-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dyz38qo5KYZN2JGeVB3MO0V1iuIJH0nz4r3gHcfBrYKmdFj3jvL6nYlm/GZIsVgv 9xeYZlYInHALXtb+jPOwyg== 0000950123-04-000419.txt : 20040116 0000950123-04-000419.hdr.sgml : 20040116 20040115201210 ACCESSION NUMBER: 0000950123-04-000419 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040116 GROUP MEMBERS: GERALD W. SCHWARTZ GROUP MEMBERS: ONEX CORPORATION GROUP MEMBERS: ONEX PARTNERS GP INC GROUP MEMBERS: ONEX PARTNERS GP LP GROUP MEMBERS: ONEX PARTNERS LP FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MAGELLAN HOLDINGS LP CENTRAL INDEX KEY: 0001275538 IRS NUMBER: 200619214 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O ONEX CORP STREET 2: 712 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125822211 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MAGELLAN HEALTH SERVICES INC CENTRAL INDEX KEY: 0000019411 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 581076937 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-12251 FILM NUMBER: 04528396 BUSINESS ADDRESS: STREET 1: 6950 COLUMBIA GATEWAY STREET 2: STE 400 CITY: COLUMBIA STATE: MD ZIP: 21046 BUSINESS PHONE: 4109531000 FORMER COMPANY: FORMER CONFORMED NAME: CHARTER MEDICAL CORP DATE OF NAME CHANGE: 19920703 SC 13D 1 y93232sc13d.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 MAGELLAN HEALTH SERVICES, INC. (Name of Issuer) ORDINARY COMMON SHARES (Title of Class of Securities) CUSIP No. 559079207 (CUSIP Number) ONEX CORPORATION CANADA TRUST TOWER 161 BAY STREET - 49TH FLOOR TORONTO, CANADA M5J 2S1 CANADA ATTENTION: EWOUT R. HEERSINK (416) 362-7711 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) COPIES TO: JOEL I. GREENBERG, ESQ. KAYE SCHOLER LLP 425 PARK AVENUE NEW YORK, NEW YORK 10022 (212) 836-8000 JANUARY 5, 2004 (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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ------------------- ------------------ CUSIP NO. 559079207 PAGE 2 OF 29 PAGES - ------------------- ------------------ - -------------------------------------------------------------------------------- NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1. Magellan Holdings LP - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 2. - -------------------------------------------------------------------------------- SEC USE ONLY 3. - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4. WC - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 5. - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6. Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER -0- -------------------------------------------------------------- SHARED VOTING POWER 8,332,726 shares of Ordinary Common Stock issuable upon conversion of shares of Multiple and Variable Vote Restricted Convertible Common Stock ("MV Common Stock") of the Issuer. See Row 13 below for a description of 8. the voting power of such shares. NUMBER OF -------------------------------------------------------------- SHARES SOLE DISPOSITIVE POWER BENEFICIALLY 9. -0- OWNED BY -------------------------------------------------------------- EACH SHARED DISPOSITIVE POWER REPORTING 8,332,726 shares of Ordinary Common Stock issuable PERSON upon conversion of shares of MV WITH 10. Common Stock of the Issuer. - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,332,726 shares of Ordinary Common Stock issuable upon 11. conversion of shares of MV Common Stock of the Issuer. - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 12. - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.6% of the Issuer's shares of Ordinary Common Stock, assuming conversion of all of the Reporting Person's shares of MV Common Stock into Ordinary Common Stock (assuming 26,982,854 shares of Ordinary Common Stock outstanding). Such shares of MV Common Stock entitle the Reporting Person to elect four (4) of nine (9) members of the Issuer's Board of Directors (of the remaining five (5) directors, two (2) are elected by the MV Common Stock and Ordinary Common Stock voting together and three (3) are elected by the Ordinary Common Stock) and to 50% of the voting power of the MV Common Stock and Ordinary Common Stock voting together as 13. a single class. - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14. PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------------------------------------------------------------------- SCHEDULE 13D - ------------------- ------------------ CUSIP NO. 559079207 PAGE 3 OF 29 PAGES - ------------------- ------------------ - -------------------------------------------------------------------------------- NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1. Onex Partners LP - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 2. - -------------------------------------------------------------------------------- SEC USE ONLY 3. - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4. AF - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 5. - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6. Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER -0- -------------------------------------------------------------- SHARED VOTING POWER 8,332,726 shares of Ordinary Common Stock issuable upon conversion of shares of MV Common Stock of the Issuer. See Row 13 below for a description of the voting power 8. of such shares. NUMBER OF -------------------------------------------------------------- SHARES SOLE DISPOSITIVE POWER BENEFICIALLY 9. -0- OWNED BY -------------------------------------------------------------- EACH SHARED DISPOSITIVE POWER REPORTING 8,332,726 shares of Ordinary Common Stock issuable upon PERSON conversion of shares of MV Common Stock of the Issuer. WITH 10. - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,332,726 shares of Ordinary Common Stock issuable upon 11. conversion of shares of MV Common Stock of the Issuer. - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 12. - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.6% of the Issuer's shares of Ordinary Common Stock, assuming conversion of all of the Reporting Person's shares of MV Common Stock into Ordinary Common Stock (assuming 26,982,854 shares of Ordinary Common Stock outstanding). Such shares of MV Common Stock entitle the Reporting Person to elect four (4) of nine (9) members of the Issuer's Board of Directors (of the remaining five (5) directors, two (2) are elected by the MV Common Stock and Ordinary Common Stock voting together and three (3) are elected by the Ordinary Common Stock) and to 50% of the voting power of the MV Common Stock and Ordinary Common Stock voting together as 13. a single class. - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14. PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------------------------------------------------------------------- SCHEDULE 13D - ------------------- ------------------ CUSIP NO. 559079207 PAGE 4 OF 29 PAGES - ------------------- ------------------ - -------------------------------------------------------------------------------- NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1. Onex Partners GP LP - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 2. - -------------------------------------------------------------------------------- SEC USE ONLY 3. - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4. AF - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 5. - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6. Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER -0- -------------------------------------------------------------- SHARED VOTING POWER 8,332,726 shares of Ordinary Common Stock issuable upon conversion of shares of MV Common Stock of the Issuer. See Row 13 below for a description of the voting power 8. of such shares. NUMBER OF -------------------------------------------------------------- SHARES SOLE DISPOSITIVE POWER BENEFICIALLY 9. -0- OWNED BY -------------------------------------------------------------- EACH SHARED DISPOSITIVE POWER REPORTING 8,332,726 shares of Ordinary Common Stock issuable PERSON upon conversion of shares of MV Common Stock of the WITH 10. Issuer. - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,332,726 shares of Ordinary Common Stock issuable upon 11. conversion of shares of MV Common Stock of the Issuer. - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 12. - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.6% of the Issuer's shares of Ordinary Common Stock, assuming conversion of all of the Reporting Person's shares of MV Common Stock into Ordinary Common Stock (assuming 26,982,854 shares of Ordinary Common Stock outstanding). Such shares of MV Common Stock entitle the Reporting Person to elect four (4) of nine (9) members of the Issuer's Board of Directors (of the remaining five (5) directors, two (2) are elected by the MV Common Stock and Ordinary Common Stock voting together and three (3) are elected by the Ordinary Common Stock) and to 50% of the voting power of the MV Common Stock and Ordinary Common Stock voting together as 13. a single class. - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14. PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------------------------------------------------------------------- Page 4 of 29 Pages SCHEDULE 13D - ------------------- ------------------ CUSIP NO. 559079207 PAGE 5 OF 29 PAGES - ------------------- ------------------ - -------------------------------------------------------------------------------- NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1. Onex Partners GP Inc. - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 2. - -------------------------------------------------------------------------------- SEC USE ONLY 3. - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4. AF - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 5. - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6. Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER -0- -------------------------------------------------------------- SHARED VOTING POWER 8,332,726 shares of Ordinary Common Stock issuable upon conversion of shares of MV Common Stock of the Issuer. See Row 13 below for a description of the voting power 8. of such shares. NUMBER OF -------------------------------------------------------------- SHARES SOLE DISPOSITIVE POWER BENEFICIALLY 9. -0- OWNED BY -------------------------------------------------------------- EACH SHARED DISPOSITIVE POWER REPORTING 8,332,726 shares of Ordinary Common Stock issuable PERSON upon conversion of shares of MV Common Stock of the WITH 10. Issuer. - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,332,726 shares of Ordinary Common Stock issuable upon 11. conversion of shares of MV Common Stock of the Issuer. - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 12. - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.6% of the Issuer's shares of Ordinary Common Stock, assuming conversion of all of the Reporting Person's shares of MV Common Stock into Ordinary Common Stock (assuming 26,982,854 shares of Ordinary Common Stock outstanding). Such shares of MV Common Stock entitle the Reporting Person to elect four (4) of nine (9) members of the Issuer's Board of Directors (of the remaining five (5) directors, two (2) are elected by the MV Common Stock and Ordinary Common Stock voting together and three (3) are elected by the Ordinary Common Stock) and to 50% of the voting power of the MV Common Stock and Ordinary Common Stock voting together as 13. a single class. - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14. CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------------------------------------------------------------------- Page 5 of 29 Pages SCHEDULE 13D - ------------------- ------------------ CUSIP NO. 559079207 PAGE 6 OF 29 PAGES - ------------------- ------------------ - -------------------------------------------------------------------------------- NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Onex Corporation - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 2 - -------------------------------------------------------------------------------- SEC USE ONLY 3 - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4 AF - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 5 - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 Ontario, Canada - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER -0- -------------------------------------------------------------- SHARED VOTING POWER 8,332,726 shares of Ordinary Common Stock issuable upon conversion of shares of MV Common Stock of the Issuer. See Row 13 below for a description of the voting power 8. of such shares. NUMBER OF -------------------------------------------------------------- SHARES SOLE DISPOSITIVE POWER BENEFICIALLY 9. -0- OWNED BY -------------------------------------------------------------- EACH SHARED DISPOSITIVE POWER REPORTING 8,332,726 shares of Ordinary Common Stock issuable PERSON upon conversion of shares of MV Common Stock of the WITH 10. Issuer. - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,332,726 shares of Ordinary Common Stock issuable upon 11. conversion of shares of MV Common Stock of the Issuer. - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 12. - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.6% of the Issuer's shares of Ordinary Common Stock, assuming conversion of all of the Reporting Person's shares of MV Common Stock into Ordinary Common Stock (assuming 26,982,854 shares of Ordinary Common Stock outstanding). Such shares of MV Common Stock entitle the Reporting Person to elect four (4) of nine (9) members of the Issuer's Board of Directors (of the remaining five (5) directors, two (2) are elected by the MV Common Stock and Ordinary Common Stock voting together and three (3) are elected by the Ordinary Common Stock) and to 50% of the voting power of the MV Common Stock and Ordinary Common Stock voting together as 13. a single class. - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14 CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------------------------------------------------------------------- Page 6 of 29 Pages SCHEDULE 13D - ------------------- ------------------ CUSIP NO. 559079207 PAGE 7 OF 29 PAGES - ------------------- ------------------ - -------------------------------------------------------------------------------- NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1. Gerald W. Schwartz - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 2. - -------------------------------------------------------------------------------- SEC USE ONLY 3. - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4. AF - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 5. - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6. Canada - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER -0- -------------------------------------------------------------- SHARED VOTING POWER 8,332,726 shares of Ordinary Common Stock issuable upon conversion of shares of MV Common Stock of the Issuer. See Row 13 below for a description of the voting power 8. of such shares. NUMBER OF -------------------------------------------------------------- SHARES SOLE DISPOSITIVE POWER BENEFICIALLY 9. -0- OWNED BY EACH -------------------------------------------------------------- REPORTING SHARED DISPOSITIVE POWER PERSON 10. WITH - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,332,726 shares of Ordinary Common Stock issuable upon 11. conversion of shares of MV Common Stock of the Issuer.** - ------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES 12. CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.6% of the Issuer's shares of Ordinary Common Stock, assuming conversion of all of the Reporting Person's shares of MV Common Stock into Ordinary Common Stock (assuming 26,982,854 shares of Ordinary Common Stock outstanding). Such shares of MV Common Stock entitle the Reporting Person to elect four (4) of nine (9) members of the Issuer's Board of Directors (of the remaining five (5) directors, two (2) are elected by the MV Common Stock and Ordinary Common Stock voting together and three (3) are elected by the Ordinary Common Stock) and to 50% of the voting power of the MV Common Stock and Ordinary Common Stock voting together as 13. a single class. - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14. IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. **Gerald W. Schwartz expressly disclaims beneficial ownership of the shares of Magellan Health Services, Inc. beneficially owned by Magellan Holdings LP, Onex Partners LP, Onex Partners GP LP, Onex Partners GP Inc. and Onex Corporation. - -------------------------------------------------------------------------------- Page 7 of 29 Pages Item 1. Security and Issuer. The securities to which this Statement on Schedule 13D relates are the shares of Ordinary Common Stock , par value $0.01 per share ("Ordinary Common Stock"), of Magellan Health Services, Inc., a Delaware corporation (the "Issuer"). The principal executive office of the Issuer is located at 6950 Columbia Gateway Drive, Suite 400, Columbia, Maryland 21046. Item 2. Identity and Background. (a), (b), (c) and (f). This Statement on Schedule 13D is being filed by Magellan Holdings LP, a Delaware limited partnership ("Holdings"), Onex Partners LP, a Delaware limited partnership ("Partners"), Onex Partners GP LP, a Delaware limited partnership ("Partners GP LP"), Onex Partners GP Inc., a Delaware corporation ("Partners GP"), Onex Corporation, an Ontario corporation ("Onex"), and Mr. Gerald W. Schwartz ("Mr. Schwartz"). Holdings Holdings is a Delaware limited partnership. Holdings is a holding company through which the other Reporting Persons hold securities of the Issuer. The address of the principal business and principal offices of Holdings is c/o Onex Investment Corp., 712 Fifth Avenue, New York, NY 10019. The general partner of Holdings is Partners. Partners Partners is a Delaware limited partnership. Partners' principal business is investing in securities. The address of the principal business and principal offices of Partners is c/o Onex Investment Corp., 712 Fifth Avenue, New York, NY 10019. The general partner of Partners is Partners GP LP. Partners GP LP Partners GP LP is a Delaware limited partnership. Partners GP LP's principal business is being the general partner of Partners. The address of the principal business and principal offices of Partners GP LP is c/o Onex Investment Corp., 712 Fifth Avenue, New York, NY 10019. The general partner of Partners GP LP is Partners GP. Partners GP Partners GP is a Delaware corporation. Partners GP's principal business is being the general partner of Partners GP LP. The address of the principal business and principal offices of Partners GP is c/o Onex Investment Corp., 712 Fifth Avenue, New York, NY 10019. Information relating to the directors and executive officers of Partners GP is set forth on Schedule A hereto which is incorporated herein by reference. Onex Onex is an Ontario, Canada corporation. It is a diversified company that operates through autonomous subsidiaries, associated companies and strategic partnerships. The address of the principal business and principal offices of Onex is 161 Bay Street, P.O. Box 700, Toronto, Ontario, Canada M5J 2S1. Information relating to the directors and executive officers of Onex is set forth on Schedule B hereto which is incorporated herein by reference. Onex indirectly owns 100% of the equity of Partners GP. Mr. Schwartz The principal occupation of Mr. Schwartz is the Chairman of the Board, President and Chief Executive Officer of Onex. The business address of Mr. Schwartz is c/o Onex Corporation, 161 Bay Street, P.O. Box 700, Tforonto, Ontario, M5J 2S1. Mr. Schwartz is a citizen of Canada. Mr. Schwartz is the indirect holder of all the issued and outstanding shares of Multiple Voting Shares of Onex, ownership of which entitles Mr. Schwartz to elect sixty percent (60%) of the members of Onex's Board of Directors. Page 8 of 29 Pages (d) and (e). No Reporting Person, nor to the best knowledge of each Reporting Person, any of the other persons identified in this Item 2 has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of which any such person 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. Item 3. Source and Amount of Funds or Other Compensation. Pursuant to a stock purchase agreement dated as of December 18, 2003, between the Issuer and Holdings (the "Stock Purchase Agreement"), Holdings purchased 8,415,580 shares of Multiple and Variable Vote Restricted Convertible Common Stock, par value $0.01 per share ("MV Common Stock") of the Issuer, which is convertible at any time at the option of the holder into the same number of shares of Ordinary Common Stock, for an aggregate purchase price of $100,572,185.50. The source of funds for such purchase was Holdings' working capital. The purchase was made in connection with the consummation of the Third Amended Joint Plan of Reorganization of the Issuer and certain of its subsidiaries under Chapter 11 of the United States Bankruptcy Code dated August 18, 2003, as amended (the "Plan of Reorganization"), and the Issuer's emergence from Chapter 11 proceedings. Item 4. Purpose of Transaction. Holdings acquired the MV Common Stock for investment purposes and to influence control of the Issuer. Pursuant to the Stock Purchase Agreement and the terms of the Plan of Reorganization, Holdings has committed to purchase up to an additional $5,000,000.00 of shares of MV Common Stock at a price of $9.78 per share, upon settlement of disputed claims of certain of the Issuer's creditors. In addition, Reporting Persons may from time to time acquire shares of Ordinary Common Stock in the open market or in privately negotiated transactions, subject to the availability of such shares at prices deemed favorable, the Issuer's business or financial condition and to other factors and conditions the Reporting Persons deem appropriate. In the event the Reporting Persons acquire shares of Ordinary Common Stock, such shares will automatically be converted into the same number of shares of MV Common Stock and will not entitle the Reporting Persons to additional voting rights. See Exhibit 4. Alternatively, the Reporting Persons may sell all or a portion of their shares of MV Common Stock, or shares of Ordinary Common Stock obtained upon conversion of such shares of MV Common Stock, in the open market or in privately negotiated transactions, subject to the rights referred to in Item 6. Holdings has registration rights with respect to the shares of Ordinary Common Stock underlying its shares of MV Common Stock. See Exhibit 5. Holders of MV Common Stock are entitled to elect, and to remove and replace, four (4) out of nine (9) members of the board of directors of the Issuer ("Class 1 Directors"). The Reporting Persons are entitled to cast 100% of the votes in any election of, or any vote to remove or replace, Class 1 Directors. Holders of MV Common Stock and Ordinary Common Stock, voting together as a single class, are entitled to elect, and to remove and replace, an additional two (2) members of the Issuer's board of directors ("Class 2 Directors"). The Reporting Persons are entitled to cast 50% of the votes entitled to be cast in any election of, or any vote to remove or replace, Class 2 Directors. See Exhibit 4. The current Class 1 Directors are Steven J. Shulman, the chief executive officer of the Issuer; Robert Haft; Mark L. Hilson, a Managing Director of Onex; and Christopher A. Govan, the Managing Director Taxation of Onex. The current Class 2 Directors are Dr. Rene Lerer, the chief operating officer of the Issuer; and Robert M. Leblanc, a Managing Director of Onex Investment Corp., a subsidiary of Onex. Except as set forth above in this Item 4, no Reporting Person has any present plans or proposals that relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or of any of its subsidiaries; (d) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of such directors or to fill any existing vacancies on such board; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer's charter, by-laws or instruments corresponding thereto or other actions that may impede the acquisition of control of the Issuer by any person; (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any action similar to any of those enumerated above. Page 9 of 29 Pages Item 5. Interest in Securities of the Issuer. (a) and (b). As of the date hereof, Holdings beneficially owns 8,332,726 shares of Ordinary Common Stock (which may be obtained at any time by conversion of shares of MV Common Stock held by Holdings), which constitute 23.6% of the Issuer's shares of Ordinary Common Stock (assuming 26,982,854 additional shares of Ordinary Common Stock outstanding). The shares of MV Common Stock beneficially owned by Holdings entitle Holdings to 50% of the voting power of the MV Common Stock and Ordinary Common Stock voting together as a single class and the power to vote for the election of directors of the Issuer as described in Item 4. All of the shares beneficially owned by Holdings may be deemed as beneficially owned by each of Partners, Partners GP LP, Partners GP and Onex. As discussed above, such shares constitute 23.6% of the Issuer's shares of Ordinary Common Stock (assuming 26,982,854 additional shares of Ordinary Common Stock outstanding). The shares of MV Common Stock beneficially owned by such Reporting Persons entitle such Reporting Persons to 50% of the voting power of the MV Common Stock and Ordinary Common Stock voting together as a single class and the power to vote for the election of directors of the Issuer as described in Item 4. Mr. Schwartz may be deemed a beneficial owner of the shares of Ordinary Common Stock beneficially owned by the other Reporting Persons but disclaims beneficial ownership of such shares. (c) On January 5, 2004, Holdings sold 82,854 shares of MV Common Stock, for a price of $12.07 per share, in a private transaction. Except as described herein and in Item 3, no Reporting Person nor, to the best knowledge of each Reporting Person, any person identified in Item 2, has effected any transaction in shares of Ordinary Common Stock during the preceding 60 days. (d) To the best knowledge of the Reporting Persons, no person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, shares of Ordinary Common Stock or MV Common Stock, except that limited partners of the Reporting Persons may receive distributions including a portion of such dividends or proceeds. (e) Not applicable. Item 6. Contracts, Arrangement, Understandings or Relationships with Respect to the Securities of the Issuer. To the best of knowledge of the Reporting Persons, except as set forth herein or in the Exhibits filed herewith, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any securities of the Issuer, finder's fees, joint ventures, loan or option agreements, puts or calls, guarantees of profits, division of profits or loss or the giving or withholding of proxies except as set forth in the other items hereof and the Exhibits, and except as follows: The partnership agreement of Partners contains provisions whereby the partnership's general partner, Partners GP LP, will receive a certain percentage of net income, if any, derived from the partnership's investments. In addition, pursuant to the Co-Investment Agreement dated as of January 5, 2004 among (i) R(2) Investments, LDC, Amalgamated Gadget, L.P. and Scepter Holdings, Inc. (collectively "R(2)") and (ii) Holdings, Onex and Partners (collectively the "Onex Group"), R(2) and the Onex Group agreed that neither party would commence any tender offer for shares of Ordinary Common Stock or securities convertible into or exchangeable or exercisable for, or which participate in dividends or distributions upon liquidation with, Ordinary Common Stock, unless whichever of the Onex Group or R(2) desires to commence a tender offer affords the other the opportunity to participate in such tender offer as a bidder in proportion to the relative proportion of shares of Ordinary Common Stock and MV Common Stock beneficially owned, or in which an economic interest is held, by the Onex Group and R(2), respectively. See Exhibit 2. In addition, pursuant to the Issuer's amended and restated certificate of incorporation, until the earlier of January 5, 2007 and the first date on which the equity interest in the Issuer held by the Reporting Persons and their affiliates falls below certain specified levels, all holders of common stock of the Issuer have the right to participate in certain sales of MV Common Stock by the Reporting Persons and the Reporting Persons have the right to participate in certain sales of Ordinary Common Stock by certain other stockholders. See Exhibit 4. Item 7. Material to Be Filed as Exhibits. 1. Joint Filing Agreement. Page 10 of 29 Pages 2. Co-Investment Agreement, dated January 5, 2004, by and among R2 Investments, LDC, Amalgamated Gadget, L.P., Scepter Holdings, Inc., Magellan Holdings LP, Onex Corporation and Onex Partners LP. 3. Stock Purchase Agreement, dated as of December 18, 2003, between Magellan Health Services, Inc. and Magellan Holdings LP (incorporated by reference to Exhibit 2.4 to the Form 8-K/A filed with the Securities and Exchange Commission by the Issuer on January 7, 2004). 4. Amended and Restated Certificate of Incorporation of Magellan Health Services, Inc., as in effect on January 5, 2004 (incorporated by reference to Exhibit 2.9 to the Form 8-K filed with the Securities and Exchange Commission by the Issuer on January 6, 2004). 5. Registration Rights Agreement, dated as of January 5, 2004, among Magellan Health Services, Inc., Magellan Holdings LP and Aetna, Inc. (incorporated by reference to Exhibit 2.15 to the Form 8-K filed with the Securities and Exchange Commission by the Issuer on January 6, 2004). 6. Power of Attorney incorporated by reference to the Amendment to Form 4 for Dura Automotive Systems, Inc. filed with the Securities and Exchange Commission by Gerald W. Schwartz on September 10, 1996. Page 11 of 29 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I hereby certify that the information set forth in this statement is true, complete and correct. Dated: January 15, 2004 MAGELLAN HOLDINGS LP By: ONEX PARTNERS LP, its General Partner By: ONEX PARTNERS GP LP, its General Partner By: ONEX PARTNERS GP INC., its General Partner By: /s/ Robert Le Blanc -------------------------------------------------- Name: Robert Le Blanc Title: Vice President ONEX PARTNERS LP By: ONEX PARTNERS GP LP, its General Partner By: ONEX PARTNERS GP INC., its General Partner By: /s/ Robert Le Blanc -------------------------------------------------- Name: Robert Le Blanc Title: Vice President ONEX PARTNERS GP LP By: ONEX PARTNERS GP INC., its General Partner By: /s/ Robert Le Blanc -------------------------------------------------- Name: Robert Le Blanc Title: Vice President ONEX PARTNERS GP INC. By: /s/ Robert Le Blanc -------------------------------------------------- Name: Robert Le Blanc Title: Vice President Page 12 of 29 Pages ONEX CORPORATION By: /s/ Donald Lewtas -------------------------------------------------- Name: Donald Lewtas Title: Authorized Signatory GERALD W. SCHWARTZ By: /s/ Donald Lewtas ------------------------------------------------------ Name: Donald Lewtas Title: Authorized Signatory for GERALD W. SCHWARTZ Page 13 of 29 Pages SCHEDULE A Directors and Executive Officers of Onex Partners GP Inc. ("Partners GP") The name, business address, present principal occupation of each director and executive officer of Partners GP are set forth below. All executive officers and directors listed on this Schedule B are United States citizens, except as specifically indicated below.
Name Business Address Present Principal Occupation or Employment Eric Rosen c/o Onex Investment Corp. President and Director; Managing Director of Onex 712 Fifth Avenue Investment Corp. New York, NY 10019 Anthony Munk c/o Onex Investment Corp. Vice President; Managing Director of Onex Investment Corp. 712 Fifth Avenue New York, NY 10019 John Troiano c/o Onex Investment Corp. Vice President; Managing Director of Onex Investment Corp. 712 Fifth Avenue New York, NY 10019 Robert Le Blanc c/o Onex Investment Corp. Vice President and Director; Managing Director of Onex 712 Fifth Avenue Investment Corp. New York, NY 10019
Page 14 of 29 Pages SCHEDULE B Directors and Executive Officers of Onex Corporation ("Onex") The name, business address, present principal occupation of each director and executive officer of Onex are set forth below. All executive officers and directors listed on this Schedule B are Canadian citizens, except as specifically indicated below.
Name Business Address Present Principal Occupation or Employment Gerald W. Schwartz 161 Bay Street Chairman of the Board, President, Chief Executive P.O. Box 700 Officer and Director Toronto, Ontario Canada M5J 2S1 Ewout R. Heersink 161 Bay Street Managing Director and Chief Financial Officer (Netherlands Citizen) P.O. Box 700 Toronto, Ontario Canada M5J 2S1 Mark L. Hilson 161 Bay Street Managing Director P.O. Box 700 Toronto, Ontario Canada M5J 2S1 Donald W. Lewtas 161 Bay Street Managing Director Finance P.O. Box 700 Toronto, Ontario Canada M5J 2S1 Anthony R. Melman 161 Bay Street Managing Director P.O. Box 700 Toronto, Ontario Canada M5J 2S1 Seth M. Mersky 161 Bay Street Managing Director (U.S. Citizen) P.O. Box 700 Toronto, Ontario Canada M5J 2S1 Andrew J. Sheiner 161 Bay Street Managing Director P.O. Box 700 Toronto, Ontario Canada M5J 2S1 Nigel S. Wright 161 Bay Street Managing Director P.O. Box 700 Toronto, Ontario Canada M5J 2S1
Page 15 of 29 Pages
Name Business Address Present Principal Occupation or Employment John S. Elder, Q.C. Fraser Milner Casgrain LLP Secretary; Partner at Fraser Milner Casgrain LLP 100 King Street West 42nd Floor - 1 First Canadian Place Toronto, Ontario Canada M5X 1B2 Christopher A. Govan 161 Bay Street Managing Director Taxation P.O. Box 700 Toronto, Ontario Canada M5J 2S1 Daniel C. Casey Creson Corporation Director; Chairman and Chief Executive Officer of 16 Clarence Square Creson Corporation, an Ontario real estate company Toronto, Ontario Canada M5V 1H1 Donald H. Gales P.O. Box 31489SMB, Villa 639 Director; Corporate Director Grand Cayman Island British West Indies Serge Gouin Citigroup Global Markets Canada Inc. Director; Vice-Chariman of Citigroup Global Markets 630 Rene-Levesque Blvd. W. Canada Inc., an investment firm Suite 2450 Montreal Quebec H3B 1S6 Brian M. King 10 Sunset Trail Director; Corporate Director Kenora, Ontario Canada P9N 4H9 J. William E. Mingo, Q.C. Stewart McKelvey Director; Partner at Stewart McKelvey Stirling Scales, Stirling Scales a law firm in Halifax, Nova Scotia. 1959 Upper Water St. 10th Floor Halifax, Nova Scotia Canada B3J 2X2 J. Robert S. Prichard, O.C. One Yonge Street Director; President and Chief Toronto, Ontario Operating Officer of Torstar Corporation Canada M5E 1E6 R. Geoffrey P. Styles 8 York Ridge Rd. Director; Corporate Director Willowdale, Ontario Canada M2P 1R7 Arni C. Thorsteinson Shelter Canadian Properties Limited Director; President of Shelter Canadian Properties 2600-7 Evergreen Place Limited Winnipeg, Manitoba Canada R3L 2T3 Heather M. Reisman Indigo Books & Music Inc. Director; President and Chief Executive Officer of 468 King St. W. Indigo Books & Music Inc. Suite 500 Toronto, Ontario M5V 1L8
Page 16 of 29 Pages INDEX TO EXHIBITS
Page No. in Sequential Numbering Exhibit System - ------- ------ 1. Joint Filing Agreement. 2. Co-Investment Agreement, dated January 5, 2004, by and among R2 Investments, LDC, Amalgamated Gadget, L.P., Scepter Holdings, Inc., Magellan Holdings LP, Onex Corporation and Onex Partners LP. 3. Stock Purchase Agreement, dated as of December 18, 2003, between Magellan Health Services, Inc. and Magellan Holdings LP (incorporated by reference to Exhibit 2.4 to the Form 8-K/A filed with the Securities and Exchange Commission by the Issuer on January 7, 2004). 4. Amended and Restated Certificate of Incorporation of Magellan Health Services, Inc., as in effect on January 5, 2004 (incorporated by reference to Exhibit 2.9 to the Form 8-K filed with the Securities and Exchange Commission by the Issuer on January 6, 2004). 5. Registration Rights Agreement, dated as of January 5, 2004, among Magellan Health Services, Inc., Magellan Holdings LP and Aetna, Inc. (incorporated by reference to Exhibit 2.15 to the Form 8-K filed with the Securities and Exchange Commission by the Issuer on January 6, 2004). 6. Power of Attorney incorporated by reference to the Amendment to Form 4 for Dura Automotive Systems, Inc. filed with the Securities and Exchange Commission by Gerald W. Schwartz on September 10, 1996.
Page 18 of 29 Pages EX-99.1 3 y93232exv99w1.txt JOINT FILING AGREEMENT EXHIBIT 1 AGREEMENT JOINT FILING OF SCHEDULE 13D The Undersigned hereby agree to file jointly the Statement on Schedule 13D (the "Statement") relating to the Ordinary Common Stock, $0.01 par value per share, of Magellan Health Services, Inc., and any amendments thereto which may be deemed necessary pursuant to Regulation 13D or G promulgated under Section 13 of the Securities Exchange Act of 1934, as amended. It is understood and agreed that a copy of this Agreement shall be attached as an Exhibit to the Statement, filed on behalf of each of the parties hereto. This Agreement may be executed in multiple counterparts, each of which shall constitute an original, one and the same instrument. IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as of the [15th] day of January, 2004. MAGELLAN HOLDINGS LP By: ONEX PARTNERS LP, its General Partner By: ONEX PARTNERS GP LP, its General Partner By: ONEX PARTNERS GP INC., its General Partner By: /s/ Robert Le Blanc ---------------------------------- Name: Robert Le Blanc Title: Vice President ONEX PARTNERS LP By: ONEX PARTNERS GP LP, its General Partner By: ONEX PARTNERS GP INC., its General Partner By: /s/ Robert Le Blanc ---------------------------------- Name: Robert Le Blanc Title: Vice President ONEX PARTNERS GP LP By: ONEX PARTNERS GP INC., its General Partner By: /s/ Robert Le Blanc ---------------------------------- Name: Robert Le Blanc Title: Vice President Page 19 of 29 Pages ONEX PARTNERS GP INC. By: /s/ Robert Le Blanc ---------------------------------- Name: Robert Le Blanc Title: Vice President ONEX CORPORATION By: /s/ Donald Lewtas ---------------------------------- Name: Donald Lewtas Title: Authorized Signatory GERALD W. SCHWARTZ By: /s/ Donald Lewtas ---------------------------------- Name: Donald Lewtas Title: Authorized Signatory for GERALD W. SCHWARTZ Page 20 of 29 Pages EX-99.2 4 y93232exv99w2.txt CO-INVESTMENT AGREEMENT EXHIBIT 2 CO-INVESTMENT AGREEMENT This Co-Investment Agreement (this "Agreement"), is made as of January 5, 2004 by and among (i) R(2) Investments, LDC ("Investments"), Amalgamated Gadget, L.P. ("Amalgamated") and Scepter Holdings, Inc. ("Scepter"); and (ii) Magellan Holdings LP ("MHLP"), Onex Corporation ("Onex") and Onex Partners LP ("Onex Partners"). WHEREAS, the Third Amended Joint Plan of Reorganization (the "Plan of Reorganization") of Magellan Health Services, Inc. (the "Company") and certain of its subsidiaries under Chapter 11 of the Bankruptcy Code dated August 18, 2003, as amended on September 25, 2003, October 8, 2003 and October 9, 2003 was confirmed on October 8, 2003; and WHEREAS, in order to induce Investments to agree, among other things, not to take any action to oppose confirmation of the Plan of Reorganization, Onex agreed, among other things, to enter into this Agreement; and NOW, THEREFORE, in consideration of the foregoing and the agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which the parties hereto hereby acknowledge, the parties hereto agree as follows: 1. DEFINITIONS. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan of Reorganization. "beneficial owner" (and the derivative terms "beneficially owned" and "beneficial ownership") shall have the meaning ascribed to such terms in the rules under Section 13(d) of the Securities Exchange Act of 1934, as amended. "Person" means any individual, corporation, partnership, joint venture, incorporated or unincorporated association, joint-stock company, limited liability company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind. "Onex Group" means, collectively, MHLP, Onex, Onex Partners and any entity controlling, controlled by, or under common control with MHLP, Onex or Onex Partners. "R(2)" means, collectively, Investments, Amalgamated, Scepter and any other entity controlling, controlled by, or under common control with Investments, Amalgamated, or Scepter. 2. CO-INVESTMENT RIGHT. Until this Agreement terminates in accordance with Section 9, no Person within the Onex Group, on the one hand, or within R(2), on the other hand, shall commence any tender offer for shares of New Common Stock, any shares of any class of capital stock into or for which the New Common Stock is converted or exchanged ("Replacement Stock"), or any warrants, options, rights, capital stock, notes or other debt or equity securities issued by the Company which are convertible into or exchangeable or exercisable for shares of New Common Stock or Replacement Stock or which participate with New Common Stock or Replacement Stock in dividends or distributions upon liquidation ("Other Securities" and together with New Common Stock and Replacement Stock, "Securities") unless whichever of the Onex Group or R(2) desires to commence a tender offer (the "Initiating Party") affords the other (the "Non-Initiating Party") the opportunity to participate in such tender offer as a bidder (whether or not R(2) or the Onex Group elects to so participate) on the basis that the shares purchased pursuant to such tender offer would be purchased by all Persons within the Onex Group, on the one hand, and all Persons within R(2), on the other hand, in proportion to (a) the number of shares (without distinction as to class) of MVS Securities, New Common Stock and Replacement Stock (with an appropriate adjustment in the event the New Common Stock was exchanged for or converted into Replacement Stock on other than a one-for-one basis) beneficially owned, or in which a full equivalent economic interest is held, including, without limitation, through an interest in a derivative or "swap" transaction (hereinafter, an "equivalent economic interest"), by the Onex Group and by R(2), respectively, Page 21 of 29 Pages relative to (b) the total number of Shares of MVS Securities, New Common Stock and Replacement Stock beneficially owned or in which an equivalent economic interest is held, by the Onex Group and R(2), collectively, immediately prior to the date of delivery of the Offer Notice (as defined below). For purposes of this Agreement, a Person shall be deemed to beneficially own or have an equivalent economic interest in any shares of New Common Stock or Replacement Stock into which or for which any Other Securities beneficially owned by such Person, or in which such Person has an equivalent economic interest, are convertible, exchangeable or exercisable. For all purposes hereof, the Onex Group shall be represented by Onex and R(2) shall be represented by Amalgamated. 3. PROCEDURES FOR COMMENCEMENT OF TENDER OFFER. (a) At least 10 and no more than 30 days prior to the commencement by any Person(s) within the Initiating Party of a tender offer for shares of Securities, the Initiating Party shall give written notice (the "Offer Notice") to the Non-Initiating Party offering each Person within the Non-Initiating Party the opportunity to participate as a bidder in the proposed tender offer to purchase in the aggregate the number of shares determined in accordance with Section 2. The Offer Notice shall set forth the salient terms of the proposed tender offer, including, without limitation, (i) the price per share to be paid for the shares of the Securities, which shall be in cash and which may be a fixed price or a variable price tied to the market price of the Securities, (ii) the total number of shares for which the Initiating Party proposes the tender offer will be made, based on the assumption that the Non-Initiating Party will not elect to participate, (iii) the proposed timing of the tender offer and (iv) the proposed conditions to the obligation of the offeror(s) to accept shares of the Securities for payment pursuant to the tender offer. The Offer Notice shall also set forth the number of shares of MVS Securities, New Common Stock and Replacement Stock which the Initiating Party beneficially owns or in which it has an equivalent economic interest as of the date of the Offer Notice, and a description of such ownership and interest in reasonable detail, and shall be accompanied by evidence reasonably satisfactory to the Non-Initiating Party of such ownership and interest. (b) The Non-Initiating Party shall have until 5:00 p.m., New York City time, on the fifth day (if such day is a Business Day, and if such day is not a Business Day, then on the next Business Day) following the date of delivery to the Non-Initiating Party of the Offer Notice (the "Offer Deadline"), to deliver written notice (an "Election Notice") to the Initiating Party (i) stating that it elects to participate in the tender offer, (ii) setting forth the number of shares of MVS Securities, New Common Stock and Replacement Stock which it beneficially owned or in which it had an equivalent economic interest immediately prior to the date of delivery of the Offer Notice, and a description of such ownership and interest in reasonable detail and (iii) stating the total number of shares which the Non-Initiating Party is willing to purchase in the tender offer, which shall not exceed the number of shares which the Non-Initiating Party would be entitled to purchase, as determined in accordance with Section 2 (the "Maximum Participation"). The Election Notice shall be accompanied by evidence reasonably satisfactory to the Initiating Party that (i) immediately prior to the date of delivery of the Offer Notice, the Non-Initiating Party beneficially owned or had an equivalent economic interest in the number of shares of MVS Securities, New Common Stock and/or Replacement Stock set forth in the Election Notice in response to clause (ii) of the first sentence of this Section 3(b) and (ii) in the event requested by the Initiating Party, each Person within the Non-Initiating Party participating in the tender offer has the financial capability to fulfill its share of the obligations to purchase shares in the tender offer. (c) Following delivery to the Initiating Party of an Election Notice, the Non-Initiating Party (x) shall not tender any Securities for purchase pursuant to the tender offer (and the number of shares sought in the tender offer shall be reduced if necessary, so as not to exceed the total number of shares outstanding that are not beneficially owned by any Person within the Onex Group or R(2)) and (y) shall be obligated to participate in the tender offer and to purchase the total number of shares in the tender offer set forth in the Election Notice (subject to adjustment as provided in Section 3(f) and 3(g)), at a price no greater than the price set forth in the Offer Notice and on the same terms and conditions as shares are being purchased by the Initiating Party, provided, however, that (i) in the event the tender offer has not been consummated within 180 days following the date of delivery of the Offer Notice (other than as a result of the failure of the Non-Initiating Party to comply with its obligations hereunder), the Non-Initiating Party shall be relieved of such obligations in the event it delivers written notice to the Initiating Party that it will no longer participate in the tender offer (a "Non-Participation Notice") and (ii) in the event the tender offer is not commenced by the Initiating Party within 30 days following the date of delivery of the Offer Notice (other than as a result of the failure of the Non-Initiating Party to comply with its obligations hereunder), the Non-Initiating Party shall be relieved of such obligations. In the event any Person(s) within the Initiating Party desire to commence a tender offer after such 30-day period, they shall be required to deliver another Offer Notice to Page 22 of 29 Pages the Non-Initiating Party and to again comply with the procedures set forth in this Section 3. In the event the Non-Initiating Party delivers a Non-Participation Notice to the Initiating Party, the Initiating Party shall have the right to consummate the tender offer without the participation of the Non-Initiating Party for a period of 90 days following the date of delivery of the Non-Participation Notice, after which time the Initiating Party shall be required to terminate any outstanding tender offer and if any Person(s) within the Initiating Party desire to commence a tender offer thereafter, they shall be required to deliver another Offer Notice to the Non-Initiating Party and to again comply with the procedures set forth in this Section 3. (d) In the event that (i) the tender offer is not consummated in accordance with the terms set forth in the Offer Notice and (ii) the Initiating Party consequently desires to increase the price to be paid for shares or the number of outstanding shares to be purchased through an outstanding tender offer in which the Non-Initiating Party has elected to participate, the Initiating Party shall deliver written notice of such proposed change to the Non-Initiating Party (the "Modification Notice"). By 5:00 p.m., New York City time, on the second Business Day following the date of delivery of the Modification Notice, the Non-Initiating Party shall notify the Initiating Party in writing whether it wishes to continue to participate in such tender offer with such modified terms. In the event the Non-Initiating Party so elects to continue to participate, the Non-Initiating Party shall continue to be obligated to participate in the tender offer with such modified terms, and otherwise in accordance with Section 3(c) as though no such modification was made. In the event the Non-Initiating Party does not so elect to continue to participate in such tender offer with such modified terms, or does not deliver any written notice to the Initiating Party by 5:00 p.m., New York City time, on the second Business Day following the date of delivery of the Modification Notice, (i) the Initiating Party shall have the right to modify the tender offer and consummate the tender offer at a price and for a number of shares of the Securities equal to or greater than that set forth in the Modification Notice without the participation of the Non-Initiating Party for a period of 90 days following the date of delivery of the Modification Notice, after which time the Initiating Party shall be required to terminate any outstanding tender offer and if any Person(s) within the Initiating Party desire to commence a tender offer thereafter, they shall be required to deliver another Offer Notice to the Non-Initiating Party and to again comply with the procedures set forth in this Section 3 and (ii) in the event the Initiating Party so modifies the tender offer, the Non-Initiating Party shall no longer be obligated to participate in the tender offer in accordance with Section 3(c). (e) In the event the Non-Initiating Party delivers an Election Notice to the Initiating Party with respect to a tender offer, the Initiating Party shall control the timing and process of such tender offer and any acquisition of shares of the Securities pursuant to the tender offer, and all actions to be taken in connection therewith, including, without limitation, the preparation of filings with governmental bodies, the negotiation of documentation with third parties necessary to effect and consummate the tender offer and purchase the Securities pursuant to the tender offer, and the retention of counsel and other advisors; provided, however, that (i) the Initiating Party shall keep the Non-Initiating Party reasonably informed as to the timing and status of the tender offer and shall permit the Non-Initiating Party to participate in the process of the tender offer and any related acquisition of shares of the Securities and (ii) the Non-Initiating Party may retain separate counsel and other advisors chosen by it at its own expense. (f) In the event that the Onex Group and R(2) are unable to agree on the respective numbers and relative proportion of shares which they would be entitled to purchase pursuant to any tender offer for which the Non-Initiating Party has delivered an Election Notice, any description or calculation of the numbers, and relative proportion of shares to be purchased by the Onex Group and R(2), respectively, as set forth in any filing or other documentation regarding the tender offer, shall be based on the good faith determination of the Initiating Party, taking into account the information regarding beneficial ownership and equivalent economic interest set forth in the Election Notice and the accompanying evidence thereof. In the event that any such disagreement has not been resolved at the time the Initiating Party is prepared to accept shares for payment pursuant to the tender offer, the Initiating Party may accept such shares for payment and the Non-Initiating Party shall purchase the proportion of shares so accepted for payment described in the tender offer documentation, as determined by the Initiating Party in accordance with this Section 3(f). Promptly following resolution of any such disagreement, whether by agreement of the parties, judicial determination or otherwise, the Non-Initiating Party shall purchase from the Initiating Party, and the Initiating Party shall sell to the Non-Initiating Party, on such terms, the number of shares equal to the difference between (i) the product of (A) the lesser of (x) the maximum number of shares which the Non-Initiating Party was entitled to purchase in the tender offer, as determined by the parties, the court or otherwise in such resolution and (y) the number of shares which the Non-Initiating Party elected to purchase in the Election Notice and (B) a fraction, the numerator of which is the number of shares purchased in the tender offer and the denominator of which is the number of shares for which the tender offer was made, and (ii) the number of shares purchased by the Non-Initiating Party in the tender offer. In the event such disagreement is resolved by means other than agreement of the Page 23 of 29 Pages parties, all reasonable fees and expenses incurred by the Initiating Party and the Non-Initiating Party in connection with such disagreement shall be borne by the parties in proportion to the relative differences between each such party's final position as to the number of shares or percentage of total shares purchased that the Non-Initiating Party is entitled to purchase in the tender offer, as submitted to the court or other body resolving the disagreement, and the final determination of the court or other body resolving the disagreement; provided, however if the body resolving the disagreement determines that the Non-Initiating Party is entitled to purchase a number of shares greater than the highest number proposed or lower than the lowest number proposed by the parties, the party whose final determination submitted to the court was furthest from the court's determination shall bear all such fees and expenses. For example, (a) if the Non-Initiating Party's final position is that it is entitled to purchase 15% of the total shares purchased and the Initiating Party's final position is that the Non-Initiating Party is entitled to purchase 10% of the total shares purchased and (b) if the body resolving the disagreement determines that the Non-Initiating Party is entitled to purchase: (i) 14%, then the Initiating Party would bear 80% of such fees and expenses, (ii) 9%, then the Initiating Party would bear none of such fees and expenses, and (iii) 16%, then the Initiating Party would bear 100% of such fees and expenses. (g) In the event shares are accepted for payment pursuant to a tender offer with respect to which the Non-Initiating Party delivered an Election Notice to the Initiating Party and the number of shares tendered for payment is less than the total number of shares for which the tender offer was made, the numbers of shares which the parties are entitled and obligated to purchase shall be reduced on a pro rata basis in proportion to the numbers of shares which they would have been entitled and obligated to purchase had all shares covered by the tender offer been tendered. (h) In the event the Non-Initiating Party does not deliver an Election Notice to the Initiating Party by the Offer Deadline, the Initiating Party shall have the right, for a period of (i) 30 days following the date of delivery of the Offer Notice to commence a tender offer and (ii) 180 days following the date of delivery of the Offer Notice to consummate a tender offer, without any participation by any Person within the Non-Initiating Party, at a price per share in cash and for a number of shares of the Securities equal to or greater than the price and the number of shares set forth in the Offer Notice and having such other terms as are materially no less favorable to the bidder in the tender offer than those set forth in the Offer Notice. (i) Nothing contained in this Agreement shall require the Initiating Party to commence or consummate the proposed tender offer described in an Offer Notice following delivery to the Non-Initiating Party of such Offer Notice. 4. COOPERATION; INDEMNIFICATION. In the event the Non-Initiating Party elects to participate in a tender offer initiated by the Initiating Party, the Non-Initiating Party shall cooperate with the Initiating Party in the commencement, conduct and consummation of the tender offer and any related acquisition of shares of the Securities, and shall take all actions and execute and deliver all documents required to be taken by it in connection therewith, including, without limitation, promptly furnishing the Initiating Party with all information required to be included in filings required to be made with any governmental body in connection with the tender offer or the acquisition of the Securities, whether pursuant to the Securities Exchange Act of 1934, as amended, the Hart-Scott-Rodino Antitrust Improvements Act, foreign antitrust laws, state regulatory requirements or otherwise. The Initiating Party shall give the Non-Initiating Party and its counsel, if any, the opportunity to review the foregoing before filing or execution thereof and will consider in good faith the comments of the Non-Initiating Party thereon. Unless the Non-Initiating Party delivers a Withdrawal Notice, the Initiating Party shall undertake, in a form and on terms reasonably acceptable to the Initiating Party, to indemnify and hold harmless the Non-Initiating Party from and against any losses, claims, damages, liabilities, judgments, costs and expenses arising out of any untrue statement of a material fact contained in any such filing, or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission relates to the Initiating Party. The Non-Initiating Party shall undertake, in a form and on terms reasonably acceptable to the Initiating Party, to indemnify and hold harmless the Initiating Party from and against any losses, claims, damages, liabilities, judgments, costs and expenses arising out of any untrue statement of a material fact contained in any such filing or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is based on information furnished by the Non-Initiating Party to the Initiating Party for use in any such filing. 5. CONFIDENTIALITY. Page 24 of 29 Pages Any Offer Notice delivered pursuant to this Agreement and the subject matter thereof shall be kept strictly confidential by the recipient thereof. Notwithstanding anything to the contrary described herein, the parties hereto and each of their respective employees, representatives or other agents, are permitted to disclose to any and all Persons, without limitations of any kind, the tax treatment and tax structure of the transactions contemplated by any such Offer Notice and all materials of any kind (including opinions or other tax analyses) that are or have been provided to such parties related to such tax treatment and tax structure; provided, however, that the foregoing permission to disclose the tax treatment and tax structure does not permit the disclosure of any information that is not relevant to understanding the tax treatment or tax structure of any such transactions (including the identity of any party and the amounts paid or to be paid in connection with such transactions); provided, further, however, that the tax treatment and tax structure shall be kept confidential to the extent necessary to comply with federal or state securities laws. 6. EXPENSES. Subject to the last two sentences of Section 3(f), each of the Onex Group and R(2) shall be responsible for its own fees and expenses in connection with the negotiation, preparation and execution of this Agreement and the performance of its obligations hereunder; provided, however, that all out-of-pocket fees and expenses incurred by an Initiating Party (including, without limitation, fees and expenses of counsel and other advisors) in connection with a tender offer with respect to which the Non-Initiating Party delivers an Election Notice and any related acquisition of shares of the Securities shall be borne by the Onex Group and R(2) in proportion to the number of shares required to be purchased by them in such tender offer; provided, further, however, that (i) in the event the Initiating Party fails to commence the tender offer within 30 days following the date of delivery of the Offer Notice, other than as a result of the failure of the Non-Initiating Party to comply with its obligations hereunder, then all such out-of-pocket fees and expenses incurred by the Initiating Party shall be borne by the Initiating Party, (ii) in the event the tender offer is not consummated within 180 days following the date of delivery of the Offer Notice, other than as a result of the failure of the Non-Initiating Party to comply with its obligations hereunder, and the Non-Initiating Party delivers a Non-Participation Notice to the Initiating Party, then all such out-of-pocket fees and expenses incurred by the Initiating Party after the date of delivery of such Non-Participation Notice shall be borne by the Initiating Party and (iii) in the event (x) the Initiating Party delivers a Modification Notice to the Non-Initiating Party pursuant to Section 3(d), (y) the Non-Initiating Party does not elect to continue to participate in the modified tender offer and (z) the Initiating Party consummates the modified tender offer, then all such out-of-pocket fees and expenses incurred by the Initiating Party shall be borne by the Initiating Party. 7. COMPLIANCE BY PERSONS WITHIN THE ONEX GROUP AND R(2). MHLP, Onex and Onex Partners shall cause each other Person within the Onex Group to comply with the obligations of the Onex Group hereunder and Investments, Amalgamated and Scepter shall cause each other Person within R(2) to comply with the obligations of R(2) hereunder. 8. SUCCESSORS AND ASSIGNS. The terms of this Agreement shall be binding on the parties hereto and their respective successors and assigns. 9. TERMINATION. This Agreement shall terminate at such time as either the Onex Group, on the one hand, or R(2), on the other hand, ceases to beneficially own or have an equivalent economic interest in at least 5% of the aggregate number of shares of MVS Securities, New Common Stock and Replacement Stock (with an appropriate adjustment in the event the New Common Stock was exchanged for or converted into Replacement Stock on other than a one-for-one basis) then outstanding; provided, however, that any outstanding obligations of any party hereto with respect to a tender offer for which any Non-Initiating Party has delivered an Election Notice prior to the time of such termination shall survive such termination. 10. NOTICES. All notices, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile with confirmation of transmission by the transmitting equipment and by telephone; or (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses or facsimile numbers and marked to the attention of the person (by name or title) Page 25 of 29 Pages designated below (or to such other address, facsimile number, e-mail address or person as a party may designate by notice to the other parties): If to any Person within the Onex Group: c/o Onex Investment Corp. 712 Fifth Avenue New York, NY 10019 Attention: Robert Le Blanc Facsimile: (212) 582-0909 Telephone: (212) 582-2211 and: c/o Onex Corporation 161 Bay Street 49th Floor P.O. Box 700 Toronto, Ontario M5J2S1 Canada Attention: Mark Hilson Facsimile: (416) 362-5765 Telephone: (416) 362-7711 with a copy to: Kaye Scholer LLP 425 Park Avenue New York, NY 10022 Attention: Joel I. Greenberg, Esq. Facsimile: (212) 836-8689 Telephone: (212) 836-8000 If to any Person within R(2): c/o Amalgamated Gadget, L.P. 301 Commerce Street, Suite 2975 Fort Worth, Texas 76102 Attention: William B. Holloway, Jr. Facsimile: (817) 332-9606 Telephone: (817) 332-9500 with a copy to: Milbank, Tweed, Hadley & McCloy, LLP 1 Chase Manhattan Plaza New York, New York 10005 Attention: Dennis C. O'Donnell, Esq. Facsimile: (212) 530-5219 Telephone: (212) 530-5000 Page 26 of 29 Pages Any notice or other communication required to be delivered hereunder to or by any Person within the Onex Group shall be deemed to have been given if given to or by, as the case may be, Onex in accordance with this Section 10 and any notice or other communication required to be delivered hereunder to or by any Person within R(2) shall be deemed to have been given if given to or by, as the case may be, Amalgamated in accordance with this Section 10. 11. EFFECTIVENESS. This Agreement shall become effective and binding on the Effective Date, provided that each of the parties hereto has executed and delivered a counterpart signature page hereto. 12. AMENDMENT AND WAIVER. Any term of this Agreement may be amended or modified and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of Onex and Amalgamated. 13. ENTIRE AGREEMENT. This Agreement supersedes all prior agreements among the parties with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. 14. SUBMISSION TO JURISDICTION; WAIVER OF TRIAL BY JURY. Each party hereto irrevocably consents and agrees that any legal action or proceeding with respect to this Agreement and any action for enforcement of any judgment in respect thereof will be brought in the Chancery Court of the State of Delaware or, if it has or can acquire jurisdiction, the United States District Court for the District of Delaware, and, by execution and delivery of this Agreement, each party hereby submits to and accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof. Each party to this Agreement further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the delivery of copies thereof in the manner set forth in Section 10. Each party to this Agreement hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing in this Section shall be deemed to constitute a submission to jurisdiction, consent or waiver with respect to any matter not specifically referred to herein. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER. 15. COUNTERPARTS; FACSIMILE EXECUTION. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same agreement. This Agreement may be executed and delivered by telecopier, provided, however, that the parties shall endeavor to deliver original counterpart signatures to the other parties as soon thereafter as practicable. 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, ENFORCED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CHOICE OF LAW PRINCIPLES. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. R(2) INVESTMENTS, LDC By: Amalgamated Gadget, L.P., its Investment Manager Page 27 of 29 Pages By: Scepter Holdings, Inc., its General Partner By: /s/ Robert McCormick ------------------------------ Title: Vice President AMALGAMATED GADGET, L.P. By: Scepter Holdings, Inc., its General Partner By: /s/ Robert McCormick ------------------------------ Title: Vice President SCEPTER HOLDINGS, INC. By: /s/ Robert McCormick ---------------------------------- Title: Vice President MAGELLAN HOLDINGS LP By: Onex Partners LP, its General Partner By: Onex Partners GP LP, its General Partner By: Onex Partners GP Inc., its General Partner By: /s/ Anthony Munk ---------------------- Title: Vice President By: /s/ John Troiano ---------------------- Title: Vice President [Additional signature page follows] ONEX CORPORATION By: /s/ Christopher Govan ---------------------------------- Title: Vice President Taxation By: /s/ Seth Mersky ---------------------------------- Title: Vice President ONEX PARTNERS LP By: Onex Partners GP LP, its General Partner By: Onex Partners GP Inc., its General Partner By: /s/ Anthony Munk -------------------------- Page 28 of 29 Pages Title: Vice President By: /s/ John Troiano -------------------------- Title: Vice President Page 29 of 29 Pages -----END PRIVACY-ENHANCED MESSAGE-----