SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
X	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* WYLY SAMUEL EVANS (Last) (First) (Middle) 300 CRESCENT COURT SUITE 1000 (Street) DALLAS TX 75201 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol MICHAELS STORES INC [ MIK ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X Director 10% Owner X Officer (give title below) Other (specify below) Vice-Chairman of the Board
	3. Date of Earliest Transaction (Month/Day/Year) 10/31/2006
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) X Form filed by One Reporting Person Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock(1)	10/31/2006		D		1,338,351	D	$44(2)	0	D
Common Stock(1)	10/31/2000		D		400,000	D	$44(2)	0	I(3)	By Partnership(4)
Common Stock(1)	10/31/2006		D		27,740	D	$44(2)	0	I(3)	By Spouse
Common Stock(1)	10/31/2006		D		145,472	D	$44(2)	0	I(3)	By Trust(5)
Common Stock(1)	10/31/2006		D		149,572	D	$44(2)	0	I(3)	By Trust(6)
Common Stock(1)	10/31/2006		D		2,142,600	D	$44(2)	0	I(3)	By Foreign Entity(7)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Stock Option (Right to Buy)(1)	$21.13	10/31/2006		D			35,000	(8)	06/19/2007	Common Stock	35,000	(8)	0	D
Stock Option (Right to Buy)(1)	$17.05	10/31/2006		D			100,000	(9)	08/06/2007	Common Stock	100,000	(9)	0	D
Stock Option (Right to Buy)(1)	$19.48	10/31/2006		D			35,000	(10)	06/18/2008	Common Stock	35,000	(10)	0	D
Stock Option (Right to Buy)(1)	$17.66	10/31/2006		D			100,000	(11)	08/06/2008	Common Stock	100,000	(11)	0	D
Stock Option (Right to Buy)(1)	$26.64	10/31/2006		D			35,000	(12)	06/16/2009	Common Stock	35,000	(12)	0	D
Stock Option (Right to Buy)(1)	$25.59	10/31/2006		D			100,000	(13)	08/05/2009	Common Stock	100,000	(13)	0	D
Stock Option (Right to Buy)(1)	$41.87	10/31/2006		D			30,000	(14)	06/15/2010	Common Stock	30,000	(14)	0	D
Stock Option (Right to Buy)(1)	$37.96	10/31/2006		D			87,500	(15)	08/04/2010	Common Stock	87,500	(15)	0	D

Explanation of Responses:

1. This report relates to the exempt disposition of issuer securities by the Reporting Person pursuant to the Agreement and Plan of Merger, dated June 30, 2006 (the "Merger Agreement"), between Bain Paste Mergerco, Inc., Blackstone Paste Mergerco, Inc., Bain Paste Finco, LLC, and Blackstone Paste Finco, LLC, and Michaels Stores, Inc. (the "Issuer").

2. Disposed pursuant to the Merger Agreement in exchange for a cash payment of $44.00 per share.

3. Notwithstanding the inclusion of the securities reported in this Form 4, the Reporting Person disclaims beneficial ownership of the securities held in the various trusts (and/or the subsidiaries thereof) mentioned in this report, except to the extent of his pecuniary interest in them.

4. Represents shares held by Tallulah, Ltd., a domestic limited partnership of which the Reporting Person is a general partner.

5. Represents shares held by Christiana Parker Wyly Trust, of which the Reporting Person is the trustee.

6. Represents shares held by Andrew David Sparrow Wyly Trust, of which the Reporting Person is the trustee.

7. Represents shares held by subsidiaries formed under the laws of the Isle of Man. Each subsidiary is owned by a foreign trust that either (i) was formed by the Reporting Person, and/or (ii) benefits, inter alia, the Reporting Person, his spouse, and his issue.

8. This option to purchase issuer common stock was granted under the Michaels Stores, Inc. 2001 General Stock Option Plan, and vested immediately upon grant (6/20/2002). In accordance with the Merger Agreement, this option was cancelled and converted into the right to receive a cash payment equal to the excess (if any) of the $44.00 per share cash merger consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

9. This option to purchase issuer common stock was granted under the Michaels Stores, Inc. 1997 Stock Option Plan. Vesting of approximately one-third of the option was scheduled to occur on each of the first, second, and third anniversary of the date of the grant (8/7/2002). In accordance with the Merger Agreement, this option was cancelled and converted into the right to receive a cash payment equal to the excess (if any) of the $44.00 per share cash merger consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

10. This option to purchase issuer common stock was granted under the Michaels Stores, Inc. 2001 General Stock Option Plan, and vested immediately upon grant (6/19/2003). In accordance with the Merger Agreement, this option was cancelled and converted into the right to receive a cash payment equal to the excess (if any) of the $44.00 per share cash merger consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

11. This option to purchase issuer common stock was granted under the Michaels Stores, Inc. 1997 Stock Option Plan. Vesting of approximately one-third of the option was scheduled to occur on each of the first, second, and third anniversary of the date of the grant (8/7/2003). In accordance with the Merger Agreement, this option was cancelled and converted into the right to receive a cash payment equal to the excess (if any) of the $44.00 per share cash merger consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

12. This option to purchase issuer common stock was granted under the Michaels Stores, Inc. 2001 General Stock Option Plan, and vested immediately upon grant (6/17/2004). In accordance with the Merger Agreement, this option was cancelled and converted into the right to receive a cash payment equal to the excess (if any) of the $44.00 per share cash merger consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

13. This option to purchase issuer common stock was granted under the Michaels Stores, Inc. 1997 Stock Option Plan. Vesting of approximately one-third of the option was scheduled to occur on each of the first, second, and third anniversary of the date of the grant (8/6/2004). In accordance with the Merger Agreement, this option was cancelled and converted into the right to receive a cash payment equal to the excess (if any) of the $44.00 per share cash merger consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

14. This option to purchase issuer common stock was granted under the Michaels Stores, Inc. 2005 Stock Option Plan, and vested immediately upon grant (6/16/2005). In accordance with the Merger Agreement, this option was cancelled and converted into the right to receive a cash payment equal to the excess (if any) of the $44.00 per share cash merger consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

15. This option to purchase issuer common stock was granted under the Michaels Stores, Inc. 2005 Stock Option Plan. Vesting of approximately one-third of the option was scheduled to occur on each of the first, second, and third anniversary of the date of the grant (8/5/2005). In accordance with the Merger Agreement, this option was cancelled and converted into the right to receive a cash payment equal to the excess (if any) of the $44.00 per share cash merger consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

Remarks:

	/s/ Eric Markus, Attorney-in-Fact for Sam Wyly, Jr.	10/31/2006
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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