Executing a Successful, Value-Enhancing Plan
Board Has Experience to Oversee Execution of Multi-Year
Plan and Holds Management Accountable for its
Success
Initiates Use of Universal Proxy and Includes Pershing
Square's William Ackman as a
Recommended CP Director Nominee
CALGARY, March 22, 2012 /PRNewswire/ - Canadian Pacific
Railway Limited (TSX: CP) (NYSE: CP) today filed the Company's
management proxy circular with the Canadian securities regulatory
authorities on SEDAR. The management proxy circular includes
a letter from John E. Cleghorn,
Chairman of the Board, inviting shareholders to attend the
Company's annual meeting, which will be held on May 17, 2012. The management proxy circular will
be available on the SEDAR website at www.sedar.com, the EDGAR
website at www.sec.gov and at www.CPonTrack.com.
The full text of the letter is below:
March 22, 2012
Dear Fellow Shareholder,
I am pleased to invite you to attend the annual meeting of
shareholders of Canadian Pacific Railway Limited to be held at the
Sheraton Suites Eau Claire, 255 Barclay Parade S.W., Calgary, Alberta on Thursday, May 17, 2012, at 8:00 a.m. local time.
The upcoming annual meeting is one of the most important in
Canadian Pacific's history. You will be asked to make a very
important decision that will have a significant impact on the
future of our company. You will be asked to choose between
the continued careful and focused execution of our value-generating
Multi-Year Plan unanimously endorsed by your Board, or the risk and
uncertainty of the proposal put forth by Pershing Square.
Canadian Pacific is delivering value to our shareholders by
aggressively and successfully executing our Multi-Year Plan.
Canadian Pacific's Multi-Year Plan includes an ambitious but
achievable operating ratio target of between 70 and 72 for 2014
that will drive substantial shareholder value. We believe
that the continued successful execution of Canadian Pacific's
Multi-Year Plan will deliver further improvements to our operating
ratio, with a target of between 68.5 and 70.5 for 2016.
The Multi-Year Plan is already yielding results in the form of
record operating metrics for the fourth quarter of 2011 and in 2012
to date. We expect these improved metrics to translate into
improved financial results beginning in the first quarter of
2012.
The Board and Canadian Pacific have sought meaningful engagement
with Pershing Square and have attempted to foster a constructive
dialogue. Members of the Board and management team of
Canadian Pacific met with Pershing Square within days of Pershing
Square's first disclosure of its holding in Canadian Pacific and a
number of meetings and conversations took place over the following
weeks. As a result of these meetings, an invitation was
extended to Mr. William A. Ackman,
Chief Executive Officer of Pershing Square, to join the Board so
that a constructive Board-level dialogue based on all the relevant
facts and information could take place. The invitation to Mr.
Ackman remains open and, in that regard, Canadian Pacific has
included him as one of the nominee directors that we recommend to
Canadian Pacific shareholders.
The Board of Directors unanimously supports Fred Green, our President and CEO, and the
Canadian Pacific management team, and endorses management's
Multi-Year Plan. We urge you to vote FOR continued
shareholder value creation and FOR the nominees proposed by the
Board by voting on the enclosed WHITE proxy today. As
outlined in detail in the Management Proxy Circular:
- Canadian Pacific is Aggressively Executing a Successful,
Value-Enhancing Plan
-
- Canadian Pacific's Multi-Year Plan includes an ambitious but
achievable operating ratio target of between 70 and 72 for 2014
that will drive substantial shareholder value and Canadian Pacific
believes that the continued successful execution of the Multi-Year
Plan will deliver further improvements to its operating ratio with
a target of between 68.5 and 70.5 for 2016.
- The successful execution of the Multi-Year Plan is already
yielding record operating results and has significant
momentum.
- The Multi-Year Plan is being executed by a strong management
team under the oversight of the Board.
- The Multi-Year Plan has been reviewed and assessed by
Oliver Wyman (part of Marsh &
McLennan Companies), highly qualified, independent railroad
industry experts retained by the Board, which has concluded that,
based upon the assumptions set out in the Management Proxy Circular
and the continued successful execution of the Multi-Year Plan by
management, an operating ratio of between 70 and 72 for 2014 is
within a reasonable range of achievement.
- Canadian Pacific's Board Has the Required Expertise and
Experience to Oversee Execution of the Multi-Year Plan and Hold
Management Accountable for its Success
-
- The Board has significant breadth and depth of expertise,
including in the railroad and complementary industries, with a
recognized commitment to the highest standards of corporate
governance.
- Pershing Square's nominees who accompany Mr. Ackman have no
evident railroad industry experience and add no other complementary
industry experience.
- The Board has engaged with Mr. Ackman and maintains an open
invitation for him to join the Board, an invitation which Mr.
Ackman has so far declined. Instead, Pershing Square has launched
an unnecessary and costly proxy contest.
The Board strongly disagrees with Pershing Square's demand that
Canadian Pacific replace its CEO with Hunter Harrison. The Board believes that
Mr. Harrison is not the right leader for Canadian Pacific.
Furthermore, Pershing Square has presented no credible, detailed
plan to support its assertions about reducing Canadian Pacific's
operating ratio. The approach advocated by Pershing Square
and its nominees, none of whom has any operational or related
experience with Class I railroads, risks moving Canadian Pacific in
the wrong direction by seriously delaying and disrupting our
progress in executing the Multi-Year Plan, thereby negatively
impacting shareholder value. In the Management Proxy
Circular, the Board provides detailed reasons for its opposition to
Pershing Square's proposal, specifically:
- Pershing Square's Proposal is Ill-Conceived and Introduces
Unwarranted Risk to Shareholder Value
-
- Pershing Square has demonstrated a lack of understanding of
Canadian Pacific's business.
- Pershing Square has disclosed no specific plan to achieve its
stated operating ratio targets.
- Pershing Square's operating ratio targets for Canadian Pacific
are unrealistic and lack credibility.
- The only stated goal of Pershing Square is to install Mr.
Harrison as President and CEO, who the Board believes is not the
right leader for Canadian Pacific.
- Installing Mr. Harrison as President and CEO would, by his own
admission, seriously delay and disrupt Canadian Pacific's progress
in executing the Multi-Year Plan.
We look forward to seeing you at the meeting and to having
the opportunity to answer your questions, but if you cannot attend,
it is important that your shares be represented. Whether
or not you plan to attend the annual meeting, we urge you to read
the Management Proxy Circular carefully and to VOTE FOR the
Canadian Pacific nominees by using the enclosed WHITE proxy
and NOT to vote for Pershing Square's other director
nominees or return any proxy card sent to you by Pershing
Square. As Canadian Pacific is using a "universal" proxy
containing all of the Canadian Pacific nominees as well as the
other nominees proposed by Pershing Square, there is no need to use
any other proxy regardless of how you propose to vote.
You may vote for Canadian Pacific's nominees in accordance with
the instructions provided on the WHITE proxy, by telephone
or internet, or by signing, dating, and returning the enclosed
WHITE proxy in the postage−paid envelope provided.
Only your last−dated proxy will count—any proxy may be revoked at
any time prior to its exercise at the annual meeting as described
in the Management Proxy Circular.
For those shareholders not able to attend in person, you can log
onto our website at www.cpr.ca before the meeting to listen to a
live audio webcast of the proceedings. If you have any
questions, please contact MacKenzie Partners, Inc. or Georgeson,
which are assisting us in connection with this year's annual
meeting, at 1-800-322-2885 or at 1-866-374-9187, respectively. You
can also visit www.CPonTrack.com for more information about CP, our
team and our value-generating Multi-Year Plan.
On behalf of the Board and management, we would like to thank
you for your continued support of Canadian Pacific.
Yours truly,
/s/
John E. Cleghorn
Chairman of the Board
Note on Forward-Looking Information
This news release contains certain forward-looking information
within the meaning of applicable securities laws relating, but not
limited, to our operations, priorities and plans, anticipated
financial performance, business prospects, planned capital
expenditures, programs and strategies. This forward looking
information also includes, but is not limited to, statements
concerning expectations, beliefs, plans, goals, objectives,
assumptions information and statements about possible future
events, conditions, and results of operations or performance.
Forward-looking information may contain statements with words such
as "anticipate", "believe", "expect", "plan" or similar words
suggesting future outcomes.
Undue reliance should not be placed on
forward-looking information as actual results may differ materially
from the forward-looking information. Forward-looking information
is not a guarantee of future performance. By its nature, CP's
forward-looking information involves numerous assumptions, inherent
risks and uncertainties that could cause actual results to differ
materially from the forward-looking information, including but not
limited to the following factors: changes in business strategies;
general North American and global economic, credit and business
conditions; risks in agricultural production such as weather
conditions and insect populations; the availability and price of
energy commodities; the effects of competition and pricing
pressures; industry capacity; shifts in market demand; inflation;
changes in laws and regulations, including regulation of rates;
changes in taxes and tax rates; potential increases in maintenance
and operating costs; uncertainties of investigations, proceedings
or other types of claims and litigation; labour disputes; risks and
liabilities arising from derailments; transportation of dangerous
goods; timing of completion of capital and maintenance projects;
currency and interest rate fluctuations; effects of changes in
market conditions and discount rates on the financial position of
pension plans and investments, including long-term floating rate
notes; and various events that could disrupt operations, including
severe weather, droughts, floods, avalanches and earthquakes as
well as security threats and governmental response to them, and
technological changes. The foregoing list of factors is not
exhaustive.
These and other factors are detailed from time
to time in reports filed by CP with securities regulators in
Canada and the United States. Reference should be made to
"Management's Discussion and Analysis" in CP's annual and interim
reports, Annual Information Form and Form 40-F. Readers are
cautioned not to place undue reliance on forward-looking
information. Forward-looking information is based on current
expectations, estimates and projections and it is possible that
predictions, forecasts, projections, and other forms of
forward-looking information will not be achieved by CP. Except as
required by law, CP undertakes no obligation to update publicly or
otherwise revise any forward-looking information, whether as a
result of new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific (TSX:CP)(NYSE:CP) operates a North American
transcontinental railway providing freight transportation services,
logistics solutions and supply chain expertise. Incorporating
best-in-class technology and environmental practices, CP is
re-defining itself as a modern 21st century transportation company
built on safety, service reliability and operational efficiency.
Visit www.CPonTrack.com and see how Canadian Pacific is further
driving shareholder value.
SOURCE Canadian Pacific