Time For An Upgrade: Jana Announces Agrium Directors To Be Replaced

- Targets 5 Directors Who Embody Board's Deficiencies in Experience, Passivity in the Face of Underperformance, Lack of Shareholder Alignment, and Entrenchment Tactics

- Includes 2 Directors Who Just This Week Invented New Credentials for Themselves

- Debunks Agrium's Tired Scare Tactics and Misleading Statements About Board Alignment with Shareholders

NEW YORK, March 7, 2013 /CNW/ - JANA Partners today filed and mailed its proxy circular to Agrium Inc. ("Agrium") (TSX / NYSE: AGU) shareholders naming the directors it plans to replace at the Annual General Meeting on April 9, 2013 with its highly-qualified independent nominees. The JANA nominees will constitute a minority of the board and are prepared to work constructively to help unlock substantial unrealized value for shareholders. A letter accompanying today's mailing from JANA Managing Partner and nominee Barry Rosenstein follows.

JANA PARTNERS URGES FELLOW SHAREHOLDERS TO VOTE THE BLUE PROXY CARD OR VIF FOR ITS EXPERIENCED AND INDEPENDENT BOARD NOMINEES
Further Information Available at www.JANAAguAnalysis.com

Letter from JANA Partners

Dear Fellow Agrium Shareholders:

We have invested more than $1 billion in Agrium, making it our largest investment and us the largest shareholder, because it has the opportunity to unlock substantial unrealized value for all shareholders. Instead of embracing this opportunity, the board has hidden behind stock performance attributable to broad industry tailwinds, as well as baseless attacks and distortions, including just this week quietly and falsely enhancing the qualifications of its board.

Agrium would like you to believe that we have invested over $1 billion in its stock to purposely destroy the value of our own investment. Does that make sense to you?

We have proposed 5 new independent directors who are all highly qualified to help address the underperformance more fully outlined below. Agrium has called our board slate a "Trojan Horse" even though these nominees would be a minority of the board and could only accomplish change through building consensus. Why is Agrium's board so afraid of a minority of independent board members with relevant experience who can ask the tough questions?

1. Agrium's retail distribution business ("Retail") has failed to live up to its potential.

• Agrium's Retail acquisitions have failed to meet its own minimum 9% return hurdle and Retail margins have contracted significantly even as Agrium spent over $4 billion on Retail acquisitions which, with proper management, should have improved margins.
• This is not surprising given that no independent director has significant "breaking bulk" distribution experience, and given that management performance targets have prioritized growth at any cost over profitability and returns.
• Agrium reduced disclosure in Retail, even as Retail's size and importance grew.
• Agrium has tried to divert attention from its unrealized value potential with the tired claim that our sole goal is to separate Retail. In truth, we have identified many issues in addition to Agrium's structure, and are calling for a fair review of this structure to address its undervaluation, rather than the rigged review Agrium conducted. Agrium seeks to focus on this sole issue to divert attention from the full range of value creation opportunities we have raised.

2. Agrium's much-touted share price return is the result of good fortune, not good board stewardship, and falls far short of the real value creation opportunity.

• Agrium benefitted from the same commodity and industry tailwinds as peers, yet Agrium meaningfully underperformed an index of its peers by over 60% over the 5 years before JANA's engagement.
• Agrium's responses to our engagement – including a meaningful dividend increase, a significant share repurchase and improved disclosure – have helped begin to address its historical underperformance.

3. Agrium has resorted to entrenchment tactics, diversions and falsehoods, including:

• In this week's 2013 proxy circular, claiming that 2 directors who were listed in its 2012 circular as not having "Distribution" experience now suddenly have such experience;
• Abandoning its long-held claim that Retail is undervalued and hiring paid mercenaries who previously argued against Agrium's conglomerate structure to manipulate the data to argue for it;
• Prioritizing loyalty to management over relevant experience in making hurried board appointments before the annual meeting designed to preserve the status quo; and
• Ignoring for months the issues we raised, then at 5pm before a holiday weekend quietly moving up the annual general meeting by over a month to cut short the debate further.

4. Agrium now attempts to attack our nominees for being 100% aligned with shareholders.

• JANA publicly disclosed months ago that our nominees are 100% aligned with shareholders through their substantial personal Agrium investments plus sharing in a percentage of the appreciation in our Agrium shares, which is akin to share ownership.
• Agrium raises this smokescreen now out of desperation. Despite its misleading attacks, this formula is automatic, not discretionary, and based solely on stock performance, and thus fully aligns our nominees' interests with those of all shareholders. While Agrium falsely claims that we are focused on the short term, we would put our nominees' integrity and long-term value creation records against the records of any of Agrium's directors.
• It is not surprising that the board, which has bought little stock and sees itself as defenders of management rather than shareholders, objects to the idea of shareholder alignment. But all applicable board guidelines define "independence" by looking at relationships with the company, not shareholders, for a reason. Board alignment with the management they are supposed to oversee is a conflict. Board alignment with shareholders is not a conflict, it is the goal.
• In fact, shareholders should ask if the board is really fighting to preserve its steady flow of board fees and DSU grants. During their tenures, in addition to cash fees, the non-management directors have collectively received DSUs valued in excess of $20 million.

Given these issues, the 5 directors we are seeking to replace on Agrium's 12-person board are:

• Frank W. Proto – Mr. Proto is the longest-serving member of the board at 20 years, served as Chair until May 2012 and thus oversaw substantial Retail underperformance, has not purchased a single share of stock in over nine years, and has no legitimate distribution experience. In fact, in a shockingly blatant distortion, Agrium in this week's proxy circular simply checked the "Distribution" experience box for Mr. Proto, despite not checking this box previously and despite no apparent support for such claim. Mr. Proto also chaired the special committee (the "special committee") that was tasked with responding to the numerous issues we raised (which arose during his stewardship), and that instead approved an assault on a reasonable debate about unlocking shareholder value.
• Dr. Susan A. Henry – Dr. Henry is the second-longest serving member of Agrium's board at over 11 years, has purchased only 100 shares of stock in her entire tenure, and serves on Agrium's compensation committee, which prioritized growth at any cost over profitability, and corporate governance committee, which condoned Agrium's scorched earth defense of the status quo and its CEO's pre-screening of directors for fealty.
• Derek G. Pannell – Mr. Pannell has served on the board for 5 years, is the chair of the compensation committee and served on the special committee, and has no legitimate distribution experience. Like Mr. Proto, Mr. Pannell suddenly went from having no claimed distribution experience last year to claiming such experience this year.
• Russell J. Horner – Mr. Horner has served on the board for over 8 years, has not purchased a single share of stock in 5 years, sat on the special committee, chairs the corporate governance committee which signed off on last-minute enhancements to the supposed qualifications of Messrs. Proto and Pannell, and serves on the compensation committee. He also has no relevant distribution experience. During his CEO tenure, Catalyst Paper suffered repeated quarterly losses, prompting shareholder intervention and his departure.
• Mayo M. Schmidt – Mr. Schmidt was appointed after Agrium's CEO stated that questioning his performance or strategy was a disqualification for board service. He made $30 million in the transaction where Agrium acquired Viterra's retail business and does not add significant distribution experience given that distribution was a small part of Viterra. $1 invested in Viterra's predecessor at the start of his 12-year CEO tenure would be worth a fraction of that today, and during his tenure Viterra struggled with costs and issued over $2 billion in equity but only paid a small dividend after shareholder pressure.

We believe these 5 directors embody the lack of relevant distribution experience, passivity in the face of underperformance, lack of shareholder alignment, and entrenchment tactics of Agrium's board that have caused Agrium to underperform. Removing them will lift a burden off Agrium, without depriving it of necessary experience or company knowledge.

I hope that you will review the enclosed materials and our website www.JANAAguAnalysis.com to learn more about our nominees. We encourage you to review the records of the board members named above and compare them to the experience and shareholder mindset of our nominees and ask yourselves, why wouldn't you want our nominees to join Agrium's board?

Please join me in voting the BLUE proxy or VIF "FOR" our director nominees to strengthen the board and put Agrium on a path to unlocking its substantial value creation potential.

Sincerely,

/s/ Barry Rosenstein
Founder and Managing Partner
JANA Partners LLC

Information in Support of Public Broadcast Solicitation

JANA is relying on the exemption under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.

This solicitation is being made by JANA, and not by or on behalf of the management of Agrium.

The address of Agrium is 13131 Lake Fraser Drive S.E., Calgary, Alberta T2J 7E8.

JANA has filed an information circular containing the information required by Form 51-102F5 – Information Circular in respect of its proposed nominees, which is available on Agrium's company profile on SEDAR at www.sedar.com and at www.JANAAguAnalysis.com.

Proxies for the Agrium shareholders' meeting may be solicited by mail, telephone, email or other electronic means as well as by newspaper or other media advertising, and in person by managers, directors, officers and employees of JANA, who will not be specifically remunerated therefor. In addition, JANA may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws. JANA may engage the services of one or more agents and authorize other persons to assist it in soliciting proxies on behalf of JANA. JANA may cause a soliciting dealer group to be formed to solicit proxies on behalf of JANA in support of its nominees, for which JANA would pay customary fees. All costs incurred for the solicitation will be borne by JANA.

JANA has entered into agreements with Kingsdale Shareholder Services Inc. ("Kingsdale") and The Laurel Hill Advisory Group Company ("Laurel Hill") pursuant to which Kingsdale and Laurel Hill have agreed to assist JANA in soliciting shareholders should JANA commence a formal solicitation of proxies. Kingsdale's responsibilities will principally include advising JANA on governance best practices, where applicable, liaising with proxy advisory firms, developing and implementing shareholder communication and engagement strategies, and advising with respect to meeting and proxy protocol. Laurel Hill will be principally responsible for the solicitation of retail shareholders and other strategic advice. Pursuant to the agreement with Kingsdale, for its solicitation services, Kingsdale would receive a fee in the range of $125,000 to $250,000, plus disbursements and a telephone call fee. In addition, Kingsdale may be entitled to a success fee on the successful completion of JANA's solicitation, as determined by JANA in consultation with Kingsdale. Kingsdale will also receive a separate fee for its other services. Pursuant to the agreement with Laurel Hill, Laurel Hill would receive a fee of up to $100,000, plus disbursements and a telephone call fee. In addition, Laurel Hill will be entitled to a success fee of $100,000 on the successful completion of JANA's solicitation. All costs incurred for the solicitation will be borne by JANA.

JANA is not requesting that Agrium shareholders submit a proxy at this time. Once JANA has commenced a formal solicitation of proxies, a registered holder of common shares of Agrium that gives a proxy may revoke it: (a) by completing and signing a valid proxy bearing a later date and returning it in accordance with the instructions contained in the form of proxy to be provided by JANA, or as otherwise provided in the final proxy circular, once made available to shareholders; (b) by depositing an instrument in writing executed by the shareholder or by the shareholder's attorney authorized in writing, as the case may be: (i) at the registered office of Agrium at any time up to and including the last business day preceding the day the meeting of Agrium shareholders or any adjournment or postponement of the meeting is to be held, or (ii) with the chairman of the meeting prior to its commencement on the day of the meeting or any adjournment or postponement of the meeting; or (c) in any other manner permitted by law. A non-registered holder of common shares of Agrium will be entitled to revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered holder by its intermediary.

To the knowledge of JANA, neither JANA nor any of its managers, directors or officers, or any associates or affiliates of the foregoing, nor any of JANA's nominees, or their respective associates or affiliates, has: (i) any material interest, direct or indirect, in any transaction since the beginning of Agrium's most recently completed financial year or in any proposed transaction that has materially affected or would materially affect Agrium or any of its subsidiaries; or (ii) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter currently known to be acted upon at the meeting of Agrium shareholders other than the election of directors.

SOURCE JANA Partners