MIK Michaels Companies Inc

On October 22, 2019, The Michaels Companies, Inc. (the “Company”) announced the appointment of Mark Cosby as the Chief Executive Officer of the Company, effective as of October 21, 2019. Mr. Cosby had served as the Company’s Interim Chief Executive Officer since February 28, 2019. The information related to Mr. Cosby in the Company’s Current Report on Form 8-K filed on February 28, 2019 is incorporated herein by reference.

In connection with his appointment as Chief Executive Officer, on October 21, 2019, Mr. Cosby, the Company and Michaels Stores, Inc. entered into an amendment (the “Letter Agreement Amendment”) to Mr. Cosby’s letter agreement that had been entered into in connection with his prior appointment as Interim Chief Executive Officer. Pursuant to the Letter Agreement Amendment, in lieu of the quarterly grants of restricted stock that Mr. Cosby had previously been eligible to receive, he will be eligible for quarterly grants of restricted stock units in the future. These restricted stock unit awards will contain similar terms as the restricted stock awards, except that for the new restricted stock unit grants (i) “Qualifying Termination” will be amended to mean (a) a termination of Mr. Cosby’s employment (x) without Cause (as defined in Mr. Cosby’s letter agreement), provided he no longer continues to serve on the Company’s board of directors (the “Board”), (y) due to his disability, provided he no longer continues to serve on the Company’s Board, or (z) by reason of Mr. Cosby’s death, or (b) following Mr. Cosby’s termination of employment for any reason other than for Cause, (x) termination of Mr. Cosby’s Board service without Cause or (y) he is not re-elected to the Board and Cause does not exist, (ii) the unvested portion of each grant will be immediately forfeited upon Mr. Cosby’s termination of employment or Board service for Cause or upon a restrictive covenant breach, and (iii) the vesting terms may be revised for future grants to reflect the same ratio of time vesting to performance vesting as the Company adopts for its annual restricted stock unit grants to its other executive officers.

The Company has also granted Mr. Cosby options to purchase 860,000 shares of the Company’s common stock, vesting annually over four years, and 75,000 restricted stock units, vesting annually over two years. Such options have an exercise price equal to $9.87, which was equal to the closing price of the Company’s common stock on The Nasdaq Global Select Market on the date of grant. The other terms of these award agreements generally are consistent with the Company’s forms of option and restricted stock unit award agreements used for grants to the Company’s other executive officers in its most recent annual grants in March 2019, except that (i) each award will only be eligible to vest if Mr. Cosby remains Chief Executive Officer of the Company through the applicable vesting date, (ii) each award will vest on a pro-rata basis on the next annual vesting date following the Company’s termination of Mr. Cosby’s employment as Chief Executive Officer without Cause, and (iii) vested options will remain exercisable for two years following the Company’s termination of Mr. Cosby’s employment as Chief Executive Officer for any reason other than for Cause and will be immediately forfeited if Mr. Cosby breaches a restrictive covenant.