
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Press release issued by Michaels Stores, Inc., dated March 20, 2006 |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MICHAELS STORES, INC. |
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By:
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/s/ Jeffrey N. Boyer |
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Jeffrey N. Boyer |
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President and Chief Financial Officer |
Date: March 20, 2006
INDEX TO EXHIBITS
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| Exhibit |
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Description |
3.1
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Amended and Restated Bylaws of Michaels Stores, Inc. |
10.1
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Amendment to Employment Agreement, dated March 15, 2006, between
Michaels Stores, Inc. and R. Michael Rouleau |
10.2
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Fiscal Year 2006 Bonus Plan for R. Michael Rouleau |
10.3
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Fiscal Year 2006 Bonus Plan for Jeffrey N. Boyer |
10.4
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Fiscal Year 2006 Bonus Plan for Gregory A. Sandfort |
10.5
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Fiscal Year 2006 Bonus Plan for Edward F. Sadler |
10.6
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Fiscal Year 2006 Bonus Plan for Thomas C. DeCaro |
99.1
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Press release issued by Michaels Stores, Inc., dated March 20, 2006 |