Exhibit 10.5

MICHAELS STORES, INC.

STOCK OPTION AGREEMENT

This Option and any securities issued upon exercise of this Option are subject to restrictions on voting and transfer and other provisions as set forth in the Amended and Restated Stockholders Agreement among Michaels Stores, Inc. and certain investors, originally dated as of October 31, 2006, as amended and restated on January 31, 2007 and amended from time to time thereafter (the “Stockholders Agreement”) and the terms of the Registration Rights Agreement referred to therein (the “Registration Rights Agreement”).  This Option and any securities issued upon exercise of this Option constitute an Option and Shares, respectively, as defined in the Stockholders Agreement.

This Stock Option Agreement (this “Agreement”) is hereby entered into between Michaels Stores, Inc., a Delaware corporation (the “Company”), and the Optionee named above pursuant to the Company’s 2006 Equity Incentive Plan, as amended from time to time (the “Plan”).  For the purpose of this Agreement, the “Grant Date” shall mean the date hereof, June 4, 2007.

1.                                       Grant of Option.   This Agreement evidences the grant by the Company on the Grant Date to the Optionee of an option (the “Option”) to purchase, in whole or in part, on the terms provided herein and in the Plan, a total of 2,270,966 shares of Common Stock of the Company, par value $.10 per share (the “Shares”), at the following prices per Share:

(a)                                   756,989 Shares at $15.00 per Share (the “Tranche 1 Option”);

(b)                                  756,989 Shares at $22.50 per Share (the “Tranche 2 Option”);

(c)                                   189,247 Shares at $30.00 per Share (the “Tranche 3 Option”);

(d)                                  189,247 Shares at $37.50 per Share (the “Tranche 4 Option”);

(e)                                   189,247 Shares at $45.00 per Share (the “Tranche 5 Option”);

and

(f)                                     189,247 Shares at $52.50 per Share (the “Tranche 6 Option”).

The Option evidenced by this Agreement is not intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code (the “Code”).

2.                                       Vesting.   During the Optionee’s Employment, the Option will vest and become exercisable (i) with respect to 20% of the Shares subject to each of the Tranche 1 Option, Tranche 2 Option, Tranche 3 Option, Tranche 4 Option, Tranche 5 Option and Tranche 6 Option on each of the first through fifth anniversaries of February 16, 2007 or (ii) if earlier, with respect to any unvested portion of the Option, upon a Change of Control (as defined in the Stockholders Agreement).

3.                                       Exercise of Option.

(a)                                   Details of Exercise .  Each election to exercise this Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by his or her executor or administrator or by the Person or Persons to whom this Option is transferred by will or the applicable laws of descent and distribution (the “Legal Representative”), and made pursuant to and in accordance with the terms and conditions set forth in the Plan.  The latest date on which this Option may be exercised (the “Final Exercise Date”) is the date which is the seventh (7th) anniversary of the Grant Date, subject to earlier termination in accordance with the terms and provisions of the Plan and this Agreement.

(b)                                  Payment of Exercise Price .  The following are permitted forms of payment for the exercise of this Option and for the remittance of withholding taxes pursuant to Section 8: (a) cash or check acceptable to the Administrator, (b) actual or constructive transfer to the Company of shares of Stock owned by the Optionee for at least six months (or, with the consent of the Administrator, for less than six months) having an aggregate Fair Market Value at the date of exercise equal to the aggregate exercise price of the Award, (c) authorization by the Optionee of the Company to withhold a number of shares of Stock otherwise issuable to the Optionee under this Option having an aggregate Fair Market Value on the date of exercise equal to the aggregate exercise price of this Option and, if applicable, the amount of any withholding tax, (d) at such time, if any, as the Stock is publicly traded through a broker-assisted “cashless” exercise program acceptable to the Administrator, and (e) by a combination of such methods of payment.

4.                                       Effect of Certain Transactions.   In the event of a Change of Control (as defined in the Stockholders Agreement), this Option will ves