X0202 4 2006-10-31 1 0000740670 MICHAELS STORES INC MIK 0001185891 DECARO THOMAS C 8000 BENT BRANCH DRIVE IRVING TX 75063 0 1 0 0 EVP - Supply Chain Common Stock 2006-10-31 4 D 0 143 44.00 D 0 D Common Stock 2006-10-31 4 D 0 1295 44.00 D 0 I By 401(k) Plan Stock Option (Right to Buy) 17.05 2006-10-31 4 D 0 35000 D 2007-08-06 Common Stock 35000 0 D Stock Option (Right to Buy) 17.655 2006-10-31 4 D 0 35000 D 2008-08-06 Common Stock 35000 0 D Stock Option (Right to Buy) 25.59 2006-10-31 4 D 0 35000 D 2009-08-05 Common Stock 35000 0 D Stock Option (Right to Buy) 37.96 2006-10-31 4 D 0 43750 D 2010-08-04 Common Stock 43750 0 D This report relates to the exempt disposition of issuer securities by the reporting person pursuant to the agreement and plan of merger, dated as of June 30, 2006, among Bain Paste Mergerco, Inc., Blackstone Paste Mergerco, Inc., Bain Paste Finco, LLC, Blackstone Paste Finco, LLC and the issuer (the "Merger Agreement"). Disposed pursuant to the Merger Agreement in exchange for a cash payment of $44.00 per share. The reported amount was held by a stock fund under the Michaels Stores, Inc. Employees 401(k) Plan. This option to purchase issuer common stock (which provides for vesting of approximately one-third of the option on each of the first, second and third anniversary of the date of grant (8/07/2002)) was, in accordance with the Merger Agreement, canceled 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. This option to purchase issuer common stock (which provides for vesting of approximately one-third of the option on each of the first, second and third anniversary of the date of grant (8/07/2003)) was, in accordance with the Merger Agreement, canceled 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. This option to purchase issuer common stock (which provides for vesting of approximately one-third of the option on each of the first, second and third anniversary of the date of grant (8/06/2004)) was, in accordance with the Merger Agreement, canceled 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. This option to purchase issuer common stock (which provides for vesting of approximately one-third of the option on each of the first, second and third anniversary of the date of grant (8/05/2005)) was, in accordance with the Merger Agreement, canceled 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. /s/ Todd J. Thorson Todd J. Thorson, Attorney-in-Fact for Thomas C. DeCaro 2006-11-02