8000 Bent Branch Drive Irving, Texas 75063 972.409.1300

102 South Hickory Avenue Bel Air, MD 21014

Purchasing Department 410-638-4082

RFP # 20-SEH-020 REQUEST FOR PROPOSALS

FOR

ARTS, CRAFTS, FRAMING, AND RELATED SERVICES

VOLUME I - TECHNICAL PROPOSAL December 28, 2019

Purchasing Office Harford County Public Schools Administration Building, 3rd Floor 102 South Hickory Avenue Bel Air, MD 21014

Dear Harford County Public Schools Review Committee:

On behalf of The Michaels Companies, we are pleased to present you with our finalized proposal for RFP 20-SHE-020 for Arts, Crafts, Framing, and Related Services.

We are a family of brands that represent the largest retailer and wholesaler of arts and crafts supplies in North America. Whether it’s the Michaels retail stores or the Michaels wholesale division, Darice, we have always been committed to offering customers an extensive selection of arts and crafts products, while at the same time inspiring creativity, fostering meaningful connections with our communities, and delivering high-quality customer support. We feel that this provides us with the unique ability to offer the exceptional value and service levels for Harford County Public Schools.

We believe that The Michaels Companies has all the product and ideas you need to create one-of-a- kind classrooms. From bulletin board ideas to fun and educational games, we have the inspiration teachers need to make their classroom a fun place to be. Michaels and Darice can offer the products and value that educators need to stretch their budgets, enable creativity and create a fun and inspiring place for students to learn. We are well positioned to partner and support Harford County Public Schools with our strength in the national marketplace, exceptional customer service and operational capabilities.

We go to work every day to do one thing: Make Creativity Happen. We believe anyone can make, and we’re on a mission to inspire and encourage everyone to unleash his or her inner maker. With over 65 years of wholesale and retail experience, The Michaels Company is well positioned to support Harford County Public Schools. We believe our partnership will provide value for educators as well as the solutions they need to Make Creativity Happen in the classroom. Thank you for the opportunity and consideration of our RFP response. We look forward to a strong and successful partnership with you in the future. If you have any questions or concerns, please do not hesitate to contact me directly.

Respectfully,

Christopher Freeman, President Lamrite West, Inc., a Michaels company TABLE OF CONTENTS

Page Tab 1 – Company Information and Capability ...... 1 Response to Exhibit A, OMNIA Partners Response for National Cooperative Contract ...... 2 Dunn & Bradstreet Reports ...... 24 2019 Sustainability Report ...... 51 Offer and Contract Signature Form ...... 60 Terms and Conditions Acceptance Form ...... 61 Exhibit F – Federal Funds Certifications ...... 62 Exhibit G – New Jersey Business Compliance ...... 67 Quarterly Financial Statements (unaudited) ...... 81

Tab 2 – Products, Pricing and Distribution ...... 99 Core Pricing List ...... 103

Tab 4 – References ...... 121

Tab 9 – Addenda ...... 126 Addendum #1 ...... 127 Addendum #2 ...... 128

Tab 10 –Required Documents ...... 129 Attachment “B” Insurance Requirements for Service/Consulting Contracts . 130 Attachment “C” Debarment Certification ...... 132 Attachment “D” Conflict of Interest Form ...... 133 Attachment “E” Employment of Sex Offenders and Other Criminal Offenders Affidavit...... 134 Attachment “F” Anti-Bribery Affidavit ...... 135 Attachment “G” Contract ...... 136 Exhibit A – Response for National Cooperative Contract ...... 137 Exhibit F – Federal Funds Certifications ...... 161 Exhibit G – New Jersey Business Compliance ...... 166 TAB 1

COMPANY INFORMATION AND CAPABILITY

1 EXHIBIT A RESPONSE FOR NATIONAL COOPERATIVE CONTRACT

1.0 Scope of National Cooperative Contract

Capitalized terms not otherwise defined herein shall have the meanings given to them in the Master Agreement or in the Administration Agreement between Supplier and OMNIA Partners, Public Sector.

1.1 Requirement

Harford County Public Schools, Maryland (hereinafter defined and referred to as “Principal Procurement Agency”), on behalf of itself and the National Intergovernmental Purchasing Alliance Company, a Delaware corporation d/b/a OMNIA Partners, Public Sector (“OMNIA Partners, Public Sector”), is requesting proposals for Arts, Crafts, Framing, and Related Services. The intent of this Request for Proposal is any contract between Principal Procurement Agency and Supplier resulting from this Request for Proposal (“Master Agreement”) be made available to other public agencies nationally, including state and local governmental entities, public and private primary, secondary and higher education entities, non-profit entities, and agencies for the public benefit (“Public Agencies”), through OMNIA Partners, Public Sector’s cooperative purchasing program. The Principal Procurement Agency has executed a Principal Procurement Agency Certificate with OMNIA Partners, Public Sector, an example of which is included as Exhibit D, and has agreed to pursue the Master Agreement. Use of the Master Agreement by any Public Agency is preceded by their registration with OMNIA Partners, Public Sector as a Participating Public Agency in OMNIA Partners, Public Sector’s cooperative purchasing program. Registration with OMNIA Partners, Public Sector as a Participating Public Agency is accomplished by Public Agencies entering into a Master Intergovernmental Cooperative Purchasing Agreement, an example of which is attached as Exhibit C, and by using the Master Agreement, any such Participating Public Agency agrees that it is registered with OMNIA Partners, Public Sector, whether pursuant to the terms of the Master Intergovernmental Purchasing Cooperative Agreement or as otherwise agreed to. The terms and pricing established in the resulting Master Agreement between the Supplier and the Principal Procurement Agency will be the same as that available to Participating Public Agencies through OMNIA Partners, Public Sector.

All transactions, purchase orders, invoices, payments etc., will occur directly between the Supplier and each Participating Public Agency individually, and neither OMNIA Partners, Public Sector, any Principal Procurement Agency nor any Participating Public Agency, including their respective agents, directors, employees or representatives, shall be liable to Supplier for any acts, liabilities, damages, etc., incurred by any other Participating Public Agency. Supplier is responsible for knowing the tax laws in each state.

2 This Exhibit A defines the expectations for qualifying Suppliers based on OMNIA Partners, Public Sector’s requirements to market the resulting Master Agreement nationally to Public Agencies. Each section in this Exhibit A refers to the capabilities, requirements, obligations, and prohibitions of competing Suppliers on a national level in order to serve Participating Public Agencies through OMNIA Partners, Public Sector.

These requirements are incorporated into and are considered an integral part of this RFP. OMNIA Partners, Public Sector reserves the right to determine whether or not to make the Master Agreement awarded by the Principal Procurement Agency available to Participating Public Agencies, in its sole and absolute discretion, and any party submitting a response to this RFP acknowledges that any award by the Principal Procurement Agency does not obligate OMNIA Partners, Public Sector to make the Master Agreement available to Participating Procurement Agencies.

1.2 Marketing, Sales and Administrative Support

During the term of the Master Agreement OMNIA Partners, Public Sector intends to provide marketing, sales, partnership development and administrative support for Supplier pursuant to this section that directly promotes the Supplier’s products and services to Participating Public Agencies through multiple channels, each designed to promote specific products and services to Public Agencies on a national basis.

OMNIA Partners will assign the Supplier a Director of Partner Development who will serve as the main point of contact for the Supplier and will be responsible for managing the overall relationship between the Supplier and OMNIA Partners. The Director of Partner Development will work with the Supplier to develop a comprehensive strategy to promote the Master Agreement and will connect the Supplier with appropriate stakeholders within OMNIA Partners including, Sales, Marketing, Contracting, Training, and Operations & Support.

The OMNIA Partners, Public Sector marketing team will work in conjunction with Supplier to promote the Master Agreement to both existing Participating Public Agencies and prospective Public Agencies through channels that may include:

A. Marketing collateral (print, electronic, email, presentations) B. Website C. Trade shows/conferences/meetings D. Advertising E. Social Media

3 The OMNIA Partners, Public Sector sales teams will work in conjunction with Supplier to promote the Master Agreement to both existing Participating Public Agencies and prospective Public Agencies through initiatives that may include:

A. Individual sales calls B. Joint sales calls C. Communications/customer service D. Training sessions for Public Agency teams E. Training sessions for Supplier teams

The OMNIA Partners, Public Sector contracting teams will work in conjunction with Supplier to promote the Master Agreement to both existing Participating Public Agencies and prospective Public Agencies through:

A. Serving as the subject matter expert for questions regarding joint powers authority and state statutes and regulations for cooperative purchasing B. Training sessions for Public Agency teams C. Training sessions for Supplier teams D. Regular business reviews to monitor program success E. General contract administration

Suppliers are required to pay an administrative fee of 3% of the greater of the Contract Sales under the Master Agreement and Guaranteed Contract Sales under this Request for Proposal. Supplier will be required to execute the OMNIA Partners, Public Sector Administration Agreement (Exhibit B).

1.3 Estimated Volume

The dollar volume purchased under the Master Agreement is estimated to be approximately $20M annually. While no minimum volume is guaranteed to Supplier, the estimated annual volume is projected based on the current annual volumes among the Principal Procurement Agency, other Participating Public Agencies that are anticipated to utilize the resulting Master Agreement to be made available to them through OMNIA Partners, Public Sector, and volume growth into other Public Agencies through a coordinated marketing approach between Supplier and OMNIA Partners, Public Sector.

1.4 Award Basis

The basis of any contract award resulting from this RFP made by Principal Procurement Agency will, at OMNIA Partners, Public Sector’s option, be the basis of award on a national level through OMNIA Partners, Public Sector. If multiple Suppliers are awarded by 4 Principal Procurement Agency under the Master Agreement, those same Suppliers will be required to extend the Master Agreement to Participating Public Agencies through OMNIA Partners, Public Sector. Utilization of the Master Agreement by Participating Public Agencies will be at the discretion of the individual Participating Public Agency. Certain terms of the Master Agreement specifically applicable to the Principal Procurement Agency (e.g. governing law) are subject to modification for each Participating Public Agency as Supplier, such Participating Public Agency and OMNIA Partners, Public Sector shall agree without being in conflict with the Master Agreement. Participating Agencies may request to enter into a separate supplemental agreement to further define the level of service requirements over and above the minimum defined in the Master Agreement (i.e. invoice requirements, order requirements, specialized delivery, diversity requirements such as minority and woman owned businesses, historically underutilized business, governing law, etc.). It shall be the responsibility of the Supplier to comply, when applicable, with the prevailing wage legislation in effect in the jurisdiction of the Participating Agency. It shall further be the responsibility of the Supplier to monitor the prevailing wage rates as established by the appropriate department of labor for any increase in rates during the term of the Master Agreement and adjust wage rates accordingly. Any supplemental agreement developed as a result of the Master Agreement is exclusively between the Participating Agency and the Supplier (Contract Sales are reported to OMNIA Partners, Public Sector).

All purchase orders issued and accepted by the Supplier may survive expiration or termination of the Master Agreement. Participating Agencies’ purchase orders may exceed the term of the Master Agreement if the purchase order is issued prior to the expiration of the Master Agreement. Supplier is responsible for reporting all sales and paying the applicable administrative fee for sales that use the Master Agreement as the basis for the purchase order, even though Master Agreement may have expired.

1.5 Objectives of Cooperative Program

This RFP is intended to achieve the following objectives regarding availability through OMNIA Partners, Public Sector’s cooperative program:

A. Provide a comprehensive competitively solicited and awarded national agreement offering the Products covered by this solicitation to Participating Public Agencies; B. Establish the Master Agreement as the Supplier’s primary go to market strategy to Public Agencies nationwide; C. Achieve cost savings for Supplier and Public Agencies through a single solicitation process that will reduce the Supplier’s need to respond to multiple solicitations and Public Agencies need to conduct their own solicitation process; D. Combine the aggregate purchasing volumes of Participating Public Agencies to achieve cost effective pricing.

2.0 REPRESENTATIONS AND COVENANTS 5 As a condition to Supplier entering into the Master Agreement, which would be available to all Public Agencies, Supplier must make certain representations, warranties and covenants to both the Principal Procurement Agency and OMNIA Partners, Public Sector designed to ensure the success of the Master Agreement for all Participating Public Agencies as well as the Supplier.

2.1 Corporate Commitment

Supplier commits that (1) the Master Agreement has received all necessary corporate authorizations and support of the Supplier’s executive management, (2) the Master Agreement is Supplier's primary “go to market” strategy for Public Agencies, (3) the Master Agreement will be promoted to all Public Agencies, including any existing customers, and Supplier will transition existing customers, upon their request, to the Master Agreement, and (4) that the Supplier has read and agrees to the terms and conditions of the Administration Agreement with OMNIA Partners, Public Sector and will execute such agreement concurrent with and as a condition of its execution of the Master Agreement with the Principal Procurement Agency. Supplier will identify an executive corporate sponsor and a separate national account manager within the RFP response that will be responsible for the overall management of the Master Agreement.

2.2 Pricing Commitment

Supplier commits the not-to-exceed pricing provided under the Master Agreement pricing is its lowest available (net to buyer) to Public Agencies nationwide and further commits that if a Participating Public Agency is eligible for lower pricing through a national, state, regional or local or cooperative contract, the Supplier will match such lower pricing to that Participating Public Agency under the Master Agreement.

2.3 Sales Commitment

Supplier commits to aggressively market the Master Agreement as its go to market strategy in this defined sector and that its sales force will be trained, engaged and committed to offering the Master Agreement to Public Agencies through OMNIA Partners, Public Sector nationwide. Supplier commits that all Master Agreement sales will be accurately and timely reported to OMNIA Partners, Public Sector in accordance with the OMNIA Partners, Public Sector Administration Agreement. Supplier also commits its sales force will be compensated, including sales incentives, for sales to Public Agencies under the Master Agreement in a consistent or better manner compared to sales to Public Agencies if the Supplier were not awarded the Master Agreement.

3.0 SUPPLIER RESPONSE

6 Supplier must supply the following information in order for the Principal Procurement Agency to determine Supplier’s qualifications to extend the resulting Master Agreement to Participating Public Agencies through OMNIA Partners, Public Sector.

3.1 Company

A. Brief history and description of Supplier. Michaels Stores, Inc. (a subsidiary of The Michaels Companies, Inc.) is the largest arts and crafts specialty retailer in North America providing materials, project ideas, and education for creative activities. We currently operate 1,274 Michaels stores in 49 U.S. states and Canada. Additionally, we serve retail customers through various digital platforms including Michaels.com and Aaronbrothers.com. Michaels also owns Artistree, a manufacturer of high-quality custom and specialty framing merchandise.

In 2016, Michaels acquired Lamrite West, Inc. (also known as Darice), a premier wholesale distributor in the arts, craft, and décor industry. Established in 1954, Darice has over 60 years of experience distributing over 40,000 items including art and craft supplies, seasonal goods and decor, frames, education supplies, party and baking supplies, and much more. Michaels Pro Education (powered by Darice) is the wholesale division of The Michaels Companies for Educators and Educational Organizations.

Darice serves big box retailers, major national and regional chains, ecommerce companies, small businesses, and schools, each with different shipping rules, timelines and delivery specifications. We currently service over 25,000 customers, both nationwide and internationally. Our supply chain technology and warehouses are designed around meeting varying customer shipping requirements and timelines. Our average on-time delivery rate is 98.2% with a fill rate of 98%.

The Darice Customer Service Team is available for any questions or problem resolution. Please contact our customer service department at 1-866-4-DARICE (1-866-432-7423) 8:30 am to 5:00 pm eastern time or via email at [email protected]. We stand behind all of our products and services and if a product is not up to customer standards we will accept returns and/or exchanges.

Orders placed through MichaelsProEducation.com (powered by Darice) will be invoiced upon shipment of goods. The invoice will be sent via mail or email based on Participating Agency preference. Orders placed on Michaels.com will be charged at time of purchase.

Currently, the MichaelsProEducation.com URL is not live. The go live date is March 1, 2020. For review purposes of this RFP, Darice.com can be reviewed for the scope of products and site navigation.

B. Total number and location of sales persons employed by Supplier. As of November 2, 2019, Michaels operated 1,274 Michaels stores. Our stores and support center have over 30,000 total employees.

7 The Darice sales team has a Vice-President of Sales, seven (7) sales directors, and over one hundred twenty (120) independent national sales reps located throughout the country.

We also utilize a dedicated and flex tele-sales team to service our customers.

C. Number and location of support centers (if applicable) and location of corporate office.  Michaels Companies Support Center – 8000 Bent Branch Drive, Irving, Texas 75063  Lamrite West Inc., Darice Support Center, 13000 Darice Pkwy., Strongsville, Ohio 44149

D. Annual sales for the three previous fiscal years. Please refer to the Annual Report on Form 10-K, as filed by The Michaels Companies, Inc. https://investors.michaels.com/sec-filings/annual-reports

E. Submit FEIN and Dunn & Bradstreet report. The Michaels Companies, Inc. – Federal Employee Identification Number (FEIN): 37- 1737959

Michaels Stores, Inc. – FEIN: 75-1943604

Lamrite West, Inc. – FEIN: 34-0944307

Please see the full Dunn & Bradstreet report for each of the Michaels Companies, Inc. and Lamrite West, Inc., starting on page 24.

F. Describe any green or environmental initiatives or policies. We believe in the value of environmentally sound business practices throughout our operations, including energy conservation as well as recycling and waste reduction efforts. As part of our continued commitment to corporate responsibility, Michaels has long pursued initiatives that are good for the environment as well as our profitability.

Earlier this year, we published our 2019 Sustainability Report, and have attached a copy on page 51, immediately following this Exhibit A, OMNIA Partners Response for National Cooperative Contract.

G. Describe any diversity programs or partners supplier does business with and how Participating Agencies may use diverse partners through the Master Agreement. Indicate how, if at all, pricing changes when using the diversity program.  Annual Respectful Leadership and Unconscious Bias training for all Team Members across all divisions  Michaels Resource Groups – Women, African American/Black, LGBTQ and Hispanic –led by Team Members and sponsored by Executives

8  Organization-wide celebration of national diversity events – MLK Day, Black History Month, Women’s History Month, Pride Month, Hispanic Heritage Month, etc.  Member of the Texas Diversity Council (Team Member sits on Board of Directors)  Gold Sponsors for the Network of Executive Women - NEW (Team Member is an Ambassador for NEW and sits on the College Outreach Committee)  Gold Sponsor for the NEW Fall Learning Event Women Inclusion Network mentoring program for women leaders on the field  connects female leaders from the field to Support Center leadership for mentoring, development and support.  Partner with University of Florida for field Summer Internship Program  Hosted creative workshops for STEAM Summer program with Coppell Independent School District  Three of our leaders participated as breakout speakers/panelist at the 2018 Texas Diversity Leadership Conference  Hosted onsite meetings for the Texas Diversity Council Leadership Hosted onsite meetings for the Network of Executive Women  Was invited and attended the North Texas Inclusion Summit: Unleashing the Power of Inclusion hosted by Deloitte  Support Center Women Inclusion Network hosted Speed Mentoring Lunch and Learns for Team Members to meet in small groups with Michaels Executives Leadership Attended the National Disability Employment Awareness Summit - Sponsored by Raytheon  Denise Paulonis, EVP-CEO awarded Texas Diversity Council 2018 Dallas Power 50

H. Describe any historically underutilized business certifications supplier holds and the certifying agency. This may include business enterprises such as minority and women owned, small or disadvantaged, disable veterans, etc. Not applicable.

I. Describe how supplier differentiates itself from its competitors.

 With 1,274 Michaels stores nationwide, Participating Agencies can take advantage of the Master Agreement retail discount at their local Michaels stores  Full service custom framing available at each Michaels location included in the Master Agreement retail discount  Access to over 100,000 art, craft, education and craft supplies everyday  State of the art distribution centers that service thousands of customers daily  Up to 60 day terms for qualified agencies  In-house product and design capabilities  Fully integrated global sourcing entity  National Sales force

9  Dedicated in-house Customer Service Team  “Classroom Crafts” ideas available on the Michaels.com site  “Video Inspo” YouTube playlists of easy teacher DIYs on the Michaels.com site  Options to create kits for your classroom

J. Describe any present or past litigation, bankruptcy or reorganization involving supplier. Please refer to the Annual Report on Form 10-K, as filed by The Michaels Companies, Inc.

https://investors.michaels.com/sec-filings/annual-reports

K. Felony Conviction Notice: Indicate if the supplier a. is a publicly held corporation and this reporting requirement is not applicable; b. is not owned or operated by anyone who has been convicted of a felony; or c. is owned or operated by and individual(s) who has been convicted of a felony and provide the names and convictions. The supplier is the indirect wholly owned subsidiary of The Michaels Companies, Inc., a publicly held corporation. As such, this reporting requirement is not applicable. L. Describe any debarment or suspension actions taken against supplier None. 3.2 Distribution, Logistics

A. Describe the full line of products and services offered by supplier. Michaels Stores and Michaels.com are Participating Agencies retail source for arts, crafts, framing and related services. Participating agencies will be able to take advantage of Master Agreement discounts to fulfill your classroom needs.

MichaelsProEducation.com (powered by Darice) is Participating Agencies’ opportunity to take advantage of a wholesale source for arts, crafts, framing and related services. Participating Agencies will be able to take advantage of Master Agreement discounts on wholesale pricing, core pricing on key items, and bulk orders to fulfill your classroom needs.

Participating agencies will have full access to over 100,000 products and services offered by Michaels Stores, Michaels.com, and MichaelsProEducation.com (powered by Darice). Product and Categories include (but are not limited to):

Art Supplies  Paint including Acrylic, Tempera, Oils, Gouache, Watercolors, and Gouache  Painting Mediums  Brushes, Brush Sets, Brush Cleaners, and Sponges  Palettes and Storage Boxes 10  Canvas including Stretched, Panels, and Pads  Drawing Supplies including Pencils, Pastels, Markers, Ink, and Pens  Clay, Clay Tools, Pottery Wheels, Glazes  Drafting Supplies including Rulers, Templates, T-Squares  Easels, Desks, and Furniture  Pads including Sketch, Drawing, Watercolor, Newsprint, Hardcover and more  Paper and Boards including Foamcore, Posterboard, Watercolor Paper, Pastel Paper, Mat Board, Illustration Board, Project Display Boards  Art Sets  Cutting Tools and Scissors Craft Basics  Pom Poms, Chenille Stems, Feathers, and Felt  Wiggle Eyes, Bells, and Magnets  Craft Sticks and Dowels  Storage and Craft Tools  Craft Paint, Spray Paint, Paint and Chalk Markers  Glitter and Sequins  Glue, Glue Guns, Adhesives, Velcro, Command Products, and Tapes  Unfinished Surfaces including Wood, Canvas, Paper Mache, and Chalk Boards  Candle and Soap Making  Mosaics, Craft Kits, Miniatures, and Models Apparel Crafts  T-shirts  Canvas Aprons and Bags  Bandannas  Dyes and Fabric Paint  Transfers Kids Crafts and Education Supplies  Markers, Crayons, and Chalk  Construction Paper  Paper Rolls and Bulletin Board Supplies  Craft Sticks and Glitter  Stickers and Plush  Tempera, Finger, and Face Paints  Puzzles and Games  Glue, Glue Sticks, Glitter Glue  Clay and Sand  Foam and Felt  Coloring Books

11 Frames  Table and Wall Frames  Certificate and Diploma Frames  Poster Frames  Specialty Frames  Gallery Frames  Flag, Sport, Jersey, and Display Cases  Pre-cut Mats  Framing Supplies Floral and Floral Supplies  Floral Stems, Picks, and Bushes  Greenery and Succulents  Styrofoam  Gems, Rocks, and Fillers  Glass including Vases, Votives, Candle Holders and more  Ceramic and Tin Containers  Baskets  Grapevine and Naturals Seasonal  Décor and Floral  Christmas Trees and holiday items  Food Crafting  Gift and packaging Décor  Candles  Lanterns  Lighting  Terra Cotta Pots, Galvanized Containers Jewelry & Beads  Beads including Glass, Seed, Crystals, Strung, and more  Jewelry Notions and Accessories  Tools, Storage, and Props  Cording, Twine, and Wire Memory/Papercrafting  Paper including Paper Packs, Sheet Paper, Cardstock, Pads, and Kits  Storage and Stamps  Albums, Binders, and Refill Pages  Diecutting , Trimmers, and Cutters  Pens, Markers, and Inks

12  Embossing Tools and Stencils  Tapes and Adhesives  Cardmaking Supplies  Technology Food Crafting  Pans and Molds  Cookie Making  Baking Tools  Treat Bags  Packaging and Storage  Decorations Celebrations/Party  Ribbon  Balloons, Gift Bags, and Basket Filler  Tablecovers and Table Rolls  Plastic Cutlery, Paper Plates, Napkins, and Cups  Wedding and Bridal Supplies Needle Crafts  Yarn including Cotton, Baby, Wool, Acrylic, Licensed, and more  Yarn and Knitting Supplies  Looms and Embroidery Hoops  Needlework Tools and Cross Stitch  Sewing Supplies  Fabric Custom Framing  Full Service Custom Framing  Conservation grade components and mounting options available  Conservation grade glazing options available including glass and acrylic  Custom Cut Mats and Glass  Hand wrapped fabric mats and liners  Custom print options available on metal, wood, acrylic, glass, and canvas

This list is not an all-inclusive list of products available; more products are available at stores and online.

B. Describe how supplier proposes to distribute the products/service nationwide. Include any states where products and services will not be offered under the Master Agreement, including U.S. Territories and Outlying Areas.

13 The Michaels Companies currently operates seven distribution centers located in California, Florida, Illinois, Ohio, Pennsylvania, Texas, and Washington. Once orders are received, they will be shipped from the appropriate distribution center. Normal processing time is 1-3 business days. Orders placed on Michaels.com currently ship to the 50 U.S. States but not any other U.S. Territories. Orders placed on MichaelsProEducation.com (powered by Darice) currently ship to the 50 U.S. States and all U.S. Territories.

In addition to having orders shipped, participating agencies will also be able to purchase product at over 1,250 Michaels Stores and also utilize the Buy Online Pickup In Store (BOPIS) option on the Michaels.com website.

C. Describe how Participating Agencies are ensure they will receive the Master Agreement pricing; include all distribution channels such as direct ordering, retail or in-store locations, through distributors, etc. Describe how Participating Agencies verify and audit pricing to ensure its compliance with the Master Agreement.

Participating Agencies will have several ways to order product and take advantage of the Master Agreement. Once a Participating Agency registers for an account on MichaelsProEducation.com (powered by Darice). They will be assigned an Agency specific account number and issued a discount card to be used at Michaels stores and Michaels.com. This card and account number will then ensure the Agency receives the Master Agreement retail discount at Michaels retail stores and Michaels.com, as well as the Master Agreement wholesale discount and core pricing at MichaelsProEducation.com (powered by Darice).

Discount pricing will be shown on all invoices for participating agencies to verify they received the correct Master Agreement pricing. Reporting is available at any time from our account team to also help verify pricing and help to audit any orders.

D. Identify all other companies that will be involved in processing, handling or shipping the products/service to the end user.

Michaels uses a variety of third party logistic providers including, but not limited to, Fed Ex, DHL, UPS, and a variety of LTL providers.

E. Provide the number, size and location of Supplier’s distribution facilities, warehouses and retail network as applicable. Estimate of 3,000,000 square feet for Michaels Distribution Centers plus 676,000 square feet for Darice. Distribution Centers located at:  Darice Distribution Center 13000 Darice Pkwy., Strongsville, OH 44149

 Darice Distribution Center 21160 Drake Rd. 21160 Drake Rd. Strongsville, OH 44149

14  Darice Distribution Center 12850 Darice Pkwy. Strongsville, OH 44149

 Michaels Alliance Distribution Center – DC # 1 860 Westport Pkwy, Fort Worth, TX 76177

 Michaels Centralia Distribution Center – DC # 2 208 Hoss Rd, Centralia, WA 98531

 Michaels Lancaster Distribution Center – DC # 4 3501 W. Ave H., Lancaster, CA 93536

 Michaels Jacksonville Distribution Center – DC # 7 9200 W. Beaver Street, Jacksonville, FL 32220

 Michaels Hazleton Distribution Center – DC # 8 60 Green Mountain Rd., Hazleton, PA 18201

 Michaels New Lenox Distribution Center – DC # 9 2400 W. Haven Ave., New Lenox, IL 60451

 Michaels Retail Store locations are available at Michaels.com

3.3 Marketing and Sales

A. Provide a detailed ninety-day plan beginning from award date of the Master Agreement describing the strategy to immediately implement the Master Agreement as supplier’s primary go to market strategy for Public Agencies to supplier’s teams nationwide, to include, but not limited to:

i. Executive leadership endorsement and sponsorship of the award as the public sector go-to-market strategy within first 10 days ii. Training and education of Supplier’s national sales force with participation from the Supplier’s executive leadership, along with the OMNIA Partners, Public Sector team within first 90 days Upon receiving notification of award, the Michaels Pro Education (powered by Darice) executive team will endorse the award and notify our internal and national sales team within 10 days of the contract.

Within 90 days, we will then complete webcast training for all Account Managers outlining changes, features and benefits, marketing and implementation of the newly awarded contract. Our in-house marketing and creative team will provide marketing and presentation materials that explain the features and benefits of the contract.

15 B. Provide a detailed ninety-day plan beginning from award date of the Master Agreement describing the strategy to market the Master Agreement to current Participating Public Agencies, existing Public Agency customers of Supplier, as well as to prospective Public Agencies nationwide immediately upon award, to include, but not limited to:

i. Creation and distribution of a co-branded press release to trade publications ii. Announcement, Master Agreement details and contact information published on the Supplier’s website within first 90 days Design, publication and distribution of co-branded marketing materials within first 90 days iii. Commitment to attendance and participation with OMNIA Partners, Public Sector at national (i.e. NIGP Annual Forum, NPI Conference, etc.), regional (i.e. Regional NIGP Chapter Meetings, Regional Cooperative Summits, etc.) and supplier-specific trade shows, conferences and meetings throughout the term of the Master Agreement iv. Commitment to attend, exhibit and participate at the NIGP Annual Forum in an area reserved by OMNIA Partners, Public Sector for partner suppliers. Booth space will be purchased and staffed by Supplier. In addition, Supplier commits to provide reasonable assistance to the overall promotion and marketing efforts for the NIGP Annual Forum, as directed by OMNIA Partners, Public Sector. vi. Design and publication of national and regional advertising in trade publications throughout the term of the Master Agreement vii. Ongoing marketing and promotion of the Master Agreement throughout its term (case studies, collateral pieces, presentations, promotions, etc.) viii. Dedicated OMNIA Partners, Public Sector internet web-based homepage on Supplier’s website with:

• OMNIA Partners, Public Sector standard logo; • Copy of original Request for Proposal; • Copy of Master Agreement and amendments between Principal Procurement Agency and Supplier; • Summary of Products and pricing; • Marketing Materials • Electronic link to OMNIA Partners, Public Sector’s website including the online registration page; • A dedicated toll-free number and email address for OMNIA Partners, Public Sector

16 Upon receiving notification of the award, it is the intent of the Michaels Pro Education (powered by Darice) team to market the Master Agreement to current Participating Public Agencies, existing Public Agency customers as well as prospective Public Agencies nationwide by the following:  Use our in-house marketing and creative team to create and deliver a co- branded press release within the first 30 days  Announce the award through the Michaels Companies websites and any applicable social media sites within the first 90 days  Our in-house marketing and creative team will design, publish and distribute co-branded collateral pieces within first 90 days.  We will email existing Public Agency customers notification of award  Michaels Pro Education commits to attend and participate with OMNIA Partners at national (i.e. NIGP Annual Forum, NPI Conference, etc.), regional (i.e. Regional NIGP Chapter Meetings, Regional Cooperative Summits, etc.) and supplier-specific trade shows, conferences and meetings throughout the term of the Master Agreement.  Michaels Pro Education agrees and commits to attend, exhibit and participate at the NIGP Annual Forum in an area reserved by OMNIA Partners for partner suppliers. We also commit to staff and purchase booth space. In addition, Michaels Pro Education commits to provide reasonable assistance to the overall promotion and marketing efforts for the NIGP Annual Forum, as directed by OMNIA Partners.  Our in-house marketing and creative team will design and conduct publication of national and regional advertising in trade publications throughout the term of the Master Agreement  We will provide dedicated OMNIA Partners internet web-based homepage on the MichaelsProEducation.com (powered by Darice) website with: o OMNIA Partners, Public Sector standard logo; o Copy of original Request for Proposal; o Copy of Master Agreement and amendments between Principal o Procurement Agency and Supplier; o Summary of Products and pricing; o Marketing Materials o Electronic link to OMNIA Partners, Public Sector’s website including the online registration page; o A dedicated toll-free number and email address for OMNIA Partners, Public Sector

C. Describe how Supplier will transition any existing Public Agency customers’ accounts to the Master Agreement available nationally through OMNIA Partners, Public Sector. Include a list of current cooperative contracts (regional

17 and national) Supplier holds and describe how the Master Agreement will be positioned among the other cooperative agreements.

There are no comparable public agencies to transition at this time.

D. Acknowledge Supplier agrees to provide its logo(s) to OMNIA Partners, Public Sector and agrees to provide permission for reproduction of such logo in marketing communications and promotions. Acknowledge that use of OMNIA Partners, Public Sector logo will require permission for reproduction, as well.

Michaels Pro Education, agrees to provide its logo(s) to OMNIA Partners and provides permission for reproduction of such logo(s) in marketing communications and promotions.

E. Confirm Supplier will be proactive in direct sales of Supplier’s goods and services to Public Agencies nationwide and the timely follow up to leads established by OMNIA Partners, Public Sector. All sales materials are to use the OMNIA Partners, Public Sector logo. At a minimum, the Supplier’s sales initiatives should communicate:

i. Master Agreement was competitively solicited and publicly awarded by a Principal Procurement Agency ii. Best government pricing iii. No cost to participate iv. Non-exclusive Michaels Pro Education confirms all notations in E, items i. through iv.

F. Confirm Supplier will train its national sales force on the Master Agreement. At a minimum, sales training should include:

i. Key features of Master Agreement ii. Working knowledge of the solicitation process iii. Awareness of the range of Public Agencies that can utilize the Master Agreement through OMNIA Partners, Public Sector iv. Knowledge of benefits of the use of cooperative contracts Michaels Pro Education confirms all notations in F, items i. through iv.

G. Provide the name, title, email and phone number for the person(s), who will be responsible for:

i. Executive Support ii. Marketing 18 iii. Sales iv. Sales Support v. Financial Reporting vi. Accounts Payable vii. Contracts

Executive Support Christopher Freeman Lamrite West, Inc., Darice, a Michaels company President Phone 440-878-3575 [email protected] Christopher Freeman joined The Michaels Companies in 2008 as Zone Vice President for Michaels Retail in the Southeast. In 2012, he took on the role of Vice President – Operations and also served as the Vice President – Manufacturing Operations. Mr. Freeman became President of Lamrite West in 2018, where he oversees retail and wholesale operations. Mr. Freeman has 26 years of business experience with extensive knowledge of operations, finance, asset protection, manufacturing processes, leadership training and development.

Marketing Anne Polkinghorn Lamrite West, Inc., Darice, a Michaels company Director Digital Marketing 440-378-4861 [email protected] Anne Polkinghorn has been with Lamrite West for 9 years. She oversees the digital marketing for both Consumer Crafts and Darice. Ms. Polkinghorn’ s team is responsible for all digital strategies including SEO, SEM, Email, Social Media, Content Marketing, Site U/X, and Online Product Management

Sales/Contracts Coleman Caldwell Lamrite West, Inc., Darice, a Michaels company Vice President, Sales Phone: (440) 378-4865 [email protected] Coleman Caldwell has been a part of the Lamrite West, Inc., Darice Team since March 2017. He has over 35 years of experience driving/achieving profitable growth. Mr. Caldwell is currently responsible for both US and International Sales with the following responsibilities: Sales & Operations planning, Category Management fundamentals, professional development & training for sales organizations – focused on finance, category management, question based selling and win/win negotiation training. Mr. Caldwell has a strong track record of achieving sustainable profitable business growth in several areas of consumer products – education, food, hardware, craft and housewares.

19 Bryan Waugaman Lamrite West, Inc., Darice, a Michaels company Director of Sales, Michaels Pro Education (powered by Darice) Phone 440-878-3515 [email protected] Bryan Waugaman has been a part of the Lamrite West, Inc., Darice team for 26 years. Mr. Waugaman is Director of the Michaels Pro Education team and also responsible for managing a sales rep team that manages and supports 20,000 wholesale customers. He has a strong background in operations, procurement, and category management.

Kort Masteller Lamrite West, Inc., Darice, a Michaels company Director of Sales Phone: 440-878-3561 [email protected] Kort Masteller has been part of the Lamrite West, Inc., Darice Team for 16+ years, leading the efforts with the Independent Rep Network. His responsibilities include managing the independent field rep network (representatives that will sell the Darice product lines); establishing trade show direction and management of the trade shows the company supports; setting direction for the corporate showrooms in Atlanta and Ohio; and supporting the majority of the marketing/sales efforts utilizing sales materials, sales support staff and ecommerce/websites. Previously, Mr. Masteller served in sales leadership positions largely related to consumer products.

Sales Support / Accounts Payable Heidi Thogmartin Lamrite West, Inc., Darice, a Michaels company Director of Credit and Customer Service Phone 440-238-9150 x 3104 [email protected] Heidi Thogmartin has been a part of the Lamrite West, Inc., Darice Team for 17+ years with the following responsibilities: accounts receivable, credit, customer service, financial planning and reporting.

Financial Reporting Joseph Rudolph Lamrite West, Inc., Darice, a Michaels company Chief Financial Officer Phone 440-378-4852 [email protected] Joe Rudolph been part of the Lamrite West, Inc., Darice Team for 11+ years as the CFO. His responsibilities include the Controllership and Treasury related functions as well as Financial Planning and Analysis. Previously Joe served in financial leadership positions within industrial manufacturing, consumer products and private equity companies.

20 H. Describe in detail how Supplier’s national sales force is structured, including contact information for the highest-level executive in charge of the sales team.

Darice uses both an in-house team of sales directors and sales support staff as well as an independent network of sales representatives offering coverage throughout the United States.

Our team consists of seven sales directors, sales support, an in-house marketing and ecommerce team as well as a full-service in-house customer service team. We also have over 120 independent reps nationwide and utilize a national tele-sales team to provide additional sales support to over 25,000 customers.

Upon notification of award, Participating Agencies will work directly with Business Development Manager to ensure they understand their needs and provide support.

Vice President of Sales is the highest-level executive in charge of the sales team: Coleman Caldwell Vice President, Sales Phone: (440) 378-4865 [email protected]

I. Explain in detail how the sales teams will work with the OMNIA Partners, Public Sector team to implement, grow and service the national program.

The Director of Sales and Business Development Managers will work closely with the OMNIA Partners Public Sector team to pursue leads provided by OMNIA Partners. We will utilize the OMNIA Website links to our site to drive business and educate customers about the Master Agreement opportunities.

I. Explain in detail how Supplier will manage the overall national program throughout the term of the Master Agreement, including ongoing coordination of marketing and sales efforts, timely new Participating Public Agency account set-up, timely contract administration, etc.

The Michaels Companies is structured to take on the benefits of what OMNIA can offer given the scope of the coverage we have across all 50 states. We offer up a team of 130 sales representatives representing 29 Ref Groups focused on all levels of trade and with an understanding of what it takes to manage a large portfolio of products. We are able to identify the support that is required, to initiate the required connection in sales to the customer and to follow up on that process from beginning to end. We have a robust Salesforce.com – Customer Relationship Management (CRM) tool used by all sales organizations to drive both new and current customer growth. This is used to measure and monitor activity and success in real time. We have an out bound tele-sales team to ensure full customer coverage and execution.

21 J. State the amount of Supplier’s Public Agency sales for the previous fiscal year. Provide a list of Supplier’s top 10 Public Agency customers, the total purchases for each for the previous fiscal year along with a key contact for each. As a publicly traded company we do not share information of this level. Please refer to the Annual Report on Form 10-K, as filed by The Michaels Companies, Inc.

https://investors.michaels.com/sec-filings/annual-reports

K. Describe Supplier’s information systems capabilities and limitations regarding order management through receipt of payment, including description of multiple platforms that may be used for any of these functions.

At the present time, Participating Agencies will be able to order through Michaels.com or MichaelsProEducation.com (powered by Darice).

Michaels.com Orders:  Michaels.com is a standard end user retail ecommerce site where orders can be placed and shipped or picked up in store (BOPIS)  All orders on Michaels.com must be paid by credit card at time of purchase

MichaelsProEducation.com (powered by Darice) Orders:  Darice runs a commercially available, tier 1 enterprise software solution fully supported by vendor  Complete order management resides in one ERP solution and is fully integrated into procurement, financials, accounts payable, accounts receivable and supply chain. All solutions run on standard, up to date technology  Orders can be entered into the system using multiple different methods. Orders can be keyed in manually by customer service staff or accepted electronically through industry standard electronic methods  Upon entry into the system, inventory is immediately allocated and secured for customer/order. A receivable is created to match order. As demand is entered into system, procurement systems will ensure inventory is available  Darice has an advanced forecasting system, utilizing demand history and multiple algorithms to keep inventory in stock.  Once an order is shipped, customer receives confirmation and tracking numbers.  An invoice can be sent electronic, e-mailed or physically mailed based on customers preference.  A full history of a customers’ orders/financials is accessible electronically for access at any time by customer.

M. Provide the Contract Sales (as defined in Section 10 of the OMNIA Partners, Public Sector Administration Agreement) that Supplier will guarantee each year under the Master Agreement for the initial three years of the Master Agreement (“Guaranteed Contract Sales”).

22 $______.00 in year one $______.00 in year two $______.00 in year three

Darice will pay OMNIA the applicable administration fees on any sales resulting from the HCPS contract. The volumes at this time are undetermined.

To the extent Supplier guarantees minimum Contract Sales, the administration fee shall be calculated based on the greater of the actual Contract Sales and the Guaranteed Contract Sales.

M. Even though it is anticipated many Public Agencies will be able to utilize the Master Agreement without further formal solicitation, there may be circumstances where Public Agencies will issue their own solicitations. The following options are available when responding to a solicitation for Products covered under the Master Agreement.

i. Respond with Master Agreement pricing (Contract Sales reported to OMNIA Partners, Public Sector). ii. If competitive conditions require pricing lower than the standard Master Agreement not-to-exceed pricing, Supplier may respond with lower pricing through the Master Agreement. If Supplier is awarded the contract, the sales are reported as Contract Sales to OMNIA Partners, Public Sector under the Master Agreement. iii. Respond with pricing higher than Master Agreement only in the unlikely event that the Public Agency refuses to utilize Master Agreement (Contract Sales are not reported to OMNIA Partners, Public Sector). iv. If alternative or multiple proposals are permitted, respond with pricing higher than Master Agreement, and include Master Agreement as the alternate or additional proposal.

Detail Supplier’s strategies under these options when responding to a solicitation.

Michaels will handle each solicitation individually but will reference the OMNIA Master Agreement as a first option.

23 Printed By:Heidi Thogmartin

Date Printed:December 20, 2019

LIVE REPORT Currency: Shown in USD unless otherwise indicated

MICHAELS COMPANIES, INC., THE Trade Names: MICHAELS

ACTIVE HEADQUARTERS

D-U-N-S 07-942-9778 Number: Company: THE MICHAELS COMPANIES INC

D&B Address Added to Portfolio: 12/20/2019 Address: 8000 BENT BRANCH DR Endorsement: [email protected] IRVING, TX, US - 75063 Last View Date: 12/20/2019 Location HEADQUARTERS Type: Phone: 972-409-1300 Fax: Web:

Company Summary

SCORE BAR

57 Paying 25 days past due PAYDEX® 

2 Low to Moderate Risk of severe Commercial Credit Score Class  payment delinquency

5 High Risk of severe financial stress Financial Stress Score Class 

Credit Limit - D&B Conservative -

D&B Rating -- Unavailable.

D&B 3-MONTH PAYDEX®

D&B 3-month PAYDEX® : 57  Low Risk (100) ; High Risk (1) When weighted by amount, Payments to suppliers average 25 Days Beyond Terms

D&B COMPANY OVERVIEW

24 This is a headquarters location

Branch(es) or Division(s) exist Chief Executive Age (Year Started) Y MARK S COSBY, CEO 36 years (1983)

Employees History Status Net Worth 47000 (Undetermined Here) CLEAR (1626195000)

Financial Condition Revenue Stock Symbol UNBALANCED 5271944000 MIK

Line of business Arts & crafts specialty retail stores; mfg SIC precut mats & custom framing NAICS 5945 ,3999 merchandise 451120

COMMERCIAL CREDIT SCORE CLASS

Commercial Credit Score Class : 2  Low Risk:1 ; High Risk:5

PAYDEX® TREND CHART

DETAILED TRADE RISK INSIGHT™

3 months from Oct-19 to Dec-19

Days Beyond Terms Past 3 months: 11 Days Days Beyond Terms Past 3 months : 11 Low Risk:0 ; High Risk:120+

Dollar-weighted average of 19 payment experiences reported from 13 companies.

FIRSTRAIN COMPANY NEWS Powered By FirstRain

Permanent Link to Michaels Companies Inc (NASDAQ:MIK) Expected to Post Quarterly Sales of $1.73 Billion The Olympia Report Dec 16, 2019 Google Inc. Brokerages Set Michaels Companies Inc (NASDAQ:MIK) PT at $7.73 - Modern Readers MR Modern Readers Dec 16, 2019 Google Inc. Michaels downgraded after Q3 exposes 'weakening' competitive foothold Retail Dive Dec 12, 2019 Google Inc. Michaels Companies (NASDAQ:MIK) Releases Q4 Earnings Guidance Tech Know Bits Dec 12, 2019 Google Inc. 25 Earnings Guidance Tech Know Bits Dec 12, 2019 Google Inc. Should Michaels Rethink Its Store Expansion Strategy? Motley Fool Dec 11, 2019 Google Inc. The Pres. ? Merch. & Supply Chain of Michaels Companies (MIK) is Selling Shares Smarter Analyst Dec 10, 2019 Google Inc. Is The Michaels Companies Inc (MIK) Going To Burn These Hedge Funds ? Insider Monkey Dec 8, 2019 Google Inc. Permanent Link to Michaels Companies (NASDAQ:MIK) Issues Earnings Results, Misses Expectations By $0.09 EPS The Olympia Report Dec 6, 2019 Google Inc. Does The Michaels Companies, Inc. (NASDAQ:MIK) Have A Good P/E Ratio? Yahoo News Finance Dec 6, 2019 Google Inc.

10 Biggest Price Target Changes For Friday Benzinga Dec 6, 2019 Google Inc.

Why Michaels Companies' Stock Crashed Today Nasdaq Dec 5, 2019 Google Inc. Wells Fargo Keeps a Hold Rating on Michaels Companies (MIK) Smarter Analyst Dec 5, 2019 Google Inc.

A downbeat Michaels crafts disappointing quarter Chain Store Age Dec 5, 2019 Google Inc. The Michaels Companies Announces Third Quarter 2019 Results Business Wire, Inc. Dec 5, 2019 Google Inc. Michaels's stock plunges after profit and sales miss, downbeat guidance Market Watch Dec 5, 2019 Google Inc. Michaels Companies Inc (NASDAQ:MIK) Holdings Boosted by Point72 Asset Management L.P. - Modern Readers MR Modern Readers Dec 5, 2019 Google Inc.

Earnings Scheduled For December 5, 2019 Benzinga Dec 5, 2019 Google Inc.

Michaels Companies Q3 Earnings Preview Benzinga Dec 4, 2019 Google Inc. California Public Employees Retirement System Has $1.66 Million Holdings in Michaels Companies Inc (NASDAQ:MIK) Tech Know Bits Nov 28, 2019 Google Inc. Arts-and-crafts retailer AC Moore to close all 145 stores The Real Deal Nov 27, 2019 Google Inc. A.C. Moore Will Close All Locations, Including 3 In Maine news.mpbn.net Nov 26, 2019 Google Inc. Crafts chain A.C. Moore shutting down; some stores to reopen as Michaels - CBS News CBS NEWS Nov 26, 2019 Google Inc. AC Moore to close more than 140 stores ? including one near Bangor Mall ? Bangor ? Bangor Daily News ? BDN Maine Bangor Daily NEWS Nov 26, 2019 Google Inc.

A.C. Moore craft stores to close Metro West Daily News Nov 25, 2019 Google Inc. Permanent Link to Zacks: Analysts Expect Michaels Companies Inc (NASDAQ:MIK) Will Post Quarterly Sales of $1.26 Billion The Olympia Report Nov 25, 2019 Google Inc. Michaels Companies (NASDAQ:MIK) Downgraded by BidaskClub - Modern Readers MR Modern Readers Nov 24, 2019 26 Google Inc. BidaskClub - Modern Readers MR Modern Readers Nov 24, 2019 Google Inc. Michaels Companies Inc (NASDAQ:MIK) Expected to Announce Earnings of $0.49 Per Share The Olympia Report Nov 23, 2019 Google Inc. Michaels Companies Inc (NASDAQ:MIK) Given Consensus Rating of ?Hold? by Analysts The Olympia Report Nov 18, 2019 Google Inc. Michaels Companies Sees Unusually High Options Volume (NASDAQ:MIK) MR Modern Readers Nov 15, 2019 Google Inc. J.P. Morgan Maintains Their Hold Rating on Walmart (WMT) Smarter Analyst Nov 15, 2019 Google Inc. Michaels names Vidya Jwala to newly-created role chief customer role Market Watch Nov 15, 2019 Google Inc.

Michaels Strengthens Senior Leadership Team Business Wire, Inc. Nov 14, 2019 Google Inc. The Michaels Companies to Report Third Quarter 2019 Results on December 5, 2019 Business Wire, Inc. Nov 14, 2019 Google Inc. Harel Insurance Investments & Financial Services Ltd. Buys Shares of 58,500 Michaels Companies Inc (NASDAQ:MIK) MR Modern Readers Nov 12, 2019 Google Inc. Wells Fargo Maintains Their Buy Rating on Floor & Decor Holdings (FND) Smarter Analyst Nov 11, 2019 Google Inc. J.P. Morgan Sticks to Their Hold Rating for Walmart (WMT) Smarter Analyst Nov 8, 2019 Google Inc. Shufro Rose & Co. LLC Has $3.40 Million Stock Holdings in Michaels Companies Inc (NASDAQ:MIK) Tech Know Bits Nov 7, 2019 Google Inc. National Vision Holdings (EYE) Gets a Buy Rating from Wells Fargo Smarter Analyst Nov 7, 2019 Google Inc. Credit Suisse Keeps Their Hold Rating on Home Depot (HD) Smarter Analyst Nov 6, 2019 Google Inc. Michaels Companies Sees Unusually Large Options Volume (NASDAQ:MIK) - Modern Readers MR Modern Readers Nov 1, 2019 Google Inc. Floor & Decor Holdings Inc (FND) Receives a Buy from Wells Fargo Smarter Analyst Nov 1, 2019 Google Inc. Analysts Expect Michaels Companies Inc (NASDAQ:MIK) to Announce $0.49 EPS Tech Know Bits Oct 31, 2019 Google Inc. Skylands Capital LLC Buys 89,350 Shares of Michaels Companies Inc (NASDAQ:MIK) The Olympia Report Oct 30, 2019 Google Inc. Bead Landing Tassel Keychain Mobile Power Banks recalled due to fire and burn hazards Health Canada Oct 29, 2019 Google Inc. Here is What Hedge Funds Think About Michaels Companies Inc (MIK) Insider Monkey Oct 28, 2019 Google Inc. Michaels Companies (NASDAQ:MIK) Trading Up 8% - Modern Readers MR Modern Readers Oct 24, 2019 Google Inc.

Nasdaq cancels trades in about 50 securities Reuters India Oct 23, 2019 Google Inc. 27 Wells Fargo Maintains Their Buy Rating on Floor & Wells Fargo Maintains Their Buy Rating on Floor & Decor Holdings Inc (FND) Smarter Analyst Oct 23, 2019 Google Inc.

Michaels Companies names CEO Chain Store Age Oct 22, 2019 Google Inc. The Michaels Companies Appoints Mark S. Cosby Chief Executive Officer Business Wire, Inc. Oct 22, 2019 Google Inc.

D&B PAYDEX®

D&B PAYDEX® : 57  Low Risk (100) ; High Risk (1) When weighted by amount, Payments to suppliers average 25 days beyond terms

PUBLIC FILINGS

The following data includes both open and closed filings found in D&B's database on this company.

Record Type Number of Most Recent Records Filing Date

Bankruptcies 0 ---

Judgments 0 ---

Liens 0 ---

Suits 0 ---

UCCs 1 03/20/2014

The public record items contained herein may have been paid, terminated, vacated or released prior to today's date.

FINANCIAL STRESS SCORE CLASS

Financial Stress Score Class : 5  Low Risk:1 ; High Risk:5

28 STOCK PERFORMANCE

MIK 6.7 -0.03  (-0.45%)

Previous Close: Volume: 6.74 2,254,294.00

Daily High: Daily Low: 6.79 6.6

52-Week High: 52-Week Low: 16.39 4.97

P/E: Market Cap: 4.0120 983,460,679

EPS: Div/Yield: 1.67 0.00

Trade Payments

PAYMENT HABITS

For all payment experiences within a given amount of credit extended, shows the percent that this Business paid within terms. Provides number of experiences to calculate the percentage, and the total credit value of the credit extended.

Credit Extended Payment Experiences Total Amount % of Payments Within Terms

Over 100,000 4 16,100,000 34%

50,000-100,000 1 70,000 0%

15,000-49,999 6 135,000 69%

5,000-14,999 7 60,000 88%

1,000-4,999 6 9,000 89%

Under 1,000 10 4,850 75%

Based on payments collected over last 24 months.

Payment experiences reflect how bills are paid in relation to the terms granted. In some instances, payment beyond terms can be the result of disputes over merchandise, skipped invoices, etc.

PAYMENT SUMMARY

There are 47 payment experience(s) in D&Bs file for the most recent 24 months, with 27 experience(s) reported during the last three month period. The highest Now Owes on file is 7000000 . The highest Past Due on file is 1000000 Below is an overview of the company's currency-weighted payments, segmented by it's supplier's primary industries:

Total Revd Total Largest High Within Terms 1 - 30 Days Late 31 - 60 Days Late 61 - 90 Days Late Top Industries 91 + Days Late (%) (#) Amount Credit (%) (%) (%) (%)

Whol groceries 5 60,000 20,000 100 0 0 0 0 29 Detective/guard svcs 5 5,250 2,500 100 0 0 0 0

Nonclassified 3 2,000 1,000 50 0 0 0 50 Mfg computers 2 215,000 200,000 50 50 0 0 0 Television station 2 45,000 30,000 50 50 0 0 0 Truck rental/leasing 2 1,500 1,000 66 17 0 0 17 Lithographic printing 1 10,000,000 10,000,000 50 50 0 0 0 Surety insurance 1 5,000,000 5,000,000 0 0 0 100 0 Advertising reps 1 900,000 900,000 50 0 50 0 0 Mfg women's outerwear1 70,000 70,000 0 100 0 0 0 Custom programming 1 30,000 30,000 100 0 0 0 0 Sawmill/planing mill 1 25,000 25,000 50 50 0 0 0 Newspaper-print/publ 1 7,500 7,500 100 0 0 0 0 Natnl commercial bank 1 7,500 7,500 0 50 50 0 0 Public finance 1 5,000 5,000 100 0 0 0 0 Electric services 1 2,500 2,500 100 0 0 0 0 Ret furniture 1 1,000 1,000 100 0 0 0 0 Passenger car rental 1 500 500 100 0 0 0 0 Hotel/motel operation 1 500 500 0 100 0 0 0 Whol industrial equip 1 500 500 50 0 50 0 0 Telephone 1 100 100 100 0 0 0 0 communictns Other payment categories

Cash experiences 12 $950 $250

Payment record unknown 0 $0 $0

Unfavorable comments 0 $0 $0

Placed for collections 1 $0 $0

Total in D&B's file 47 $16,379,800$10,000,000

Accounts are sometimes placed for collection even though the existence or amount of the debt is disputed.

Indications of slowness can be result of dispute over merchandise, skipped invoices, etc.

DETAILED PAYMENT HISTORY FOR THIS COMPANY

Date Reported (mm/yy) Paying Record High Credit Now Owes Past Due Selling Terms Last Sale Within (month)

12/19 Ppt 1,000 0 0 N30 6-12 mos

11/19 Ppt 30,000 0 0 2-3 mos

11/19 Ppt 20,000 15,000 0 1 mo

11/19 Ppt 10,000 10,000 0 1 mo

11/19 Ppt 10,000 10,000 0 1 mo

11/19 Ppt 10,000 10,000 0 1 mo

11/19 Ppt 10,000 10,000 0 1 mo

11/19 Ppt 1,000 0 0 N30 4-5 mos

11/19 Ppt 100 100 0 1 mo

11/19 Ppt-Slow 30 200,000 0 0 6-12 mos

30 11/19 Ppt-Slow 30 15,000 15,000 15,000 1 mo

11/19 Ppt-Slow 60 500 500 250 1 mo

11/19 Slow 60+ 5,000,000 100,000 100,000 2-3 mos

11/19 Slow 30-90+ 500 500 500 N30 1 mo

11/19 Slow 120 1,000 0 0 N30 6-12 mos

11/19 (016) 250 0 0 Cash account 2-3 mos

11/19 (017) 100 0 0 Cash account 1 mo

11/19 (018) 50 0 0 Cash account 6-12 mos

11/19 (019) 50 0 0 Cash account 6-12 mos

11/19 (020) 50 0 0 Cash account 4-5 mos

10/19 Ppt 7,500 0 0 4-5 mos

10/19 Ppt 2,500 2,500 0 1 mo

10/19 Ppt 500 500 0 1 mo

10/19 Ppt-Slow 30 10,000,000 7,000,000 1,000,000 1 mo

10/19 Ppt-Slow 60 900,000 0 0 1 mo

10/19 (026) 500 500 500

09/19 (027) 50 Cash account 1 mo

08/19 Ppt 2,500 2,500 0 N30 1 mo

08/19 Ppt 1,000 1,000 0 N30 1 mo

08/19 Ppt 750 750 0 N30 1 mo

08/19 Ppt 750 750 0 1 mo

08/19 Ppt 500 500 0 N30 1 mo

08/19 Ppt 500 500 0 N30 1 mo

08/19 Ppt 250 250 0 1 mo

08/19 Ppt-Slow 30 25,000 0 0 6-12 mos

08/19 (036) 250 Cash account 1 mo

07/19 Ppt 5,000 1 mo

07/19 (038) 0 0 0 Cash account 6-12 mos

03/19 Slow 30-60 7,500 0 0 N30 6-12 mos

10/18 Slow 30 500 0 0 6-12 mos

08/18 Ppt-Slow 30 30,000 0 0 6-12 mos

08/18 Ppt-Slow 30 15,000 0 0 2-3 mos

07/18 (043) 50 Cash account 6-12 mos

07/18 (044) 50 Cash account 1 mo

31 06/18 (045) Sales COD 1 mo

05/18 Slow 30 70,000 0 0 N60 6-12 mos

02/18 (047) 50 Cash account 1 mo

Payments Detail Key: 30 or more days beyond terms Payment experiences reflect how bills are paid in relation to the terms granted. In some instances payment beyond terms can be the result of disputes over merchandise, skipped invoices, etc. Each experience shown is from a separate supplier. Updated trade experiences replace those previously reported

History & Operations

COMPANY OVERVIEW

Company Name Phone History MICHAELS COMPANIES, INC., THE 972 409-1300 CLEAR Stock Symbol Doing Business As Present management control MIK MICHAELS 36 years

Street Address Operations 8000 Bent Branch Dr Irving, TX 75063 Profitable

Annual Sales $5,271,944,000.00

HISTORY

The following information was reported 12/19/2019

Officer(s): JAMES A QUELLA, CHB+ MARK S COSBY, CEO+ DENISE A PAULONIS, EXEC V PRES-CFO JAMES E SULLIVAN, CAO-CONTRL

DIRECTOR(S): The officers identified by (+) and Joshua Bekenstein, Ryan Cotton, Monte E Ford, Karen Kaplan, Matthew S Levin, John J Mahoney and Beryl B Raff.

The Delaware Secretary of State's business registrations file showed that The Michaels Companies, Inc. was registered as a Corporation on July 17, 2013, under the file registration number 5363423.

Business started 1983.

The company was incorporated in the State of Delaware in July 2013 in connection with Michaels Stores, Inc.'s (MSI) reorganization into a holding company structure. MSI was incorporated in Delaware in 1983.

32 In July 2013, the company's corporate structure was reorganized into a holding company structure. The Michaels Companies, Inc. (Parent), Michaels FinCo Holdings, LLC (FinCo Holdings), Michaels FinCo, Inc. (FinCo Inc.) and Michaels Funding, Inc. (Holdings) and Michaels Stores MergerCo, Inc. (MergerCo) were formed in connection with the Reorganization and (i) MergerCo was merged with and into Michaels Stores, Inc. (MSI) with MSI being the surviving corporation. As a result of the Reorganization, FinCo Holdings is wholly owned by the company, FinCo Inc. and Holdings are wholly owned by FinCo Holdings and MSI is wholly owned by Holdings.

On July 2, 2014, the company completed its Initial Public Offering (IPO) of 27.8 million shares of common stock at a public offering price of $17.00 per share.

The company's common stock is traded on the NASDAQ Global Select Market under the symbol "MIK ". As of February 2, 2019, there were 380 holders of record of the company's common stock. As of April 16, 2019, those shareholders identified by the company as beneficially owning 5% or more of the outstanding shares were: Bain Capital Investors, LLC and related funds (33.4%); Affiliates of The Blackstone Group LP (12.9%); T Rowe Price Associates Inc (8.0%); The Vanguard Group (5.4%); and BlackRock, Inc and affiliates (5.3%). As of the same date, directors and officers as a group beneficially owns less than 1% of the outstanding shares.

JAMES A QUELLA. Director since 2006. He has been appointed as the Chairman of the company's Board effective April 1, 2019. He retired as a Senior Managing Director, Senior Operating Partner and co-head of the Portfolio Operations Group at Blackstone in the Private Equity Group in June 2014, having served in these roles since 2003.

MARK S COSBY. Director since 2019. He has been appointed as the company's Interim CEO effective as of February 28, 2019. He served as President, North America of Office Depot, Inc. from July 2014 until December 2016. From September 2011 to November 2013, he served as President, Retail at CVS Caremark Corporation. Prior to CVS, he spent five years at Macys, Inc., where he served in a number of executive roles, including President, Stores from April 2009 to August 2011.

DENISE A PAULONIS. She was appointed Executive Vice President and CFO in August 2016. She held several positions within the company since 2014. Prior to joining the company, she served in various capacities at PepsiCo, Inc. since 2009.

JAMES E SULLIVAN. He serves as the CAO and Controller of the company.

JOSHUA BEKENSTEIN. Director since 2006. He is a Managing Director at Bain.

RYAN COTTON. Director since 2017. He has served as a Managing Director in the North American Private Equity - Consumer, Retail & Dining Vertical since 2015.

MONTE E FORD. Director since 2015. He is currently the Principal Partner at the CIO Strategy Exchange.

KAREN KAPLAN. Director since 2015. She has served as Chairman and CEO of Hill Holliday, Inc. since 2013.

MATTHEW S LEVIN. Director since 2006. He is a senior advisor of Bain Capital in the private equity business.

JOHN J MAHONEY. Director since 2015. He retired as Vice Chairman of Staples, Inc. in July 2012, having served as Vice Chairman since January 2006.

BERYL B RAFF. Director since 2014. She has been CEO and Chairman of Helzberg Diamond Shops, Inc. since 2009.

AFFILIATES: The following are related through common principals, management and/or ownership: Bain Capital Investors, LLC, Boston, MA. Started '1997'. DUNS #965503100. Operates as investors.

The Blackstone Group Inc., New York, NY. Started '1985'. DUNS #144630571. Operates as a security broker/dealer.

T. Rowe Price Associates, Inc., Baltimore, MD. Started '1937'. DUNS #004987608. Operates as open-end management investment.

The Vanguard Group, Inc., Malvern, PA. Started '1974'. DUNS #060074812. Operates as open-end management investment.

33 Blackrock, Inc., New York, NY. Started '1988'. DUNS #786987052. Operates as open-end management investment, investment advisory service.

BUSINESS REGISTRATION

CORPORATE AND BUSINESS REGISTRATIONS REPORTED BY THE SECRETARY OF STATE OR OTHER OFFICIAL 02/14/2019 SOURCE AS OF

Registered THE MICHAELS COMPANIES, INC. Name:

Business type: DOMESTIC CORPORATION

Corporation NOT AVAILABLE type:

Date 07/17/2013 incorporated:

State of DELAWARE incorporation:

Filing date: 07/17/2013

Registration ID: 5363423

Status: GOOD STANDING

Where filed: SECRETARY OF STATE/CORPORATIONS DIVISION, DOVER ,DE

Registered agent: CORPORATION SERVICE COMPANY, 251 LITTLE FALLS DRIVE ,WILMINGTON,DE,198080000

OPERATIONS

12/19/2019

Description: The company owns and operates arts and crafts specialty retail stores for Makers and do-it-yourself home decorators in North America. It operates Michaels stores that offer stock-keeping units (SKUs) in crafts, home decor and seasonal, framing, and paper crafting. The company also provides private brands, including Recollections, Studio Decor, Bead Landing, Creatology, Ashland, Celebrate It, Art Minds, Artist's Loft, Craft Smart, Loops & Threads, Make Market, Foamies, LockerLookz, Imagin8, and Sticky Sticks. Further, it manufactures custom and specialty framing merchandise; distributes craft and hobby items products under the Darice brand; and sells its products through an e-commerce platform. TRADEMARK (S): Aaron Brothers, Artistree, Darice, Lamrite, Michaels, Michaels the Arts and Crafts Store, Pat Catans, Recollections, Make Creativity Happen, and Where Creativity Happens. Terms are cash and on contract basis. Sells to general public and commercial concerns. Territory : International.

The company's business is highly seasonal, with higher sales in the third and fourth fiscal quarters.

34 Employees: 47,000 which includes officer(s) and 35000 part-time. Undetermined employed here. The number of part-time associates substantially increases during the Holiday selling season.

Facilities: Leases 296,000 sq. ft. in a building.

Subsidiaries: The business has subsidiary(ies); detailed subsidiary information is available in Dun & Bradstreet's linkage or family tree products.

SIC & NAICS

SIC: NAICS: Based on information in our file, D&B has assigned this 451120 Hobby, Toy, and Game Stores company an extended 8-digit SIC. D&B's use of 8-digit SICs 339999 All Other Miscellaneous Manufacturing enables us to be more specific about a company's operations 314110 Carpet and Rug Mills than if we use the standard 4-digit code. 314110 Carpet and Rug Mills

The 4-digit SIC numbers link to the description on the Occupational Safety & Health Administration (OSHA) Web site. Links open in a new browser window.

5945 0101 Arts and crafts supplies 3999 9950 Framed artwork 2273 0200 Mats and matting 2273 0202 Door mats: paper, grass, reed, coir, sisal, jute, rags, etc.

Financials

 STATEMENT UPDATE

2019-12-09

Interim Consolidated statement dated NOV 2 2019 (in thousands):

Assets Liabilities Cash 118,387 Accts Pay 658,182 Accts Rec 25,224 Operating Lease 303,023 Inventory 1,423,367 Liabilities

Income Taxes Receivable 1,744 Accruals 374,120

Prepaid 73,223 Taxes 22,520

L.T. Liab-(1yr) 24,900

35 Curr Assets 1,641,945 Curr Liabs 1,382,745

Fixt & Equip 431,932 Long-Term Debt 2,649,756

Operating Lease Assets 1,613,527 Operating Lease 1,374,555 Liabilities Goodwill 94,290 L.T. Liab-Other 69,853 Other Intangible Assets- 5,043 Net COMMON STOCK 9,850

Other Assets 58,342 ADDIT. PD.-IN CAP 1,245

ACCUM OTHER (22,916) COMPREHENSIVE LOSS

RETAINED EARNINGS (1,620,009)

Total Assets 3,845,079 Total Liabilities + Equity 3,845,079

From FEB 02 2019 to NOV 02 2019 sales $3,349,430,000; cost of goods sold $2,123,171,000. Gross profit $1,226,259,000; operating expenses $986,180,000. Operating income $240,079,000; other expenses $120,521,000; net income before taxes $119,558,000; Federal income tax $28,615,000; net income $90,943,000.

Statement obtained from Securities And Exchange Commission. Prepared from books without audit.

Fixed assets shown net less $1,301,785,000 depreciation.

Explanations

The net worth of this company includes intangibles; Other Assets consist of deferred income taxes and other assets.

ADDITIONAL FINANCIAL DATA

Fiscal Consolidated statement dated FEB 2 2019 (in thousands):

Assets Liabilities

Cash 245,887 Accts Pay 485,004

Accts Rec 57,328 Accruals 378,742

Inventory 1,108,715 Taxes 43,907

Prepaid Expenses & Other 98,659 L.T. Liab-(1yr) 24,900

Income Taxes Receivable 4,935

36 Curr Assets 1,515,524 Curr Liabs 932,553

Fixt & Equip 439,077 Long-Term Debt 2,681,000

Goodwill 112,069 Other Liabilities 140,978

Other Intangible Assets- 17,238 COMMON STOCK 10,594 Net ADDIT. PD.-IN CAP 5,954 Deferred Income Taxes 25,005 ACCUM OTHER (14,558) Other Assets 19,423 COMPREHENSIVE LOSS

RETAINED (1,628,185) EARNINGS

Total Assets 2,128,336 Total Liabilities + 2,128,336 Equity

From FEB 04 2018 to FEB 02 2019 annual sales $5,271,944,000; cost of goods sold $3,248,276,000. Gross profit $2,023,668,000; operating expenses $1,460,056,000. Operating income $563,612,000; other income $2,362,000; other expenses $148,920,000; net income before taxes $417,054,000; Federal income tax $97,509,000. Net income $319,545,000.

Statement obtained from Securities And Exchange Commission. Prepared from statement(s) by Accountant: Ernst & Young LLP, Dallas, Texas.

ACCOUNTANTS OPINION

A review of the accountant's opinion indicated that the financial statement meets generally accepted accounting principles and the audit contains no qualifications.

Explantions

The net worth of this company includes intangibles.

The report was updated using information the company filed with the Securities and Exchange Commission.

KEY BUSINESS RATIOS

Statement Date : 2019-02-02

Based on this Number of Establishments : 18

Industry Norms Based On 18 Establishments

This Business Industry Median Industry Quartile

Profitability

37 Return on Sales % 6.1 5.2 2

Return on Net Worth % (-) 5.1 4

Short Term Solvency

Current Ratio 1.6 1.9 3

Quick Ratio 0.3 0.9 4

Efficiency

Assets to Sale % 40.4 55.2 1

Sales/Net Working Capital 9.0 7.7 2

Utilization

Total Liabilities / Net 97.5 4 Worth %

UN = Unavailable

Spread Financials

Financial Trend Graphs

38 This information may not be reproduced in whole or in part by any means of reproduction.

©Dun & Bradstreet, Inc. 2005-2019. All rights reserved US Government Employee Disclaimer

39 Printed By:Heidi Thogmartin

Date Printed:December 20, 2019

LIVE REPORT Currency: Shown in USD unless otherwise indicated

LAMRITE WEST, INC. Trade Names: (SUBSIDIARY OF MICHAELS COMPANIES, INC., THE, IRVING, TX),DARICE,PAT CATAN'S,A C SUPPLY CO,PAT CATANS CRAFT CENTER

ACTIVE HEADQUARTERS (SUBSIDIARY)

D-U-N-S 01-778-6245 Number: Company: LAMRITE WEST, INC.

D&B Address Added to Portfolio: 02/28/2007 Address: 13000 DARICE PKWY Endorsement: [email protected] STRONGSVILLE, OH, US - 44149 Last View Date: 12/20/2019 Location HEADQUARTERS (SUBSIDIARY) Type: Phone: 440-238-9150 Fax: Web: www.darice.com

Company Summary

SCORE BAR

75 Paying 8 days past due PAYDEX® 

2 Low to Moderate Risk of severe payment Commercial Credit Score Class  delinquency

3 Moderate Risk of severe financial stress Financial Stress Score Class 

Credit Limit - D&B Conservative 1,000,000.00 Based on profiles of other similar companies.

D&B Rating -- Unavailable.

D&B 3-MONTH PAYDEX®

D&B 3-month PAYDEX® : 73  Low Risk (100) ; High Risk (1) When weighted by amount, Payments to suppliers average 11 Days Beyond Terms

D&B COMPANY OVERVIEW 40 This is a headquarters (subsidiary) location

Branch(es) or Division(s) exist Chief Executive Age (Year Started) Y MICHAEL CATANZARITE, PRES 55 years (1964)

Employees History Status Financing 600-900 (200 Here) INCOMPLETE SECURED

Line of business SIC Ret misc merchandise, whol nondurable NAICS 5999 ,5199 goods, whol toys/hobby goods 453998

COMMERCIAL CREDIT SCORE CLASS

Commercial Credit Score Class : 2  Low Risk:1 ; High Risk:5

PAYDEX® TREND CHART

DETAILED TRADE RISK INSIGHT™

3 months from Oct-19 to Dec-19

Days Beyond Terms Past 3 months: 3 Days Days Beyond Terms Past 3 months : 3 Low Risk:0 ; High Risk:120+

Dollar-weighted average of 23 payment experiences reported from 16 companies.

D&B PAYDEX®

D&B PAYDEX® : 75  Low Risk (100) ; High Risk (1) When weighted by amount, Payments to suppliers average 8 days beyond terms

41 PUBLIC FILINGS

The following data includes both open and closed filings found in D&B's database on this company.

Record Type Number of Most Recent Records Filing Date

Bankruptcies 0 --- FINANCIAL STRESS SCORE CLASS Judgments 0 ---

Liens 0 --- Financial Stress Score Class : 3  Suits 2 11/26/2018 Low Risk:1 ; High Risk:5

UCCs 24 05/24/2018

The public record items contained herein may have been paid, terminated, vacated or released prior to today's date.

Trade Payments

PAYMENT HABITS

For all payment experiences within a given amount of credit extended, shows the percent that this Business paid within terms. Provides number of experiences to calculate the percentage, and the total credit value of the credit extended.

Credit Extended Payment Experiences Total Amount % of Payments Within Terms

Over 100,000 2 400,000 87%

50,000-100,000 3 205,000 83%

15,000-49,999 9 230,000 74%

5,000-14,999 15 112,500 90%

1,000-4,999 12 25,500 91%

Under 1,000 20 6,700 94%

Based on payments collected over last 24 months.

Payment experiences reflect how bills are paid in relation to the terms granted. In some instances, payment beyond terms can be the result of disputes over merchandise, skipped invoices, etc.

PAYMENT SUMMARY

There are 83 payment experience(s) in D&Bs file for the most recent 24 months, with 45 experience(s) reported during the last three month period. The highest Now Owes on file is 90000 . The highest Past Due on file is 40000 Below is an overview of the company's currency-weighted payments, segmented by it's supplier's primary industries:

Top Industries Total Revd (#)Total Amount Largest High Credit Within Terms (%) 1 - 30 Days Late (%) 31 - 60 Days Late (%) 61 - 90 Days Late (%) 91 + Days Late (%)

Telephone communictns 6 2,200 750 100 0 0 0 0 Mfg misc plastic prdt 5 90,050 70,000 54 7 39 0 0 Electric services 5 25,100 15,000 100 0 0 0 0 Trucking non-local 4 76,500 65,000 100 0 0 0 0 Short-trm busn credit 3 110,000 100,000 55 45 0 0 0 42 Nonclassified 3 35,750 30,000 51 49 0 0 0 Natnl commercial bank 3 1,350 750 100 0 0 0 0 Public finance 2 45,000 35,000 100 0 0 0 0 Mfg computer storage 2 30,000 20,000 100 0 0 0 0 Misc business service 2 15,000 10,000 83 0 0 0 17 Misc coml printing 2 15,000 10,000 100 0 0 0 0 State commercial bank 1 300,000 300,000 100 0 0 0 0 Mfg women's underwear 1 70,000 70,000 100 0 0 0 0 Ret mail-order house 1 30,000 30,000 0 100 0 0 0 Mfg abrasive products 1 30,000 30,000 50 50 0 0 0 Mfg flat glass 1 30,000 30,000 100 0 0 0 0 Whol office supplies 1 20,000 20,000 100 0 0 0 0 Mfg dolls/stuffed toy 1 20,000 20,000 100 0 0 0 0 Mfg treated minerals 1 10,000 10,000 100 0 0 0 0 Mfg press/blown glass 1 5,000 5,000 100 0 0 0 0 Thread mill 1 2,500 2,500 100 0 0 0 0 Arrange cargo transpt 1 2,500 2,500 100 0 0 0 0 Mfg misc products 1 2,500 2,500 100 0 0 0 0 Mfg confectionery 1 2,500 2,500 100 0 0 0 0 Whol industrial suppl 1 2,500 2,500 100 0 0 0 0 Mfg extracts/syrup 1 2,500 2,500 50 50 0 0 0 Investment advice 1 1,000 1,000 0 100 0 0 0 Mfg pin/button/fasten 1 1,000 1,000 100 0 0 0 0 Testing laboratory 1 750 750 100 0 0 0 0 Whol computers/softwr 1 500 500 100 0 0 0 0 Whol auto parts 1 250 250 0 50 50 0 0 Whol chemicals 1 100 100 100 0 0 0 0 Whol books/newspapers 1 50 50 100 0 0 0 0 Whol metal 1 50 50 0 0 100 0 0 Whol electronic parts 1 50 50 100 0 0 0 0 Other payment categories

Cash experiences 21 $1,200 $250

Payment record unknown 1 $90,000 $90,000

Unfavorable comments 0 $0 $0

Placed for collections 0 $0 $0

Total in D&B's file 83 $1,070,900 $300,000

Accounts are sometimes placed for collection even though the existence or amount of the debt is disputed.

Indications of slowness can be result of dispute over merchandise, skipped invoices, etc.

DETAILED PAYMENT HISTORY FOR THIS COMPANY

Date Reported (mm/yy) Paying Record High Credit Now Owes Past Due Selling Terms Last Sale Within (month)

11/19 Ppt 30,000 0 0 6-12 mos

11/19 Ppt 20,000 1,000 0 1 mo

11/19 Ppt 20,000 0 0 1 mo

11/19 Ppt 10,000 10,000 0 1 mo

11/19 Ppt 10,000 10,000 0 1 mo

11/19 Ppt 10,000 0 0 2-3 mos

43 11/19 Ppt 7,500 1,000 0 1 mo

11/19 Ppt 7,500 7,500 0 1 mo

11/19 Ppt 5,000 0 0 2-3 mos

11/19 Ppt 2,500 0 0 6-12 mos

11/19 Ppt 2,500 750 0 N15 1 mo

11/19 Ppt 2,500 0 0 6-12 mos

11/19 Ppt 2,500 0 0 6-12 mos

11/19 Ppt 2,500 0 0 6-12 mos

11/19 Ppt 1,000 0 0 4-5 mos

11/19 Ppt 750 750 0 N30 1 mo

11/19 Ppt 750 0 0 6-12 mos

11/19 Ppt 500 0 0 2-3 mos

11/19 Ppt 500 500 0 N30 1 mo

11/19 Ppt 500 0 0 1 mo

11/19 Ppt 500 0 0 N30 6-12 mos

11/19 Ppt 250 0 0 1 mo

11/19 Ppt 100 0 0 N30 1 mo

11/19 Ppt 100 0 0 1 mo

11/19 Ppt 50 0 0 6-12 mos

11/19 Ppt-Slow 15 30,000 20,000 5,000 1 mo

11/19 Ppt-Slow 30 7,500 0 0 4-5 mos

11/19 Ppt-Slow 30 5,000 0 0 1 mo

11/19 Ppt-Slow 60 70,000 0 0 4-5 mos

11/19 Ppt-Slow 120 5,000 500 500 1 mo

11/19 Slow 30 50 50 50

11/19 (032) 50 Cash account 1 mo

11/19 (033) 50 0 0 Cash account 6-12 mos

10/19 Ppt 65,000 40,000 2,500 1 mo

10/19 Ppt 10,000 1,000 750 1 mo

10/19 Ppt 10,000 0 0 1 mo

10/19 (037) 250 Cash account 2-3 mos

10/19 (038) 100 Cash account 1 mo

09/19 Ppt 300,000 7,500 0 1 mo

09/19 Ppt 70,000 0 0 6-12 mos

09/19 Ppt 750 0 0 2-3 mos

44 09/19 Ppt-Slow 30 100,000 20,000 2,500 1 mo

09/19 Slow 30 1,000 0 0 4-5 mos

09/19 Slow 60 50 0 0 6-12 mos

09/19 (045) 100 Cash account 1 mo

09/19 (046) 100 Cash account 6-12 mos

09/19 (047) 50 Cash account 1 mo

08/19 Ppt 2,500 100 0 N30 1 mo

08/19 Slow 30 30,000 0 0 6-12 mos

07/19 Slow 30-60 250 0 0 6-12 mos

06/19 Ppt 50 0 0 4-5 mos

06/19 Ppt-Slow 30 30,000 0 0 6-12 mos

06/19 (053) 50 Cash account 1 mo

06/19 (054) 50 Cash account 1 mo

05/19 (055) 50 Cash account 2-3 mos

04/19 Ppt 15,000 0 0 1 mo

04/19 Ppt 5,000 2,500 0 1 mo

04/19 Ppt 2,500 0 0 1 mo

04/19 Ppt 2,500 0 0 2-3 mos

04/19 Ppt 100 0 0 1 mo

04/19 (061) 50 Cash account 1 mo

01/19 Ppt 20,000 10,000 0 1 mo

12/18 Ppt 5,000 1,000 0 1 mo

11/18 Ppt 100 0 0 N30 6-12 mos

09/18 (065) 50 Cash account 6-12 mos

08/18 Ppt 750 0 0 6-12 mos

07/18 Ppt 500 0 0 6-12 mos

07/18 (068) 50 Cash account 1 mo

06/18 (069) Sales COD 1 mo

06/18 (070) Sales COD 1 mo

06/18 (071) Sales COD 1 mo

06/18 (072) Sales COD 1 mo

06/18 (073) Sales COD 1 mo

06/18 (074) 90,000 90,000 40,000 N30

06/18 (075) 50 Cash account 2-3 mos

05/18 Ppt 10,000 1 mo

45 05/18 (077) 50 Cash account 1 mo

04/18 Ppt-Slow 30 2,500 0 0 PROX 6-12 mos

02/18 Ppt 35,000 1 mo

12/17 Ppt 1,000 0 0 4-5 mos

Payments Detail Key: 30 or more days beyond terms Payment experiences reflect how bills are paid in relation to the terms granted. In some instances payment beyond terms can be the result of disputes over merchandise, skipped invoices, etc. Each experience shown is from a separate supplier. Updated trade experiences replace those previously reported

History & Operations

COMPANY OVERVIEW

Company Name Phone History LAMRITE WEST, INC. 440 238-9150 INCOMPLETE URL Doing Business As Present management control www.darice.com (SUBSIDIARY OF MICHAELS 55 years COMPANIES, INC., THE, IRVING, TX) DARICE

Street Address 13000 Darice Pkwy Strongsville, OH 44149

HISTORY

The following information was reported 11/03/2018

Officer(s): MICHAEL CATANZARITE, PRES DAVID CATANZARITE, V PRES JOE RUDOLPH, CFO

DIRECTOR(S): THE OFFICER(S)

The Ohio Secretary of State's business registrations file showed that Lamrite West, Inc. was registered as a Corporation on September 29, 1964, under the file registration number 333918.

Business started 1964.

Business started 1964. Present control succeeded Feb 2016.

CONTROL CHANGE:.

On February 23, 2016, sources stated that Michaels Companies, Inc., Irving, TX, has completed the acquisition of Lamrite West, Inc., Strongville, OH, on February 2, 2016. With the acquisition, Lamrite West, Inc. will now operate as a subsidiary of Michaels Companies, Inc. Employees and management were retained. Purchased price of the transaction was $150 million.

MICHAEL CATANZARITE born 1957. 1978-present active here.

DAVID CATANZARITE born 1953. 1972-present active here.

46 JOE RUDOLPH. Antecedents are unknown.

Business address has changed from 21160 Drake Road, Cleveland, OH, 44136 to 13000 Darice Pkwy, Strongsville, OH, 44136.

AFFILIATES: The following are related through common principals, management and/or ownership: DARICE, INC., STRONGSVILLE, OH. Started '1977'.

Business address has changed from 13000 Darice Pkwy, Strongsville, OH, 44149 to 14225 Pearl Road, Strongsville, OH, 44136.

Business address has changed from 14225 Pearl Road, Strongsville, OH, 44136 to 13000 Darice Pkwy , Strongsville, OH, 44149.

BUSINESS REGISTRATION

CORPORATE AND BUSINESS REGISTRATIONS REPORTED BY THE SECRETARY OF STATE OR OTHER OFFICIAL 12/16/2019 SOURCE AS OF

Registered Name: LAMRITE WEST, INC.

Business type: CORPORATION

Corporation PROFIT type:

Date 09/29/1964 incorporated:

State of OHIO incorporation:

Filing date: 09/29/1964

Registration ID: 333918

Status: ACTIVE

Where filed: SECRETARY OF STATE/CORPORATIONS DIVISION, COLUMBUS ,OH

Registered agent: CORPORATION SERVICE COMPANY, 50 WEST BROAD STREET; SUITE 1330 ,COLUMBUS,OH,432150000

Principals: ARMOND D ARNSON INCORPORATOR

BENNET KLEINMAN INCORPORATOR

BERNARD R HOLLANDER INCORPORATOR

Common Stocks: Authorized shares:

OPERATIONS

11/03/2018

47 Description: Subsidiary of Michaels Companies, Inc., The, Irving, TX started 1983 which operates as a chain of arts and crafts. As noted, this company is a subsidiary of The Michaels Companies, Inc. DUNS number 07-942-9778, and reference is made to that report for background information on the parent company and its management. Retails artists' supplies and artificial flowers. Wholesales nondurable goods, specializing in art goods or supplies. Wholesales toys, hobby goods and supplies. Has 3,500 account(s). Terms are Net 30 days. Sells to retailers. Territory : Local.

Nonseasonal.

Employees: 600-900 which includes officer(s). 200 employed here. Management stated that there are 300-450 part-time employees. Management could not submit an actual employee figure, but stated employees range between 600 and 900.

Facilities: Rents 125,000 sq. ft. in a single story building.

Branches: This business has multiple branches, detailed branch/division information is available in Dun & Bradstreets linkage or family tree products.

Subsidiaries:

SIC & NAICS

SIC: NAICS: Based on information in our file, D&B has assigned this 453998 All Other Miscellaneous Store Retailers (except company an extended 8-digit SIC. D&B's use of 8-digit SICs Tobacco Stores) enables us to be more specific about a company's operations 453998 All Other Miscellaneous Store Retailers (except than if we use the standard 4-digit code. Tobacco Stores) 424990 Other Miscellaneous Nondurable Goods Merchant Wholesalers The 4-digit SIC numbers link to the description on the 423920 Toy and Hobby Goods and Supplies Merchant Occupational Safety & Health Administration (OSHA) Web Wholesalers site. Links open in a new browser window.

5999 0202 Artists' supplies and materials 5999 1602 Artificial flowers 5199 0100 Art goods and supplies 5092 0000 Toys and hobby goods and supplies

BANKING

BANK: First Merit Bank, Cleveland, OH.

Financials

ADDITIONAL FINANCIAL DATA

On September 27, 2018, attempts to contact the management of this business have been unsuccessful. Inside an outside sources confirmed operation and location. 48 REQUEST FINANCIALS STATEMENTS

You can ask D&B to make a personalized request to this company on your behalf to obtain its latest financial information by clicking the button below.

Financial Date Requested Requested Period Requested Year Requested By Received Date Status

No data found The requested financials below were provided by LAMRITE WEST, INC. and are not DUNSRight certified.

KEY BUSINESS RATIOS

D & B has been unable to obtain sufficient financial information from this company to calculate business ratios. Our check of additional outside sources also found no information available on its financial performance. To help you in this instance, ratios for other firms in the same industry are provided below to support your analysis of this business.

Based on this Number of Establishments : 120

Industry Norms Based On 120 Establishments

This Business Industry Median Industry Quartile

Profitability

Return on Sales % UN 2.4 UN

Return on Net Worth % UN 11.6 UN

Short Term Solvency

Current Ratio UN 1.9 UN

Quick Ratio UN 0.7 UN

Efficiency

Assets to Sale % UN 44.2 UN

Sales/Net Working Capital UN 6.5 UN

Utilization

Total Liabilities / Net Worth UN 101.2 UN %

UN = Unavailable

Spread Financials

This information may not be reproduced in whole or in part by any means of reproduction.

49 ©Dun & Bradstreet, Inc. 2005-2019. All rights reserved US Government Employee Disclaimer

50 2019 sustainability report

51 THE MICHAELS COMPANIES, INC. ENVIRONMENTAL, SOCIAL, AND GOVERNANCE SUSTAINABILITY REPORT who we are With $5.27 billion in sales in fiscal 2018, The Michaels Companies, Inc. (Michaels) is the largest arts and crafts specialty retailer in North America (based on store count), providing materials, project ideas and education for creative activities. Our vision is to inspire and enable customer creativity, create a fun and rewarding place to work, foster meaningful connections with our communities and lead the industry in growth and innovation.

We operate more than 1,200 Michaels stores in 49 states and Canada. Additionally, we serve customers through various digital platforms including Michaels.com, ConsumerCrafts. com, and AaronBrothers.com. Michaels also owns Artistree, a manufacturer of high-quality customer and specialty framing merchandise, and Darice, a premier wholesale distributor in the craft, gift and décor industry.

We believe anyone can make, and we’re on a mission to inspire and encourage everyone to unleash his or her inner maker. With crafting classes, store events, project sheets, store displays, mobile applications and online videos, we offer a shopping experience that can inspire creativity and build confidence in our customer’s artistic abilities. our core values Michaels operates by a set of core values every day. We believe we should:

**Make People Happy: We’re dedicated to making Michaels a fun and supportive place to work, as well as a great place to shop. **Keep It Simple: It sounds easy, but sometimes simple is hard! Nevertheless, most things work best if they aren’t complicated. **Innovate & Learn: The world moves quickly, and we aren’t looking just to keep up. We strive to think bigger, have the best ideas, move faster and work smarter. **Give Back: We are committed to giving back to the communities that support us, including through our partnership with the Boys & Girls Clubs of America and Canada. **Spend Smart: We try to be frugal and spend our money in the best possible ways so we can invest in what truly matters. **Do The Right Thing: At Michaels, integrity is of the utmost importance. We try each day to do what’s right (not just what’s easy) for each other and for our customers. **Have Fun: We take our work seriously, but ourselves? Not. At. All. After all, we sell glitter and googly eyes!

Our sustainability efforts relate to and reinforce our core values, especially the values of Innovate & Learn, Give Back, Spend Smart and Do The Right Thing.

52 environmental sustainability We believe in the value of environmentally sound business practices throughout our operations, including energy conservation as well as recycling and waste reduction efforts. As part of our continued commitment to corporate responsibility, Michaels has long pursued initiatives that are good for the environment as well as our profitability.

Energy Efficiency Using less energy when possible is a key component of our environmental sustainability program. We operate an Energy Management System from our Support Center in Irving, Texas that controls when and how much electricity is used by our retail stores. By controlling devices that use electricity - like the overhead lights, the heating and cooling system and even the vending machines – we have been able to decrease the amount of energy we utilize as a company (in fact, for 2018 to the tune of 4% average savings over the prior year kWh spend). To further decrease energy use and costs, we decided to “relamp” our stores by replacing traditional, higher use and cost light bulbs with lower-energy LED bulbs. Currently ninety percent of store light bulbs have been changed to LED bulbs, and all Michaels stores will only use LED bulbs by the end of 2020.

Recycling and Stewardship Recycling what we have used is another key component of our environmental sustainability program. To encourage our Team Members to recycle, we have adopted a single-stream recycling program for our Support Center and have initiated carboard recycling programs in our stores. To encourage recycling by customers, we also fund participation in the Multi Material Blue Box Recycling Programs in Ontario, Quebec, British Columbia, Saskatchewan and Manitoba. Our stewardship program also includes participation in the Household Hazardous Waste Programs across Canada, and the Electronic Products Programs in Quebec, British Columbia and Saskatchewan. Through these efforts, 122,169 tons of trash was recycled by our Company in 2018.

Disposal of Hazardous Materials At times we use or sell hazardous materials in our stores, and we provide for a responsible way for Team Members to dispose of these items. Stericycle is an expert in the field and is our hazardous waste disposal vendor partner. The majority of our hazardous material waste is recycled or used to produce energy by Stericycle. social sustainability We care about people and want to make sure our customers, partners, and Team Members are treated fairly and with respect. We have implemented multiple policies and programs to foster communication with Team Members, customers and business partners in our supply chain. We operate ethically and expect our vendors to as well. We also believe in giving back to the community through our work with charitable organizations.

53 Code of Business Ethics and Conduct We have adopted a written Code of Business Ethics and Conduct (Code of Ethics) that applies to our directors, officers and Team Members, and is designed to ensure that our business is conducted with integrity. The Code of Ethics covers professional conduct, conflicts of interest and the protection of confidential information, as well as adherence to laws and regulations applicable to the conduct of our business. We ask Team Members and vendors to report any potential violations of the Code of Ethics to a third-party hotline. A copy of the Code of Ethics is posted on our website at www.michaels.com.

Vendor Code of Conduct & Human Rights Policy We have adopted a written Vendor Code of Conduct and Human Rights Policy (Vendor Code of Conduct) that includes the minimum standards we expect all of our merchandise vendors and their factories to follow. Merchandise vendors must agree in writing to comply with the Vendor Code of Conduct as a prerequisite to doing business with us. We have translated the Vendor Code of Conduct into the languages our vendor base primarily speaks and reads and have provided these translations to our vendors for their use. The Vendor Code of Conduct is an integral part of our Social Accountability Program, and we ask Team Members and vendors to report any potential violations of the Code of Conduct to a third-party hotline. The Code of Conduct is posted on our website at www.michaels.com.

Social Accountability Program We have a robust sourcing initiative and many of the products we sell are under a private brand owned by Michaels. We have third parties audit the vendors and factories that produce Michaels-branded or private branded products against the principles described in the Vendor Code of Conduct. Those principles include, among others, respecting an employee’s basic human rights, non-discriminatory hiring practices, fair compensation, prohibiting child or slave/ forced labor and maintaining a safe working environment. Factories must earn satisfactory audit results before manufacturing Michaels-branded or private branded products for Michaels.

California Transparency in Supply Chains Act We are dedicated to conducting business in a lawful and ethical manner. It is our expectation that our vendors also conduct themselves in such a manner. While we believe the risk of slavery or human trafficking in our supply chain is generally low, we have focused our compliance efforts in this area on our foreign vendors. We conduct training on the prevention of slavery and human trafficking for Team Members who do business internationally and expect Team Members to report any suspected violations. We are committed to the prevention of slavery and human trafficking in our supply chain.

Conflict Minerals Policy We fully support the humanitarian goal of ending violent conflict in the Democratic Republic of the Congo (DRC) and adjoining countries by eliminating the use of conflict minerals mined from this region. We require all of our private brand vendors, and encourage our other vendors, to disclose whether their products include conflict minerals, to source raw materials from certified metal recyclers or certified smelters, and to provide documentation authenticating the chain of custody back to the original source if the vendor is not using a certified metal recycler or smelter. We encourage individuals or vendors to report any possible violations using a third-party hotline.

54 Health and Safety We are strongly committed to providing a safe work environment for our Team Members as well as a safe shopping experience for our customers. It is our policy to safeguard the health, safety and welfare of our Team Members, the public and others who may be affected by our operations. High standards of safety and occupational health management are pursued in the same manner and with the same vigor as other managerial objectives. The Company will, at a minimum, comply with the requirements of the relevant safety and occupational health legislation in the countries in which it operates. No Team Member is required to work at a job he/she knows is not safe and has the right to refuse work if conditions warrant such an action.

Our Company is committed to: **Improving safety performance by setting meaningful, realistic objectives. **Providing adequate and appropriate resources to implement this policy. **Providing a smoke free work environment for Team Members and customers. **Working positively in partnership with our Team Members in order to develop and maintain a positive safety culture and encourage healthy lifestyles in the working environment. ** Providing suitable, sufficient training to all Team Members as appropriate to their particular employment. **Ensuring competent professional advice on safety and occupational health will be made available to all parts of the Company. **Requiring cooperation in all safety and health matters, not only between supervisor and Team Member, but also between each Team Member and his/her co-workers.

Great Place to Work Certified We are honored to be certified as a Great Place to Work for 2018-2019. Great Place to Work® is the global authority on high-trust, high-performance workplace cultures. Through proprietary assessment tools, advisory services, and certification programs, including Best Workplaces lists and workplace reviews, Great Place to Work® provides the benchmarks, framework and expertise needed to create, sustain, and recognize outstanding workplace cultures.

Michaels CARES Michaels CARES is a Team Member funded charity serving our fellow Team Members in their times of need. Team Members can apply for an immediate cash grant to help cover costs while recovering from a difficult event, including loss of a residence due to natural disaster or crime, or death, a life-threatening illness or injury of a dependent family member or Team Member. Michaels CARES succeeds through the charitable contributions of our Team Members, corporate donations, and special events. Since its inception, Michaels CARES has assisted Team Members with $2.3 million in grants.

Open Door Policy We want to hear from our Team Members and believe that an open door fosters open communication. We believe the best way for us to succeed is through a direct one-on-one relationship between our Team Members and their supervisors. Issues and concerns are best solved through open, honest and direct communication. Team Members’ calls and concerns can also be made to our 24-hour confidential hotline or reported online.

55 Diversity and Inclusion As part of our culture journey, we’ve launched Michaels Resource Groups (“MRGs”), made up of individuals who join together based on similar interests, backgrounds and shared experiences. Aligned with the Great Place to Work initiative, these groups support diversity and inclusion. Each group is formed from a grassroots effort and led by Team Members who volunteer their time. All groups are open to allies so that anyone may join any group. The purpose of these groups is to create opportunities to build an inclusive culture; support business growth; provide a platform for Team Member engagement and development; support the company strategy, culture and values. We currently have four established MRGs: A Black/African American Group, a Hispanic Group, an LGBTQ Group and a Women’s Group.

Veteran Hiring We are proud to recruit and hire current military members, veterans and their families to work for Michaels. The training, discipline and leadership skills instilled through military service are outstanding, and we consider ourselves lucky to build upon that foundation of excellence and help veterans further their careers. Providing a clear path for development and growth potential for all Team Members - especially our military members - is important. We thank veterans for their service, and we’re proud to be a part of their civilian careers.

Adoption Benefits We will reimburse eligible Team Members up to $5,000 per adoption to help cover adoption fees, attorney fees, court costs, travel expenses, medical fees (for the child) and temporary foster care.

Tuition Reimbursement Benefits We believe an investment in our Team Members is an investment in our future. We offer tuition assistance to help eligible Team Members pay a portion of the cost for college tuition or language programs for professional and personal development. Most Team Members are eligible to receive up to $2,000 per year in assistance.

Fuel for Growth & Next Big Item Team Member Engagement Program We value our Team Member’s opinions, and some of the best ideas for efficiency and new products have come from our talented co-workers. We’ve established two internal programs to collect great ideas from Team Members: Fuel for Growth and Next Big Item. Team Members are encouraged to submit their ideas for improving our efficiency as a business to the Fuel for Growth panel, and for new or innovative products to the Next Big Item team. Team Members are rewarded with cash payments for novel ideas that are implemented.

Charitable Contributions At Michaels, we are proud of our involvement in helping build a better community. To maximize our impact, we focus our financial support on nationally recognized non-profit organizations that align with our giving goals.

Starlight Children’s Foundation From 2010 through 2019, we supported Starlight Children’s Foundation as our U.S. and Canadian charity partner. Starlight is a leading global charity that improves the life and health

56 of kids and families in the U.S., Canada and around the world. Collaborating with innovators in pediatric healthcare, entertainment and technology, Starlight provides a unique blend of family-centered programs and services from hospital to home. We raised funding for Starlight through a wide range of programs that included corporate contributions, in-store promotions, customer donation programs, Team Member-driven events and giving, vendor engagement, product donations and more. We also participated in many Starlight programs that provided comfort and care for hospitalized children, including Starlight® Fun Center® mobile entertainment units, Starlight® Tablets and Starlight® Comfort Kits.

Partnership with Boys & Girls Clubs In February 2019, we announced our partnership with the Boys & Girls Clubs of America and Boys & Girls Clubs of Canada as our exclusive charity partners. Our goal is to nourish critical youth development and provide opportunities for Club members to confidently explore and discover their creative voices to positively and significantly impact their lives. To encourage Club members’ creative growth, Michaels and Boys & Girls Clubs are providing kids and teens with access to the tools to pursue creative thinking and the ability to make without limits, with a goal of improving all-around engagement and achievement. To help Club members and staff expand their boundaries, Michaels will transform select Club art spaces into ultimate craft rooms, complete with all the supplies—from paint and paper to easels, and everything in-between—needed for social and emotional creative expression. Our Team Members will also work with Boys & Girls Club teams annually to ensure that youth development professionals are armed with a robust, celebratory and comprehensive approach to training and development to further cultivate optimism, originality and, most importantly, the confidence to bring kids’ and teens’ visions to life.

Community Classroom In March 2019, we announced the national launch of Community Classroom, an educational, collaborative workspace program designed to transform Michaels classrooms into true community “Making Spaces” for instructors and Makers across the country. Community Classroom will support local Makers and provide them with a new way to teach what they love and connect within their community. Makers are invited to submit potential class proposals online at www.michaels.com/instructors. All Community Classroom classes will utilize Michaels products that can be purchased either in-store or online, and customers will be able to sign up online to take Community Classroom classes in local markets. corporate governance Our Board is responsible for governing the business and affairs of Michaels. Highlights of our corporate governance practices are described below.

Board Independence The Board evaluates any relationships of each director and nominee and makes an affirmative determination whether or not such director or nominee is independent. Under our Corporate Governance Guidelines, an “independent” director is one who meets the qualification requirements for being independent under applicable laws and the corporate governance listing standards of The Nasdaq Stock Market. Our Board reviews any transactions and

57 relationships between each non-management director or any member of his or her immediate family and the Company. The purpose of this review is to determine whether there were any such transactions or relationships and if so, whether they were inconsistent with a determination that the director was independent.

Board Expertise and Diversity Our Corporate Governance Guidelines provide that the Board shall be committed to a diversified membership, in terms of both the individuals involved as well as their personal backgrounds, various experiences and areas of expertise. We also seek a Board that reflects a range of talents, ages, skills, viewpoints, professional experience, educational background and expertise to provide sound and prudent guidance with respect to our operations and interests. All of our directors are financially literate, and at least one member of our Audit Committee is an audit committee financial expert.

Board Annual Performance Reviews Our Corporate Governance Guidelines and Nominating and Governance Committee charter provide that the Nominating and Governance Committee shall be responsible for periodically, and at least annually, conducting an evaluation of the Board as a whole, as well as each of the committees’ performance, on an annual basis using criteria that it has developed and shall report to the Board on its findings. In fiscal 2018, this additionally included Individual director peer evaluations.

Board Nominees Our Nominating and Governance Committee is responsible for recommending for Board approval the candidates for election to the Board at the Company’s annual meeting of stockholders and for recommending individuals to fill vacancies on the Board that may occur between annual meetings of stockholders. It is the policy of the Nominating and Governance Committee to consider recommendations for director nominees from all sources, including stockholders, and to evaluate all recommendations under the same standards and criteria. The Corporate Governance Guidelines provide that nominees for director shall be selected on the basis of their character, wisdom, judgment, diversity, ability to make independent analytical inquiries, business experiences, understanding of the Company’s industry and business environment, time commitment and acumen. Board members are expected to become and remain informed about the Company, its business and its industry and rigorously prepare for, attend and participate in all Board and applicable committee meetings. The Nominating and Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of our business and represent stockholder interests through the exercise of sound judgment using its diversity of experience. In addition, the Nominating and Governance Committee considers, in light of our business, each director nominee’s experience, qualifications, attributes and skills.

Policies Relating to Board Service We expect each of our directors to attend the Annual Meeting of Stockholders. Under our Audit Committee Charter, members of the Audit Committee should serve on no more than three separate public company audit committees simultaneously without prior review and determination by the Board that such simultaneous service would not impair the ability of such member to effectively serve on the Audit Committee.

58 Attendance Our Board of Directors held seven meetings in fiscal 2018. During fiscal 2018, each director attended at least 75% of the Board and committee meetings on which he or she served during the periods that he or she served. Our independent directors also met separately in executive session at each of our regularly scheduled Board meetings during the year.

Communications with Directors Stockholders and other interested parties may communicate directly with the Board, the non-management directors or the independent directors as a group, or specified individual directors by writing to such individual or group c/o Office of the Corporate Secretary, The Michaels Companies, Inc., 8000 Bent Branch Drive, Irving, Texas 75063. The Secretary will forward such communications to the relevant group or individual at or prior to the next meeting of the Board.

Compensation Committee Interlocks and Insider Participation None of our executive officers serves as a member of the board of directors or compensation committee of any other entity (other than a subsidiary of the Company) that has one or more executive officers who serve on our Board or Compensation Committee.

59 60 61 EXHIBIT F: FEDERAL FUNDS CERTIFICATIONS

FEDERAL CERTIFICATIONS ADDENDUM FOR AGREEMENT FUNDED BY U.S. FEDERAL GRANT

TO WHOM IT MAY CONCERN:

Participating Agencies may elect to use federal funds to purchase under the Master Agreement. This form should be completed and returned.

DEFINITIONS Contract means a legal instrument by which a non–Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used in this part does not include a legal instrument, even if the non– Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward

Contractor means an entity that receives a contract as defined in Contract.

Cooperative agreement means a legal instrument of financial assistance between a Federal awarding agency or pass- through entity and a non–Federal entity that, consistent with 31 U.S.C. 6302–6305: (a) Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or pass-through entity to the non–Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal government or pass-through entity's direct benefit or use; (b) Is distinguished from a grant in that it provides for substantial involvement between the Federal awarding agency or pass-through entity and the non–Federal entity in carrying out the activity contemplated by the Federal award. (c) The term does not include: (1) A cooperative research and development agreement as defined in 15 U.S.C. 3710a; or (2) An agreement that provides only: (i) Direct United States Government cash assistance to an individual; (ii) A subsidy; (iii) A loan; (iv) A loan guarantee; or (v) Insurance.

Federal awarding agency means the Federal agency that provides a Federal award directly to a non–Federal entity

Federal award has the meaning, depending on the context, in either paragraph (a) or (b) of this section: (a)(1) The Federal financial assistance that a non–Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in § 200.101 Applicability; or (2) The cost-reimbursement contract under the Federal Acquisition Regulations that a non–Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in § 200.101 Applicability. (b) The instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative agreement, other agreement for assistance covered in paragraph (b) of § 200.40 Federal financial assistance, or the cost- reimbursement contract awarded under the Federal Acquisition Regulations. (c) Federal award does not include other contracts that a Federal agency uses to buy goods or services from a contractor or a contract to operate Federal government owned, contractor operated facilities (GOCOs). (d) See also definitions of Federal financial assistance, grant agreement, and cooperative agreement.

Non–Federal entity means a state, local government, Indian tribe, institution of higher education (IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient.

Nonprofit organization means any corporation, trust, association, cooperative, or other organization, not including IHEs, that: (a) Is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest; (b) Is not organized primarily for profit; and (c) Uses net proceeds to maintain, improve, or expand the operations of the organization.

62 63 64 65 66 EXHIBIT G: NEW JERSEY BUSINESS COMPLIANCE

NEW JERSEY BUSINESS COMPLIANCE

Suppliers intending to do business in the State of New Jersey must comply with policies and procedures required under New Jersey statues. All offerors submitting proposals must complete the following forms specific to the State of New Jersey. Completed forms should be submitted with the offeror’s response to the RFP. Failure to complete the New Jersey packet will impact OMNIA Partners, Public Sector’s ability to promote the Master Agreement in the State of New Jersey.

DOC #1 Ownership Disclosure

Form DOC #2 Non-Collusion Affidavit

DOC #3 Affirmative Action Affidavit

DOC #4 Political Contribution Disclosure

Form DOC #5 Stockholder Disclosure Certification

DOC #6 Certification of Non-Involvement in Prohibited Activities in Iran

DOC #7 New Jersey Business Registration Certificate

New Jersey suppliers are required to comply with the following New Jersey statutes when applicable:

 all anti-discrimination laws, including those contained in N.J.S.A. 10:2-1 through N.J.S.A. 10:2-14, N.J.S.A. 10:5-1, and N.J.S.A. 10:5-31 through 10:5-38;

 Prevailing Wage Act, N.J.S.A. 34:11-56.26, for all contracts within the contemplation of the Act;

 Public Works Contractor Registration Act, N.J.S.A. 34:11-56.26; and

 Bid and Performance Security, as required by the applicable municipal or state statutes.

67 68 STOCK OWNERSHIP INFORMATION

Beneficial Ownership

The following table sets forth information regarding the beneficial ownership of our Common Stock as of April 16, 2019 by (i) such persons known to us to be beneficial owners of more than 5% of our Common Stock, (ii) each director, director nominee and Named Executive Officer (as defined in “Executive Compensation – Compensation Discussion and Analysis” below) , and (iii) all directors, nominees and executive officers as a group. Unless otherwise indicated by footnote, the address for each listed director, officer and stockholder is c/o The Michaels Companies, Inc., 8000 Bent Branch Drive, Irving, Texas 75063 and each beneficial owner exercises sole voting and investment power over the shares noted below. The percentage of beneficial ownership for our directors and executive officers, both individually and as a group, and beneficial owners of 5% or more of Common Stock is calculated based on 158,121,299 shares of Common Stock outstanding as of April 16, 2019, and the number of unissued shares as to which such person or persons has the right to acquire voting and/or investment power within 60 days. The beneficial ownership information set forth below was provided or disclosed by or on behalf of our executive officers, our directors, and our beneficial owners of 5% or more of our Common Stock. As such, the Company has not independently verified the accuracy or completeness of the information so provided.

Number of Name and address of beneficial owner(1) Shares Owned Percent Beneficial Owners of 5% or More of Our Common Stock: Bain Capital Investors, LLC and related funds (2) ...... 52,798,929 33.4 % Affiliates of The Blackstone Group L.P. (3) ...... 20,393,531 12.9 % T. Rowe Price Associates Inc. (4) ...... 12,650,536 8.0 % The Vanguard Group (5) ...... 8,513,247 5.4 % BlackRock, Inc. and affiliates (6) ...... 8,456,082 5.3 %

Directors and Named Executive Officers: Joshua Bekenstein (7) ...... — — Mark Cosby (8) ...... 18,943 * Ryan Cotton (7) ...... — — Monte E. Ford ...... 17,401 * Karen Kaplan ...... 19,567 * Matthew S. Levin (7) ...... 5,835 * John J. Mahoney ...... 29,433 * James A. Quella (9) ...... 22,620 * Beryl B. Raff ...... 24,293 * Peter F. Wallace (9) ...... — — Carl S. Rubin (10) ...... 2,418,930 1.5 % Denise A. Paulonis (11) ...... 182,414 * Stephen J. Carlotti (12) ...... 327,465 * J. Robert Koch ...... — — All directors and executive officers as a group (14 persons) (13) ...... 802,654 *

* Less than one percent.

(1) Pursuant to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of any securities as to which such person, directly or indirectly, through any contract, arrangement, undertaking, relationship or otherwise has or shares voting power and/or investment power or as to which such person has the right to acquire such voting and/or investment power within 60 days. Percentage of beneficial ownership by a person as of a particular date is calculated by dividing the number of shares beneficially owned by such person by the sum of the number of shares outstanding as of such date and the number of unissued shares as to which such person has the right to acquire voting and/or investment power within 60 days. Unless otherwise indicated, the number of shares shown includes outstanding shares of Common Stock owned as of April 16, 2019 by the person indicated.

(2) The shares included in this table consist of: (i) 52,644,833 shares of Common Stock held by Bain Capital Integral Investors 2006, LLC (“Integral 06”); and (ii) 154,096 shares of Common Stock held by BCIP TCV, LLC (“TCV”). Bain Capital Investors, LLC (“BCI”) is the administrative member of Integral 06 and governs the investment

69 strategy and decision-making process with respect to investments held by TCV. As a result, BCI may be deemed to share voting and dispositive power with respect to the shares held by Integral 06 and TCV (collectively, the “Bain Capital Entities”). Each of the Bain Capital Entities has an address c/o Bain Capital Private Equity, L.P., 200 Clarendon Street, Boston, Massachusetts 02116.

(3) Includes 15,397,191 shares of our Common Stock owned by Blackstone Capital Partners V L.P. (“BCP V”), 3,521,509 shares of our Common Stock owned by BCP V-S L.P. (“BCP V-S”), 220,529 shares of our Common Stock owned by Blackstone Family Investment Partnership V L.P. (“Family”), 46,810 shares of our Common Stock owned by Blackstone Participation Partnership V L.P. (“Participation”), 686,552 shares of our Common Stock owned by BCP V Co-Investors L.P. (“BCP Co-Investors”) and 520,940 shares of our Common Stock owned by Blackstone Family Investment Partnership V-SMD L.P. (“Family-SMD”) (collectively, “the “Blackstone Funds”). The general partner of BCP V, BCP V-S and BCP Co-Investors is Blackstone Management Associates V L.L.C. BMA V L.L.C. is the sole member of Blackstone Management Associates V L.L.C. BCP V Side-by-Side GP L.L.C. is the general partner of Family and Participation. Blackstone Holdings III L.P. is the managing member and majority in interest owner of BMA V L.L.C. and the sole member of BCP V Side-by-Side GP L.L.C. The general partner of Blackstone Holdings III L.P. is Blackstone Holdings III GP L.P. The general partner of Blackstone Holdings III G.P. is Blackstone Holdings III GP Management L.L.C. The sole member of Blackstone Holdings III GP Management L.L.C. is The Blackstone Group L.P. The general partner of The Blackstone Group L.P. is Blackstone Group Management L.L.C. Blackstone Group Management L.L.C. is wholly owned by Blackstone’s senior managing directors and controlled by its founder, Stephen A. Schwarzman. The general partner of Family-SMD is Blackstone Family GP L.L.C., which is controlled by its founder Mr. Schwarzman. As a result of his control of Blackstone Group Management L.L.C. and Blackstone Family GP L.L.C., Mr. Schwarzman has voting and investment power with respect to the shares held by the Blackstone Funds. Each of such Blackstone entities and Mr. Schwarzman may be deemed to beneficially own the shares beneficially owned by the Blackstone Funds directly or indirectly controlled by it or him, but each (other than the Blackstone Funds to the extent of their direct holdings) disclaims beneficial ownership of such shares. The address for each of the Blackstone Funds, Blackstone Management Associates V L.L.C., BMA V L.L.C., BCP V Side-by-Side GP L.L.C., Blackstone Holdings III L.P., Blackstone Holdings III GP L.P., Blackstone Holdings III GP Management L.L.C., The Blackstone Group L.P., Blackstone Group Management L.L.C., Blackstone Family GP L.L.C. and Mr. Schwarzman is c/o The Blackstone Group L.P., 345 Park Avenue, New York, New York 10154.

(4) The information regarding T. Rowe Price Associates, Inc. (“T. Rowe”) is based solely on information included in Amendment No. 4 to its Schedule 13G filed by T. Rowe with the SEC on February 14, 2019, which reflects sole voting power with respect to 3,864,727 shares of Common Stock and sole dispositive power with respect to 12,650,536 shares of Common Stock. These shares are owned by various individual and institutional investors, for which T. Rowe serves as an investment adviser with the power to direct investments and/or sole power to vote the securities. By virtue of the relationships described in this footnote, T. Rowe may be deemed to be a beneficial owner of the shares, but expressly disclaims its beneficial ownership of such shares. T. Rowe reported its address as 100 E. Pratt Street, Baltimore, Maryland 21202.

(5) The information regarding The Vanguard Group is based solely on information included in its Schedule 13G filed by The Vanguard Group with the SEC on February 11, 2019, which reflected sole voting power with respect to 48,873 shares, sole dispositive power with respect to 8,463,638 shares and shared dispositive power with respect to 49,609 shares. The Vanguard Group. reported its address as 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.

(6) The information regarding BlackRock, Inc. and its affiliates is based solely on information included in its Amendment No. 1 to its Schedule 13G filed by BlackRock, Inc. with the SEC on February 5, 2019, which reflected sole voting power with respect to 8,010,686 shares and sole dispositive power with respect to 8,456,082 shares. BlackRock, Inc. reported its address as 55 East 52nd Street, New York, New York 10055.

(7) Does not include shares indirectly held by the Bain Capital Entities. Mr. Bekenstein and Mr. Cotton are each Managing Directors of BCI, and Mr. Levin is a Senior Advisor of BCI. As a result, by virtue of the relationships described above, each may be deemed to share beneficial ownership of the shares of Common Stock held by the Bain Capital Entities. The address of Mr. Bekenstein, Mr. Cotton and Mr. Levin is c/o Bain Capital Private Equity, L.P., 200 Clarendon Street, Boston, Massachusetts 02116.

70 (8) Includes 18,943 shares of unvested restricted stock for which Mr. Cosby holds voting rights (of which 2,367 shares of restricted stock are to vest as of May 6, 2019).

(9) Mr. Wallace is an employee, and Mr. Quella is a former employee, of affiliates of The Blackstone Group L.P., but each disclaims beneficial ownership of the shares beneficially owned by the Blackstone Funds. The addresses of Mr. Quella and Mr. Wallace are c/o The Blackstone Group L.P., 345 Park Avenue, New York, New York 10154.

(10) Includes 369,000 stock options that vested on March 18, 2014; 369,000 stock options that vested on March 18, 2015; 369,000 stock options that vested on March 18, 2016; 63,131 stock options that vested on September 30, 2016; 369,000 stock options that vested on March 18, 2017; 87,169 stock options that vested on September 14, 2017; 63,132 stock options that vested on September 30, 2017; 369,000 stock options that vested on March 18, 2018 111,657 stock options that vested on March 31, 2018; 87,169 stock options that vested on September 14, 2018; 63,131 stock options that vested on September 30, 2018; 126,839 stock options that vested on March 29, 2019; 111,657 stock options that vested on March 31, 2019 and 79,177 stock options that vested on April 1, 2019, of which an aggregate of 493,789 shares have been exercised and sold. Mr. Rubin resigned as Chief Executive Officer effective February 28, 2019. His role as Chairman of the Board and his employment as an employee of MSI terminated effective April 1, 2019. In connection with his separation, 804,103 vested stock options will be forfeited if unexercised on June 1, 2019. For more information about Mr. Rubin’s separation, including his agreements with the Company, see Executive and Director Compensation – Employment Agreements with Certain Named Executive Officers – Agreements with Carl S. Rubin.”

(11) Includes 16,850 stock options that vested on December 9, 2015; 6,043 stock options that vested on September 30, 2016; 16,850 stock options that vested on December 9, 2016; 16,931 stock options that vested on August 29, 2017; 6,042 stock options that vested on September 30, 2017; 16,850 stock options that vested on December 9, 2017; 12,282 stock options that vested on March 31, 2018; 16,932 stock options that vested on August 29, 2018; 6,043 stock options that vested on September 30, 2018; 16,850 stock options that vested on December 9, 2018; 13,953 stock options that vested on March 29, 2019; and 12,282 stock options that vested on March 31, 2019. Includes 1,208 shares of unvested restricted stock for which Ms. Paulonis holds voting rights.

(12) Includes 58,488 stock options that vested on June 16, 2015; 58,487 stock options that vested on June 16, 2016; 9,921 stock options that vested on September 30, 2016; 58,488 stock options that vested on June 16, 2017; 9,589 stock options that vested on September 14, 2017; 9,922 stock options that vested on September 30, 2017; 12,282 stock options that vested on March 31, 2018; 58,487 stock options that vested on June 16, 2018; 9,589 stock options that vested on September 14, 2018; 9,921 stock options that vested on September 30, 2018; 13,953 stock options that vested on March 29, 2019; and 12,282 stock options that vested on March 31, 2019 of which an aggregate of 40,000 shares have been exercised and sold. Includes 1,984 shares of unvested restricted stock for which Mr. Carlotti holds voting rights.

(13) Consistent with the disclaimers of beneficial ownership of Messrs. Bekenstein, Cotton, Levin, Quella and Wallace contained in notes (2), (3), (6) and (8) above, this number does not include the 73,192,460 shares of Common Stock that may be deemed to be beneficially owned by each of (a) the Bain Capital Entities (b) affiliates of The Blackstone Group L.P. The total includes 1,373,567 vested options or options that will vest within 60 days of April 16, 2019 held by current executive officers of the Company (of which an aggregate of 797,572 shares have been exercised and sold) and 31,065 shares of unvested restricted stock for which executive officers of the Company hold voting rights. For a list of the current directors and executive officers of the Company, please see page 3 and page 10, respectively.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers to file reports of holdings and transactions in our Common Stock with the SEC and Nasdaq. To facilitate compliance, we have undertaken the responsibility to prepare and file these reports on behalf of our officers and our independent directors. Based on our records and other information, all reports were timely filed in fiscal 2018.

71 72 73 The following Employee Information Report was completed for the purposes of this proposal, and as of the date of submission, has not been filed with the State of New Jersey.

74 75 76 77 78 79 '2& 1(:-(56(<%86,1(665(*,675$7,21&(57,),&$7( 1-6$

STATE OF NEW JERSEY BUSINESS REGISTRATION CERTIFICATE

Taxpayer Name: MICHAELS STORES, INC. Trade Name: Address: 8000 BENT BRANCH DR IRVING, TX 75063-6023 Certificate Number: 0095262 Effective Date: March 23, 1994 Date of Issuance: December 16, 2019

For Office Use Only: 20191216104125729

80 https://www1.state.nj.us/TYTR_BRC/servlet/common/BRCLogin The following financial statements are an excerpt from the Quarterly Report on Form 10-Q of The Michaels Companies, Inc., filed with the Securities and Exchange Commission on December 6, 2019.

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Part I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE MICHAELS COMPANIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands, except per share data) (Unaudited)

13 Weeks Ended 39 Weeks Ended November 2, November 3, November 2, November 3, 2019 2018 2019 2018 Net sales $ 1,222,021 $ 1,274,058 $ 3,349,430 $ 3,482,835 Cost of sales and occupancy expense 780,387 795,104 2,123,171 2,173,990 Gross profit 441,634 478,954 1,226,259 1,308,845 Selling, general and administrative 322,807 340,593 933,478 970,191 Restructure and impairment charges 41,376 — 48,332 44,278 Store pre-opening costs 1,402 1,196 4,370 3,995 Operating income 76,049 137,165 240,079 290,381 Interest expense 38,781 37,798 116,274 109,493 Losses on early extinguishments of debt and refinancing costs 161 — 1,316 1,835 Other expense (income), net 78 (121) 2,931 (2,646) Income before income taxes 37,029 99,488 119,558 181,699 Income taxes 8,324 15,719 28,615 43,557 Net income $ 28,705 $ 83,769 $ 90,943 $ 138,142

Other comprehensive income, net of tax: Foreign currency and interest rate swaps 1,230 3,016 (8,358) (3,230) Comprehensive income $ 29,935 $ 86,785 $ 82,585 $ 134,912

Earnings per common share: Basic $ 0.19$ 0.50$ 0.58$ 0.79 Diluted $ 0.19$ 0.50$ 0.58$ 0.78 Weighted-average common shares outstanding: Basic 150,877 165,975 155,299 174,949 Diluted 150,925 166,570 155,342 175,851

See accompanying notes to consolidated financial statements.

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THE MICHAELS COMPANIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (Unaudited)

November 2, February 2, November 3, ASSETS 2019 2019 2018 Current Assets: Cash and equivalents $ 118,387 $ 245,887 $ 102,670 Merchandise inventories 1,423,367 1,108,715 1,440,875 Prepaid expenses and other 73,223 98,659 100,791 Accounts receivable, net 25,224 57,328 42,997 Income taxes receivable 1,744 4,935 6,544 Total current assets 1,641,945 1,515,524 1,693,877 Property and equipment, at cost 1,733,717 1,656,098 1,642,838 Less accumulated depreciation and amortization (1,301,785) (1,217,021) (1,189,442) Property and equipment, net 431,932 439,077 453,396 Operating lease assets 1,613,527 — — Goodwill 94,290 112,069 119,074 Other intangible assets, net 5,043 17,238 20,591 Deferred income taxes 38,075 25,005 23,367 Other assets 20,267 19,423 28,730 Total assets $ 3,845,079 $ 2,128,336 $ 2,339,035

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities: Accounts payable $ 658,182 $ 485,004 $ 645,469 Accrued liabilities and other 374,120 378,742 407,684 Current portion of operating lease liabilities 303,023 — — Current portion of long-term debt 24,900 24,900 240,261 Income taxes payable 22,520 43,907 476 Total current liabilities 1,382,745 932,553 1,293,890 Long-term debt 2,649,756 2,681,000 2,690,302 Long-term operating lease liabilities 1,374,555 — — Other liabilities 69,853 140,978 144,694 Total liabilities 5,476,909 3,754,531 4,128,886

Commitments and contingencies

Stockholders’ Deficit: Common stock, $0.06775 par value, 350,000 shares authorized; 146,770 shares issued and outstanding at November 2, 2019; 157,774 shares issued and outstanding at February 2, 2019; and 158,616 shares issued and outstanding at November 3, 2018 9,850 10,594 10,700 Additional paid-in-capital 1,245 5,954 — Treasury stock — — (12,168) Accumulated deficit (1,620,009) (1,628,185) (1,781,493) Accumulated other comprehensive loss (22,916) (14,558) (6,890) Total stockholders’ deficit (1,631,830) (1,626,195) (1,789,851) Total liabilities and stockholders’ deficit $ 3,845,079 $ 2,128,336 $ 2,339,035

See accompanying notes to consolidated financial statements.

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THE MICHAELS COMPANIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) 39 Weeks Ended November 2, November 3, 2019 2018 Cash flows from operating activities: Net income $ 90,943 $ 138,142 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of operating lease assets 244,258 — Depreciation and amortization 94,025 89,933 Share-based compensation 18,664 20,780 Debt issuance costs amortization 3,509 3,759 Loss on write-off of investment 5,036 — Accretion of long-term debt, net (195) (385) Restructure and impairment charges 48,332 44,278 Deferred income taxes (9,984) 7,710 Losses on early extinguishments of debt and refinancing costs 1,316 1,835 Changes in assets and liabilities: Merchandise inventories (316,220) (338,260) Prepaid expenses and other (14,445) (2,886) Accounts receivable 30,684 (18,269) Other assets (4,728) (1,314) Operating lease liabilities (225,951) — Accounts payable 162,222 150,088 Accrued interest 8,441 7,850 Accrued liabilities and other (10,471) 1,077 Income taxes (18,318) (79,258) Other liabilities (751) 734 Net cash provided by operating activities 106,367 25,814

Cash flows used in investing activities: Additions to property and equipment (89,632) (119,553)

Cash flows from financing activities: Common stock repurchased (107,908) (430,509) Payments on term loan credit facility (18,675) (17,356) Payment of 2020 senior subordinated notes (510,000) — Issuance of 2027 senior notes 500,000 — Borrowings on asset-based revolving credit facility 11,100 307,400 Payments on asset-based revolving credit facility (11,100) (89,400) Payment of debt refinancing costs (8,158) (1,117) Payment of dividends — (317) Proceeds from stock options exercised 506 1,812 Net cash used in financing activities (144,235) (229,487)

Net change in cash and equivalents (127,500) (323,226) Cash and equivalents at beginning of period 245,887 425,896 Cash and equivalents at end of period $ 118,387 $ 102,670

Supplemental cash flow information: Cash paid for interest $ 105,374 $ 98,864 Cash paid for taxes $ 56,793 $ 115,724

See accompanying notes to consolidated financial statements.

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THE MICHAELS COMPANIES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (in thousands) (Unaudited)

13 Weeks Ended Accumulated Number of Additional Other Common Common Treasury Paid-in Accumulated Comprehensive Shares Stock Stock Capital Deficit Loss Total Balance at August 3, 2019 155,199 $ 10,419 $ — $ — $ (1,573,843) $ (24,146) $ (1,587,570) Net income — — — — 28,705 — 28,705 Foreign currency and interest rate swaps ———— — 1,230 1,230 Share-based compensation — — — 6,424 — — 6,424 Exercise of stock options and other awards 242 17 — (53) — — (36) Repurchase of stock and retirements (8,747) (586) — (5,126) (74,871) — (80,583) Issuance of restricted stock awards 76 — — — — — — Balance at November 2, 2019 146,770 $ 9,850 $ — $ 1,245 $ (1,620,009) $ (22,916) $ (1,631,830)

Balance at August 4, 2018 171,375 $ 11,504 $ — $ — $ (1,700,978)$ (9,906)$ (1,699,380) Net income — — — — 83,769 — 83,769 Foreign currency and interest rate swaps ———— — 3,016 3,016 Share-based compensation — — — 8,550 — — 8,550 Exercise of stock options and other awards 347 23 — 340 — — 363 Repurchase of stock and retirements (13,106) (827) (12,168) (8,890) (164,284) — (186,169) Balance at November 3, 2018 158,616 $ 10,700 $ (12,168) $ — $ (1,781,493) $ (6,890) $ (1,789,851)

39 Weeks Ended Accumulated Number of Additional Other Common Common Treasury Paid-in Accumulated Comprehensive Shares Stock Stock Capital Deficit Loss Total Balance at February 2, 2019 157,774 $ 10,594 $ — $ 5,954 $ (1,628,185) $ (14,558) $ (1,626,195) Net income — — — — 90,943 — 90,943 Foreign currency and interest rate swaps ———— — (8,358) (8,358) Share-based compensation — — — 19,182 — — 19,182 Exercise of stock options and other awards 836 57 — 449 — — 506 Repurchase of stock and retirements (11,987) (801) — (24,340) (82,767) — (107,908) Issuance of restricted stock awards 147 — — — — — — Balance at November 2, 2019 146,770 $ 9,850 $ — $ 1,245 $ (1,620,009) $ (22,916) $ (1,631,830)

Balance at February 3, 2018 181,919 $ 12,206 $ — $ 21,740 $ (1,539,781) $ (3,660) $ (1,509,495) Net income — — — — 138,142 — 138,142 Foreign currency and interest rate swaps ———— — (3,230) (3,230) Share-based compensation — — — 21,597 — — 21,597 Exercise of stock options and other awards 847 57 — 1,755 — — 1,812 Repurchase of stock and retirements (24,150) (1,563) (12,168) (45,092) (379,854) — (438,677) Balance at November 3, 2018 158,616 $ 10,700 $ (12,168) $ — $ (1,781,493) $ (6,890) $ (1,789,851)

See accompanying notes to consolidated financial statements.

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THE MICHAELS COMPANIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. BASIS OF PRESENTATION

All expressions of the “Company”, “us”, “we”, “our”, and all similar expressions are references to The Michaels Companies, Inc. and our consolidated, wholly-owned subsidiaries, unless otherwise expressly stated or the context otherwise requires. Our consolidated financial statements include the accounts of The Michaels Companies, Inc. and our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 2, 2019 filed with the Securities and Exchange Commission (“SEC”) pursuant to Section 13 or 15(d) under the Securities Exchange Act of 1934. In the opinion of management, all adjustments (consisting of normal recurring accruals and other items) considered necessary for a fair presentation have been included.

We report on the basis of a 52-week or 53-week fiscal year, which ends on the Saturday closest to January 31. All references to fiscal year mean the year in which that fiscal year began. References to “fiscal 2019” relate to the 52 weeks ending February 1, 2020 and references to “fiscal 2018” relate to the 52 weeks ended February 2, 2019. In addition, all references to “the third quarter of fiscal 2019” relate to the 13 weeks ended November 2, 2019 and all references to “the third quarter of fiscal 2018” relate to the13 weeks ended November 3, 2018. Finally, all references to “the nine months ended November 2, 2019” relate to the 39 weeks ended November 2, 2019 and all references to “the nine months ended November 3, 2018” relate to the 39 weeks ended November 3, 2018. Because of the seasonal nature of our business, the results of operations for the 13 and 39 weeks ended November 2, 2019 are not indicative of the results to be expected for the entire year.

Restructure and Impairment Charges

In March 2018 and January 2019, we closed our Aaron Brothers and Pat Catan’s stores, respectively. In the first nine months of fiscal 2019, we recorded a restructure charge related to Pat Catan’s totaling $8.2 million, primarily related to employee-related expenses and the impairment of an indefinite-lived intangible asset. In the first nine months of fiscal 2018, we recorded a restructure charge related to Aaron Brothers totaling $44.3 million, primarily related to the transfer of the rights to sell inventory and other assets to a third party to facilitate the store closures and assist with the disposition of our remaining lease obligations and employee-related expenses. In the first nine months of fiscal 2018, Pat Catan's and Aaron Brothers had net sales totaling approximately $75.5 million and $12.9 million, respectively. Excluding the restructure charges, Aaron Brothers and Pat Catan’s did not have a material impact on the Company’s operating income in the periods presented.

The Company reviews goodwill and other indefinite-lived intangible assets for impairment annually in the fourth quarter, or more frequently if events occur which indicate the carrying value of these assets may not be recoverable. In addition, long-lived assets and definite-lived intangible assets that are subject to amortization are evaluated for indicators of impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. If indications of impairment exist, fair value is generally determined using the present value of future cash flows using updated financial projections and a weighted-average cost of capital.

During the third quarter of fiscal 2019, the Company identified impairment indicators within our Darice wholesale business that were primarily due to a deterioration in sales associated with overall declining demand from customers. These indicators have led the Company to revise Darice’s forecasted sales expectations downwards resulting in a significantly lower projected operating plan. As a result, the Company performed interim impairment tests as of November 2, 2019 on Darice’s goodwill, indefinite and definite-lived intangible assets and long-lived assets, including operating lease assets.

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As a result of the interim impairment testing, the Company recorded an impairment charge of $40.1 million at November 2, 2019, consisting of $17.8 million related to goodwill, $14.4 million related to long-lived assets, including operating lease assets, and $7.9 million related to indefinite and definite-lived intangible assets. At November 2, 2019, the carrying value of Darice’s operating lease assets adjusted for the impairment charge totaled $32.5 million. The carrying value of the remaining long-lived assets related to Darice, including intangible assets, are not material.

Share Repurchase Program

In September 2018, the Board of Directors authorized a new share repurchase program for the Company to purchase $500 million of the Company’s common stock on the open market or through accelerated share repurchase transactions. The share repurchase program does not have an expiration date, and the timing and number of repurchase transactions under the program will depend on market conditions, corporate considerations, debt agreements and regulatory requirements. Shares repurchased under the program are held as treasury shares until retired. During the nine months ended November 2, 2019, we repurchased 11.6 million shares for an aggregate amount of $105.1 million. As of November 2, 2019, we had $293.5 million of availability remaining under our current share repurchase program.

Accounting Pronouncement Recently Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). Under ASU 2016-02, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The lease standard requires companies to use a modified retrospective transition approach as of the beginning of the earliest comparable period presented in the company’s financial statements. In July 2018, the FASB issued ASU 2018-11, “ Leases (Topic 842): Targeted Improvements” which provided an additional transition option that allows companies to continue applying the guidance under the current lease standard in the comparative periods presented in the consolidated financial statements. We utilized the additional transition option to adopt ASU 2016-02 in the first quarter of fiscal 2019. As a result, the standard was applied starting February 3, 2019 and prior periods were not restated. We also elected the practical expedient permitted under the transition guidance which permits companies not to reassess prior conclusions on lease identification, historical lease classification and initial direct costs. The adoption of the standard resulted in the recognition of operating lease assets and liabilities of approximately $1.7 billion as of February 3, 2019. The adoption did not result in a material impact on our consolidated statements of comprehensive income.

Recent Accounting Pronouncement Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326)” (“ASU 2016-13”) which makes significant changes to the accounting for credit losses on financial assets and disclosures. The standard requires immediate recognition of management’s estimates of current expected credit losses. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. ASU 2016-13 permits only a modified retrospective approach without restatement. We do not anticipate a material impact to the consolidated financial statements once implemented.

2. FAIR VALUE MEASUREMENTS

As defined in Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC 820”), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level valuation hierarchy for fair value measurements. These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect

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market data obtained from independent sources, while unobservable inputs reflect less transparent active market data, as well as internal assumptions. These two types of inputs create the following fair value hierarchy:

● Level 1—Quoted prices for identical instruments in active markets;

● Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose significant inputs are observable; and

● Level 3—Instruments with significant unobservable inputs.

Impairment losses related to store-level operating lease assets and property and equipment are calculated using significant unobservable inputs including the present value of future cash flows expected to be generated using a risk-adjusted weighted-average cost of capital and comparable store sales growth assumptions and, therefore, are classified as a Level 3 measurement in the fair value hierarchy.

Impairment losses related to goodwill and other indefinite-lived intangible assets are calculated based on the estimated fair value of each reporting unit, which is determined using significant unobservable inputs including the present value of future cash flows expected to be generated by the reporting unit using a weighted-average cost of capital, terminal values and updated financial projections for the next five years and are classified as Level 3 measurements in the fair value hierarchy.

The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximates their estimated fair values due to the short maturities of these instruments.

The table below provides the fair values of our senior secured term loan facility (“Amended and Restated Term Loan Credit Facility”), our 8% senior notes maturing in 2027 (“2027 Senior Notes”), our 5.875% senior subordinated notes maturing in 2020 (“2020 Senior Subordinated Notes’’) and our interest rate swaps.

November 2, February 2, November 3, 2019 2019 2018 (in thousands) Assets Interest rate swaps $ — $ — $ 5,028

Liabilities Term loan credit facility $ 2,135,435 $ 2,177,098 $ 2,195,613 Senior notes 496,155 — — Senior subordinated notes — 511,913 510,000 Short-term portion of interest rate swaps 11,938 2,557 571 Long-term portion of interest rate swaps 6,295 3,809 —

The fair values of our Amended and Restated Term Loan Credit Facility, our 2027 Senior Notes and our 2020 Senior Subordinated Notes were determined based on quoted market prices which are considered Level 1 inputs within the fair value hierarchy.

The fair value of our interest rate swaps was calculated using significant observable inputs including the present value of estimated future cash flows using the applicable interest rate curves and, therefore, were classified as Level 2 inputs within the fair value hierarchy. The short-term and long-term interest rate swap liabilities are recorded in accrued liabilities and other liabilities, respectively, in our consolidated balance sheets. The interest rate swap asset in fiscal 2018 is recorded in other assets in our consolidated balance sheets.

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3. REVENUE RECOGNITION

Our revenue is primarily associated with sales of merchandise to customers within our stores, customers utilizing our e-commerce platforms and through our Darice wholesale business (“Darice”). Revenue from sales of our merchandise is recognized when the customer takes possession of the merchandise. Payment for our retail sales is typically due at the time of the sale.

Right of Return

A sales return reserve is established using historical customer return behavior and reduces both revenue and cost of goods sold. The Company presents the gross sales return reserve in other current liabilities and the estimated value of the merchandise expected to be returned in prepaid expenses and other in the consolidated balance sheets.

Customer Receivables

As of November 2, 2019, February 2, 2019 and November 3, 2018, receivables from customers, which consist primarily of trade receivables related to Darice, were approximately $18.0 million, $32.1 million and $30.5 million, respectively, and are included in accounts receivable, net in the consolidated balance sheets.

Gift Cards

The gift card liability is included in accrued liabilities and other in the consolidated balance sheets. The following table includes activity related to gift cards (in thousands):

13 Weeks Ended 39 Weeks Ended November 2, November 3, November 2, November 3, 2019 2018 2019 2018 Balance at beginning of period $ 55,764 $ 50,513 $ 61,071 $ 56,729 Issuance of gift cards 11,878 12,275 36,343 37,552 Revenue recognized (1) (12,300) (12,592) (41,715) (42,193) Gift card breakage (724) (758) (1,081) (2,650) Balance at end of period $ 54,618 $ 49,438 $ 54,618 $ 49,438

(1) Revenue recognized from the beginning liability during the third quarters of fiscal 2019 and fiscal 2018 totaled $6.9 million and $7.1 million, respectively. Revenue recognized from the beginning liability during the first nine months of fiscal 2019 and fiscal 2018 totaled $19.4 million and $19.7 million, respectively.

4. LEASES

We lease our retail store locations, distribution centers, office facilities and certain equipment under non-cancelable operating leases. Substantially all store leases have initial lease terms of approximately 10 years, the majority of which provide for one or more five- year renewal options. The exercise of lease renewal options is at the Company’s sole discretion. We include the lease renewal option periods in the calculation of our operating lease assets and liabilities when it is reasonably certain that we will renew the lease. Our operating lease assets represent our right to use an underlying asset for the lease term and our operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. In addition, operating lease assets exclude lease incentives received. As most of our leases do not contain an implicit rate of return, we use our estimated incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. For operating leases that commenced prior to the adoption date of the new lease accounting standard, we used the incremental borrowing rate as of the adoption date. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

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We have lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. Our short-term non-real estate leases, which have a non-cancelable lease term of less than one year, are not included in the operating lease assets or liabilities. Short-term lease expense is recognized on a straight-line basis over the lease term.

The components of lease costs are as follows (in thousands):

13 Weeks Ended 39 Weeks Ended November 2, November 2, 2019 2019 Operating lease cost (1) $ 106,294 $ 316,358 Variable lease cost (2) 38,319 110,836 Total lease cost $ 144,613 $ 427,194

(1) Includes an immaterial amount related to short-term non-real estate leases. (2) Includes taxes, insurance and common areas maintenance costs for our leased facilities which are paid based on actual cost incurred by the lessor. Also includes contingent rent which is immaterial in the periods presented.

Additional information related to our operating leases is as follows (in thousands, except weighted-average data):

39 Weeks Ended November 2, 2019 Operating cash outflows included in the measurement of lease liabilities $ 322,701 Operating lease assets obtained in exchange for new operating lease liabilities $ 222,887 Weighted-average remaining lease term 6.0 years Weighted-average discount rate 5.6%

Maturities of our lease liabilities are as follows as of November 2, 2019 (in thousands):

Fiscal Year 2019 $ 71,036 2020 421,971 2021 373,165 2022 311,434 2023 248,741 Thereafter 573,554 Total lease payments $ 1,999,901 Less: Interest (322,323) Present value of lease liabilities $ 1,677,578

Lease payments exclude $96.1 million related to 28 leases that have been signed as of November 2, 2019 but have not yet commenced.

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5. DEBT

Long-term debt consists of the following (in thousands):

November 2, February 2, November 3, Interest Rate 2019 2019 2018 Term loan credit facility Variable $ 2,188,775 $ 2,207,450 $ 2,214,994 Asset-based revolving credit facility Variable — — 218,000 Senior notes 8.00% 500,000 — — Senior subordinated notes 5.875 % — 510,000 510,000 Total debt 2,688,775 2,717,450 2,942,994 Less unamortized discount/premium and debt costs (14,119) (11,550) (12,431) Total debt, net 2,674,656 2,705,900 2,930,563 Less current portion (24,900) (24,900) (240,261) Long-term debt $ 2,649,756 $ 2,681,000 $ 2,690,302

Revolving Credit Facility

As of November 2, 2019 and November 3, 2018, the borrowing base under our senior secured asset-based revolving credit facility (“Amended Revolving Credit Facility”) was $850.0 million, of which Michaels Stores, Inc. (“MSI”) had unused borrowing capacity of $768.0 million and $567.0 million, respectively. As of November 2, 2019 and November 3, 2018, outstanding standby letters of credit, which reduce our borrowing base, totaled $82.0 million and $65.0 million, respectively.

On August 30, 2019, MSI, as borrower, and Michaels Funding, Inc. and certain of MSI’s subsidiaries, as guarantors, entered into an amended and restated credit agreement with Wells Fargo Bank, National Association and other lenders. The amendment extends the maturity date of the Amended Revolving Credit Facility to August 30, 2024, subject to an earlier springing maturity date if certain of our outstanding indebtedness has not been repaid, redeemed, refinanced or cash collateralized or if the necessary availability reserves have not been established prior to such time. MSI is required to pay a commitment fee on the unutilized commitments under the Amended Revolving Credit Facility which is 0.25% per annum, subject to reduction to 0.20% when excess availability is less than 50% of the loan cap. The loan cap is defined as the lesser of the commitment amount and the borrowing base. All other significant terms of the Amended Revolving Credit Facility have remained unchanged.

As of November 2, 2019, net debt issuance costs totaled $3.7 million and are being amortized as interest expense over the life of the Amended Revolving Credit Facility. As a result of the refinancing of our Amended Revolving Credit Facility on August 30, 2019, MSI recorded a loss on the early extinguishment of debt of $0.2 million during the third quarter of fiscal 2019.

8% Senior Notes due 2027

On July 8, 2019, MSI issued $500 million in principal amount of 2027 Senior Notes. The 2027 Senior Notes were issued pursuant to an indenture among MSI, certain subsidiaries of MSI, as guarantors, and U.S. Bank National Association, as trustee (the “2027 Senior Notes Indenture”). The 2027 Senior Notes mature on July 15, 2027 and bear interest at a rate of 8% per year, with interest payable semi- annually on January 15 and July 15 of each year, beginning on January 15, 2020.

The net proceeds from the offering and sale of the 2027 Senior Notes, together with cash on hand, were used to redeem MSI’s outstanding 2020 Senior Subordinated Notes.

The 2027 Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of MSI’s subsidiaries that guarantee indebtedness under the Amended Revolving Credit Facility and the Amended and Restated Term Loan Credit Facility (collectively defined as the “Senior Secured Credit Facilities”).

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The 2027 Senior Notes are general, unsecured obligations of MSI, and the guarantees of the 2027 Senior Notes are general, unsecured obligations of the guarantors. They (i) rank equally in right of payment with all of MSI’s and the guarantors’ existing and future senior debt, including the Senior Secured Credit Facilities, (ii) are effectively subordinated to any of MSI’s and the guarantors’ existing and future secured debt to the extent of the value of the assets securing such debt, including the Senior Secured Credit Facilities, (iii) are structurally subordinated to all of the liabilities of MSI’s subsidiaries that are not guaranteeing the 2027 Senior Notes, and (iv) are senior in right of payment with all of MSI’s and the guarantors’ existing and future subordinated debt.

At any time prior to July 15, 2022, MSI may redeem (a) up to40% of the aggregate principal amount of the 2027 Senior Notes with the gross proceeds from one or more Equity Offerings, as defined in the 2027 Senior Notes Indenture, at a redemption price of 108% of the principal amount plus accrued and unpaid interest thereon to, but excluding, the redemption date and/or (b) all or part of the 2027 Senior Notes at 100% of the principal amount plus any accrued and unpaid interest thereon to, but excluding, the redemption date plus a make- whole premium. Thereafter, MSI may redeem all or part of the 2027 Senior Notes at the redemption prices set forth below (expressed as percentages of the principal amount of the 2027 Senior Notes to be redeemed) plus any accrued and unpaid interest thereon to, but excluding, the applicable date of redemption, if redeemed during the twelve month period beginning on July 15 of each of the years indicated below:

Year Percentage 2022 104 % 2023 102 % 2024 and thereafter 100 %

Upon a change in control, MSI is required to offer to purchase the 2027 Senior Notes at101% of the aggregate principal amount, plus any accrued and unpaid interest thereon to, but excluding, the date of purchase.

Subject to certain exceptions and qualifications, the 2027 Senior Notes Indenture contains covenants that, among other things, limit MSI’s ability and the ability of its restricted subsidiaries, including the guarantors, to:

● incur additional indebtedness or issue certain disqualified stock or preferred stock;

● create liens;

● pay dividends on MSI’s capital stock or make distributions or redeem or repurchase MSI’s capital stock;

● prepay subordinated debt or make certain investments, loans, advances, and acquisitions;

● transfer or sell assets;

● engage in consolidations, amalgamations or mergers, or sell, transfer or otherwise dispose of all or substantially all of their assets; and

● enter into certain transactions with affiliates.

The 2027 Senior Notes Indenture also provides for customary events of default which, if any of them occurs, would require or permit the principal of and accrued interest on the 2027 Senior Notes to become or to be declared due and payable. As of November 2, 2019, MSI was in compliance with all covenants.

As of November 2, 2019, net debt issuance costs totaled $6.0 million and are being amortized over the life of the 2027 Senior Notes. As a result of the redemption of our 2020 Senior Subordinated Notes on July 29, 2019, MSI recorded a loss on the early extinguishment of debt of $1.2 million during the second quarter of fiscal 2019.

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Interest Rate Swaps

In April 2018, we executed two interest rate swaps with an aggregate notional value of $1 billion associated with our outstanding Amended and Restated Term Loan Credit Facility. The interest rate swaps have a maturity date of April 30, 2021 and were executed for risk management and are not held for trading purposes. The objective of the interest rate swaps is to hedge the variability of cash flows resulting from fluctuations in the one-month LIBOR. The swaps replaced the one-month LIBOR with a fixed interest rate of 2.7765% and payments are settled monthly. The swaps qualify as cash flow hedges and changes in the fair values are recorded in accumulated other comprehensive income in the consolidated balance sheet. The changes in fair value are reclassified from accumulated other comprehensive income to interest expense in the same period that the hedged items affect earnings. Amounts reclassified from accumulated other comprehensive income to interest expense during the third quarters of fiscal 2019 and fiscal 2018 were $1.7 million and $1.6 million, respectively. Amounts reclassified from accumulated other comprehensive income to interest expense during the nine months ended November 2, 2019 and November 3, 2018 were $3.3 million and $3.7 million, respectively.

6. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table includes detail regarding changes in the composition of accumulated other comprehensive loss (in thousands):

13 Weeks Ended 39 Weeks Ended November 2, November 3, November 2, November 3, 2019 2018 2019 2018 Beginning of period $ (24,146) $ (9,906) $ (14,558) $ (3,660) Foreign currency translation 972 (942) 424 (6,528) Interest rate swaps 258 3,958 (8,782) 3,298 End of period $ (22,916) $ (6,890) $ (22,916) $ (6,890)

7. INCOME TAXES

The effective tax rate was 22.5% in the third quarter of fiscal 2019 compared to 15.8% in the third quarter of fiscal 2018. The effective tax rate in the third quarter of fiscal 2019 was higher than the same period in the prior year primarily due to $7.1 million of tax benefits recognized in the third quarter of fiscal 2018 associated with the enactment of the Tax Cuts and Jobs Act of 2017 (“Tax Act”). The effective tax rate was 23.9% in the nine months ended November 2, 2019 compared to 24.0% in the same period in the prior year. The effective tax rate in the first nine months of fiscal 2019 was slightly lower than the same period in the prior year primarily due to a tax benefit associated with a state income tax settlement in fiscal 2019 and a $1.0 million charge in fiscal 2018 associated with the enactment of the Tax Act, partially offset by the vesting and expiration of share-based compensation awards.

8. EARNINGS PER SHARE

The Company’s unvested restricted stock awards contain non-forfeitable rights to dividends and meet the criteria of a participating security as defined by ASC 260, “Earnings Per Share”. In applying the two-class method, net income is allocated to both common and participating securities based on their respective weighted-average shares outstanding for the period. Basic earnings per share is computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average common shares outstanding plus the potential dilutive impact from stock options and restricted stock units. Common equivalent shares are excluded from the computation if their effect is anti-dilutive. There were 10.1 million and 8.4 million anti-dilutive shares during the third quarters of fiscal 2019 and fiscal 2018, respectively. There were 10.6 million and 7.1 million anti-dilutive shares during the nine months ended November 2, 2019 and November 3, 2018, respectively.

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The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share data): 13 Weeks Ended 39 Weeks Ended November 2, November 3, November 2, November 3, 2019 2018 2019 2018 Basic earnings per common share: Net income $ 28,705 $ 83,769 $ 90,943 $ 138,142 Less income related to unvested restricted shares (40) (138) (108) (285) Income available to common shareholders - Basic $ 28,665 $ 83,631 $ 90,835 $ 137,857

Weighted-average common shares outstanding - Basic 150,877 165,975 155,299 174,949

Basic earnings per common share $ 0.19$ 0.50$ 0.58$ 0.79

Diluted earnings per common share: Net income $ 28,705 $ 83,769 $ 90,943 $ 138,142 Less income related to unvested restricted shares (40) (138) (108) (284) Income available to common shareholders - Diluted $ 28,665 $ 83,631 $ 90,835 $ 137,858

Weighted-average common shares outstanding - Basic 150,877 165,975 155,299 174,949 Effect of dilutive stock options and restricted stock units 48 595 43 902 Weighted-average common shares outstanding - Diluted 150,925 166,570 155,342 175,851

Diluted earnings per common share $ 0.19$ 0.50$ 0.58$ 0.78

9. SEGMENTS AND GEOGRAPHIC INFORMATION

We consider Michaels-U.S., Michaels-Canada, Pat Catan’s and Darice to be our operating segments for purposes of determining reportable segments based on the criteria of ASC 280, Segment Reporting (“ASC 280”). We determined that Michaels-U.S., Michaels- Canada and Pat Catan’s have similar economic characteristics and meet the aggregation criteria set forth in ASC 280. Therefore, we combine these operating segments into one reporting segment. Darice does not meet the materiality criteria in ASC 280 and, therefore, is not disclosed separately as a reportable segment. Our chief operating decision makers evaluate historical operating performance and forecast future periods’ operating performance based on operating income.

Our net sales by country are as follows (in thousands):

13 Weeks Ended 39 Weeks Ended November 2, November 3, November 2, November 3, 2019 2018 2019 2018 United States(1) $ 1,105,178 $ 1,153,784 $ 3,038,315 $ 3,158,393 Canada 116,843 120,274 311,115 324,442 Total $ 1,222,021 $ 1,274,058 $ 3,349,430 $ 3,482,835

(1) In the first quarter of fiscal 2018 we closed our Aaron Brothers stores and in the fourth quarter of fiscal 2018 we closed our Pat Catan’s stores. In the third quarter of fiscal 2018, Pat Catan’s sales totaled approximately $26.7 million. For the nine months ended November 3, 2018, Pat Catan’s and Aaron Brothers sales totaled approximately $75.5 million and $12.9 million, respectively.

10. RELATED PARTY TRANSACTIONS

Affiliates of, or funds advised by, Bain Capital Private Equity, L.P. (“Bain Capital”) and The Blackstone Group L.P. (“The Blackstone Group”) owned approximately 36% and 14% of our outstanding common stock, respectively, as of November 2, 2019. Affiliates of The Blackstone Group also held $4.9 million of our Amended and Restated Term Loan Credit Facility as of November 2, 2019.

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The Blackstone Group owns a majority equity position in RGIS, a vendor we utilized until February 2018 to count our store inventory. There were no payments associated with this vendor during the third quarter of fiscal 2018. Payments associated with this vendor during the nine months ended November 3, 2018 were $0.7 million. These expenses are included in selling, general and administrative (“SG&A”) in the consolidated statements of comprehensive income.

The Blackstone Group owns a majority equity position in ShopCore Properties, LP, Blackstone Real Estate DDR Retail Holdings III, LLC and Blackstone Real Estate RC Retail Holdings, LLC and has significant influence over Edens Limited Partnership, vendors we utilize to lease certain properties. Payments associated with these vendors during the third quarters of fiscal 2019 and fiscal 2018 were $2.5 million. Payments made during the nine months ended November 2, 2019 and November 3, 2018 were $7.5 million and $8.5 million, respectively. These expenses are included in cost of sales and occupancy expense in the consolidated statements of comprehensive income.

The Blackstone Group owns a majority equity position in JDA Software Group, Inc., a vendor we utilize for transportation and supply chain software. Payments associated with this vendor during the third quarters of fiscal 2019 and fiscal 2018 were $0.7 million and $0.3 million, respectively. Payments made during the nine months ended November 2, 2019 and November 3, 2018 were $2.3 million and $2.2 million, respectively. These expenses are included in SG&A in the consolidated statements of comprehensive income.

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11. CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Our debt covenants restrict MSI, and certain subsidiaries of MSI, from various activities including the incurrence of additional debt, payment of dividends and the repurchase of MSI’s capital stock (subject to certain exceptions), among other things. The following condensed consolidated financial information represents the financial information of MSI and its wholly-owned subsidiaries subject to these restrictions. The information is presented in accordance with the requirements of Rule 12-04 under the SEC’s Regulation S-X.

Michaels Stores, Inc. Condensed Consolidated Balance Sheets (in thousands)

November 2, February 2, November 3, ASSETS 2019 2019 2018 Current assets: Cash and equivalents $ 117,597 $ 245,108 $ 101,895 Merchandise inventories 1,423,367 1,108,715 1,440,875 Prepaid expenses and other current assets 100,165 160,767 146,317 Total current assets 1,641,129 1,514,590 1,689,087 Property and equipment, net 431,932 439,077 453,396 Operating lease assets 1,613,527 — — Goodwill 94,290 112,069 119,074 Other assets 63,390 61,667 73,088 Total assets $ 3,844,268 $ 2,127,403 $ 2,334,645

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities: Accounts payable $ 658,182 $ 485,004 $ 645,469 Accrued liabilities and other 373,710 378,313 407,252 Current portion of operating lease liabilities 303,023 — — Current portion of long-term debt 24,900 24,900 240,261 Other current liabilities 22,520 43,907 41,948 Total current liabilities 1,382,335 932,124 1,334,930 Long-term debt 2,649,756 2,681,000 2,690,302 Long-term operating lease liabilities 1,374,555 — — Other liabilities 125,819 199,705 156,770 Total stockholders’ deficit (1,688,197) (1,685,426) (1,847,357) Total liabilities and stockholders’ deficit $ 3,844,268 $ 2,127,403 $ 2,334,645

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Michaels Stores, Inc. Condensed Consolidated Statements of Comprehensive Income (in thousands)

13 Weeks Ended 39 Weeks Ended November 2, November 3, November 2, November 3, 2019 2018 2019 2018 Net sales $ 1,222,021 $ 1,274,058 $ 3,349,430 $ 3,482,835 Cost of sales and occupancy expense 780,387 795,104 2,123,171 2,173,990 Gross profit 441,634 478,954 1,226,259 1,308,845 Selling, general and administrative 322,563 340,375 932,777 969,500 Restructure and impairment charges 41,376 — 48,332 44,278 Store pre-opening costs 1,402 1,196 4,370 3,995 Operating income 76,293 137,383 240,780 291,072 Interest and other expense, net 38,863 37,680 119,218 106,857 Losses on early extinguishment of debt and refinancing costs 161 — 1,316 1,835 Income before income taxes 37,269 99,703 120,246 182,380 Income taxes 8,381 15,771 28,780 43,722 Net income $ 28,888 $ 83,932 $ 91,466 $ 138,658

Other comprehensive income, net of tax: Foreign currency and interest rate swaps 1,230 3,016 (8,358) (3,230) Comprehensive income $ 30,118 $ 86,948 $ 83,108 $ 135,428

Michaels Stores, Inc. Condensed Consolidated Statements of Cash Flows (in thousands)

39 Weeks Ended November 2, November 3, 2019 2018 Cash flows from operating activities: Net cash provided by operating activities $ 104,014 $ 22,855

Cash flows used in investing activities: Additions to property and equipment (89,632) (119,553)

Cash flows from financing activities: Net repayments of debt (539,775) (106,756) Net borrowings of debt 511,100 307,400 Payment of debt refinancing costs (8,158) (1,117) Payment of dividend to Michaels Funding, Inc. (105,060) (426,063) Net cash used in financing activities (141,893) (226,536)

Net change in cash and equivalents (127,511) (323,234) Cash and equivalents at beginning of period 245,108 425,129 Cash and equivalents at end of period $ 117,597 $ 101,895

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12. SUBSEQUENT EVENT

On November 22, 2019, the Company entered into an asset purchase agreement with A.C. Moore Incorporated, and certain of its affiliates, to acquire intellectual property and the right to lease up to 40 store locations for $58 million, subject to certain purchase price adjustments. In connection with the acquisition we also leased a distribution facility in New Jersey. The store locations are expected to be reopened under the Michaels brand name in fiscal 2020 and will include the relocation of certain existing Michaels stores. The transaction is intended to expand our presence in strategic markets and better serve our customers both online and in stores.

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98 TAB 2

PRODUCTS, PRICING AND DISTRIBUTION

99 Tab 2 – Products, Pricing, and Distribution– (Weighted Value 45) • Indicate the areas that can be provided as it relates to the scope of this RFP. • Provide a customized market basket of products and services (market basket does not need to be broken out by area). • Provide pricing based on a discount from a manufacturer’s price list or catalog, or fixed price, or a combination of both with indefinite quantities. Offerors shall indicate discounts that can be provided at both an e-commerce and retail level (as applicable). Prices listed will be used to establish the extent of a manufacturer’s product lines, services, warranties, etc. that are available from Offeror and the pricing per item. Multiple percentage discounts are acceptable if, where different percentage discounts apply, they different percentages are specified. Additional pricing and/or discounts may be included. Products and services proposed are to be priced separately with all ineligible items identified. Offerors may elect to limit their proposals to any category or categories. o The discount proposed shall remain the same throughout the term of the contract and at all renewal options. At a minimum, Awarded Offerors must hold the proposed price list firm for the first 12 months after the contract award. • Include an electronic copy of the catalog from which discount, or fixed price, is calculated. Electronic price lists must contain the following: (if applicable) o Manufacturer part #

o Offeror’s Part # (if different from manufacturer part #) o Description

o Manufacturers Suggested List Price and Net Price o Net price to HCPS (including freight) Media submitted for price list must include the Offerors’ company name, name of the solicitation, and date on a Flash Drive (i.e. Pin or Jump Drives). • Describe any shipping charges, return and restocking fees, or any additional charges and fees. • Describe any pricing for warranties, discounts for rebates, discounts for volume, or other available discounts. • Provide available ordering methods to include both retail and ecommerce presence. For online ordering describe any tracking, searching options, and order history options. • Provide available payment terms to include if payment will be accepted via credit card to include online options and if there are any additional fees (such as convenience fees for using a credit card). • Provide any additional information relevant to this section.

The Michaels Companies is making all of our products and services available to Harford County Schools including, but not limited to Art Supplies, Craft Basics, Apparel Crafts, Kids Crafts, Education Supplies, Frames, Floral and Floral Supplies, Seasonal, Décor, Jewelry and Beads, Memory and Papercrafting, Food Crafting, Celebration/Party, Needle Crafts, and Custom Framing. Harford County Schools will have access to over 100,000 items that will be included as part of a discount or core pricing for the Master Agreement.

100 The Michaels Companies is providing the following pricing proposal:

 20% off entire purchase at Michaels Stores and Michaels.com (over 100,000 items) including Sale Items (excludes Clearance; Doorbusters; Beverage & Candy; Books & Magazines; Gift Cards; Lego; Brother; Cricut; Silhouette; and Christmas Trees)  20% off Custom Framing at Michaels Stores and Michaels.com (excludes Value Package Pricing, Value Canvas, Aaron Brothers Essentials)  15% off our Wholesale Pricing (over 40,000 items) on MichaelsProEducation.com powered by Darice (excludes Clearance, Hot Buys, and Luminara)  Core List Offering (over 800 items) at deeply discounted prices available on MichaelsProEducation.com poweredby Darice (price list for core items is included on the flash drive enclosed in the packet and pg 103)  Please note that exclusions may apply, including, but not limited to: Clearance; doorbusters; custom framing; beverages & candy; books & magazines; gift cards; LEGO; Brother; Cricut, and Silhouette.

Shipping and Ordering Minimums

 Free shipping on orders over $49 to one ship to location  Michaels.com shipping charges for orders less than $49 available to view at https://www.michaels.com/shipping-policy/ca-shipping-policy.html  As a wholesale entity, MichaelsProEducation.com powered by Darice is not able to ship orders less than $49  Items on MichaelsProEducation.com may have minimum order quantities; these will be noted on the item available to view on the website and any core item minimums will be noted in the price list  Expedited shipping options are available, please contact customer service at 1-866-432-7423 for quotes

Ordering Methods

 Once a Participating Agency registers on MichaelsProEducation.com (powered by Darice), approved users will be issued a membership card for use at Michaels stores and Michaels.com. They will be able to visit any local Michaels with the membership card and purchase products under the Master Agreement. They will also be able to use this card number on Michaels.com and order product for delivery to the requested ship to location or BOPIS (Buy Online Pickup in Store).  For orders on MichaelsProEducation.com (powered by Darice) customers will log in using their customer account number and can order via the website. Agency members can also call 1-866- 432-7423 to place an order with our customer service department Monday thru Friday 8:30am to 5:00pm EST.  Both websites offer the ability to view and track orders and view previous orders.

101 Payment Terms

 Michaels Stores and Michaels.com accept credit card for payment. Terms are not available at this time through Michaels Stores and Michaels.com

 MichaelsProEducation.com accepts payments by credit cards as well as open terms. We typically offer Net 60 day terms for schools and educational organizations

102 MichaelsProEducation.com Core Price List (in addition to catalog discounts listed above)

CORE PRICE LIST ON PAGES 103 - 120 AVAILABLE IN VOLUME II COST PROPOSAL

103 TAB 4

REFERENCES

121

21.3. Tab 4– References – (Weighted Value 20)

• Provide a minimum of three (3) reference letters from owner representatives for projects that your firm has provided or is providing services which are similar in scope to this RFP. Reference letters shall be current, dated within one (1) year of this solicitation. The reference from the owner representative must be provided on their letterhead, and include details regarding your Firm’s role, level of service provided, etc. Letters from Harford County Public Schools staff shall not be considered. Please include current contact information for all references. Please also include contact information for two (2) former clients that have discontinued services with your Firm in the last 2 years.

• Experiences with HCPS and entities that evaluation committee members represent may be taken into consideration when evaluating qualifications and experience.

• Provide any additional information relevant to this section. Included in this Tab 4 are three reference letters for review. Contact information for two former clients: Metro Sales Michael Valenti 5416 West Belmont Ave Chicago, IL 60641 773-777-0038

Craft Zone Eli Schneur 725 Airport Road Lakewood, NJ 08701 732-348-1234

122

123 124 125

TAB 9

ADDENDA

126 127 128

TAB 10

REQUIRED DOCUMENTS - HCPS

129 ATTACHMENT B

The following is a certificate of the liability insurance held by Michaels Stores, Inc.

130 DATE (MM/DD/YYYY) CERTIFICATE OF LIABILITY INSURANCE 6/1/2020 5/28/2019 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). CONTACT PRODUCER Lockton Companies NAME: PHONE FAX 444 W. 47th Street, Suite 900 (A/C, No, Ext): (A/C, No): Kansas City MO 64112-1906 E-MAIL (816) 960-9000 ADDRESS: INSURER(S) AFFORDING COVERAGE NAIC # INSURER A : Safety National Casualty Corporation 15105 INSURED MICHAELS STORES, INC. INSURER B : XL Specialty Insurance Company 37885 AND ITS SUBSIDIARIES 1073877 INSURER C : ACE Property & Casualty Insurance Co 20699 8000 BENT BRANCH DR. IRVING TX 75063 INSURER D : The Ohio Casualty Insurance Company 24074 INSURER E : Allianz Global Risks US Insurance Co 35300 INSURER F : COVERAGES MICHA02 CERTIFICATE NUMBER: 14942883 REVISION NUMBER: XXXXXXX THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADDL SUBR POLICY EFF POLICY EXP LTR TYPE OF INSURANCE INSD WVD POLICY NUMBER (MM/DD/YYYY) (MM/DD/YYYY) LIMITS A X COMMERCIAL GENERAL LIABILITY NN GL 4044104 6/1/2019 6/1/2020 EACH OCCURRENCE $ 2,000,000 DAMAGE TO RENTED CLAIMS-MADEX OCCUR PREMISES (Ea occurrence) $ 1,000,000 MED EXP (Any one person) $ XXXXXXX PERSONAL & ADV INJURY $ 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 10,000,000 PRO- X POLICY JECT LOC PRODUCTS - COMP/OP AGG $ 2,000,000 OTHER: $ COMBINED SINGLE LIMIT A AUTOMOBILE LIABILITY NN CAS 4054911 6/1/2019 6/1/2020 (Ea accident) $ 1,000,000 X ANY AUTO BODILY INJURY (Per person) $ XXXXXXX OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY (Per accident) $ XXXXXXX HIRED NON-OWNED PROPERTY DAMAGE X AUTOS ONLY X AUTOS ONLY (Per accident) $ XXXXXXX X PHYS DAM X $1000 COMP/COLL DED $ XXXXXXX B X UMBRELLA LIAB X OCCUR NN US00084588LI19A 6/1/2019 6/1/2020 EACH OCCURRENCE $ 25,000,000 EXCESS LIAB CLAIMS-MADE AGGREGATE $ 25,000,000 DEDX RETENTION $ 10,000 $ XXXXXXX WORKERS COMPENSATION PER OTH- A AND EMPLOYERS' LIABILITY N LDS 4044102 (AOS) 6/1/2019 6/1/2020 X STATUTE ER A Y / N PS 4044105 (WI) 6/1/2019 6/1/2020 ANY PROPRIETOR/PARTNER/EXECUTIVE E.L. EACH ACCIDENT $ 1,000,000 OFFICER/MEMBER EXCLUDED? N N / A (Mandatory in NH) E.L. DISEASE - EA EMPLOYEE $ 1,000,000 If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT $ 1,000,000 C EXCESS LIABILITY XCQ G71142322 002 6/1/2019 6/1/2020 $25,000,000 XS $25,000,000 D UMBRELLA FORM NN ECO (20) 5986 9236 6/1/2019 6/1/2020 $50,000,000 XS $50,000,000 E ULS00063719 6/1/2019 6/1/2020 $25,000,000 XS $75,000,000

DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

CERTIFICATE HOLDER CANCELLATION

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

14942883 AUTHORIZED REPRESENTATIVE NOTICE ONLY 00000

ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved The ACORD name and logo are registered marks of ACORD 131 132 ATTACHMENT D

CONFLICT OF INTEREST

To the knowledge of Michaels Stores, Inc. (the “Company”), there are no known personal conflicts of interest between the Company and Harford County Public Schools.

133 134 135 136 EXHIBIT A RESPONSE FOR NATIONAL COOPERATIVE CONTRACT

1.0 Scope of National Cooperative Contract

Capitalized terms not otherwise defined herein shall have the meanings given to them in the Master Agreement or in the Administration Agreement between Supplier and OMNIA Partners, Public Sector.

1.1 Requirement

Harford County Public Schools, Maryland (hereinafter defined and referred to as “Principal Procurement Agency”), on behalf of itself and the National Intergovernmental Purchasing Alliance Company, a Delaware corporation d/b/a OMNIA Partners, Public Sector (“OMNIA Partners, Public Sector”), is requesting proposals for Arts, Crafts, Framing, and Related Services. The intent of this Request for Proposal is any contract between Principal Procurement Agency and Supplier resulting from this Request for Proposal (“Master Agreement”) be made available to other public agencies nationally, including state and local governmental entities, public and private primary, secondary and higher education entities, non-profit entities, and agencies for the public benefit (“Public Agencies”), through OMNIA Partners, Public Sector’s cooperative purchasing program. The Principal Procurement Agency has executed a Principal Procurement Agency Certificate with OMNIA Partners, Public Sector, an example of which is included as Exhibit D, and has agreed to pursue the Master Agreement. Use of the Master Agreement by any Public Agency is preceded by their registration with OMNIA Partners, Public Sector as a Participating Public Agency in OMNIA Partners, Public Sector’s cooperative purchasing program. Registration with OMNIA Partners, Public Sector as a Participating Public Agency is accomplished by Public Agencies entering into a Master Intergovernmental Cooperative Purchasing Agreement, an example of which is attached as Exhibit C, and by using the Master Agreement, any such Participating Public Agency agrees that it is registered with OMNIA Partners, Public Sector, whether pursuant to the terms of the Master Intergovernmental Purchasing Cooperative Agreement or as otherwise agreed to. The terms and pricing established in the resulting Master Agreement between the Supplier and the Principal Procurement Agency will be the same as that available to Participating Public Agencies through OMNIA Partners, Public Sector.

All transactions, purchase orders, invoices, payments etc., will occur directly between the Supplier and each Participating Public Agency individually, and neither OMNIA Partners, Public Sector, any Principal Procurement Agency nor any Participating Public Agency, including their respective agents, directors, employees or representatives, shall be liable to Supplier for any acts, liabilities, damages, etc., incurred by any other Participating Public Agency. Supplier is responsible for knowing the tax laws in each state.

137 This Exhibit A defines the expectations for qualifying Suppliers based on OMNIA Partners, Public Sector’s requirements to market the resulting Master Agreement nationally to Public Agencies. Each section in this Exhibit A refers to the capabilities, requirements, obligations, and prohibitions of competing Suppliers on a national level in order to serve Participating Public Agencies through OMNIA Partners, Public Sector.

These requirements are incorporated into and are considered an integral part of this RFP. OMNIA Partners, Public Sector reserves the right to determine whether or not to make the Master Agreement awarded by the Principal Procurement Agency available to Participating Public Agencies, in its sole and absolute discretion, and any party submitting a response to this RFP acknowledges that any award by the Principal Procurement Agency does not obligate OMNIA Partners, Public Sector to make the Master Agreement available to Participating Procurement Agencies.

1.2 Marketing, Sales and Administrative Support

During the term of the Master Agreement OMNIA Partners, Public Sector intends to provide marketing, sales, partnership development and administrative support for Supplier pursuant to this section that directly promotes the Supplier’s products and services to Participating Public Agencies through multiple channels, each designed to promote specific products and services to Public Agencies on a national basis.

OMNIA Partners will assign the Supplier a Director of Partner Development who will serve as the main point of contact for the Supplier and will be responsible for managing the overall relationship between the Supplier and OMNIA Partners. The Director of Partner Development will work with the Supplier to develop a comprehensive strategy to promote the Master Agreement and will connect the Supplier with appropriate stakeholders within OMNIA Partners including, Sales, Marketing, Contracting, Training, and Operations & Support.

The OMNIA Partners, Public Sector marketing team will work in conjunction with Supplier to promote the Master Agreement to both existing Participating Public Agencies and prospective Public Agencies through channels that may include:

A. Marketing collateral (print, electronic, email, presentations) B. Website C. Trade shows/conferences/meetings D. Advertising E. Social Media

138 The OMNIA Partners, Public Sector sales teams will work in conjunction with Supplier to promote the Master Agreement to both existing Participating Public Agencies and prospective Public Agencies through initiatives that may include:

A. Individual sales calls B. Joint sales calls C. Communications/customer service D. Training sessions for Public Agency teams E. Training sessions for Supplier teams

The OMNIA Partners, Public Sector contracting teams will work in conjunction with Supplier to promote the Master Agreement to both existing Participating Public Agencies and prospective Public Agencies through:

A. Serving as the subject matter expert for questions regarding joint powers authority and state statutes and regulations for cooperative purchasing B. Training sessions for Public Agency teams C. Training sessions for Supplier teams D. Regular business reviews to monitor program success E. General contract administration

Suppliers are required to pay an administrative fee of 3% of the greater of the Contract Sales under the Master Agreement and Guaranteed Contract Sales under this Request for Proposal. Supplier will be required to execute the OMNIA Partners, Public Sector Administration Agreement (Exhibit B).

1.3 Estimated Volume

The dollar volume purchased under the Master Agreement is estimated to be approximately $20M annually. While no minimum volume is guaranteed to Supplier, the estimated annual volume is projected based on the current annual volumes among the Principal Procurement Agency, other Participating Public Agencies that are anticipated to utilize the resulting Master Agreement to be made available to them through OMNIA Partners, Public Sector, and volume growth into other Public Agencies through a coordinated marketing approach between Supplier and OMNIA Partners, Public Sector.

1.4 Award Basis

The basis of any contract award resulting from this RFP made by Principal Procurement Agency will, at OMNIA Partners, Public Sector’s option, be the basis of award on a national level through OMNIA Partners, Public Sector. If multiple Suppliers are awarded by 139 Principal Procurement Agency under the Master Agreement, those same Suppliers will be required to extend the Master Agreement to Participating Public Agencies through OMNIA Partners, Public Sector. Utilization of the Master Agreement by Participating Public Agencies will be at the discretion of the individual Participating Public Agency. Certain terms of the Master Agreement specifically applicable to the Principal Procurement Agency (e.g. governing law) are subject to modification for each Participating Public Agency as Supplier, such Participating Public Agency and OMNIA Partners, Public Sector shall agree without being in conflict with the Master Agreement. Participating Agencies may request to enter into a separate supplemental agreement to further define the level of service requirements over and above the minimum defined in the Master Agreement (i.e. invoice requirements, order requirements, specialized delivery, diversity requirements such as minority and woman owned businesses, historically underutilized business, governing law, etc.). It shall be the responsibility of the Supplier to comply, when applicable, with the prevailing wage legislation in effect in the jurisdiction of the Participating Agency. It shall further be the responsibility of the Supplier to monitor the prevailing wage rates as established by the appropriate department of labor for any increase in rates during the term of the Master Agreement and adjust wage rates accordingly. Any supplemental agreement developed as a result of the Master Agreement is exclusively between the Participating Agency and the Supplier (Contract Sales are reported to OMNIA Partners, Public Sector).

All purchase orders issued and accepted by the Supplier may survive expiration or termination of the Master Agreement. Participating Agencies’ purchase orders may exceed the term of the Master Agreement if the purchase order is issued prior to the expiration of the Master Agreement. Supplier is responsible for reporting all sales and paying the applicable administrative fee for sales that use the Master Agreement as the basis for the purchase order, even though Master Agreement may have expired.

1.5 Objectives of Cooperative Program

This RFP is intended to achieve the following objectives regarding availability through OMNIA Partners, Public Sector’s cooperative program:

A. Provide a comprehensive competitively solicited and awarded national agreement offering the Products covered by this solicitation to Participating Public Agencies; B. Establish the Master Agreement as the Supplier’s primary go to market strategy to Public Agencies nationwide; C. Achieve cost savings for Supplier and Public Agencies through a single solicitation process that will reduce the Supplier’s need to respond to multiple solicitations and Public Agencies need to conduct their own solicitation process; D. Combine the aggregate purchasing volumes of Participating Public Agencies to achieve cost effective pricing.

2.0 REPRESENTATIONS AND COVENANTS 140 As a condition to Supplier entering into the Master Agreement, which would be available to all Public Agencies, Supplier must make certain representations, warranties and covenants to both the Principal Procurement Agency and OMNIA Partners, Public Sector designed to ensure the success of the Master Agreement for all Participating Public Agencies as well as the Supplier.

2.1 Corporate Commitment

Supplier commits that (1) the Master Agreement has received all necessary corporate authorizations and support of the Supplier’s executive management, (2) the Master Agreement is Supplier's primary “go to market” strategy for Public Agencies, (3) the Master Agreement will be promoted to all Public Agencies, including any existing customers, and Supplier will transition existing customers, upon their request, to the Master Agreement, and (4) that the Supplier has read and agrees to the terms and conditions of the Administration Agreement with OMNIA Partners, Public Sector and will execute such agreement concurrent with and as a condition of its execution of the Master Agreement with the Principal Procurement Agency. Supplier will identify an executive corporate sponsor and a separate national account manager within the RFP response that will be responsible for the overall management of the Master Agreement.

2.2 Pricing Commitment

Supplier commits the not-to-exceed pricing provided under the Master Agreement pricing is its lowest available (net to buyer) to Public Agencies nationwide and further commits that if a Participating Public Agency is eligible for lower pricing through a national, state, regional or local or cooperative contract, the Supplier will match such lower pricing to that Participating Public Agency under the Master Agreement.

2.3 Sales Commitment

Supplier commits to aggressively market the Master Agreement as its go to market strategy in this defined sector and that its sales force will be trained, engaged and committed to offering the Master Agreement to Public Agencies through OMNIA Partners, Public Sector nationwide. Supplier commits that all Master Agreement sales will be accurately and timely reported to OMNIA Partners, Public Sector in accordance with the OMNIA Partners, Public Sector Administration Agreement. Supplier also commits its sales force will be compensated, including sales incentives, for sales to Public Agencies under the Master Agreement in a consistent or better manner compared to sales to Public Agencies if the Supplier were not awarded the Master Agreement.

3.0 SUPPLIER RESPONSE

141 Supplier must supply the following information in order for the Principal Procurement Agency to determine Supplier’s qualifications to extend the resulting Master Agreement to Participating Public Agencies through OMNIA Partners, Public Sector.

3.1 Company

A. Brief history and description of Supplier. Michaels Stores, Inc. (a subsidiary of The Michaels Companies, Inc.) is the largest arts and crafts specialty retailer in North America providing materials, project ideas, and education for creative activities. We currently operate 1,274 Michaels stores in 49 U.S. states and Canada. Additionally, we serve retail customers through various digital platforms including Michaels.com and Aaronbrothers.com. Michaels also owns Artistree, a manufacturer of high-quality custom and specialty framing merchandise.

In 2016, Michaels acquired Lamrite West, Inc. (also known as Darice), a premier wholesale distributor in the arts, craft, and décor industry. Established in 1954, Darice has over 60 years of experience distributing over 40,000 items including art and craft supplies, seasonal goods and decor, frames, education supplies, party and baking supplies, and much more. Michaels Pro Education (powered by Darice) is the wholesale division of The Michaels Companies for Educators and Educational Organizations.

Darice serves big box retailers, major national and regional chains, ecommerce companies, small businesses, and schools, each with different shipping rules, timelines and delivery specifications. We currently service over 25,000 customers, both nationwide and internationally. Our supply chain technology and warehouses are designed around meeting varying customer shipping requirements and timelines. Our average on-time delivery rate is 98.2% with a fill rate of 98%.

The Darice Customer Service Team is available for any questions or problem resolution. Please contact our customer service department at 1-866-4-DARICE (1-866-432-7423) 8:30 am to 5:00 pm eastern time or via email at [email protected]. We stand behind all of our products and services and if a product is not up to customer standards we will accept returns and/or exchanges.

Orders placed through MichaelsProEducation.com (powered by Darice) will be invoiced upon shipment of goods. The invoice will be sent via mail or email based on Participating Agency preference. Orders placed on Michaels.com will be charged at time of purchase.

Currently, the MichaelsProEducation.com URL is not live. The go live date is March 1, 2020. For review purposes of this RFP, Darice.com can be reviewed for the scope of products and site navigation.

B. Total number and location of sales persons employed by Supplier. As of November 2, 2019, Michaels operated 1,274 Michaels stores. Our stores and support center have over 30,000 total employees.

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The Darice sales team has a Vice-President of Sales, seven (7) sales directors, and over one hundred twenty (120) independent national sales reps located throughout the country.

We also utilize a dedicated and flex tele-sales team to service our customers.

C. Number and location of support centers (if applicable) and location of corporate office.  Michaels Companies Support Center – 8000 Bent Branch Drive, Irving, Texas 75063  Lamrite West Inc., Darice Support Center, 13000 Darice Pkwy., Strongsville, Ohio 44149

D. Annual sales for the three previous fiscal years. Please refer to the Annual Report on Form 10-K, as filed by The Michaels Companies, Inc.

https://investors.michaels.com/sec-filings/annual-reports

E. Submit FEIN and Dunn & Bradstreet report. The Michaels Companies, Inc. – Federal Employee Identification Number (FEIN): 37- 1737959

Michaels Stores, Inc. – FEIN: 75-1943604

Lamrite West, Inc. – FEIN: 34-0944307

Please see the full Dunn & Bradstreet report for each of the Michaels Companies, Inc. and Lamrite West, Inc., starting on page 24.

F. Describe any green or environmental initiatives or policies. We believe in the value of environmentally sound business practices throughout our operations, including energy conservation as well as recycling and waste reduction efforts. As part of our continued commitment to corporate responsibility, Michaels has long pursued initiatives that are good for the environment as well as our profitability.

Earlier this year, we published our 2019 Sustainability Report, and have attached a copy on page 51, immediately following this Exhibit A, OMNIA Partners Response for National Cooperative Contract.

G. Describe any diversity programs or partners supplier does business with and how Participating Agencies may use diverse partners through the Master Agreement. Indicate how, if at all, pricing changes when using the diversity program.  Annual Respectful Leadership and Unconscious Bias training for all Team Members across all divisions  Michaels Resource Groups – Women, African American/Black, LGBTQ and Hispanic –led by Team Members and sponsored by Executives

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 Organization-wide celebration of national diversity events – MLK Day, Black History Month, Women’s History Month, Pride Month, Hispanic Heritage Month, etc.  Member of the Texas Diversity Council (Team Member sits on Board of Directors)  Gold Sponsors for the Network of Executive Women - NEW (Team Member is an Ambassador for NEW and sits on the College Outreach Committee)  Gold Sponsor for the NEW Fall Learning Event Women Inclusion Network mentoring program for women leaders on the field  connects female leaders from the field to Support Center leadership for mentoring, development and support.  Partner with University of Florida for field Summer Internship Program  Hosted creative workshops for STEAM Summer program with Coppell Independent School District  Three of our leaders participated as breakout speakers/panelist at the 2018 Texas Diversity Leadership Conference  Hosted onsite meetings for the Texas Diversity Council Leadership Hosted onsite meetings for the Network of Executive Women  Was invited and attended the North Texas Inclusion Summit: Unleashing the Power of Inclusion hosted by Deloitte  Support Center Women Inclusion Network hosted Speed Mentoring Lunch and Learns for Team Members to meet in small groups with Michaels Executives Leadership Attended the National Disability Employment Awareness Summit - Sponsored by Raytheon  Denise Paulonis, EVP-CEO awarded Texas Diversity Council 2018 Dallas Power 50

H. Describe any historically underutilized business certifications supplier holds and the certifying agency. This may include business enterprises such as minority and women owned, small or disadvantaged, disable veterans, etc. Not applicable.

I. Describe how supplier differentiates itself from its competitors.

 With 1,274 Michaels stores nationwide, Participating Agencies can take advantage of the Master Agreement retail discount at their local Michaels stores  Full service custom framing available at each Michaels location included in the Master Agreement retail discount  Access to over 100,000 art, craft, education and craft supplies everyday  State of the art distribution centers that service thousands of customers daily  Up to 60 day terms for qualified agencies  In-house product and design capabilities  Fully integrated global sourcing entity  National Sales force

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 Dedicated in-house Customer Service Team  “Classroom Crafts” ideas available on the Michaels.com site  “Video Inspo” YouTube playlists of easy teacher DIYs on the Michaels.com site  Options to create kits for your classroom

J. Describe any present or past litigation, bankruptcy or reorganization involving supplier. Please refer to the Annual Report on Form 10-K, as filed by The Michaels Companies, Inc.

https://investors.michaels.com/sec-filings/annual-reports

K. Felony Conviction Notice: Indicate if the supplier a. is a publicly held corporation and this reporting requirement is not applicable; b. is not owned or operated by anyone who has been convicted of a felony; or c. is owned or operated by and individual(s) who has been convicted of a felony and provide the names and convictions. The supplier is the indirect wholly owned subsidiary of The Michaels Companies, Inc., a publicly held corporation. As such, this reporting requirement is not applicable. L. Describe any debarment or suspension actions taken against supplier None. 3.2 Distribution, Logistics

A. Describe the full line of products and services offered by supplier. Michaels Stores and Michaels.com are Participating Agencies retail source for arts, crafts, framing and related services. Participating agencies will be able to take advantage of Master Agreement discounts to fulfill your classroom needs.

MichaelsProEducation.com (powered by Darice) is Participating Agencies’ opportunity to take advantage of a wholesale source for arts, crafts, framing and related services. Participating Agencies will be able to take advantage of Master Agreement discounts on wholesale pricing, core pricing on key items, and bulk orders to fulfill your classroom needs.

Participating agencies will have full access to over 100,000 products and services offered by Michaels Stores, Michaels.com, and MichaelsProEducation.com (powered by Darice). Product and Categories include (but are not limited to):

Art Supplies  Paint including Acrylic, Tempera, Oils, Gouache, Watercolors, and Gouache  Painting Mediums  Brushes, Brush Sets, Brush Cleaners, and Sponges  Palettes and Storage Boxes 145

 Canvas including Stretched, Panels, and Pads  Drawing Supplies including Pencils, Pastels, Markers, Ink, and Pens  Clay, Clay Tools, Pottery Wheels, Glazes  Drafting Supplies including Rulers, Templates, T-Squares  Easels, Desks, and Furniture  Pads including Sketch, Drawing, Watercolor, Newsprint, Hardcover and more  Paper and Boards including Foamcore, Posterboard, Watercolor Paper, Pastel Paper, Mat Board, Illustration Board, Project Display Boards  Art Sets  Cutting Tools and Scissors Craft Basics  Pom Poms, Chenille Stems, Feathers, and Felt  Wiggle Eyes, Bells, and Magnets  Craft Sticks and Dowels  Storage and Craft Tools  Craft Paint, Spray Paint, Paint and Chalk Markers  Glitter and Sequins  Glue, Glue Guns, Adhesives, Velcro, Command Products, and Tapes  Unfinished Surfaces including Wood, Canvas, Paper Mache, and Chalk Boards  Candle and Soap Making  Mosaics, Craft Kits, Miniatures, and Models Apparel Crafts  T-shirts  Canvas Aprons and Bags  Bandannas  Dyes and Fabric Paint  Transfers Kids Crafts and Education Supplies  Markers, Crayons, and Chalk  Construction Paper  Paper Rolls and Bulletin Board Supplies  Craft Sticks and Glitter  Stickers and Plush  Tempera, Finger, and Face Paints  Puzzles and Games  Glue, Glue Sticks, Glitter Glue  Clay and Sand  Foam and Felt  Coloring Books

146 Frames  Table and Wall Frames  Certificate and Diploma Frames  Poster Frames  Specialty Frames  Gallery Frames  Flag, Sport, Jersey, and Display Cases  Pre-cut Mats  Framing Supplies Floral and Floral Supplies  Floral Stems, Picks, and Bushes  Greenery and Succulents  Styrofoam  Gems, Rocks, and Fillers  Glass including Vases, Votives, Candle Holders and more  Ceramic and Tin Containers  Baskets  Grapevine and Naturals Seasonal  Décor and Floral  Christmas Trees and holiday items  Food Crafting  Gift and packaging Décor  Candles  Lanterns  Lighting  Terra Cotta Pots, Galvanized Containers Jewelry & Beads  Beads including Glass, Seed, Crystals, Strung, and more  Jewelry Notions and Accessories  Tools, Storage, and Props  Cording, Twine, and Wire Memory/Papercrafting  Paper including Paper Packs, Sheet Paper, Cardstock, Pads, and Kits  Storage and Stamps  Albums, Binders, and Refill Pages  Diecutting , Trimmers, and Cutters  Pens, Markers, and Inks

147  Embossing Tools and Stencils  Tapes and Adhesives  Cardmaking Supplies  Technology Food Crafting  Pans and Molds  Cookie Making  Baking Tools  Treat Bags  Packaging and Storage  Decorations Celebrations/Party  Ribbon  Balloons, Gift Bags, and Basket Filler  Tablecovers and Table Rolls  Plastic Cutlery, Paper Plates, Napkins, and Cups  Wedding and Bridal Supplies Needle Crafts  Yarn including Cotton, Baby, Wool, Acrylic, Licensed, and more  Yarn and Knitting Supplies  Looms and Embroidery Hoops  Needlework Tools and Cross Stitch  Sewing Supplies  Fabric Custom Framing  Full Service Custom Framing  Conservation grade components and mounting options available  Conservation grade glazing options available including glass and acrylic  Custom Cut Mats and Glass  Hand wrapped fabric mats and liners  Custom print options available on metal, wood, acrylic, glass, and canvas

This list is not an all-inclusive list of products available; more products are available at stores and online.

B. Describe how supplier proposes to distribute the products/service nationwide. Include any states where products and services will not be offered under the Master Agreement, including U.S. Territories and Outlying Areas.

148 The Michaels Companies currently operates seven distribution centers located in California, Florida, Illinois, Ohio, Pennsylvania, Texas, and Washington. Once orders are received, they will be shipped from the appropriate distribution center. Normal processing time is 1-3 business days. Orders placed on Michaels.com currently ship to the 50 U.S. States but not any other U.S. Territories. Orders placed on MichaelsProEducation.com (powered by Darice) currently ship to the 50 U.S. States and all U.S. Territories.

In addition to having orders shipped, participating agencies will also be able to purchase product at over 1,250 Michaels Stores and also utilize the Buy Online Pickup In Store (BOPIS) option on the Michaels.com website.

C. Describe how Participating Agencies are ensure they will receive the Master Agreement pricing; include all distribution channels such as direct ordering, retail or in-store locations, through distributors, etc. Describe how Participating Agencies verify and audit pricing to ensure its compliance with the Master Agreement.

Participating Agencies will have several ways to order product and take advantage of the Master Agreement. Once a Participating Agency registers for an account on MichaelsProEducation.com (powered by Darice). They will be assigned an Agency specific account number and issued a discount card to be used at Michaels stores and Michaels.com. This card and account number will then ensure the Agency receives the Master Agreement retail discount at Michaels retail stores and Michaels.com, as well as the Master Agreement wholesale discount and core pricing at MichaelsProEducation.com (powered by Darice).

Discount pricing will be shown on all invoices for participating agencies to verify they received the correct Master Agreement pricing. Reporting is available at any time from our account team to also help verify pricing and help to audit any orders.

D. Identify all other companies that will be involved in processing, handling or shipping the products/service to the end user.

Michaels uses a variety of third party logistic providers including, but not limited to, Fed Ex, DHL, UPS, and a variety of LTL providers.

E. Provide the number, size and location of Supplier’s distribution facilities, warehouses and retail network as applicable. Estimate of 3,000,000 square feet for Michaels Distribution Centers plus 676,000 square feet for Darice. Distribution Centers located at:  Darice Distribution Center 13000 Darice Pkwy., Strongsville, OH 44149

 Darice Distribution Center 21160 Drake Rd. 21160 Drake Rd. Strongsville, OH 44149

149  Darice Distribution Center 12850 Darice Pkwy. Strongsville, OH 44149

 Michaels Alliance Distribution Center – DC # 1 860 Westport Pkwy, Fort Worth, TX 76177

 Michaels Centralia Distribution Center – DC # 2 208 Hoss Rd, Centralia, WA 98531

 Michaels Lancaster Distribution Center – DC # 4 3501 W. Ave H., Lancaster, CA 93536

 Michaels Jacksonville Distribution Center – DC # 7 9200 W. Beaver Street, Jacksonville, FL 32220

 Michaels Hazleton Distribution Center – DC # 8 60 Green Mountain Rd., Hazleton, PA 18201

 Michaels New Lenox Distribution Center – DC # 9 2400 W. Haven Ave., New Lenox, IL 60451

 Michaels Retail Store locations are available at Michaels.com

3.3 Marketing and Sales

A. Provide a detailed ninety-day plan beginning from award date of the Master Agreement describing the strategy to immediately implement the Master Agreement as supplier’s primary go to market strategy for Public Agencies to supplier’s teams nationwide, to include, but not limited to:

i. Executive leadership endorsement and sponsorship of the award as the public sector go-to-market strategy within first 10 days ii. Training and education of Supplier’s national sales force with participation from the Supplier’s executive leadership, along with the OMNIA Partners, Public Sector team within first 90 days Upon receiving notification of award, the Michaels Pro Education (powered by Darice) executive team will endorse the award and notify our internal and national sales team within 10 days of the contract.

Within 90 days, we will then complete webcast training for all Account Managers outlining changes, features and benefits, marketing and implementation of the newly awarded contract. Our in-house marketing and creative team will provide marketing and presentation materials that explain the features and benefits of the contract.

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B. Provide a detailed ninety-day plan beginning from award date of the Master Agreement describing the strategy to market the Master Agreement to current Participating Public Agencies, existing Public Agency customers of Supplier, as well as to prospective Public Agencies nationwide immediately upon award, to include, but not limited to:

i. Creation and distribution of a co-branded press release to trade publications ii. Announcement, Master Agreement details and contact information published on the Supplier’s website within first 90 days Design, publication and distribution of co-branded marketing materials within first 90 days iii. Commitment to attendance and participation with OMNIA Partners, Public Sector at national (i.e. NIGP Annual Forum, NPI Conference, etc.), regional (i.e. Regional NIGP Chapter Meetings, Regional Cooperative Summits, etc.) and supplier-specific trade shows, conferences and meetings throughout the term of the Master Agreement iv. Commitment to attend, exhibit and participate at the NIGP Annual Forum in an area reserved by OMNIA Partners, Public Sector for partner suppliers. Booth space will be purchased and staffed by Supplier. In addition, Supplier commits to provide reasonable assistance to the overall promotion and marketing efforts for the NIGP Annual Forum, as directed by OMNIA Partners, Public Sector. vi. Design and publication of national and regional advertising in trade publications throughout the term of the Master Agreement vii. Ongoing marketing and promotion of the Master Agreement throughout its term (case studies, collateral pieces, presentations, promotions, etc.) viii. Dedicated OMNIA Partners, Public Sector internet web-based homepage on Supplier’s website with:

• OMNIA Partners, Public Sector standard logo; • Copy of original Request for Proposal; • Copy of Master Agreement and amendments between Principal Procurement Agency and Supplier; • Summary of Products and pricing; • Marketing Materials • Electronic link to OMNIA Partners, Public Sector’s website including the online registration page; • A dedicated toll-free number and email address for OMNIA Partners, Public Sector

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Upon receiving notification of the award, it is the intent of the Michaels Pro Education (powered by Darice) team to market the Master Agreement to current Participating Public Agencies, existing Public Agency customers as well as prospective Public Agencies nationwide by the following:  Use our in-house marketing and creative team to create and deliver a co- branded press release within the first 30 days  Announce the award through the Michaels Companies websites and any applicable social media sites within the first 90 days  Our in-house marketing and creative team will design, publish and distribute co-branded collateral pieces within first 90 days.  We will email existing Public Agency customers notification of award  Michaels Pro Education commits to attend and participate with OMNIA Partners at national (i.e. NIGP Annual Forum, NPI Conference, etc.), regional (i.e. Regional NIGP Chapter Meetings, Regional Cooperative Summits, etc.) and supplier-specific trade shows, conferences and meetings throughout the term of the Master Agreement.  Michaels Pro Education agrees and commits to attend, exhibit and participate at the NIGP Annual Forum in an area reserved by OMNIA Partners for partner suppliers. We also commit to staff and purchase booth space. In addition, Michaels Pro Education commits to provide reasonable assistance to the overall promotion and marketing efforts for the NIGP Annual Forum, as directed by OMNIA Partners.  Our in-house marketing and creative team will design and conduct publication of national and regional advertising in trade publications throughout the term of the Master Agreement  We will provide dedicated OMNIA Partners internet web-based homepage on the MichaelsProEducation.com (powered by Darice) website with: o OMNIA Partners, Public Sector standard logo; o Copy of original Request for Proposal; o Copy of Master Agreement and amendments between Principal o Procurement Agency and Supplier; o Summary of Products and pricing; o Marketing Materials o Electronic link to OMNIA Partners, Public Sector’s website including the online registration page; o A dedicated toll-free number and email address for OMNIA Partners, Public Sector

C. Describe how Supplier will transition any existing Public Agency customers’ accounts to the Master Agreement available nationally through OMNIA Partners, Public Sector. Include a list of current cooperative contracts (regional

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and national) Supplier holds and describe how the Master Agreement will be positioned among the other cooperative agreements.

There are no comparable public agencies to transition at this time.

D. Acknowledge Supplier agrees to provide its logo(s) to OMNIA Partners, Public Sector and agrees to provide permission for reproduction of such logo in marketing communications and promotions. Acknowledge that use of OMNIA Partners, Public Sector logo will require permission for reproduction, as well.

Michaels Pro Education, agrees to provide its logo(s) to OMNIA Partners and provides permission for reproduction of such logo(s) in marketing communications and promotions.

E. Confirm Supplier will be proactive in direct sales of Supplier’s goods and services to Public Agencies nationwide and the timely follow up to leads established by OMNIA Partners, Public Sector. All sales materials are to use the OMNIA Partners, Public Sector logo. At a minimum, the Supplier’s sales initiatives should communicate:

i. Master Agreement was competitively solicited and publicly awarded by a Principal Procurement Agency ii. Best government pricing iii. No cost to participate iv. Non-exclusive Michaels Pro Education confirms all notations in E, items i. through iv.

F. Confirm Supplier will train its national sales force on the Master Agreement. At a minimum, sales training should include:

i. Key features of Master Agreement ii. Working knowledge of the solicitation process iii. Awareness of the range of Public Agencies that can utilize the Master Agreement through OMNIA Partners, Public Sector iv. Knowledge of benefits of the use of cooperative contracts Michaels Pro Education confirms all notations in F, items i. through iv.

G. Provide the name, title, email and phone number for the person(s), who will be responsible for:

i. Executive Support ii. Marketing 153

iii. Sales iv. Sales Support v. Financial Reporting vi. Accounts Payable vii. Contracts

Executive Support Christopher Freeman Lamrite West, Inc., Darice, a Michaels company President Phone 440-878-3575 [email protected] Christopher Freeman joined The Michaels Companies in 2008 as Zone Vice President for Michaels Retail in the Southeast. In 2012, he took on the role of Vice President – Operations and also served as the Vice President – Manufacturing Operations. Mr. Freeman became President of Lamrite West in 2018, where he oversees retail and wholesale operations. Mr. Freeman has 26 years of business experience with extensive knowledge of operations, finance, asset protection, manufacturing processes, leadership training and development.

Marketing Anne Polkinghorn Lamrite West, Inc., Darice, a Michaels company Director Digital Marketing 440-378-4861 [email protected] Anne Polkinghorn has been with Lamrite West for 9 years. She oversees the digital marketing for both Consumer Crafts and Darice. Ms. Polkinghorn’ s team is responsible for all digital strategies including SEO, SEM, Email, Social Media, Content Marketing, Site U/X, and Online Product Management

Sales/Contracts Coleman Caldwell Lamrite West, Inc., Darice, a Michaels company Vice President, Sales Phone: (440) 378-4865 [email protected] Coleman Caldwell has been a part of the Lamrite West, Inc., Darice Team since March 2017. He has over 35 years of experience driving/achieving profitable growth. Mr. Caldwell is currently responsible for both US and International Sales with the following responsibilities: Sales & Operations planning, Category Management fundamentals, professional development & training for sales organizations – focused on finance, category management, question based selling and win/win negotiation training. Mr. Caldwell has a strong track record of achieving sustainable profitable business growth in several areas of consumer products – education, food, hardware, craft and housewares.

154 Bryan Waugaman Lamrite West, Inc., Darice, a Michaels company Director of Sales, Michaels Pro Education (powered by Darice) Phone 440-878-3515 [email protected] Bryan Waugaman has been a part of the Lamrite West, Inc., Darice team for 26 years. Mr. Waugaman is Director of the Michaels Pro Education team and also responsible for managing a sales rep team that manages and supports 20,000 wholesale customers. He has a strong background in operations, procurement, and category management.

Kort Masteller Lamrite West, Inc., Darice, a Michaels company Director of Sales Phone: 440-878-3561 [email protected] Kort Masteller has been part of the Lamrite West, Inc., Darice Team for 16+ years, leading the efforts with the Independent Rep Network. His responsibilities include managing the independent field rep network (representatives that will sell the Darice product lines); establishing trade show direction and management of the trade shows the company supports; setting direction for the corporate showrooms in Atlanta and Ohio; and supporting the majority of the marketing/sales efforts utilizing sales materials, sales support staff and ecommerce/websites. Previously, Mr. Masteller served in sales leadership positions largely related to consumer products.

Sales Support / Accounts Payable Heidi Thogmartin Lamrite West, Inc., Darice, a Michaels company Director of Credit and Customer Service Phone 440-238-9150 x 3104 [email protected] Heidi Thogmartin has been a part of the Lamrite West, Inc., Darice Team for 17+ years with the following responsibilities: accounts receivable, credit, customer service, financial planning and reporting.

Financial Reporting Joseph Rudolph Lamrite West, Inc., Darice, a Michaels company Chief Financial Officer Phone 440-378-4852 [email protected] Joe Rudolph been part of the Lamrite West, Inc., Darice Team for 11+ years as the CFO. His responsibilities include the Controllership and Treasury related functions as well as Financial Planning and Analysis. Previously Joe served in financial leadership positions within industrial manufacturing, consumer products and private equity companies.

155 H. Describe in detail how Supplier’s national sales force is structured, including contact information for the highest-level executive in charge of the sales team.

Darice uses both an in-house team of sales directors and sales support staff as well as an independent network of sales representatives offering coverage throughout the United States.

Our team consists of seven sales directors, sales support, an in-house marketing and ecommerce team as well as a full-service in-house customer service team. We also have over 120 independent reps nationwide and utilize a national tele-sales team to provide additional sales support to over 25,000 customers.

Upon notification of award, Participating Agencies will work directly with Business Development Manager to ensure they understand their needs and provide support.

Vice President of Sales is the highest-level executive in charge of the sales team: Coleman Caldwell Vice President, Sales Phone: (440) 378-4865 [email protected]

I. Explain in detail how the sales teams will work with the OMNIA Partners, Public Sector team to implement, grow and service the national program.

The Director of Sales and Business Development Managers will work closely with the OMNIA Partners Public Sector team to pursue leads provided by OMNIA Partners. We will utilize the OMNIA Website links to our site to drive business and educate customers about the Master Agreement opportunities.

I. Explain in detail how Supplier will manage the overall national program throughout the term of the Master Agreement, including ongoing coordination of marketing and sales efforts, timely new Participating Public Agency account set-up, timely contract administration, etc.

The Michaels Companies is structured to take on the benefits of what OMNIA can offer given the scope of the coverage we have across all 50 states. We offer up a team of 130 sales representatives representing 29 Ref Groups focused on all levels of trade and with an understanding of what it takes to manage a large portfolio of products. We are able to identify the support that is required, to initiate the required connection in sales to the customer and to follow up on that process from beginning to end. We have a robust Salesforce.com – Customer Relationship Management (CRM) tool used by all sales organizations to drive both new and current customer growth. This is used to measure and monitor activity and success in real time. We have an out bound tele-sales team to ensure full customer coverage and execution.

156 J. State the amount of Supplier’s Public Agency sales for the previous fiscal year. Provide a list of Supplier’s top 10 Public Agency customers, the total purchases for each for the previous fiscal year along with a key contact for each. As a publicly traded company we do not share information of this level. Please refer to the Annual Report on Form 10-K, as filed by The Michaels Companies, Inc.

https://investors.michaels.com/sec-filings/annual-reports

K. Describe Supplier’s information systems capabilities and limitations regarding order management through receipt of payment, including description of multiple platforms that may be used for any of these functions.

At the present time, Participating Agencies will be able to order through Michaels.com or MichaelsProEducation.com (powered by Darice).

Michaels.com Orders:  Michaels.com is a standard end user retail ecommerce site where orders can be placed and shipped or picked up in store (BOPIS)  All orders on Michaels.com must be paid by credit card at time of purchase

MichaelsProEducation.com (powered by Darice) Orders:  Darice runs a commercially available, tier 1 enterprise software solution fully supported by vendor  Complete order management resides in one ERP solution and is fully integrated into procurement, financials, accounts payable, accounts receivable and supply chain. All solutions run on standard, up to date technology  Orders can be entered into the system using multiple different methods. Orders can be keyed in manually by customer service staff or accepted electronically through industry standard electronic methods  Upon entry into the system, inventory is immediately allocated and secured for customer/order. A receivable is created to match order. As demand is entered into system, procurement systems will ensure inventory is available  Darice has an advanced forecasting system, utilizing demand history and multiple algorithms to keep inventory in stock.  Once an order is shipped, customer receives confirmation and tracking numbers.  An invoice can be sent electronic, e-mailed or physically mailed based on customers preference.  A full history of a customers’ orders/financials is accessible electronically for access at any time by customer.

M. Provide the Contract Sales (as defined in Section 10 of the OMNIA Partners, Public Sector Administration Agreement) that Supplier will guarantee each year under the Master Agreement for the initial three years of the Master Agreement (“Guaranteed Contract Sales”).

157

$______.00 in year one $______.00 in year two $______.00 in year three

Darice will pay OMNIA the applicable administration fees on any sales resulting from the HCPS contract. The volumes at this time are undetermined.

To the extent Supplier guarantees minimum Contract Sales, the administration fee shall be calculated based on the greater of the actual Contract Sales and the Guaranteed Contract Sales.

M. Even though it is anticipated many Public Agencies will be able to utilize the Master Agreement without further formal solicitation, there may be circumstances where Public Agencies will issue their own solicitations. The following options are available when responding to a solicitation for Products covered under the Master Agreement.

i. Respond with Master Agreement pricing (Contract Sales reported to OMNIA Partners, Public Sector). ii. If competitive conditions require pricing lower than the standard Master Agreement not-to-exceed pricing, Supplier may respond with lower pricing through the Master Agreement. If Supplier is awarded the contract, the sales are reported as Contract Sales to OMNIA Partners, Public Sector under the Master Agreement. iii. Respond with pricing higher than Master Agreement only in the unlikely event that the Public Agency refuses to utilize Master Agreement (Contract Sales are not reported to OMNIA Partners, Public Sector). iv. If alternative or multiple proposals are permitted, respond with pricing higher than Master Agreement, and include Master Agreement as the alternate or additional proposal.

Detail Supplier’s strategies under these options when responding to a solicitation.

Michaels will handle each solicitation individually but will reference the OMNIA Master Agreement as a first option.

158

See the Dunn & Bradstreet Reports of The Michaels Companies, Inc. and Lamrite West, Inc., respectively, under Tab 1 of this proposal, on page 24.

159 See the 2019 Sustainability Report of The Michaels Companies, Inc. under Tab 1 of this proposal, on page 51.

160 EXHIBIT F: FEDERAL FUNDS CERTIFICATIONS

FEDERAL CERTIFICATIONS ADDENDUM FOR AGREEMENT FUNDED BY U.S. FEDERAL GRANT

TO WHOM IT MAY CONCERN:

Participating Agencies may elect to use federal funds to purchase under the Master Agreement. This form should be completed and returned.

DEFINITIONS Contract means a legal instrument by which a non–Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used in this part does not include a legal instrument, even if the non– Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward

Contractor means an entity that receives a contract as defined in Contract.

Cooperative agreement means a legal instrument of financial assistance between a Federal awarding agency or pass- through entity and a non–Federal entity that, consistent with 31 U.S.C. 6302–6305: (a) Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or pass-through entity to the non–Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal government or pass-through entity's direct benefit or use; (b) Is distinguished from a grant in that it provides for substantial involvement between the Federal awarding agency or pass-through entity and the non–Federal entity in carrying out the activity contemplated by the Federal award. (c) The term does not include: (1) A cooperative research and development agreement as defined in 15 U.S.C. 3710a; or (2) An agreement that provides only: (i) Direct United States Government cash assistance to an individual; (ii) A subsidy; (iii) A loan; (iv) A loan guarantee; or (v) Insurance.

Federal awarding agency means the Federal agency that provides a Federal award directly to a non–Federal entity

Federal award has the meaning, depending on the context, in either paragraph (a) or (b) of this section: (a)(1) The Federal financial assistance that a non–Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in § 200.101 Applicability; or (2) The cost-reimbursement contract under the Federal Acquisition Regulations that a non–Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in § 200.101 Applicability. (b) The instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative agreement, other agreement for assistance covered in paragraph (b) of § 200.40 Federal financial assistance, or the cost- reimbursement contract awarded under the Federal Acquisition Regulations. (c) Federal award does not include other contracts that a Federal agency uses to buy goods or services from a contractor or a contract to operate Federal government owned, contractor operated facilities (GOCOs). (d) See also definitions of Federal financial assistance, grant agreement, and cooperative agreement.

Non–Federal entity means a state, local government, Indian tribe, institution of higher education (IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient.

Nonprofit organization means any corporation, trust, association, cooperative, or other organization, not including IHEs, that: (a) Is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest; (b) Is not organized primarily for profit; and (c) Uses net proceeds to maintain, improve, or expand the operations of the organization.

161 162 163 164 165 EXHIBIT G: NEW JERSEY BUSINESS COMPLIANCE

NEW JERSEY BUSINESS COMPLIANCE

Suppliers intending to do business in the State of New Jersey must comply with policies and procedures required under New Jersey statues. All offerors submitting proposals must complete the following forms specific to the State of New Jersey. Completed forms should be submitted with the offeror’s response to the RFP. Failure to complete the New Jersey packet will impact OMNIA Partners, Public Sector’s ability to promote the Master Agreement in the State of New Jersey.

DOC #1 Ownership Disclosure

Form DOC #2 Non-Collusion Affidavit

DOC #3 Affirmative Action Affidavit

DOC #4 Political Contribution Disclosure

Form DOC #5 Stockholder Disclosure Certification

DOC #6 Certification of Non-Involvement in Prohibited Activities in Iran

DOC #7 New Jersey Business Registration Certificate

New Jersey suppliers are required to comply with the following New Jersey statutes when applicable:

 all anti-discrimination laws, including those contained in N.J.S.A. 10:2-1 through N.J.S.A. 10:2-14, N.J.S.A. 10:5-1, and N.J.S.A. 10:5-31 through 10:5-38;

 Prevailing Wage Act, N.J.S.A. 34:11-56.26, for all contracts within the contemplation of the Act;

 Public Works Contractor Registration Act, N.J.S.A. 34:11-56.26; and

 Bid and Performance Security, as required by the applicable municipal or state statutes.

166 167 STOCK OWNERSHIP INFORMATION

Beneficial Ownership

The following table sets forth information regarding the beneficial ownership of our Common Stock as of April 16, 2019 by (i) such persons known to us to be beneficial owners of more than 5% of our Common Stock, (ii) each director, director nominee and Named Executive Officer (as defined in “Executive Compensation – Compensation Discussion and Analysis” below) , and (iii) all directors, nominees and executive officers as a group. Unless otherwise indicated by footnote, the address for each listed director, officer and stockholder is c/o The Michaels Companies, Inc., 8000 Bent Branch Drive, Irving, Texas 75063 and each beneficial owner exercises sole voting and investment power over the shares noted below. The percentage of beneficial ownership for our directors and executive officers, both individually and as a group, and beneficial owners of 5% or more of Common Stock is calculated based on 158,121,299 shares of Common Stock outstanding as of April 16, 2019, and the number of unissued shares as to which such person or persons has the right to acquire voting and/or investment power within 60 days. The beneficial ownership information set forth below was provided or disclosed by or on behalf of our executive officers, our directors, and our beneficial owners of 5% or more of our Common Stock. As such, the Company has not independently verified the accuracy or completeness of the information so provided.

Number of Name and address of beneficial owner(1) Shares Owned Percent Beneficial Owners of 5% or More of Our Common Stock: Bain Capital Investors, LLC and related funds (2) ...... 52,798,929 33.4 % Affiliates of The Blackstone Group L.P. (3) ...... 20,393,531 12.9 % T. Rowe Price Associates Inc. (4) ...... 12,650,536 8.0 % The Vanguard Group (5) ...... 8,513,247 5.4 % BlackRock, Inc. and affiliates (6) ...... 8,456,082 5.3 %

Directors and Named Executive Officers: Joshua Bekenstein (7) ...... — — Mark Cosby (8) ...... 18,943 * Ryan Cotton (7) ...... — — Monte E. Ford ...... 17,401 * Karen Kaplan ...... 19,567 * Matthew S. Levin (7) ...... 5,835 * John J. Mahoney ...... 29,433 * James A. Quella (9) ...... 22,620 * Beryl B. Raff ...... 24,293 * Peter F. Wallace (9) ...... — — Carl S. Rubin (10) ...... 2,418,930 1.5 % Denise A. Paulonis (11) ...... 182,414 * Stephen J. Carlotti (12) ...... 327,465 * J. Robert Koch ...... — — All directors and executive officers as a group (14 persons) (13) ...... 802,654 *

* Less than one percent.

(1) Pursuant to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of any securities as to which such person, directly or indirectly, through any contract, arrangement, undertaking, relationship or otherwise has or shares voting power and/or investment power or as to which such person has the right to acquire such voting and/or investment power within 60 days. Percentage of beneficial ownership by a person as of a particular date is calculated by dividing the number of shares beneficially owned by such person by the sum of the number of shares outstanding as of such date and the number of unissued shares as to which such person has the right to acquire voting and/or investment power within 60 days. Unless otherwise indicated, the number of shares shown includes outstanding shares of Common Stock owned as of April 16, 2019 by the person indicated.

(2) The shares included in this table consist of: (i) 52,644,833 shares of Common Stock held by Bain Capital Integral Investors 2006, LLC (“Integral 06”); and (ii) 154,096 shares of Common Stock held by BCIP TCV, LLC (“TCV”). Bain Capital Investors, LLC (“BCI”) is the administrative member of Integral 06 and governs the investment

168 strategy and decision-making process with respect to investments held by TCV. As a result, BCI may be deemed to share voting and dispositive power with respect to the shares held by Integral 06 and TCV (collectively, the “Bain Capital Entities”). Each of the Bain Capital Entities has an address c/o Bain Capital Private Equity, L.P., 200 Clarendon Street, Boston, Massachusetts 02116.

(3) Includes 15,397,191 shares of our Common Stock owned by Blackstone Capital Partners V L.P. (“BCP V”), 3,521,509 shares of our Common Stock owned by BCP V-S L.P. (“BCP V-S”), 220,529 shares of our Common Stock owned by Blackstone Family Investment Partnership V L.P. (“Family”), 46,810 shares of our Common Stock owned by Blackstone Participation Partnership V L.P. (“Participation”), 686,552 shares of our Common Stock owned by BCP V Co-Investors L.P. (“BCP Co-Investors”) and 520,940 shares of our Common Stock owned by Blackstone Family Investment Partnership V-SMD L.P. (“Family-SMD”) (collectively, “the “Blackstone Funds”). The general partner of BCP V, BCP V-S and BCP Co-Investors is Blackstone Management Associates V L.L.C. BMA V L.L.C. is the sole member of Blackstone Management Associates V L.L.C. BCP V Side-by-Side GP L.L.C. is the general partner of Family and Participation. Blackstone Holdings III L.P. is the managing member and majority in interest owner of BMA V L.L.C. and the sole member of BCP V Side-by-Side GP L.L.C. The general partner of Blackstone Holdings III L.P. is Blackstone Holdings III GP L.P. The general partner of Blackstone Holdings III G.P. is Blackstone Holdings III GP Management L.L.C. The sole member of Blackstone Holdings III GP Management L.L.C. is The Blackstone Group L.P. The general partner of The Blackstone Group L.P. is Blackstone Group Management L.L.C. Blackstone Group Management L.L.C. is wholly owned by Blackstone’s senior managing directors and controlled by its founder, Stephen A. Schwarzman. The general partner of Family-SMD is Blackstone Family GP L.L.C., which is controlled by its founder Mr. Schwarzman. As a result of his control of Blackstone Group Management L.L.C. and Blackstone Family GP L.L.C., Mr. Schwarzman has voting and investment power with respect to the shares held by the Blackstone Funds. Each of such Blackstone entities and Mr. Schwarzman may be deemed to beneficially own the shares beneficially owned by the Blackstone Funds directly or indirectly controlled by it or him, but each (other than the Blackstone Funds to the extent of their direct holdings) disclaims beneficial ownership of such shares. The address for each of the Blackstone Funds, Blackstone Management Associates V L.L.C., BMA V L.L.C., BCP V Side-by-Side GP L.L.C., Blackstone Holdings III L.P., Blackstone Holdings III GP L.P., Blackstone Holdings III GP Management L.L.C., The Blackstone Group L.P., Blackstone Group Management L.L.C., Blackstone Family GP L.L.C. and Mr. Schwarzman is c/o The Blackstone Group L.P., 345 Park Avenue, New York, New York 10154.

(4) The information regarding T. Rowe Price Associates, Inc. (“T. Rowe”) is based solely on information included in Amendment No. 4 to its Schedule 13G filed by T. Rowe with the SEC on February 14, 2019, which reflects sole voting power with respect to 3,864,727 shares of Common Stock and sole dispositive power with respect to 12,650,536 shares of Common Stock. These shares are owned by various individual and institutional investors, for which T. Rowe serves as an investment adviser with the power to direct investments and/or sole power to vote the securities. By virtue of the relationships described in this footnote, T. Rowe may be deemed to be a beneficial owner of the shares, but expressly disclaims its beneficial ownership of such shares. T. Rowe reported its address as 100 E. Pratt Street, Baltimore, Maryland 21202.

(5) The information regarding The Vanguard Group is based solely on information included in its Schedule 13G filed by The Vanguard Group with the SEC on February 11, 2019, which reflected sole voting power with respect to 48,873 shares, sole dispositive power with respect to 8,463,638 shares and shared dispositive power with respect to 49,609 shares. The Vanguard Group. reported its address as 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.

(6) The information regarding BlackRock, Inc. and its affiliates is based solely on information included in its Amendment No. 1 to its Schedule 13G filed by BlackRock, Inc. with the SEC on February 5, 2019, which reflected sole voting power with respect to 8,010,686 shares and sole dispositive power with respect to 8,456,082 shares. BlackRock, Inc. reported its address as 55 East 52nd Street, New York, New York 10055.

(7) Does not include shares indirectly held by the Bain Capital Entities. Mr. Bekenstein and Mr. Cotton are each Managing Directors of BCI, and Mr. Levin is a Senior Advisor of BCI. As a result, by virtue of the relationships described above, each may be deemed to share beneficial ownership of the shares of Common Stock held by the Bain Capital Entities. The address of Mr. Bekenstein, Mr. Cotton and Mr. Levin is c/o Bain Capital Private Equity, L.P., 200 Clarendon Street, Boston, Massachusetts 02116.

169 (8) Includes 18,943 shares of unvested restricted stock for which Mr. Cosby holds voting rights (of which 2,367 shares of restricted stock are to vest as of May 6, 2019).

(9) Mr. Wallace is an employee, and Mr. Quella is a former employee, of affiliates of The Blackstone Group L.P., but each disclaims beneficial ownership of the shares beneficially owned by the Blackstone Funds. The addresses of Mr. Quella and Mr. Wallace are c/o The Blackstone Group L.P., 345 Park Avenue, New York, New York 10154.

(10) Includes 369,000 stock options that vested on March 18, 2014; 369,000 stock options that vested on March 18, 2015; 369,000 stock options that vested on March 18, 2016; 63,131 stock options that vested on September 30, 2016; 369,000 stock options that vested on March 18, 2017; 87,169 stock options that vested on September 14, 2017; 63,132 stock options that vested on September 30, 2017; 369,000 stock options that vested on March 18, 2018 111,657 stock options that vested on March 31, 2018; 87,169 stock options that vested on September 14, 2018; 63,131 stock options that vested on September 30, 2018; 126,839 stock options that vested on March 29, 2019; 111,657 stock options that vested on March 31, 2019 and 79,177 stock options that vested on April 1, 2019, of which an aggregate of 493,789 shares have been exercised and sold. Mr. Rubin resigned as Chief Executive Officer effective February 28, 2019. His role as Chairman of the Board and his employment as an employee of MSI terminated effective April 1, 2019. In connection with his separation, 804,103 vested stock options will be forfeited if unexercised on June 1, 2019. For more information about Mr. Rubin’s separation, including his agreements with the Company, see Executive and Director Compensation – Employment Agreements with Certain Named Executive Officers – Agreements with Carl S. Rubin.”

(11) Includes 16,850 stock options that vested on December 9, 2015; 6,043 stock options that vested on September 30, 2016; 16,850 stock options that vested on December 9, 2016; 16,931 stock options that vested on August 29, 2017; 6,042 stock options that vested on September 30, 2017; 16,850 stock options that vested on December 9, 2017; 12,282 stock options that vested on March 31, 2018; 16,932 stock options that vested on August 29, 2018; 6,043 stock options that vested on September 30, 2018; 16,850 stock options that vested on December 9, 2018; 13,953 stock options that vested on March 29, 2019; and 12,282 stock options that vested on March 31, 2019. Includes 1,208 shares of unvested restricted stock for which Ms. Paulonis holds voting rights.

(12) Includes 58,488 stock options that vested on June 16, 2015; 58,487 stock options that vested on June 16, 2016; 9,921 stock options that vested on September 30, 2016; 58,488 stock options that vested on June 16, 2017; 9,589 stock options that vested on September 14, 2017; 9,922 stock options that vested on September 30, 2017; 12,282 stock options that vested on March 31, 2018; 58,487 stock options that vested on June 16, 2018; 9,589 stock options that vested on September 14, 2018; 9,921 stock options that vested on September 30, 2018; 13,953 stock options that vested on March 29, 2019; and 12,282 stock options that vested on March 31, 2019 of which an aggregate of 40,000 shares have been exercised and sold. Includes 1,984 shares of unvested restricted stock for which Mr. Carlotti holds voting rights.

(13) Consistent with the disclaimers of beneficial ownership of Messrs. Bekenstein, Cotton, Levin, Quella and Wallace contained in notes (2), (3), (6) and (8) above, this number does not include the 73,192,460 shares of Common Stock that may be deemed to be beneficially owned by each of (a) the Bain Capital Entities (b) affiliates of The Blackstone Group L.P. The total includes 1,373,567 vested options or options that will vest within 60 days of April 16, 2019 held by current executive officers of the Company (of which an aggregate of 797,572 shares have been exercised and sold) and 31,065 shares of unvested restricted stock for which executive officers of the Company hold voting rights. For a list of the current directors and executive officers of the Company, please see page 3 and page 10, respectively.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers to file reports of holdings and transactions in our Common Stock with the SEC and Nasdaq. To facilitate compliance, we have undertaken the responsibility to prepare and file these reports on behalf of our officers and our independent directors. Based on our records and other information, all reports were timely filed in fiscal 2018.

170 171 172 The following Employee Information Report was completed for the purposes of this proposal, and as of the date of submission, has not been filed with the State of New Jersey.

173 174 175 176 177 178 '2& 1(:-(56(<%86,1(665(*,675$7,21&(57,),&$7( 1-6$

STATE OF NEW JERSEY BUSINESS REGISTRATION CERTIFICATE

Taxpayer Name: MICHAELS STORES, INC. Trade Name: Address: 8000 BENT BRANCH DR IRVING, TX 75063-6023 Certificate Number: 0095262 Effective Date: March 23, 1994 Date of Issuance: December 16, 2019

For Office Use Only: 20191216104125729

179 https://www1.state.nj.us/TYTR_BRC/servlet/common/BRCLogin