UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
MAGNA INTERNATIONAL INC.
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(Name of Issuer)
CLASS A SUBORDINATE VOTING SHARES
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(Title of Class of Securities)
559222401
-----------------------------------
(CUSIP Number)
Jeffrey O. Palmer
Executive Vice-President
Magna International Inc.
337 Magna Drive
Aurora, Ontario L4G 7K1
(905) 726-2462
Scott M. Freeman
Sidley Austin LLP
787 Seventh Avenue
New York City, NY 10019
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
May 10, 2007
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. |_|
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
(Continued on following pages)
SCHEDULE 13D
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13D
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CUSIP No. 559222401 Page 2 of 14 Pages
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1 NAME OF REPORTING PERSONS: Donald Walker
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP (a) |_|
(b) |X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(D) OR 2(E) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 876,638
OWNED BY --------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH --------------------------------------------------------
9 SOLE DISPOSITIVE POWER
876,638
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
876,638
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.8%
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14 TYPE OF REPORTING PERSON
IN
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2
SCHEDULE 13D
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13D
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CUSIP No. 559222401 Page 3 of 14 Pages
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1 NAME OF REPORTING PERSONS: Siegfried Wolf
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP (a) |_|
(b) |X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(D) OR 2(E) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Austria
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 610,500
OWNED BY --------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH --------------------------------------------------------
9 SOLE DISPOSITIVE POWER
610,500
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
610,500
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.6%
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14 TYPE OF REPORTING PERSON
IN
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3
SCHEDULE 13D
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13D
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CUSIP No. 559222401 Page 4 of 14 Pages
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1 NAME OF REPORTING PERSONS: Vincent J. Galifi
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP (a) |_|
(b) |X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(D) OR 2(E) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 368,707
OWNED BY --------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH --------------------------------------------------------
9 SOLE DISPOSITIVE POWER
368,707
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
368,707
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.3%
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14 TYPE OF REPORTING PERSON
IN
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4
SCHEDULE 13D
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13D
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CUSIP No. 559222401 Page 5 of 14 Pages
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1 NAME OF REPORTING PERSONS: Jeffrey O. Palmer
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP (a) |_|
(b) |X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(D) OR 2(E) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 149,063
OWNED BY --------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH --------------------------------------------------------
9 SOLE DISPOSITIVE POWER
149,063
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
149,063
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
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14 TYPE OF REPORTING PERSON
IN
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5
SCHEDULE 13D
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13D
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CUSIP No. 559222401 Page 6 of 14 Pages
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1 NAME OF REPORTING PERSONS: Peter Koob
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP (a) |_|
(b) |X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(D) OR 2(E) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 166,720
OWNED BY --------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH --------------------------------------------------------
9 SOLE DISPOSITIVE POWER
166,720
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
166,720
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2%
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14 TYPE OF REPORTING PERSON
IN
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6
Introduction
This Statement is being filed to report the entry by Magna International Inc.,
a corporation existing under the laws of the Province of Ontario (the
"Company"), Open Joint Stock Company Russian Machines ("RM"), Veleron Holding
B.V. ("RM Sub"), the Stronach Trust, 445327 Ontario Limited ("445327", and
together with RM, RM Sub, the Stronach Trust, and Mr. Frank Stronach, the
"Major Investors") and the Reporting Persons (as defined below) into an
agreement (the "Transaction Agreement") providing for, among other things, the
formation of a new entity ("Newco"), owned by 445327 (indirectly, through a
wholly-owned subsidiary), RM Sub and the Reporting Persons for the purpose of
holding, acquiring, voting and disposing of Class A Subordinate Voting Shares
(the "Class A Shares") of the Company and Class B Shares of the Company ("Class
B Shares"), each of which is convertible into one Class A Share of the Company
at the option of the holder thereof.
Item 1. Security and Issuer.
This Statement on Schedule 13D relates to the Class A Shares. The
principal executive offices of the Company are located at 337 Magna Drive,
Aurora, Ontario, Canada, L4G 7K1.
Item 2. Identity and Background.
This Statement is being filed by Siegfried Wolf ("Mr. Wolf"), Donald J.
Walker ("Mr. Walker"), Vincent J. Galifi ("Mr. Galifi"), Peter Koob ("Mr.
Koob") and Jeffrey O. Palmer ("Mr. Palmer", and together with Mr. Wolf, Mr.
Walker, Mr. Galifi and Mr. Koob, the "Reporting Persons").
Mr. Wolf is a citizen of Austria. His present principal occupation is
Co-Chief Executive Officer of the Company. His business address is: c/o Magna
International Europe, Magna - Strasse 1, A-2522, Oberwaltersdorf, Austria.
Mr. Walker is a citizen of Canada. His present principal occupation is
Co-Chief Executive Officer of the Company. His business address is: Magna
International Inc., 337 Magna Drive, Aurora, Ontario, Canada, L4G 7K1.
Mr. Galifi is a citizen of Canada. His present principal occupation is
Executive Vice-President and Chief Financial Officer of the Company. His
business address is: Magna International Inc., 337 Magna Drive, Aurora,
Ontario, Canada, L4G 7K1.
Mr. Koob is a citizen of the Federal Republic of Germany. His present
principal occupation is Executive Vice-President, Corporate Development of the
Company. His business address is: c/o Magna International Europe, Magna -
Strasse 1, A-2522, Oberwaltersdorf, Austria.
Mr. Palmer is a citizen of Canada. His present principal occupation is
Executive Vice-President of the Company. His business address is: Magna
International Inc., 337 Magna Drive, Aurora, Ontario, Canada, L4G 7K1.
During the last five years, none of the Reporting Persons has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). During the last five years, none of the Reporting Persons has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding were or are subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, United States Federal or State
securities laws or finding any violations with respect to such laws.
7
Item 3. Source and Amount of Funds or Other Consideration.
No funds or other consideration were provided by any Reporting Person
contemporaneously with the execution of the Transaction Agreement, and upon
consummation of the transactions contemplated by the Transaction Agreement the
Reporting Persons will contribute Class A Shares to Newco in exchange for
shares of capital stock of Newco. See Item 6 for a description of the
Transaction Agreement.
Item 4. Purpose of Transaction.
The purpose of the arrangements described in Item 6 below is to
accelerate the Company's strategic efforts to capitalize on the growth
opportunities within the Russian and other automotive markets, and align the
interests of the Reporting Persons, RM and the Stronach Trust with respect to
the Company.
Mr. Frank Stronach ("Mr. Stronach") (in his capacity as Chairman of the
Board of the Company or otherwise), the Stronach Trust and 445327 have
indicated that they may, from time to time, communicate with the Company's
management, directors, shareholders and other interested parties regarding
matters of mutual interest, including strategies designed to increase the value
of the Class A Shares. The Major Investors and Newco may from time to time
acquire or dispose of beneficial ownership of additional Class A Shares
(including by acquiring or disposing of beneficial ownership of additional
Class B Shares) in the open market, in privately negotiated transactions or
otherwise.
The Reporting Persons may from time to time acquire or dispose of
beneficial ownership of additional Class A Shares (including by acquiring or
disposing of beneficial ownership of additional Class B Shares) in the open
market, in privately negotiated transactions or otherwise.
Except as indicated in this Schedule 13D, none of the Reporting Persons
currently has any plans or proposals that relate to or would result in any of
the matters described in subparagraphs (a) through (j) of Item 4 of Schedule
13D. However, such plans and proposals may have been considered, and may from
time to time hereafter be considered, by Mr. Stronach in his capacity as a
director and/or officer of the Company, as trustee of the Stronach Trust, or
otherwise, and by the Reporting Persons.
Item 5. Interest in Securities of Issuer.
The information on the cover pages is incorporated herein by reference.
Mr. Walker is the beneficial owner of 876,638 Class A Shares, comprised
of 60,000 Class A Shares, 10,000 Class B Shares which are convertible into
10,000 Class A Shares, 146,037 restricted Class A Shares, 548 Class A Shares
issuable upon conversion of CDN$50,000 of the Company's 6.5% Convertible
Subordinated Debentures (the "Debentures") and 660,053 options to acquire Class
A Shares, all of which are presently exercisable.
Mr. Wolf is the beneficial owner of 610,500 Class A Shares, comprised of
54,199 Class A Shares, 329,248 restricted Class A Shares and 227,053 options to
acquire Class A Shares all of which are presently exercisable.
Mr. Galifi is the beneficial owner of 368,707 Class A Shares, comprised
of 5,273 Class A Shares, 66,971 restricted Class A Shares, 2,193 Class A Shares
issuable upon conversion of CDN$200,000 of the Debentures, 268,900 options to
acquire Class A Shares, all of which are presently exercisable, and an
aggregate of 25,370 Class A Shares held in the name of family members sharing
the same residence.
Mr. Koob is the beneficial owner of 166,720 Class A Shares, comprised of
11,020 Class A Shares and 155,700 options to acquire Class A Shares.
8
Mr. Palmer is the beneficial owner of 149,063 Class A Shares, comprised
of 18,625 Class A Shares, 438 Class A Shares issuable upon conversion of
CDN$40,000 of the Debentures and 130,000 options to acquire Class A Shares.
None of the Reporting Persons have effected any transactions in the Class
A Shares during the past sixty days. Each Reporting Person disclaims beneficial
ownership of all the Class A Shares owned by each other Reporting Person.
The Reporting Persons may be deemed to be part of a group together with
RM, RM Sub, the Stronach Trust, and 445327 and therefore deemed to beneficially
own the Class A Shares beneficially owned by the Major Investors, but no
Reporting Person affirms the existence of any such group and each Reporting
Person disclaims beneficial ownership of any such shares.
Based on information provided in the Company's latest publicly available
reports and information provided by the Major Investors, the beneficial
ownership of Class A Shares by the Major Investors is as set forth below:
Mr. Stronach beneficially owns 100,000 Class A Shares that are subject to
a fully vested and immediately exercisable option (the "Option") that was
issued to Mr. Stronach by the Company on November 5, 1999 in partial
consideration for his services as Chairman of the Company. The Option is held
directly by Mr. Stronach.
Mr. Stronach acts as one of four trustees of the Stronach Trust. The
remaining trustees of the Stronach Trust are Elfriede Stronach, Belinda
Stronach and Andrew Stronach, who are immediate family members of Mr. Stronach.
Mr. Stronach is entitled to appoint additional trustees and to remove trustees.
Determinations by the Stronach Trust are made by a majority of the trustees,
which majority must include Mr. Stronach.
The Stronach Trust owns more than 99.9% of the outstanding voting
securities of 445327. 445327 holds 726,829 Class B Shares, which are
convertible into the same number of Class A Shares at any time at the option of
445327. Such Class B Shares represent approximately 55.5% of the total votes
carried by the Class A Shares and the Class B Shares.
865714 Ontario Inc. ("865714"), an entity that was incorporated to
provide a continuing separate vehicle for the acquisition of capital stock of
the Company and the sale thereof to members of Company management, beneficially
owns 91,740 Class A Shares issuable upon conversion of the same number of Class
B Shares held by it. Pursuant to a shareholder agreement, the Company may
exercise dispositive power with respect to these Class B Shares.
Delaware Charter Guarantee & Trust ("Delaware Trust"), conducting
business under the trade name Principal Trust Company, is the trustee of the
Employees Deferred Profit Sharing Plan (the "US DPSP"), which beneficially owns
1,894,279 Class A Shares. Delaware Charter Guarantee & Trust has the power to
vote the shares held in the US DPSP. However, as Chairman of the Company, Mr.
Stronach has the right to direct Delaware Trust with respect to the voting and
disposition of the Class A Shares held by the US DPSP.
Sun Life Financial Trust Inc. ("Sun Life") is the trustee of the Magna
Deferred Profit Sharing Plan (the "Canadian DPSP"), which beneficially owns
4,013,472 Class A Shares (including 111,595 Class A Shares issuable upon
conversion of an equivalent number of Class B Shares held by it). Sun Life has
the power to vote the Class A Shares held by the Canadian DPSP. However, as
Chairman of the Company, Mr. Stronach has the right to direct Sun Life with
respect to the voting and disposition of the Class A Shares held by the
Canadian DPSP.
Mr. Stronach is a partner of Stronach & Co. ("S&Co."), an entity that
provides consulting services to certain subsidiaries of the Company. S&Co.
holds options to purchase a total of 548,475 Class A Shares.
Mr. Stronach, the Stronach Trust and 445327 do not admit that any of them
beneficially owns any Class A Shares that are not held directly by such
persons. Without limitation of the foregoing, Mr. Stronach disclaims beneficial
ownership of Class A Shares that are or may be deemed to be beneficially owned
by S&Co., the Stronach Trust, 445327, the Company, 865714, the US DPSP or the
Canadian DPSP for purposes other than U.S. securities
9
law purposes. Assuming the beneficial ownership of all such Class A Shares, (i)
Mr. Stronach is the beneficial owner of 7,374,795 Class A Shares, representing
6.6% of the Class A Shares, (ii) the Stronach Trust is the beneficial owner of
818,569 Class A Shares, representing 0.7% of the Class A Shares and (iii)
445327 is the beneficial owner of 818,569 Class A Shares, representing 0.7% of
the Class A Shares (in each case determined in accordance with Rule 13d-3).
Item 6. Contracts, Arrangements, Understanding or Relationships
with Respect to Securities of the Issuer.
The transactions contemplated by the Transaction Agreement would be
effected by way of a court approved plan of arrangement (the "Plan of
Arrangement") under the laws of Ontario, Canada and is subject to court and
regulatory approvals and, subject to court approval, the following shareholder
approvals:
o two-thirds of the votes cast by holders of the Class A Shares and Class
B Shares represented at a shareholders meeting to be convened by the Company,
voting together;
o two-thirds of the votes cast by the holders of the Class B Shares
represented at such shareholders meeting, voting separately as a class;
o a majority of the votes cast by holders of the Class A Shares and Class
B Shares represented at such shareholders meeting, excluding shares held by
445327, the Reporting Persons and any other "insiders," (as defined in the
Toronto Stock Exchange Company Manual), voting together;
o a majority of votes cast by holders of the Class A Shares represented
at such shareholders meeting, excluding shares held by such "insiders," voting
separately as a class; and
o with respect only to the redemption and modification of the Class B
Shares described below, a majority of the votes cast by holders of the Class B
Shares represented at such shareholders meeting, excluding shares held by
445327, the Reporting Persons, and certain other parties deemed to be
"interested" shareholders under applicable Canadian law, voting separately as a
class.
Completion of the transaction is also subject to finalizing definitive
documentation and customary closing conditions. The Transaction Agreement may
be terminated under certain circumstances before the effectiveness of the Plan
of Arrangement, including (i) by mutual agreement of the Company, RM and
445327, (ii) by the Company on five days' notice or by either RM or 445327 if
the Company's board of directors fails to recommend, recommends against or
withdraws, modifies or changes its approval or recommendation of the Plan of
Arrangement in a manner adverse to RM, (iii) by the Company, 445327 or RM if
the Certificate of Arrangement has not been issued on or before October 31,
2007, or such later date as may be mutually agreed from time to time, or (iv)
by RM if the Company enters into certain transactions outside the ordinary
course of business.
Pursuant to the Transaction Agreement, 445327 would, among other things,
incorporate a wholly-owned subsidiary ("446"), which would, in turn,
incorporate a wholly-owned subsidiary ("Newco"). Pursuant to the Plan of
Arrangement, 445327 would transfer the 726,829 Class B Shares currently held by
it to 446, which would in turn transfer such Class B Shares to Newco in return
for 420 Class B shares of Newco that would carry an approximately 53% voting
interest and 42% dividend entitlement. The remainder of the share capital of
Newco would be divided such that (x) RM Sub would hold 420 Class C shares of
Newco that would carry an approximately 36% voting interest and 42% dividend
entitlement (subject to certain contingencies and conditions) and (y) the
Reporting Persons would hold in the aggregate, indirectly, 130 Class A shares
and 30 Class D non-voting shares of Newco that would represent in the aggregate
an approximately 11% voting interest (shared equally as between Mr. Walker and
Mr. Wolf only) and approximately a 16% dividend entitlement in Newco. RM Sub's
interest in Newco would be issued in consideration for US$76,830,000,
constituting 5% of the "RM Investment Amount" (being US$1,536,600,000) and the
interest of the Reporting Persons in Newco would be issued in exchange for the
transfer by the Reporting Persons to Newco of 605,000 Class A Shares currently
held by them.
Further to the Plan of Arrangement, Newco would subscribe for 1,000,000
preferred shares of its wholly-owned subsidiary ("Newco II") for cash equal to
5% of the RM Investment Amount. Newco would also own 100
10
voting shares of Newco II. RM Sub would subscribe for 100 non-voting common
shares of Newco II and loan to Newco II an amount equal to the Canadian dollar
equivalent of US$1,459,770,000, being 95% of the RM Investment Amount (the
"Newco II Loan"). Newco II would subscribe for 20,000,000 Class A Subordinate
Voting Shares at a price equal to the RM Investment Amount using the proceeds
of the Newco II Loan and the Newco II subscription amount contributed to Newco.
As a result of the transactions contemplated by the Transaction
Agreement, Newco and Newco II would hold 20,605,000 Class A Shares and 726,829
Class B Shares, collectively representing approximately 56.9% of the total
voting power of the Class A Shares and Class B Shares. If approved by the
minority Class B shareholders pursuant to a special vote of the Class B
Shareholders pursuant to the Plan of Arrangement: (i) the Company would acquire
for cancellation all the outstanding Class B Shares other than those held by
Newco for Cdn$114.00 in cash per Class B Share; and (ii) the number of votes
per share attached to the Class B Shares would be reduced to 300 votes per
Class B Share. As a consequence, Newco and Newco II would control Class A
Shares and Class B Shares collectively representing approximately 68.8% of the
total voting power of the Class A Shares and Class B Shares.
The 20,000,000 Class A Subordinate Voting Shares held by Newco II would
be pledged by Newco II as security for the Newco II Loan. RM Sub is permitted
to pledge some or all of the Newco and Newco II shares held by it, as well as
the Newco II Loan and the 20,000,000 Class A Shares pledged to RM Sub as
security for the Newco II Loan, to the person or persons providing financing to
RM or RM Sub in respect of the RM Investment Amount.
As a result of the transactions contemplated by the Transaction
Agreement, the shareholders of Newco would share (pro rata to their respective
equity interests) in any dividends received on the Class A Shares and the Class
B Shares held by Newco and Newco II. Under the terms of the Transaction
Agreement, at any time after the second anniversary of the effective date of
the Plan of Arrangement, RM Sub would have the right to sell its Newco shares
and any Newco II shares it holds to Newco or its designee (the "RM Exit Right")
for a purchase price that would result in RM Sub receiving (a) the pre-tax
value to Newco II of 20,000,000 Class A Shares up to the RM Investment Amount
plus (b) 50% of the amount, if any, by which the pre-tax value to Newco and
Newco II of 20,000,000 Class A Shares exceeds the RM Investment Amount less (c)
25% of the tax incurred by Newco and Newco II in connection with such buyback.
In addition, at any time after the third anniversary of the effective date of
the Plan of Arrangement, 446 would have the right to require RM Sub to sell its
Newco shares and any Newco II shares it holds to Newco or its designee (the
"446 Exit Right") for a purchase price that would result in RM Sub receiving
(x) the pre-tax value to Newco and Newco II of 20,000,000 Class A Shares up to
the RM Investment Amount plus (y) the amount, if any, by which the pre-tax
value to Newco and Newco II of 20,000,000 Class A Shares exceeds the RM
Investment Amount less (z) any tax incurred by Newco and Newco II in connection
with such buyback.
In connection with the transactions contemplated by the Transaction
Agreement, RM Sub entered into an agreement (the "European Transaction
Agreement") whereby, on the effective date of the Plan of Arrangement, it would
invest a net amount of US$150 million for a 50% interest in Styria Management
Limited, a European company that provides the consulting services of Mr.
Stronach in relation to the Company's business outside Canada and Austria. As a
result of this investment, RM would be entitled to a 50% share of consulting
fees paid by the Company and its affiliates to S&Co. and its affiliates under
the existing arrangements. The completion of the transactions contemplated by
the European Transaction Agreement is conditional upon the effectiveness of the
Plan of Arrangement.
Newco Governance
Under the Transaction Agreement, 446, RM, RM Sub and the Reporting Persons
would enter into certain agreements governing their relationship with respect
to Newco and Newco II and providing for the RM Exit Right, the 446 Exit Right
and certain other matters. The terms of such agreements would specify, among
other things, the following:
o the board of directors of Newco would consist of 6 directors: 2
nominees of 446 (including the Chair), 2 nominees of RM Sub and each of the
co-chief executive officers of the Company (being nominees of the Reporting
Persons), provided that (i) if either of the co-chief executive officers ceases
to serve as a Newco director, unless 446 and RM Sub otherwise agree, neither of
the co-chief executive officers would be entitled to remain a
11
director of Newco and the Reporting Persons would no longer be entitled to
Newco Board representation and (ii) if either of the co-chief executive
officers resigns as an executive officer of the Company, unless 446 and RM Sub
otherwise agree, such co-chief executive officer would be entitled to continue
to serve as a director of Newco;
o each of 446 and RM Sub would have veto rights over all actions taken by
Newco and Newco II, other than voting in respect of the election or removal of
directors of the Company or Newco II (in accordance with the terms set out
below);
o 446 and RM Sub would cause the Class A Shares and Class B Shares held
by Newco and Newco II to be voted to effect the following in respect of the
Company:
o the Company's board would consist of 14 directors: 6 nominees of
446 (including the Chair), 6 nominees of RM Sub and 2 nominees of the
Reporting Persons (both co-chief executive officers of the Company);
o at least 4 nominees of each of 446 and RM Sub must meet the
independence requirements of applicable securities laws and stock
exchange rules;
o there would be governance guidelines that would provide that: (i)
directors shall declare their interest and abstain from voting on all
matters where there is an actual or perceived conflict, including, in the
case of the Reporting Persons who are directors, the appointment of
members to Board committees or on any matter where 446 or RM Sub have
declared a conflict; and (ii) any material transaction "out of the
ordinary course of business" (as such term is defined in the Transaction
Agreement) shall require the support of two-thirds of the Company's
directors, where a transaction shall be deemed to be material if the
transaction exceeds certain specified thresholds;
o without the prior approval of the Newco board of directors,
neither RM Sub nor 446 (nor their respective affiliates nor their
shareholders) would be permitted to acquire any additional shares of the
Company, excluding Class A Shares which, when added to the Class A Shares
held or controlled by Newco, Newco II and their shareholders (after
giving effect to the exercise of any options held by them), would not
exceed 20% in aggregate of the Class A Shares outstanding; and
o the board of directors of Newco II would be the same as the board
of directors of Newco, unless otherwise agreed to by the Newco board of
directors.
Item 7. Material to be Filed as Exhibits.
The following documents are being filed as exhibits to this statement and
are incorporated herein by reference:
Exhibit A Joint Filing Agreement
Exhibit B Transaction Agreement dated May 10, 2007
(Incorporated by reference from Exhibit C to the
Schedule 13D/A filed on May 14, 2007 by Frank
Stronach, The Stronach Trust and 445327 Ontario
Limited).
12
Signature
After reasonable inquiry and to the best of the undersigneds' knowledge
and belief, each of the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Dated: May 18, 2007
SIEGFRIED WOLF
/s/ SIEGFRIED WOLF
-------------------------
DONALD J. WALKER
/s/ DONALD J. WALKER
-------------------------
VINCENT J. GALIFI
/s/ VINCENT J. GALIFI
-------------------------
PETER KOOB
/s/ PETER KOOB
-------------------------
JEFFREY O. PALMER
/s/ JEFFREY O. PALMER
-------------------------
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be
typed or printed beneath his signature.
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).
13
Exhibit A
JOINT FILING AGREEMENT
The undersigned hereby agree jointly to prepare and file with regulatory
authorities a Statement on Schedule 13D reporting each of the undersigned's
beneficial ownership of the Class A Subordinate Voting Shares of Magna
International Inc. and hereby affirm that such Statement on Schedule 13D is
being filed on behalf of each of the undersigned in accordance with Rule
13d-1(k)(1) under the Securities Exchange Act of 1934. This agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Dated: May 18, 2007
SIEGFRIED WOLF
/s/ SIEGFRIED WOLF
-------------------------
DONALD J. WALKER
/s/ DONALD J. WALKER
-------------------------
VINCENT J. GALIFI
/s/ VINCENT J. GALIFI
-------------------------
PETER KOOB
/s/ PETER KOOB
-------------------------
JEFFREY O. PALMER
/s/ JEFFREY O. PALMER
-------------------------
14