UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
MAGNA INTERNATIONAL INC.
(Name of Issuer)
CLASS A SUBORDINATE VOTING SHARES
(Title of Class of Securities)
559222 401
(CUSIP Number)
Dan Fuoco Brian Colburn
Magna International Inc. Executive Vice President, Special Projects
337 Magna Drive and Secretary
Aurora, Ontario L4G 7K1 Magna International Inc.
(905) 726-7123 337 Magna Drive
Aurora, Ontario L4G 7K1
(905) 726-2462
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with a copy to:
Kenneth G. Alberstadt
Law Office of Kenneth G. Alberstadt PLLC
111 Broadway, 18th Floor
New York, New York 10006
(212) 404-7566
April 3, 2005
(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. |_|
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
CUSIP No. 559222 401
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
FRANK STRONACH
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
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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 ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Austria
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7 SOLE VOTING POWER
6,185,556
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NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 6,185,556
WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,185,556
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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)
5.7%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
INTRODUCTION.
This Amendment No. 1 to Schedule 13D amends the Statement on Schedule 13D (the
"Statement") filed by Frank Stronach on September 5, 2003 with respect to the
Class A Subordinate Voting Shares (the "Class A Shares") of Magna International
Inc. (the "Company"). This Amendment No. 1 is filed to reflect (i) the adoption
by the Stronach Trust, a family trust, as sole shareholder of 445327 Ontario
Limited ("445327"), of certain arrangements relating to the exercise of voting
power with respect to capital stock of the Company held by 445327 and (ii)
changes in the beneficial ownership of Class A Shares by the reporting person
subsequent to the filing of the Statement.
ITEM 1. SECURITY AND ISSUER.
This statement 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.
(a) This Schedule 13D is being filed by Frank Stronach, an individual.
(b) The principal business address of the reporting person is Badener
Strasse 12, Oberwaltersdorf, Austria 2522.
(c) The reporting person is a partner of Stronach & Co. ("S&Co."), an
entity that provides consulting services to certain subsidiaries of
the Company. In addition, the reporting person is the Chairman of
the Board of the Company, the Chairman of the Board of MI
Developments Inc. ("MID") and the Chairman of the Board of Magna
Entertainment Corp. ("MEC"). The Company designs, develops and
manufactures automotive systems, assemblies, modules and components
and engineers and assembles complete vehicles. MID is a real estate
operating company engaged in the ownership, development, management,
leasing, expansion and acquisition of income-producing industrial
and commercial properties. MID is the successor to the Company's
real estate division and operated as an autonomous business unit
within the Company prior to distribution of the capital stock of MID
to the shareholders of the Company on August 29, 2003. MEC operates
thoroughbred and standardbred racetracks; supplies, via
simulcasting, live racing content to the inter-track, off-track and
account wagering markets; and owns and operates a television network
focused exclusively on horse racing.
(d)-(e) During the last five years, the reporting person has not been: (i)
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors); or (ii) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a
result of which he was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) The reporting person is a citizen of Austria.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
See Item 4 below.
3
ITEM 4. PURPOSE OF TRANSACTION.
On February 4, 2005, the Company and Tesma International Inc. ("Tesma")
consummated a plan of arrangement pursuant to which the Company acquired all of
the outstanding Class A Subordinate Voting Shares of Tesma that it did not own
immediately prior to the transaction. On March 6, 2005, the Company and Decoma
International Inc. ("Decoma") consummated a plan of arrangement pursuant to
which the Company acquired all of the outstanding Class A Subordinate Voting
Shares of Decoma that it did not own immediately prior to the transaction. On
April 3, 2005, the Company and Intier Automotive Inc. ("Intier") consummated a
plan of arrangement pursuant to which the Company acquired all of the
outstanding Class A Subordinate Voting Shares of Intier that it did not own
immediately prior to the transaction. The consideration paid to holders of the
acquired shares ("Target Shares") in these privatization transactions consisted
of Class A Shares or, at the election of the holders of such Target Shares (to
the extent provided by the terms of such transactions), cash in lieu thereof. In
addition, to the extent holders of options for the purchase of Target Shares
("Target Options") did not elect to exchange such options for Company options
exercisable for Class A Shares in accordance with the terms of such
transactions, such Target Options became exercisable for Class A Shares in
accordance with their terms at the exchange ratio in the applicable transaction.
As a result, Target Options held by S&Co. became exercisable for a total of
475,225 Class A Shares.
100,000 Class A Shares are subject to a fully vested and immediately exercisable
option (the "Option") that was issued to the reporting person by the Company on
November 5, 1999 in partial consideration for his services as Chairman of the
Company. The Option was previously exercised with respect to an additional
100,000 Class A Shares that were originally subject to the Option and such
shares were sold in the open market. The reporting person paid the US$51.00 per
share purchase price under the Option with respect to such Class A Shares using
personal funds.
726,829 Class A Shares are issuable upon conversion of an equivalent number of
Class B Shares held by 445327, which is wholly owned by the Stronach Trust as
more fully described below. 697,929 of such Class B Shares were beneficially
owned by the Stronach Trust prior to February 16, 1996. Beneficial ownership of
the remainder of such Class B Shares was acquired during the period from
February 16, 1996 to April 1, 2002 in the open market using internally available
funds. Such Class B Shares represent approximately 55.4% of the total voting
power of the outstanding Class A Shares and Class B Shares of the Company.
Accordingly, by virtue of its control over such shares, the Stronach Trust is
able to direct the election of all of the directors of the Company and exercises
control over the Company.
A total of 4,757,882 Class A Shares are held or issuable upon conversion of
Class B Shares held by the Employees Deferred Profit Sharing Plan (US) (the "US
DPSP") of the Company and the Magna Deferred Profit Sharing Plan (Canada) (the
"Canadian DPSP" and, together with the US DPSP, the "Plans"). A total of 632,335
of such Class A Shares were acquired by the Plans pursuant to the privatization
transactions described above. With the exception of the Class A Shares acquired
pursuant to such privatization transactions, the Class A and Class B Shares held
by the Plans were acquired through contributions from the Magna International
Inc. Trust, which in turn acquired such shares in the open market using funds
contributed to such trust by the Company. Class A and Class B Shares are
purchased and sold by the Plans in the ordinary course of their investment
activities on behalf of employees of the Company participating in the Plans on
an ongoing basis. The reporting person is not a beneficiary of either Plan.
91,740 Class A Shares are issuable upon conversion of an equivalent number of
Class B Shares held by 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. The Class B Shares owned by 865714 are held for such general
purpose. A portion of such Class B Shares were acquired from a departing
executive of the Company in a private transaction and the remainder of such
Class B Shares were acquired in the open market, in each case using internally
available funds.
4
33,880 Class A Shares are held by 1620364 Ontario Inc. ("1620364"), 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. The Class A Shares owned by 1620364 are held for such
general purpose. Such Class A Shares were acquired in exchange for Class A
Subordinate Voting Shares of Intier in the privatization transaction described
above relating to Intier.
The reporting person (in his capacity as Chairman of the Board of the Company or
otherwise) 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 reporting person 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, the reporting person currently has no
plans or proposals, in his capacity as a shareholder, 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 the reporting person in
his capacity as a director and/or officer of the Company.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The reporting person beneficially owns 100,000 Class A Shares
directly as a result of holding the Option.
The reporting person acts as one of four trustees of the Stronach
Trust. The remaining trustees of the Stronach Trust are Elfriede
Stronach, the reporting person's spouse; Belinda Stronach, the
reporting person's daughter; and Andrew Stronach, the reporting
person's son. The reporting person 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 the reporting person. The Stronach Trust owns all of the
outstanding shares of 445327. 445327 holds 726,829 Class B Shares of
the Company, such shares representing approximately 55.4% of the
total votes carried by the Class A Shares and the Class B Shares.
865714 beneficially owns 91,740 Class A Shares issuable upon
conversion of an equivalent number of Class B Shares held by it,
with respect to which Class B Shares the Company exercises
dispositive power pursuant to a unanimous shareholder agreement.
1620364 beneficially owns 33,880 Class A Shares, with respect to
which Class A Shares the Company exercises dispositive power
pursuant to a unanimous shareholder agreement.
The reporting person acts as one of the three trustees of the US
DPSP, which holds 2,266,768 Class A Shares.
The Canada Trust Company is the trustee of the Canadian DPSP, which
beneficially owns 2,491,114 Class A Shares (including 111,444 Class
A Shares issuable upon conversion of an equivalent number of Class B
Shares held by it). The Canada Trust Company has the power to vote
the Class A Shares held by the Canadian DPSP. However, as Chairman
of the Company, the reporting person has the right to direct The
Canada Trust Company with respect to the voting and disposition of
the Class A Shares held by the Canadian DPSP.
Elfriede Stronach, the reporting person's spouse, holds 1300 Class A
Shares. The reporting person disclaims beneficial ownership of such
Class A Shares and they are excluded from the beneficial ownership
position of the reporting person described herein.
The filing of this amendment shall not be construed as an admission
that the reporting person beneficially owns any Class A Shares that
are or may be deemed to be beneficially owned by
5
S&Co., the Stronach Trust, 445327, the Company, 865714, 1620364 or
the Plans. Without limitation of the foregoing, the reporting person
disclaims beneficial ownership of such Class A Shares for purposes
other than U.S. securities law purposes. Assuming the beneficial
ownership of all such Class A Shares, the reporting person is the
beneficial owner of 6,185,556 Class A Shares, representing 5.7% of
the Class A Shares (determined in accordance with Rule 13d-3).
(b) The reporting person may be deemed to have sole voting and
dispositive power with respect to all Class A Shares that are the
subject of this statement.
(c) During the sixty days preceding the filing of this statement, the
reporting person may be deemed to have acquired beneficial ownership
of (i) 594,763 Class A Shares received by the Plans pursuant to the
privatization transactions described in Item 4 and (ii) 365,225
Class A Shares issuable, as a consequence of such transactions, upon
exercise of Target Options held by S&Co.
(d)-(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
On March 4, 2005, the Stronach Trust, as sole shareholder of 445327, adopted two
representative designations with respect to 445437 under Section 102(2) of the
Business Corporations Act (Ontario). The first designation (the "First
Designation") appointed the reporting person as 445327's authorized
representative to exclusively represent 445327 at all meetings of the
shareholders of the Company and to vote all shares of capital stock of the
Company owned by 445327 solely in the manner directed by the Stronach Trust.
Prior to this designation, the reporting person exercised such voting power, in
accordance with the directions of the Stronach Trust, as sole director and
officer of 445327, positions which he resigned simultaneously with his
appointment as representative. The First Designation terminates automatically
upon the death or disability of the reporting person and upon the occurrence of
certain other events ("Transition Events").
The second designation (the "Second Designation" and, together with the First
Designation, the "Designations") appointed Belinda Stronach, effective upon the
occurrence of a Transition Event, as 445327's authorized representative with
respect to shares of the Company capital stock held by 445327 on similar terms,
except that if the Second Designation becomes effective, Ms. Stronach will not
be bound to vote shares of capital stock of the Company owned by 445327 in the
manner directed by the Stronach Trust. Belinda Stronach is the reporting
person's daughter.
Following the adoption of the designations, Belinda Stronach became a
shareholder of 445327 and 445327, the Stronach Trust and Ms. Stronach entered
into a unanimous shareholder agreement with respect to 445327 (the "USA"). The
combined effect of the Designations and the USA is to provide for (i) the voting
of the Company capital stock held by 445327 in the manner directed by the
Stronach Trust prior to the occurrence of a Transition Event, (ii) the voting of
the Company capital stock held by 445327 in Belinda Stronach's discretion
following the occurrence of a Transition Event, (iii) the revocation of either
or both Designations and the termination of the USA at the Stronach Trust's
discretion prior to the occurrence of a Transition Event and (iv) the revocation
of the Second Designation and the termination of the USA only with Belinda
Stronach's agreement following the occurrence of a Transition Event. The USA
appoints Belinda Stronach as the sole officer and director of 445327.
6
The foregoing arrangements are not expected to result in any change in the
manner in which capital stock of the Company held by 445327 is voted prior to
the occurrence of a Transition Event. The purpose of the foregoing arrangements
is to provide for succession of control over the capital stock of the Company
held by 445327 upon the occurrence of a Transition Event, and prior to the
occurrence of a Transition Event such arrangements are revocable by the Stronach
Trust.
The description herein of the Designations and the USA and the matters
contemplated thereby is qualified in its entirety by reference to the
Designations and the USA.
7
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A Resolutions of the Sole Shareholder of 445327 (First Designation)
Exhibit B Resolutions of the Sole Shareholder of 445327 (Second Designation)
Exhibit C Shareholder Agreement dated as of March 4, 2005 among 445327, the
Stronach Trust and Belinda Stronach.
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated as of April 8, 2005
/s/ Frank Stronach
-------------------------------
Frank Stronach
8
RESOLUTIONS OF THE SOLE SHAREHOLDER
OF
445327 ONTARIO LIMITED
(the "Corporation")
APPOINTMENT OF FRANK STRONACH AS REPRESENTATIVE OF THE CORPORATION
WHEREAS
A. The Corporation holds shares in the capital stock of Magna International
Inc. ("Magna") and MI Developments Inc. ("MID") and may from time to time
acquire and hold shares of other bodies corporate which are, or in the
future become, successors to all or part of the business or undertaking of
Magna or MID from time to time (collectively, the "Magna Entities"),
including any shares held directly or indirectly by any affiliate or
subsidiary (as such terms are defined in the Business Corporations Act
(Ontario) ("OBCA")) of Magna or MID;
B. Each of the Corporation, Magna and MID are incorporated under and are
governed by the OBCA;
C. The Corporation wishes to authorize an individual (the "Representative")
to represent it at meetings of the shareholders of Magna and MID and, to
the extent that the Corporation owns shares in the capital stock thereof,
at meetings of any other Magna Entity; and
D. The discretion, rights and powers of the directors of the Corporation
(including each individual who is now a director of the Corporation or is
subsequently elected or appointed a director of the Corporation) to
manage, and supervise the management of, the business and affairs of the
Corporation, including the exercise of the rights and powers granted to
the Representative under these resolutions, is restricted by a unanimous
shareholder declaration made by the sole shareholder of the Corporation as
of April 19, 1991, as amended, superseded and replaced from time to time
by any other unanimous shareholder declaration or unanimous shareholder
agreement (the "USD");
NOW THEREFORE BE IT RESOLVED that:
1. Frank Stronach is hereby appointed as the Corporation's authorized
representative to exclusively represent the Corporation at all meetings of
the shareholders of Magna and to act on the Corporation's behalf at all
such meetings, and he is hereby authorized to exercise on behalf of the
Corporation all the powers it could exercise if it were an individual
holder of shares in the capital stock of Magna, including the right and
power to exercise all voting rights attaching or applicable to any shares
in the capital stock of Magna owned directly by the Corporation from time
to time and to exercise those rights and powers by, without limitation,
executing and delivering on behalf of the Corporation
all necessary or desirable documents or instruments in writing, including
all proxies, ballots and resolutions in writing in lieu of an actual
meeting of shareholders, subject always to the requirement that those
rights and powers shall only be exercised by him in the manner directed by
the Trustees of Stronach Trust in accordance with Section V(I) of the
trust indenture constituting Stronach Trust dated the 18th day of
February, 1991 (the "Trust Indenture") and otherwise in accordance with
the provisions of the Trust Indenture.
2. Subject to the terms hereof, Frank Stronach is hereby appointed as the
Corporation's authorized representative to exclusively represent the
Corporation at all meetings of the shareholders of MID and to act on the
Corporation's behalf at all such meetings, and he is hereby authorized to
exercise on behalf of the Corporation all the powers it could exercise if
it were an individual holder of shares in the capital stock of MID,
including the right and power to exercise all voting rights attaching or
applicable to any shares in the capital stock of MID owned directly by the
Corporation from time to time and to exercise those rights and powers by,
without limitation, executing and delivering on behalf of the Corporation
all necessary or desirable documents or instruments in writing, including
all proxies, ballots and resolutions in writing in lieu of an actual
meeting of the shareholders subject always to the requirement that those
rights and powers shall only be exercised by him in the manner directed by
Stronach Trust.
3. Frank Stronach is hereby appointed as the Corporation's authorized
representative to exclusively represent the Corporation at all meetings of
the shareholders of any of the other Magna Entities (if, as and when any
shares in the capital stock of any Magna Entity are acquired directly by
the Corporation) and to act on the Corporation's behalf at all such
meetings, and he is hereby authorized to exercise on behalf of the
Corporation all the powers it could exercise if it were an individual
holder of shares in the capital stock of any Magna Entity, including the
right and power to exercise all voting rights attaching or applicable to
any shares in the capital stock of any Magna Entity owned directly by the
Corporation from time to time and to exercise those rights and powers by,
without limitation, executing and delivering on behalf of the Corporation
all necessary or desirable documents or instruments in writing, including
all proxies, ballots and resolutions in writing in lieu of an actual
meeting of shareholders subject always to the requirement that those
rights and powers shall only be exercised by him in the manner directed by
Stronach Trust.
4. The appointments and authorizations under paragraphs 1, 2 and 3 of this
resolution are made, as applicable depending on the governing corporate
statute of the corporation or corporations whose shares are described in
paragraphs 1, 2 and 3, pursuant to subsection 102(2) of the OBCA,
subsection 140(2) of the Canada Business Corporations Act ("CBCA") and the
provisions of any other applicable corporate statute that are
substantially the same as subsection 102(2) of the OBCA and 140(2) of the
CBCA, as the case may be ("collectively, the "Applicable Provisions"). The
Corporation shall prepare or cause to be prepared all such other documents
and instruments as are necessary from time to time to give effect to any
appointments and authorizations made under paragraphs 1, 2 and 3 pursuant
to the Applicable Provisions.
- 2 -
5. The appointments and authorizations under paragraphs 1, 2 and 3 of this
resolution shall automatically terminate and, subject to paragraph 6
below, shall be of no force or effect immediately upon (i) the death of
Frank Stronach; (ii) the mental incompetency of Frank Stronach; (iii) the
voluntary resignation of Frank Stronach as the appointee hereunder; (iv)
the voluntary resignation of Frank Stronach as Trustee of Stronach Trust;
and (v) the failure or inability of Frank Stronach to exercise his powers
as and when required under the appointments made herein, which failure or
inability is not due to his death, mental incompetency or abstention. For
the purposes of this resolution, Frank Stronach shall be deemed to be
mentally incompetent upon the occurrence of any one or more of the
following events (in each case referred to in this resolution as, a
"Competency Decision"):
(a) a Court has found him to be incapable of managing property in a
proceeding under the Substitute Decisions Act (S.O. 1992 as amended,
superseded, substituted or replaced from time to time, hereinafter
referred to as the "SDA");
(b) an assessor (as such term is defined by the Regulations to the SDA)
has issued a certificate of incapacity certifying that he is
incapable of managing property pursuant to the SDA;
(c) a certificate of incapacity has been issued under the Mental Health
Act (R.S.O. 1990, as amended, superseded, substituted or replaced
from time to time, hereinafter referred to as the "MHA") certifying
that he is incapable of managing property; or
(d) a finding, certification, declaration, judgement or decision with
regard to Frank Stronach's capacity to manage property has been
made, on substantially the same basis as provided under the SDA or
the MHA, pursuant to the applicable laws of any other jurisdiction
that has proper jurisdiction over Frank Stronach's person or
property.
6. In the event that (i) the appointments made hereunder are terminated
pursuant to section 5(v) and Frank Stronach's ability to exercise his
powers as and when required under the appointments made herein are
subsequently restored (where Frank Stronach had previously failed or been
unable to exercise those powers other than by reason of death, mental
incompetency or abstention); or (ii) a Competency Decision is reversed,
rescinded, terminated or otherwise ceases to be of force and effect by way
of Court order or by way of any other procedure under the applicable laws
pursuant to which the Competency Decision was issued, (in the case of (i)
and (ii), each a "Reversal Event") the appointments and authorizations
under paragraphs 1, 2 and 3 of this resolution shall again become
enforceable and effective as of the date on which the Reversal Event
occurs without prejudice to any actions taken by or on behalf of the
Corporation in the period in which the appointments and authorizations
hereunder were terminated.
7. The exercise by Frank Stronach on behalf of the Corporation of all of the
power it could exercise if it were an individual holder of shares in the
capital stock of Magna, including the right and power to exercise all
voting rights attaching or applicable to any shares in
- 3 -
the capital stock of Magna, MID and any other Magna Entities, as
applicable, and the exercise by Frank Stronach of the voting rights
attaching to the Magna, MID or any other Magna Entity shares shall be
conclusive evidence that the exercise of such rights and powers and the
voting of such shares were carried out by him in the manner directed by
the Trustees of Stronach Trust and in accordance with the relevant
provisions of the Trust Indenture.
8. This resolution may be executed by the parties in several counterparts
each of which when so executed and delivered shall be deemed to be an
original, and all such counterparts shall together constitute one and the
same instrument. This resolution may be delivered by fax or other form of
electronic means of recorded communication.
THE UNDERSIGNED, being the sole shareholder of the Corporation exercising the
powers of the board of directors of the Corporation by virtue of the USD, hereby
passes the foregoing resolutions pursuant to the provisions of the OBCA.
DATED the 4th day of March, 2005.
TRUSTEES OF STRONACH TRUST
/s/ Frank Stronach
-----------------------------------
Frank Stronach - Trustee
/s/ Elfriede Stronach
-----------------------------------
Elfriede Stronach - Trustee
/s/ Belinda Stronach
-----------------------------------
Belinda Stronach - Trustee
/s/ Andrew Stronach
-----------------------------------
Andrew Stronach - Trustee
- 4 -
RESOLUTIONS OF THE SOLE SHAREHOLDER
OF
445327 ONTARIO LIMITED
(the "Corporation")
APPOINTMENT OF BELINDA STRONACH AS REPRESENTATIVE OF THE CORPORATION
WHEREAS
A. The Corporation holds shares in the capital stock of Magna International
Inc. ("Magna") and MI Developments Inc. ("MID") and may from time to time
acquire and hold shares of other bodies corporate which are, or in the
future become, successors to all or part of the business or undertaking of
Magna or MID from time to time (collectively, the "Magna Entities"),
including any shares held directly or indirectly by any affiliate or
subsidiary (as such terms are defined in the Business Corporations Act
(Ontario) ("OBCA")) of Magna or MID;
B. Each of the Corporation, Magna and MID are incorporated under and are
governed by the OBCA;
C. The Corporation has authorized and appointed Frank Stronach (the
"Appointee") to represent it at meetings of the shareholders of Magna and
MID and, to the extent that the Corporation owns shares in the capital
stock thereof, at meetings of shareholders of any other Magna Entity
pursuant to a resolution of the sole shareholder of the Corporation of
even date herewith (the "FS Appointment");
D. The Corporation wishes to authorize Belinda Stronach to act as the
representative of the Corporation at meetings of the shareholders upon the
occurrence of a Transition Event as defined in paragraph 7 hereof; and
E. The discretion, rights and powers of the directors of the Corporation
(including each individual who is now a director of the Corporation or is
subsequently elected or appointed a director of the Corporation) to
manage, and supervise the management of, the business and affairs of the
Corporation, including the exercise of the rights and powers granted to
Belinda Stronach under these resolutions, is restricted, in part, by a
unanimous shareholder declaration made by the sole shareholder of the
Corporation as of April 19, 1991, as amended, superseded and replaced from
time to time by any other unanimous shareholder declaration or unanimous
shareholder agreement (the "USD");
NOW THEREFORE BE IT RESOLVED that:
1. Upon , and only upon, the occurrence of a Transition Event (as defined
herein):
(a) Belinda Stronach is hereby, and shall be deemed to be, appointed the
Corporation's authorized representative to exclusively represent the
Corporation
at all meetings of the shareholders of Magna and to act on the
Corporation's behalf at all such meetings, and she is hereby
authorized to exercise on behalf of the Corporation all the powers
it could exercise if it were an individual holder of shares in the
capital stock of Magna, including the right and power to exercise
all voting rights attaching or applicable to any shares in the
capital stock of Magna owned directly by the Corporation from time
to time and to exercise those rights and powers by, without
limitation, executing and delivering on behalf of the Corporation
all necessary or desirable documents or instruments in writing,
including all proxies, ballots and resolutions in writing in lieu of
an actual meeting of shareholders, subject always to the requirement
that those rights and powers shall at all times be exercised by her
in accordance with the requirements set out in Section V(I) of the
trust indenture constituting Stronach Trust dated the 18th day of
February, 1991 (the "Trust Indenture"); and
(b) Belinda Stronach is hereby, and shall be deemed to be, appointed the
Corporation's authorized representative to exclusively represent the
Corporation at all meetings of the shareholders of MID and to act on
the Corporation's behalf at all such meetings, and she is hereby
authorized to exercise on behalf of the Corporation all the powers
it could exercise if it were an individual holder of shares in the
capital stock of MID, including the right and power to exercise all
voting rights attaching or applicable to any shares in the capital
stock of MID owned directly by the Corporation from time to time and
to exercise those rights and powers by, without limitation,
executing and delivering on behalf of the Corporation all necessary
or desirable documents or instruments in writing, including all
proxies, ballots and resolutions in writing in lieu of an actual
meeting of shareholders; and
(c) Belinda Stronach is hereby, and shall be deemed to be, appointed as
the Corporation's authorized representative to exclusively represent
the Corporation at all meetings of the shareholders of any of the
other Magna Entities (if, as and when any shares in the capital
stock of any Magna Entity are acquired directly by the Corporation)
and to act on the Corporation's behalf at all such meetings, and she
is hereby authorized to exercise on behalf of the Corporation all
the powers it could exercise if it were an individual holder of
shares in the capital stock of any Magna Entity, including the right
and power to exercise all voting rights attaching or applicable to
any shares in the capital stock of any Magna Entity owned directly
by the Corporation from time to time and to exercise those rights
and powers by, without limitation, executing and delivering on
behalf of the Corporation all necessary or desirable documents or
instruments in writing, including all proxies, ballots and
resolutions in writing in lieu of an actual meeting of shareholders.
Notwithstanding the provisions of paragraph 1(b) above, it is acknowledged
that the shareholders of the Corporation have expressly reserved the
right, exercisable at any time before the occurrence of a Transition Event
or after a Reversal Event (as defined herein) in respect of Frank
Stronach, to appoint Andrew Stronach as the Corporation's authorized
representative with respect to all meetings of the shareholders of MID (on
substantially
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the same terms as the appointment in favour of Belinda Stronach under
these resolutions) and in which case paragraph 1(b) hereof shall not have
any further force or effect and these resolutions shall otherwise be
deemed to be amended accordingly.
Subject to the immediately foregoing paragraph, upon the occurrence of a
Transition Event, the appointments under this paragraph 1 shall be
effective instantaneously and without the requirement of any further
action by or documentation from any of the Corporation or its directors,
officers or shareholders.
2. The appointments and authorizations under paragraph 1 of this resolution
are made, as applicable depending on the governing corporate statute of
the corporation or corporations whose shares are described in
subparagraphs 1(a), 1(b) and 1(c), pursuant to subsection 102(2) of the
OBCA, subsection 140(2) of the Canada Business Corporations Act ("CBCA")
and the provisions of any other applicable corporate statute that are
substantially the same as subsection 102(2) of the OBCA and 140(2) of the
CBCA, as the case may be ("collectively, the "Applicable Provisions"). The
Corporation shall prepare or cause to be prepared all such other documents
and instruments as are necessary from time to time to give effect to any
appointments and authorizations made under paragraphs 1(a), 1(b) and 1(c)
pursuant to the Applicable Provisions.
3. The appointments and authorizations under paragraph 1 of this resolution
shall automatically terminate and, subject to paragraph 4 below, shall be
of no force or effect immediately upon the death, or mental incompetency
of Belinda Stronach. For the purposes of this resolution, a person shall
be deemed to be mentally incompetent upon the occurrence of any one or
more of the following events (in each case referred to in this resolution
as, a "Competency Decision"):
(a) a Court has found such person to be incapable of managing property
in a proceeding under the Substitute Decisions Act (S.O. 1992 as
amended, superseded, substituted or replaced from time to time,
hereinafter referred to as the "SDA");
(b) an assessor (as such term is defined by the Regulations to the SDA)
has issued a certificate of incapacity certifying that such person
is incapable of managing property pursuant to the SDA;
(c) a certificate of incapacity has been issued under the Mental Health
Act (R.S.O. 1990, as amended, superseded, substituted or replaced
from time to time, hereinafter referred to as the "MHA") certifying
that such person is incapable of managing property; or
(d) a finding, certification, declaration, judgement or decision with
regard to such person's capacity to manage property has been made,
on substantially the same basis as provided under the SDA or the
MHA, pursuant to the applicable laws of any other jurisdiction that
has proper jurisdiction over their person or property.
- 3 -
4. For the purposes of this resolution, a "Reversal Event" means the
reversal, rescission, or termination of a Competency Decision in respect
of any person by way of Court order or by way of any other procedure under
the applicable laws pursuant to which the Competency Decision was issued,
and additionally means in the case of Frank Stronach only, that Frank
Stronach's ability to exercise his powers, as and when required under the
FS Appointment are subsequently restored (where Frank Stronach had
previously failed or been unable to exercise those powers other than by
reason of death, mental incompetency or abstention).
5. If Belinda Stronach is subject to a Reversal Event, the appointments and
authorizations under paragraph 1 of this resolution shall again become
enforceable and effective as of the date upon which the Reversal Event
occurs.
6. If Frank Stronach is subject to a Reversal Event, the appointments and
authorizations under paragraph 1 of this resolution shall immediately
cease without prejudice to any actions taken by Belinda Stronach pursuant
to the appointments and authorizations hereunder, and without derogation
from this resolution and from the subsequent appointment and authorization
of Belinda Stronach under paragraph 1 upon the recurrence of a Transition
Event.
7. For the purposes of this resolution, a "Transition Event" means (i) the
death of Frank Stronach; (ii) the mental incompetency of Frank Stronach
for purposes of the FS Appointment; (iii) the voluntary resignation of
Frank Stronach as the appointee under the FS Appointment; (iv) the
voluntary resignation of Frank Stronach as Trustee of Stronach Trust; and
(v) the failure or inability of Frank Stronach to exercise his powers as
and when required under the FS Appointment not due to his death, mental
incompetency or abstention.
8. This resolution may be executed by the parties in several counterparts
each of which when so executed and delivered shall be deemed to be an
original, and all such counterparts shall together constitute one and the
same instrument. This resolution may be delivered by fax or other form of
electronic means of recorded communication.
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THE UNDERSIGNED, being the sole shareholder of the Corporation exercising the
powers of the board of directors of the Corporation by virtue of the USD, hereby
passes the foregoing resolutions pursuant to the provisions of the OBCA.
DATED the 4th day of March, 2005.
TRUSTEES OF STRONACH TRUST
/s/ Frank Stronach
-----------------------------------
Frank Stronach - Trustee
/s/ Elfriede Stronach
-----------------------------------
Elfriede Stronach - Trustee
/s/ Belinda Stronach
-----------------------------------
Belinda Stronach - Trustee
/s/ Andrew Stronach
-----------------------------------
Andrew Stronach - Trustee
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SHAREHOLDER AGREEMENT
THIS AGREEMENT made as of the 4th day of March, 2005,
B E T W E E N
445327 ONTARIO LIMITED, a corporation incorporated under the laws of
the Province of Ontario,
(the "Corporation")
OF THE FIRST PART
-and-
TRUSTEES OF STRONACH TRUST
(the "Trust")
OF THE SECOND PART
-and-
BELINDA STRONACH
("Belinda")
OF THE THIRD PART
WHEREAS:
A. The Corporation is a corporation incorporated under and governed by the
OBCA;
B. The authorized capital of the Corporation consists of an unlimited number
of shares of one class designated as Class A special shares, an unlimited
number of shares of one class designated as Class B special shares and an
unlimited number of shares of one class designated as common shares;
C. As of the date of this Agreement the issued and outstanding shares of the
Corporation are owned beneficially and of record as follows:
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Shareholder Class of Shares Number of Shares
----------- --------------- ----------------
Trust Common 1,918,306
Class B special 5,408,950
Belinda Class A special 100
(The Class A special shares owned by Belinda, including any acquired in
addition to those noted above, shall hereinafter be referred to as the
"Class A Special Shares");
D. Prior to the execution hereof, the Trustees of the Trust passed a
resolution of same date, on behalf of the Trust as sole shareholder of the
Corporation (and acting on behalf of the directors of the Corporation by
authority of the unanimous shareholder declaration made as of April 19,
1991, as amended, superseded and replaced from time to time) pursuant to
section 102(2) of the OBCA (and other similar legislation) to authorize
Frank Stronach to represent it at meetings of shareholders of Magna, MID,
and other Magna Entities;
E. Prior to the execution hereof, the Trustees of the Trust passed a further
resolution of same date, on behalf of the Trust as sole shareholder of the
Corporation (and acting on behalf of the directors of the Corporation by
authority of the unanimous shareholder declaration made as of April 19,
1991, as amended, superseded and replaced from time to time) pursuant to
section 102(2) of the OBCA (and other similar legislation) to authorize
Belinda to represent it at meetings of shareholders of Magna, MID, and
other Magna Entities upon the occurrence of a Transition Event;
F. The parties are entering into this Agreement to provide for the governance
of the Corporation and to state their obligations with respect to the
Corporation and to each other in relation to their respective shareholding
in the Corporation;
NOW THEREFORE for good and valuable consideration now paid by each of the
parties to the other (the receipt and sufficiency of which is hereby
acknowledged) and for the premises and covenants herein contained, the
undersigned parties agree as follows:
1. Definitions
In this Agreement, (in addition to those other words and phrases also
defined and set out in bold), unless the context expressly or by necessary
implication requires otherwise, the following words and phrases shall have the
meanings indicated and grammatical variations shall have the corresponding
meanings:
"Applicable Provisions" means the provisions of any other corporate
statute that are substantially the same and purport to have the same
effect as subsection 102(2) of the OBCA and subsection 140(2) of the CBCA;
"Business Day" means any day that is not a Saturday, a Sunday or a
statutory holiday under the laws of the Province of Ontario;
"CBCA" means Canada Business Corporations Act, as amended;
- 3 -
"Competency Decision" means any decision, determination, certification,
judgment, declaration or finding under any of paragraphs (a) to (d) in the
definition of "Mental Incompetency" below.
"First Authorization" means the appointment of Frank Stronach as a
representative of the Corporation by resolution authorized under
subsection 102(2) of the OBCA as described in Recital D above, a copy of
which is attached as Schedule "A";
"Insolvency" means, in relation to any person, that such person makes a
proposal or files an assignment for the benefit of creditors or is
adjudged bankrupt or voluntarily seeks relief or protection from his or
her creditors under or pursuant to any bankruptcy, insolvency or
reorganization law of Canada or any province thereof or any other
jurisdiction;
"Magna" means Magna International Inc., and its successors by merger or
amalgamation;
"Magna Entities" means other bodies corporate which are, or in the future
become, successors to all or part of the business or undertaking of Magna
or MID from time to time, the shares in the capital stock of which have
been previously owned directly or indirectly by Magna or MID, including
any shares held directly or indirectly by any affiliate or subsidiary (as
such terms are defined in the OBCA) of Magna or MID;
"Mental Incompetency" means, in relation to any individual, that any one
or more of the following events has occurred with respect to such
individual:
(a) a Court has found such individual to be incapable of managing
property in a proceeding under the Substitute Decisions Act (S.O.
1992 as amended, superseded, substituted or replaced from time to
time, hereinafter referred to as the "SDA");
(b) an assessor (as such term is defined by the Regulations to the SDA)
has issued a certificate of incapacity certifying that such person
is incapable of managing property pursuant to the SDA;
(c) a certificate of incapacity has been issued under the Mental Health
Act (R.S.O. 1990, as amended, superseded, substituted or replaced
from time to time, hereinafter referred to as the "MHA") certifying
that such person is incapable of managing property; or
(d) a finding, certification, declaration, judgment or decision with
regard to such individual's capacity to manage property has been
made, on substantially the same basis as provided under the SDA or
the MHA, pursuant to the applicable laws of any other jurisdiction
that has proper jurisdiction over such individual's person or
property;
"MID" means MI Developments Inc., and its successors by merger or
amalgamation;
"MID Authorization" has the meaning ascribed thereto in section 4 of this
Agreement;
- 4 -
"OBCA" means Business Corporations Act (Ontario), as amended;
"Ordinary Resolution" means (i) a resolution passed by Shareholders
holding shares representing not less than 51% of the votes attached to all
of the Voting Shares at a duly convened meeting of the Shareholders; or
(ii) an instrument or counterpart instruments executed in writing by
Shareholders holding shares representing not less than 51% of the votes
attached to all of the Voting Shares;
"Reversal Event" means the reversal, rescission, or termination of a
Competency Decision in respect of any person by way of Court order or by
way of any other procedure under the applicable laws pursuant to which the
Competency Decision was issued, and additionally means in the case of
Frank Stronach only, that Frank Stronach's ability to exercise his powers,
as and when required under the First Authorization, are subsequently
restored (where Frank Stronach had previously failed or been unable to
exercise those powers other than by reason of death, Mental Incompetency
or abstention);
"Second Authorization" means the appointment of Belinda Stronach as a
representative of the Corporation by resolution authorized under
subsection 102(2) of the OBCA as described in Recital E above, a copy of
which is attached as Schedule "B";
"Shareholders" means the Trust and Belinda and any other person who
purchases or otherwise acquires any share or shares in the capital stock
of the Corporation by any means permitted under the terms and conditions
of this Agreement, and "Shareholder" means any one of them;
"Transition Event" means (i) the death of Frank Stronach; (ii) the Mental
Incompetency of Frank Stronach; (iii) the voluntary resignation of Frank
Stronach as the appointee under the First Authorization; (iv) the
voluntary resignation of Frank Stronach as Trustee of Stronach Trust; and
(v) the failure by, or the inability of, Frank Stronach to exercise his
powers as and when required under the First Authorization not due to his
death, Mental Incompetency or abstention; and
"Voting Shares" means the common shares in the capital stock of the
Corporation and any other shares in the capital stock of the Corporation
that entitle the holder thereof to vote at all meetings of Shareholders.
2. Conduct of the Affairs of the Corporation
(a) Restriction of Discretion and Powers of the Directors -
Notwithstanding any other provision of this Agreement, the
discretion and powers of the directors of the Corporation (including
each individual who is now a director of the Corporation or is
subsequently elected or appointed a director of the Corporation) to
manage, and supervise the management of, the business and affairs of
the Corporation, whether such discretion or powers arise under the
OBCA, the articles or by-laws of the Corporation, or otherwise, are
hereby restricted to the fullest extent permitted by law.
- 5 -
(b) Power - The Shareholders shall, at all times, have full and complete
discretion and power to manage, and supervise the management of, the
business and affairs of the Corporation to the fullest extent
permitted by law, and shall have all the rights, powers, duties and
liabilities which the directors would have had but for this section
of this Agreement.
(c) Exercise of Powers - The rights, powers and duties of the directors
of the Corporation which the Shareholders have hereunder assumed,
including the right and power to in any manner alter, revoke or
replace any or all of the First Authorization, the Second
Authorization and, if applicable, the MID Authorization, shall be
exercised, except as set out in section 5 of this Agreement and
unless otherwise specifically provided under this Agreement, by
unanimous consent of the Shareholders (whether or not their shares
otherwise carry the right to vote), such consent to be evidenced by
an instrument or instruments in writing signed by all the
Shareholders.
(d) Rights and Powers as Shareholders - The rights and powers of the
Shareholders, in their capacity as shareholders of the Corporation
shall be exercised, unless otherwise specifically provided under
this Agreement, in accordance with the OBCA.
3. Corporate Matters
The parties agree to cause such meetings of the Corporation to be held,
resolutions passed, by-laws enacted, agreements and other documents signed and
things performed or done as may be required to provide for the following
arrangements in connection with the affairs of the Corporation:
(a) Number of Directors - the board of directors of the Corporation
shall, for so long as Belinda is a shareholder, consist of one
director.
(b) Election of Directors - At such times as she is qualified to serve
as a director of the Corporation pursuant to the OBCA while this
Agreement is in force, Belinda shall be the sole director of the
Corporation and the Shareholders shall vote all of their Voting
Shares or cause to be voted all of their Voting Shares in the
capital of the Corporation to elect her as the sole director of the
Corporation. If Belinda ceases to be a director of the Corporation
during the term of the First Authorization, then Frank Stronach (or
a nominee of his choice) shall be nominated as the sole director of
the Corporation to replace Belinda and the Shareholders shall vote
all of their Voting Shares or cause to be voted all of their Voting
Shares in the capital of the Corporation to elect Frank Stronach (or
his chosen nominee) as the sole director of the Corporation until
such time as Belinda again qualifies to serve as a director of the
Corporation while this Agreement is in effect, at which time the
Shareholders shall re-elect her as the sole director of the
Corporation.
(c) Officers - For so long as she is a director of the Corporation,
Belinda shall be the sole officer of the Corporation and the
Shareholders shall appoint Belinda as the
- 6 -
sole officer of the Corporation to hold the offices of President,
Secretary and Treasurer of the Corporation.
4. MID Authorization
Notwithstanding subsection 2(c) hereof, the Shareholders may by Ordinary
Resolution made at any time prior to the occurrence of a Transition Event, and
at any time after the occurrence of a Reversal Event in respect of Frank
Stronach (but prior to a subsequent Transition Event), appoint Andrew Stronach
as a representative of the Corporation by resolution authorized under subsection
102(2) of the OBCA, subsection 140(2) of the CBCA or under any Applicable
Provisions, to act on the Corporation's behalf at all meetings of the
shareholders of MID and to exercise on its behalf all of the powers it could
exercise if it were an individual holder of shares in the capital stock of MID
(the "MID Authorization"), in which case subsection 1(b) of the Second
Authorization shall be of no force and effect and the First Authorization and
the Second Authorization shall deemed to be amended as necessary to give effect
to the authorizations and appointment of Andrew Stronach provided for hereunder.
For greater certainty, the MID Authorization, if and when issued, shall be on
substantially the same terms and conditions as the Second Authorization
including, in particular, the provision that the appointment should take effect
only upon the occurrence and continuance of a Transition Event.
5. Special Transactions
The provisions of this section 5 shall apply if, prior to the occurrence
of a Transition Event or after the occurrence of a Reversal Event reinstating
Frank Stronach under the First Authorization (but prior to any subsequent
Transition Event), the Corporation wishes to take, or intends or purports to
take, any of the actions described in the following sections 5(i) and (ii) (each
of which being hereinafter referred to in this Agreement as, a "Disposition"):
(i) the sale, lease, exchange, transfer, loan, assignment or other disposition
of any shares of Magna, MID or any other Magna Entity held by the Corporation;
or (ii) the pledge by the Corporation of, or the granting by the Corporation of
any charge, lien, encumbrance or other security interest over or with respect
to, any shares of Magna, MID or any other Magna Entity held by the Corporation.
Without limiting the generality of the foregoing, the provisions of this section
5 shall apply, during the relevant time periods, to all considerations,
decisions and determinations by the Corporation with respect to all possible,
proposed and actual Dispositions, including the Corporation's decision whether
to accept any third party offer to acquire, or to enter into any agreement to
sell or to grant any right or option to any person to acquire, any shares of
Magna, MID or any other Magna Entity held by the Corporation. The Shareholders
and the Corporation agree to the following provisions which shall govern all
Dispositions:
(a) The Shareholders who hold Voting Shares from time to time are hereby
vested with the exclusive corporate power and authority to legally
bind or obligate the Corporation with respect to all aspects of all
Dispositions. The power and authority granted under this subsection
5(a) shall, notwithstanding subsection 2(c) of this Agreement, be
exercised by the holders of Voting Shares by Ordinary Resolution or
by such greater threshold of approval as may be required pursuant to
applicable laws, including the OBCA, and, upon passage, each such
Ordinary Resolution or other approval, as the case may be, shall be
legally binding upon the Corporation and upon all Shareholders in
accordance with its terms, whether or
- 7 -
not those Shareholders were entitled to vote with respect to, or
voted in favour of, the proposed Ordinary Resolution or other
approval; and
(b) If and to the extent that at any time any Shareholder who holds
Class A Special Shares has any rights or powers that he or she
wishes to exercise pursuant to applicable laws, including subsection
184(6) of the OBCA, to vote his or her Class A Special Shares with
regard to any aspect of any Disposition, each holder of Class A
Special Shares hereby covenants and agrees that he or she shall, in
all circumstances, vote or cause to be voted (or withhold from
voting) his or her Class A Special Shares in the manner that he or
she shall be directed, either specifically or generally, by
instrument in writing signed by the holders of a majority of the
then issued and outstanding Voting Shares; and
(c) The provisions of this section 5 are not intended to restrict in any
respect the exercise by a holder of Class A Special Shares of any
applicable dissent rights under the OBCA.
6. Transition Event / Reversal Event
Upon the occurrence of a Transition Event, and save and except if the
Second Authorization has previously terminated in accordance with its terms, the
parties agree that the Second Authorization will become effective and that
Belinda shall, immediately upon the occurrence of such Transition Event, become
the representative of the Corporation in accordance with the terms of the Second
Authorization. If a Reversal Event occurs with respect to Frank Stronach, then
the parties agree that notwithstanding the foregoing, the First Authorization
and the appointments and authorizations made thereunder shall be reinstated and
shall continue thereafter in full force and effect in accordance with its terms
without derogation from the effect of the First Authorization and without
prejudice to any actions taken by Belinda under the Second Authorization while
it was in effect, and the appointments and authorizations under section 1 of the
Second Authorization will cease to have effect until the occurrence of a
subsequent Transition Event. The foregoing provisions of this section 6 shall
also apply to Andrew Stronach and the MID Authorization, mutatis mutandis, if
the MID Authorization is in existence at the relevant time or times.
7. Indemnity
In consideration hereof, the Trust hereby indemnifies and saves harmless
and agrees to defend at the Trust's expense the directors of the Corporation and
their respective heirs, executors, administrators and other legal
representatives (collectively, the "Indemnitees") from and against all losses,
damages, costs, charges and expenses suffered or incurred by any director by
reason of his or her having acted as a director of the Corporation, including,
without limitation, all amounts paid to settle any action or satisfy any
judgment reasonably incurred by or on behalf of any director in respect of any
civil, criminal or administrative action or proceeding to which such director is
a party (or any such proceeding which might be threatened and in respect of
which such director is threatened to be made a party) by reason of such director
being or having been a director of the Corporation or by reason of any default
in the performance of or breach by the Shareholders of the rights, powers,
duties and liabilities expressed herein to be assumed by the Shareholders
provided that the director has acted honestly and in good faith and
- 8 -
in the best interests of the Corporation. Notwithstanding the foregoing, the
recourse of any Indemnitee under this Agreement (including the indemnification
provisions hereunder), and the liability of each of the Trustees of the Trust to
the Indemnitee under this Agreement, shall, despite the legal nature of any
action, suit, right, claim, relief or remedy brought or asserted by any
Indemnitee against any Trustee of the Trust, be limited to the enforcement and
realization by the Indemnitee of his or her legal and equitable rights and
remedies against the property and assets, from time to time, of the Trust. No
Indemnitee shall have any recourse against any of the personal assets, property
or rights of any of the Trustees of the Trust.
8. Right of Purchase
(a) Grant of Option. For value received, Belinda hereby grants to the
Trustees of the Trust, subject to the terms and conditions of this
Agreement, the irrevocable right and option (the "Option") to
purchase from Belinda all the Class A Special Shares held by her at
the time of the exercise of the Option (collectively the "Optioned
Shares") at the price of $100.00 for each Optioned Share.
(b) Expiry of Option. The Option, unless earlier exercised, shall expire
and be null and void on the date (the "Expiration Date") of the
first to occur of the death of either Frank Stronach or Belinda.
(c) Period of Exercise. The Option may be exercised by the Trust, in the
manner provided in subsection 8(d) of this Agreement, at any time
during the period beginning on the date of this Agreement and ending
on the Expiration Date, provided that the Trust's right to exercise
the Option shall be suspended immediately upon the occurrence and
shall remain suspended during the continuance of any Transition
Event (other than as a result of the death of Frank Stronach). For
greater certainty, upon the occurrence of a Reversal Event involving
Frank Stronach, the right of the Trust to exercise the Option shall
be fully reinstated until the earlier of (1) the Expiration Date;
and (2) the date of the occurrence of the next Transition Event.
(d) Manner of Exercise. The exercise of the Option by the Trust shall be
made by written notice of exercise of the Option in respect of all
but not less than all of the Optioned Shares (the "Notice") which
Notice shall be sent to and be deemed to have been received by
Belinda in accordance with the provisions of section 18 of this
Agreement.
(e) Closing. The purchase and sale of the Optioned Shares upon the
exercise of the Option (the "Closing") shall be completed at 2:00
p.m. (Toronto time) on the third Business Day after the date or
deemed date of receipt by Belinda of the Notice (the "Closing Time")
at the place in the Province of Ontario specified in the Notice,
failing which the Closing shall take place at the offices of Miller
Thomson LLP located in the City of Toronto. Payment of the purchase
price for the Optioned Shares shall be made by the presentation at
the Closing Time by the Trust, as purchaser (the "Purchaser") of a
banker's draft or certified cheque payable to Belinda, as vendor
(the "Vendor") against the delivery by the Vendor to the Purchaser
of the following: (i) share certificate(s) representing the Optioned
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Shares, duly endorsed in blank for transfer; (ii) a written warranty
that the Optioned Shares are free and clear of all interests of any
third party, including any options or other rights of purchase,
liens, encumbrances, pledges or other security interests; and (iii)
any other documents or instruments that may be necessary to effect
the completion of the purchase and sale of the Optioned Shares.
Immediately after the Closing, the Corporation shall issue to the
Purchaser a share certificate registered in the name of the
Purchaser representing the Optioned Shares.
(f) Absent Vendor. If the Vendor is not present at the place of closing
on the Closing Date, or is present but fails for any reason
whatsoever to produce and deliver to the Purchaser the certificates
and instruments required under this Agreement, then the price
payable for the Shares of the Vendor may, at the Purchaser's
discretion, within three Business Days be deposited by the Purchaser
into a special account at the Corporation's bank in the name of the
Vendor. Such deposit shall constitute valid and effective payment of
the price for the Shares of the Vendor even though the Vendor may
have encumbered or disposed of his or her Shares and notwithstanding
the fact that a certificate or certificates or assignment or
assignments for any of the Shares or indebtedness may have been
delivered to any pledgee, transferee or other person. If payment of
the price (or portion thereof) for the Shares is deposited under
this subsection 8(f) into a special account at a branch of the
Corporation's Bank in the name of the Vendor, then from and after
the date of such deposit, notwithstanding that certificates and
assignments evidencing the Shares of the Vendor may not have been
delivered to the Purchaser, the purchase of the Shares of the
Vendors shall be deemed to have been fully completed and all right,
title, benefit and interest both at law and in equity of the Vendor
or of any transferee, assignee or any other person having any
interest, legal or equitable therein or thereto whether as a
shareholder or a creditor of the Corporation or otherwise shall
cease and determine, provided, however, that the Vendor shall be
entitled to receive the purchase price so deposited, without
interest, upon delivery to the Corporation of certificates
evidencing the Shares so purchased duly endorsed in blank for
transfer and the other documents and instruments required under this
Agreement.
9. Termination
Subject to the terms hereof, the Agreement shall be terminated and of
shall be no force and effect upon the earlier of:
(a) the date upon which the Trust becomes the sole shareholder of the
Corporation; or
(b) such date upon which all of the Shareholders shall agree to
terminate this Agreement,
provided that such termination shall not affect any obligation of any party
hereto that is, by its terms, intended to survive termination, or that arose
prior to the date of such termination, including, without limitation, any
obligation to indemnify by reason of any matter which has arisen or any
circumstances which have occurred prior to the termination.
- 10 -
In addition, immediately upon the death, Mental Incompetency or Insolvency of
Belinda before the occurrence of a Transition Event or after a Reversal Event
involving Frank Stronach, the provisions of sections 2 and 3 of this Agreement,
in their entirety, shall terminate and shall not be of any further force or
effect. For additional certainty, it is hereby acknowledged and confirmed that
the Insolvency of Belinda shall not, in and of itself, result in the amendment
of, or otherwise affect the terms of, the Second Authorization.
If a Reversal Event occurs in respect of Belinda's Mental Incompetency or if her
Insolvency proceedings conclude and if at that time she continues to own any
Class A Special Shares, then sections 2 and 3 of this Agreement shall thereupon
be fully reinstated without derogation from her rights hereunder and without
prejudice to any actions taken by the Corporation, by any Shareholder or by any
other person during the period of such termination.
10. Redemption of Class A Special Shares
Upon Belinda's death, the Corporation shall be permitted, without the
additional consent or authorization of any person, to redeem for cancellation
all the issued and outstanding Class A Special Shares. Upon Belinda's Mental
Incompetency or Insolvency, the Corporation may, with the consent of Belinda or
her personal legal representatives, as the case may be, redeem for cancellation
the Class A Special Shares. Notwithstanding any such redemption and despite
subsection 9(a), Belinda shall have the right to again subscribe for the number
of Class A Special Shares so redeemed (and the Corporation shall forthwith
reissue to Belinda that number of Class A Special Shares upon receipt by the
Corporation of payment in full of the subscription price therefor) upon the
occurrence of a Reversal Event in the case of her Mental Incompetency or upon
the conclusion of her Insolvency proceedings, provided that such subscription
shall occur within one year from the date of the occurrence of the Reversal
Event with respect to her Mental Incompetency or of the conclusion of her
Insolvency, as the case may be (for purposes of this Agreement, the conclusion
of Belinda's Insolvency shall be deemed to include, without limitation each of
the following (1) the completion of an Insolvency proceeding, in accordance with
applicable laws, that does not result in Belinda acquiring the legal status of a
bankrupt, (2) the issuance of a Court order annulling Belinda's bankruptcy; and
(3) the full and unconditional discharge of Belinda from the legal status of
bankrupt). This Agreement shall be fully reinstated upon the reissue of
Belinda's Class A Special Shares as aforesaid without derogation from her rights
hereunder and without prejudice to any actions taken by the Corporation, by any
Shareholder or by any other person during the period of such termination. The
Corporation shall not redeem, nor accept the retraction of nor permit the
transfer of the Class A Special Shares without Belinda's express consent except
as set out in this section 10 or pursuant to the exercise of the Option or as
otherwise required by law.
11. Survival and Non-Merger
This Agreement, the Schedules, and the indemnity contained herein shall
survive all future amalgamations of the Corporation and shall thereafter
continue and remain in full force and effect as a valid and binding unanimous
shareholder agreement and the amalgamated corporation resulting from the
amalgamation shall be deemed to be a party to this Agreement in place and stead
of the Corporation.
- 11 -
12. Gender
In this Agreement, words importing the singular include the plural and
vice versa and words importing gender include all genders.
13. Waiver
A waiver by any party of any of its rights under this Agreement or of the
performance by any party of any of its obligations under this Agreement shall be
without prejudice to all or any of the other rights under this Agreement of the
party so waiving and shall not constitute a waiver of any of such other rights
or, in any other instance, of the rights so waived or a waiver of the
performance by the party of any of his other obligations hereunder or of the
performance, in any other instance, of the obligations so waived.
14. Time of Essence
Time shall be of the essence of this Agreement and every part hereof.
15. Further Assurances
Each of the parties covenants and agrees that he will sign such further
agreements, assurances, papers and documents, attend such meetings, enact such
by-laws, pass such resolutions and exercise such votes and generally do and
perform or cause to be done and performed such further and other acts and things
that may be reasonably necessary or desirable from time to time in order to give
full effect to this Agreement, and to each and every individual provision
hereof.
16. Severability
If any of the provisions of this Agreement shall be held invalid or
unenforceable by any court having jurisdiction, this Agreement shall be
construed as if not containing those provisions, and the rights and obligations
of the parties hereto should be construed and enforced accordingly.
17. Truth of Recitals
The parties hereby irrevocably and mutually acknowledge and declare that
the statements contained in the recitals to this Agreement are true in substance
and in fact.
18. Notices
If and whenever any party to this Agreement desires to give notice to any
of the others under or in connection with this Agreement, such notice shall be
considered to have been received by the addressee at the time of personal
service on the addressee, if an individual, or otherwise on any director,
officer or trustee of the addressee, or on the date of delivery or transmission,
as the case may be, if delivered by hand or by commercial courier during normal
business hours or if transmitted during normal business hours by telecopy and
addressed as set out below and if received during normal business hours at the
place of receipt, or if not received during normal business hours at the place
of receipt then notice shall be considered to have been received by the
addressee on the next Business Day:
- 12 -
to the Corporation at:
c/o Trustees of Stronach Trust
14785 Bayview Avenue
RR#2, Aurora, ON
L4G 3G8
Attention: President
Telefax: (905) 726-2010
and to the Trust at:
14785 Bayview Avenue
RR#2, Aurora, ON
L4G 3G8
Attention: Frank Stronach
Telefax: +43 (2253) 7879
-and-
Attention: Elfriede Stronach
Telefax: (905) 841-6791
-and-
Attention: Andrew Stronach
Telefax: (905) 726-7169
-and-
Attention: Belinda Stronach
Telefax: (905) 726-2010
and to Belinda at:
14785 Bayview Avenue
RR#2, Aurora, ON
L4G 3G8
Telefax: (905) 726-2010
19. Assignment
This Agreement and the rights and obligations of the parties hereunder may
not be assigned.
20. Enurement and Governing Law
This Agreement and the indemnity contained herein shall enure to the
benefit of and shall remain binding upon the parties hereto each of their
respective heirs, executors, administrators, other legal representatives,
successors and permitted assigns, and shall be governed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein.
- 13 -
21. Amendment in Writing
This Agreement may not be amended except by instrument in writing executed
by all of the parties hereto.
22. Counterparts
This agreement may be executed by the parties in several counterparts each
of which when so executed and delivered shall be deemed to be an original, and
all such counterparts shall together constitute one and the same instrument.
This agreement may be delivered by fax or other form of electronic means of
recorded communication. Notwithstanding the date of the execution and delivery
of any of such several counterparts, their date of execution shall be deemed to
be the date first above written.
[Execution page to follow.]
- 14 -
[Execution page to the shareholder agreement between the undersigned dated the
4th day of March, 2005.]
IN WITNESS WHEREOF the parties have caused this Agreement to be executed
on the date hereof
/s/ Belinda Stronach
---------------------------- -----------------------------------
Witness BELINDA STRONACH
TRUSTEES OF STRONACH TRUST
/s/ Frank Stronach
-----------------------------------
Frank Stronach - Trustee
/s/ Elfriede Stronach
-----------------------------------
Elfriede Stronach - Trustee
/s/ Belinda Stronach
-----------------------------------
Belinda Stronach - Trustee
/s/ Andrew Stronach
-----------------------------------
Andrew Stronach - Trustee
445327 ONTARIO LIMITED
By: /s/ Belinda Stronach
-------------------------------
Name: Belinda Stronach
Title: Director
Schedule A
First Authorization
************************************************
RESOLUTIONS OF THE SOLE SHAREHOLDER
OF
445327 ONTARIO LIMITED
(the "Corporation")
APPOINTMENT OF FRANK STRONACH AS REPRESENTATIVE OF THE CORPORATION
WHEREAS
A. The Corporation holds shares in the capital stock of Magna International
Inc. ("Magna") and MI Developments Inc. ("MID") and may from time to time
acquire and hold shares of other bodies corporate which are, or in the
future become, successors to all or part of the business or undertaking of
Magna or MID from time to time (collectively, the "Magna Entities"),
including any shares held directly or indirectly by any affiliate or
subsidiary (as such terms are defined in the Business Corporations Act
(Ontario) ("OBCA")) of Magna or MID;
B. Each of the Corporation, Magna and MID are incorporated under and are
governed by the OBCA;
C. The Corporation wishes to authorize an individual (the "Representative")
to represent it at meetings of the shareholders of Magna and MID and, to
the extent that the Corporation owns shares in the capital stock thereof,
at meetings of any other Magna Entity; and
D. The discretion, rights and powers of the directors of the Corporation
(including each individual who is now a director of the Corporation or is
subsequently elected or appointed a director of the Corporation) to
manage, and supervise the management of, the business and affairs of the
Corporation, including the exercise of the rights and powers granted to
the Representative under these resolutions, is restricted by a unanimous
shareholder declaration made by the sole shareholder of the Corporation as
of April 19, 1991, as amended, superseded and replaced from time to time
by any other unanimous shareholder declaration or unanimous shareholder
agreement (the "USD");
NOW THEREFORE BE IT RESOLVED that:
1. Frank Stronach is hereby appointed as the Corporation's authorized
representative to exclusively represent the Corporation at all meetings of
the shareholders of Magna and to act on the Corporation's behalf at all
such meetings, and he is hereby authorized to exercise on behalf of the
Corporation all the powers it could exercise if it were an individual
holder of shares in the capital stock of Magna, including the right and
power to exercise all voting rights attaching or applicable to any shares
in the capital stock of
- 2 -
Magna owned directly by the Corporation from time to time and to exercise
those rights and powers by, without limitation, executing and delivering
on behalf of the Corporation all necessary or desirable documents or
instruments in writing, including all proxies, ballots and resolutions in
writing in lieu of an actual meeting of shareholders, subject always to
the requirement that those rights and powers shall only be exercised by
him in the manner directed by the Trustees of Stronach Trust in accordance
with Section V(I) of the trust indenture constituting Stronach Trust dated
the 18th day of February, 1991 (the "Trust Indenture") and otherwise in
accordance with the provisions of the Trust Indenture.
2. Subject to the terms hereof, Frank Stronach is hereby appointed as the
Corporation's authorized representative to exclusively represent the
Corporation at all meetings of the shareholders of MID and to act on the
Corporation's behalf at all such meetings, and he is hereby authorized to
exercise on behalf of the Corporation all the powers it could exercise if
it were an individual holder of shares in the capital stock of MID,
including the right and power to exercise all voting rights attaching or
applicable to any shares in the capital stock of MID owned directly by the
Corporation from time to time and to exercise those rights and powers by,
without limitation, executing and delivering on behalf of the Corporation
all necessary or desirable documents or instruments in writing, including
all proxies, ballots and resolutions in writing in lieu of an actual
meeting of the shareholders subject always to the requirement that those
rights and powers shall only be exercised by him in the manner directed by
Stronach Trust.
3. Frank Stronach is hereby appointed as the Corporation's authorized
representative to exclusively represent the Corporation at all meetings of
the shareholders of any of the other Magna Entities (if, as and when any
shares in the capital stock of any Magna Entity are acquired directly by
the Corporation) and to act on the Corporation's behalf at all such
meetings, and he is hereby authorized to exercise on behalf of the
Corporation all the powers it could exercise if it were an individual
holder of shares in the capital stock of any Magna Entity, including the
right and power to exercise all voting rights attaching or applicable to
any shares in the capital stock of any Magna Entity owned directly by the
Corporation from time to time and to exercise those rights and powers by,
without limitation, executing and delivering on behalf of the Corporation
all necessary or desirable documents or instruments in writing, including
all proxies, ballots and resolutions in writing in lieu of an actual
meeting of shareholders subject always to the requirement that those
rights and powers shall only be exercised by him in the manner directed by
Stronach Trust.
4. The appointments and authorizations under paragraphs 1, 2 and 3 of this
resolution are made, as applicable depending on the governing corporate
statute of the corporation or corporations whose shares are described in
paragraphs 1, 2 and 3, pursuant to subsection 102(2) of the OBCA,
subsection 140(2) of the Canada Business Corporations Act ("CBCA") and the
provisions of any other applicable corporate statute that are
substantially the same as subsection 102(2) of the OBCA and 140(2) of the
CBCA, as the case may be ("collectively, the "Applicable Provisions"). The
Corporation shall prepare or cause to be prepared all such other documents
and instruments as are necessary from time to time to give effect to any
appointments and authorizations made under paragraphs 1, 2 and 3 pursuant
to the Applicable Provisions.
- 3 -
5. The appointments and authorizations under paragraphs 1, 2 and 3 of this
resolution shall automatically terminate and, subject to paragraph 6
below, shall be of no force or effect immediately upon (i) the death of
Frank Stronach; (ii) the mental incompetency of Frank Stronach; (iii) the
voluntary resignation of Frank Stronach as the appointee hereunder; (iv)
the voluntary resignation of Frank Stronach as Trustee of Stronach Trust;
and (v) the failure or inability of Frank Stronach to exercise his powers
as and when required under the appointments made herein, which failure or
inability is not due to his death, mental incompetency or abstention. For
the purposes of this resolution, Frank Stronach shall be deemed to be
mentally incompetent upon the occurrence of any one or more of the
following events (in each case referred to in this resolution as, a
"Competency Decision"):
(a) a Court has found him to be incapable of managing property in a
proceeding under the Substitute Decisions Act (S.O. 1992 as amended,
superseded, substituted or replaced from time to time, hereinafter
referred to as the "SDA");
(b) an assessor (as such term is defined by the Regulations to the SDA)
has issued a certificate of incapacity certifying that he is
incapable of managing property pursuant to the SDA;
(c) a certificate of incapacity has been issued under the Mental Health
Act (R.S.O. 1990, as amended, superseded, substituted or replaced
from time to time, hereinafter referred to as the "MHA") certifying
that he is incapable of managing property; or
(d) a finding, certification, declaration, judgement or decision with
regard to Frank Stronach's capacity to manage property has been
made, on substantially the same basis as provided under the SDA or
the MHA, pursuant to the applicable laws of any other jurisdiction
that has proper jurisdiction over Frank Stronach's person or
property.
6. In the event that (i) the appointments made hereunder are terminated
pursuant to section 5(v) and Frank Stronach's ability to exercise his
powers as and when required under the appointments made herein are
subsequently restored (where Frank Stronach had previously failed or been
unable to exercise those powers other than by reason of death, mental
incompetency or abstention); or (ii) a Competency Decision is reversed,
rescinded, terminated or otherwise ceases to be of force and effect by way
of Court order or by way of any other procedure under the applicable laws
pursuant to which the Competency Decision was issued, (in the case of (i)
and (ii), each a "Reversal Event") the appointments and authorizations
under paragraphs 1, 2 and 3 of this resolution shall again become
enforceable and effective as of the date on which the Reversal Event
occurs without prejudice to any actions taken by or on behalf of the
Corporation in the period in which the appointments and authorizations
hereunder were terminated.
7. The exercise by Frank Stronach on behalf of the Corporation of all of the
power it could exercise if it were an individual holder of shares in the
capital stock of Magna, including the right and power to exercise all
voting rights attaching or applicable to any shares in the capital stock
of Magna, MID and any other Magna Entities, as applicable, and the
- 4 -
exercise by Frank Stronach of the voting rights attaching to the Magna,
MID or any other Magna Entity shares shall be conclusive evidence that the
exercise of such rights and powers and the voting of such shares were
carried out by him in the manner directed by the Trustees of Stronach
Trust and in accordance with the relevant provisions of the Trust
Indenture.
8. This resolution may be executed by the parties in several counterparts
each of which when so executed and delivered shall be deemed to be an
original, and all such counterparts shall together constitute one and the
same instrument. This resolution may be delivered by fax or other form of
electronic means of recorded communication.
THE UNDERSIGNED, being the sole shareholder of the Corporation exercising the
powers of the board of directors of the Corporation by virtue of the USD, hereby
passes the foregoing resolutions pursuant to the provisions of the OBCA.
DATED the 4th day of March, 2005.
TRUSTEES OF STRONACH TRUST
/s/ Frank Stronach
-----------------------------------
Frank Stronach - Trustee
/s/ Elfriede Stronach
-----------------------------------
Elfriede Stronach - Trustee
/s/ Belinda Stronach
-----------------------------------
Belinda Stronach - Trustee
/s/ Andrew Stronach
-----------------------------------
Andrew Stronach - Trustee
Schedule B
Second Authorization
*****************************************************
RESOLUTIONS OF THE SOLE SHAREHOLDER
OF
445327 ONTARIO LIMITED
(the "Corporation")
APPOINTMENT OF BELINDA STRONACH AS REPRESENTATIVE OF THE CORPORATION
WHEREAS
A. The Corporation holds shares in the capital stock of Magna International
Inc. ("Magna") and MI Developments Inc. ("MID") and may from time to time
acquire and hold shares of other bodies corporate which are, or in the
future become, successors to all or part of the business or undertaking of
Magna or MID from time to time (collectively, the "Magna Entities"),
including any shares held directly or indirectly by any affiliate or
subsidiary (as such terms are defined in the Business Corporations Act
(Ontario) ("OBCA")) of Magna or MID;
B. Each of the Corporation, Magna and MID are incorporated under and are
governed by the OBCA;
C. The Corporation has authorized and appointed Frank Stronach (the
"Appointee") to represent it at meetings of the shareholders of Magna and
MID and, to the extent that the Corporation owns shares in the capital
stock thereof, at meetings of shareholders of any other Magna Entity
pursuant to a resolution of the sole shareholder of the Corporation of
even date herewith (the "FS Appointment");
D. The Corporation wishes to authorize Belinda Stronach to act as the
representative of the Corporation at meetings of the shareholders upon the
occurrence of a Transition Event as defined in paragraph 7 hereof; and
E. The discretion, rights and powers of the directors of the Corporation
(including each individual who is now a director of the Corporation or is
subsequently elected or appointed a director of the Corporation) to
manage, and supervise the management of, the business and affairs of the
Corporation, including the exercise of the rights and powers granted to
Belinda Stronach under these resolutions, is restricted, in part, by a
unanimous shareholder declaration made by the sole shareholder of the
Corporation as of April 19, 1991, as amended, superseded and replaced from
time to time by any other unanimous shareholder declaration or unanimous
shareholder agreement (the "USD");
- 2 -
NOW THEREFORE BE IT RESOLVED that:
1. Upon , and only upon, the occurrence of a Transition Event (as defined
herein):
(a) Belinda Stronach is hereby, and shall be deemed to be, appointed the
Corporation's authorized representative to exclusively represent the
Corporation at all meetings of the shareholders of Magna and to act
on the Corporation's behalf at all such meetings, and she is hereby
authorized to exercise on behalf of the Corporation all the powers
it could exercise if it were an individual holder of shares in the
capital stock of Magna, including the right and power to exercise
all voting rights attaching or applicable to any shares in the
capital stock of Magna owned directly by the Corporation from time
to time and to exercise those rights and powers by, without
limitation, executing and delivering on behalf of the Corporation
all necessary or desirable documents or instruments in writing,
including all proxies, ballots and resolutions in writing in lieu of
an actual meeting of shareholders, subject always to the requirement
that those rights and powers shall at all times be exercised by her
in accordance with the requirements set out in Section V(I) of the
trust indenture constituting Stronach Trust dated the 18th day of
February, 1991 (the "Trust Indenture"); and
(b) Belinda Stronach is hereby, and shall be deemed to be, appointed the
Corporation's authorized representative to exclusively represent the
Corporation at all meetings of the shareholders of MID and to act on
the Corporation's behalf at all such meetings, and she is hereby
authorized to exercise on behalf of the Corporation all the powers
it could exercise if it were an individual holder of shares in the
capital stock of MID, including the right and power to exercise all
voting rights attaching or applicable to any shares in the capital
stock of MID owned directly by the Corporation from time to time and
to exercise those rights and powers by, without limitation,
executing and delivering on behalf of the Corporation all necessary
or desirable documents or instruments in writing, including all
proxies, ballots and resolutions in writing in lieu of an actual
meeting of shareholders; and
(c) Belinda Stronach is hereby, and shall be deemed to be, appointed as
the Corporation's authorized representative to exclusively represent
the Corporation at all meetings of the shareholders of any of the
other Magna Entities (if, as and when any shares in the capital
stock of any Magna Entity are acquired directly by the Corporation)
and to act on the Corporation's behalf at all such meetings, and she
is hereby authorized to exercise on behalf of the Corporation all
the powers it could exercise if it were an individual holder of
shares in the capital stock of any Magna Entity, including the right
and power to exercise all voting rights attaching or applicable to
any shares in the capital stock of any Magna Entity owned directly
by the Corporation from time to time and to exercise those rights
and powers by, without limitation, executing and delivering on
behalf of the Corporation all necessary or desirable documents or
instruments in writing, including all proxies, ballots and
resolutions in writing in lieu of an actual meeting of shareholders.
- 3 -
Notwithstanding the provisions of paragraph 1(b) above, it is acknowledged
that the shareholders of the Corporation have expressly reserved the
right, exercisable at any time before the occurrence of a Transition Event
or after a Reversal Event (as defined herein) in respect of Frank
Stronach, to appoint Andrew Stronach as the Corporation's authorized
representative with respect to all meetings of the shareholders of MID (on
substantially the same terms as the appointment in favour of Belinda
Stronach under these resolutions) and in which case paragraph 1(b) hereof
shall not have any further force or effect and these resolutions shall
otherwise be deemed to be amended accordingly.
Subject to the immediately foregoing paragraph, upon the occurrence of a
Transition Event, the appointments under this paragraph 1 shall be
effective instantaneously and without the requirement of any further
action by or documentation from any of the Corporation or its directors,
officers or shareholders.
2. The appointments and authorizations under paragraph 1 of this resolution
are made, as applicable depending on the governing corporate statute of
the corporation or corporations whose shares are described in
subparagraphs 1(a), 1(b) and 1(c), pursuant to subsection 102(2) of the
OBCA, subsection 140(2) of the Canada Business Corporations Act ("CBCA")
and the provisions of any other applicable corporate statute that are
substantially the same as subsection 102(2) of the OBCA and 140(2) of the
CBCA, as the case may be ("collectively, the "Applicable Provisions"). The
Corporation shall prepare or cause to be prepared all such other documents
and instruments as are necessary from time to time to give effect to any
appointments and authorizations made under paragraphs 1(a), 1(b) and 1(c)
pursuant to the Applicable Provisions.
3. The appointments and authorizations under paragraph 1 of this resolution
shall automatically terminate and, subject to paragraph 4 below, shall be
of no force or effect immediately upon the death, or mental incompetency
of Belinda Stronach. For the purposes of this resolution, a person shall
be deemed to be mentally incompetent upon the occurrence of any one or
more of the following events (in each case referred to in this resolution
as, a "Competency Decision"):
(a) a Court has found such person to be incapable of managing property
in a proceeding under the Substitute Decisions Act (S.O. 1992 as
amended, superseded, substituted or replaced from time to time,
hereinafter referred to as the "SDA");
(b) an assessor (as such term is defined by the Regulations to the SDA)
has issued a certificate of incapacity certifying that such person
is incapable of managing property pursuant to the SDA;
(c) a certificate of incapacity has been issued under the Mental Health
Act (R.S.O. 1990, as amended, superseded, substituted or replaced
from time to time, hereinafter referred to as the "MHA") certifying
that such person is incapable of managing property; or
(d) a finding, certification, declaration, judgement or decision with
regard to such person's capacity to manage property has been made,
on substantially the same
- 4 -
basis as provided under the SDA or the MHA, pursuant to the
applicable laws of any other jurisdiction that has proper
jurisdiction over their person or property.
4. For the purposes of this resolution, a "Reversal Event" means the
reversal, rescission, or termination of a Competency Decision in respect
of any person by way of Court order or by way of any other procedure under
the applicable laws pursuant to which the Competency Decision was issued,
and additionally means in the case of Frank Stronach only, that Frank
Stronach's ability to exercise his powers, as and when required under the
FS Appointment are subsequently restored (where Frank Stronach had
previously failed or been unable to exercise those powers other than by
reason of death, mental incompetency or abstention).
5. If Belinda Stronach is subject to a Reversal Event, the appointments and
authorizations under paragraph 1 of this resolution shall again become
enforceable and effective as of the date upon which the Reversal Event
occurs.
6. If Frank Stronach is subject to a Reversal Event, the appointments and
authorizations under paragraph 1 of this resolution shall immediately
cease without prejudice to any actions taken by Belinda Stronach pursuant
to the appointments and authorizations hereunder, and without derogation
from this resolution and from the subsequent appointment and authorization
of Belinda Stronach under paragraph 1 upon the recurrence of a Transition
Event.
7. For the purposes of this resolution, a "Transition Event" means (i) the
death of Frank Stronach; (ii) the mental incompetency of Frank Stronach
for purposes of the FS Appointment; (iii) the voluntary resignation of
Frank Stronach as the appointee under the FS Appointment; (iv) the
voluntary resignation of Frank Stronach as Trustee of Stronach Trust; and
(v) the failure or inability of Frank Stronach to exercise his powers as
and when required under the FS Appointment not due to his death, mental
incompetency or abstention.
8. This resolution may be executed by the parties in several counterparts
each of which when so executed and delivered shall be deemed to be an
original, and all such counterparts shall together constitute one and the
same instrument. This resolution may be delivered by fax or other form of
electronic means of recorded communication.
- 5 -
THE UNDERSIGNED, being the sole shareholder of the Corporation exercising the
powers of the board of directors of the Corporation by virtue of the USD, hereby
passes the foregoing resolutions pursuant to the provisions of the OBCA.
DATED the 4th day of March, 2005.
TRUSTEES OF STRONACH TRUST
/s/ Frank Stronach
-----------------------------------
Frank Stronach - Trustee
/s/ Elfriede Stronach
-----------------------------------
Elfriede Stronach - Trustee
/s/ Belinda Stronach
-----------------------------------
Belinda Stronach - Trustee
/s/ Andrew Stronach
-----------------------------------
Andrew Stronach - Trustee