Board Of Directors Implements Changes to Governance Structure

TSX: MFI
www.mapleleaffoods.com

TORONTO, July 28, 2011 /PRNewswire/ - Maple Leaf Foods Inc. ("Maple Leaf" or the "Company") announced today changes approved by the Board of Directors to further enhance the Company's governance structure. These include a new governance agreement (the "governance agreement") with Michael H. McCain, the Company's President and CEO, and McCain Capital Corporation ("MCC"), the Company's largest shareholder, and the adoption of a shareholder rights plan (the "rights plan").

"These initiatives establish an enhanced governance framework for Maple Leaf Foods," said James Hankinson, Chair of the Special Committee. "We go forward with a Board and management team that are intent on building shareholder value."

The Special Committee was constituted to consider, report on and make recommendations to the Board of Directors on action to be taken by the Company, if any, in connection with a proposed reorganization transaction of MCC and the adoption of a shareholder rights plan.  The Special Committee is comprised of all of the directors of the Company independent of Mr. McCain and MCC.

Governance Agreement

The governance agreement with MCC, which currently holds approximately 31.3% of the Company's common shares outstanding, and Mr. McCain was precipitated by a proposed reorganization transaction involving MCC that the Company understands will result in Mr. McCain, the Company's President and CEO, acquiring all of the shares in Maple Leaf Foods currently held by MCC.  Upon completion of that transaction, the Company understands that  Mr. McCain will beneficially own or control 44,673,922 common shares of the Company, or approximately 31.9% of the total shares outstanding.

Under the governance agreement, MCC, and upon completion of the re-organization, Mr. McCain will have the right to nominate that number of directors of the Company that is proportionate to its or his ownership interest in the Company.  Accordingly, based on the current Board size of 13, MCC or Mr. McCain, as applicable, would be entitled to nominate four directors.  All other directors on the Board, other than one director who is affiliated with West Face Capital Inc. ("West Face Capital"), will, except in certain circumstances, be directors independent of management, Mr. McCain, MCC and West Face Capital.

Shareholder Rights Plan

In addition, and upon the recommendation of the Special Committee, the Board of Directors of Maple Leaf also voted to adopt the rights plan.  The rights plan contains customary market terms for a rights plan and includes several provisions recommended as best practice by various governance organizations.  It follows a previous plan that was allowed to expire on December 29, 2010.

The rights plan was not adopted in response to any actual or anticipated transaction, but rather to allow the Board of Directors of Maple Leaf and its shareholders sufficient time to consider fully any transaction involving the acquisition or proposed acquisition of 20 percent or more of the outstanding common shares of the Company. The plan allows the Board of Directors time to consider all alternatives and to ensure the fair treatment of shareholders should any such transaction be initiated.

The rights plan, which is effective immediately, will expire on the six month anniversary of its adoption should shareholder approval of the rights plan not be obtained prior to that time.  The Company intends to call and hold a special meeting of shareholders to approve the rights plan within six months.  If approved by shareholders, the rights plan will need to be  reconfirmed at the third and sixth annual meeting of shareholders held after its adoption, or it will terminate. In any event it will terminate at the end of the annual meeting of shareholders held in 2020.  Pursuant to the governance agreement, MCC and upon completion of the reorganization, Mr. McCain, have agreed to vote all of their shares in favour of the adoption of the rights plan.

One right has been issued with respect to each common share of Maple Leaf issued and outstanding as of the close of business on July 27, 2011. These rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20 percent or more of the outstanding common shares of Maple Leaf without, among other things, complying with the "permitted bid" provisions of the rights plan or without approval of the board of directors of the Company. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase common shares of Maple Leaf at a 50 percent discount to the market price at the time.

Under the rights plan, a "permitted bid" is a bid made to all holders of the common shares of Maple Leaf and which is open for acceptance for not less than 60 days. If at the end of 60 days at least 50 percent of the outstanding common shares, other than those owned by the offeror and certain related parties have been tendered, the offeror may take up and pay for the shares but must extend the bid for a further 10 business days to allow other shareholders to tender.

Current shareholders of the Company that have beneficial ownership of 20 percent or more of the common shares will not trigger the application of the rights plan provided that they do not increase their ownership of shares except through one of the exemptions set out in the rights plan, which includes an  exemption for the proposed reorganization involving MCC and an un-related transaction involving the purchase of up to 549,861 common shares by Mr. McCain from Wallace McCain's former personal investment company.

The TSX has informed the Company that it has deferred its approval of the rights plan until such time as shareholders have ratified the rights plan.  This deferral is typical where an issuer has adopted a rights plan within the past three years and the issuer did not obtain shareholder approval within six months of its adoption.  The Company's previous rights plan, adopted on June 29, 2010, expired without the Company obtaining shareholder approval within the requisite time frame.

A material change report and the full text of the governance agreement and the rights plan will be available at www.sedar.com.

Forward-Looking Statements

This press release may contain forward-looking statements. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by these forward-looking statements are discussed more fully in the Company's filings with the securities regulatory authorities, including its management's discussion and analysis, all of which are available on SEDAR at www.sedar.com. The Company does not intend, and the Company disclaims any obligation to update any forward-looking statements, whether written or oral, or whether as a result of new information, future events or otherwise except as required by law.

Maple Leaf Foods Inc. is a leading food processing company, headquartered in Toronto, Canada. The Company employs approximately 21,000 people at its operations across Canada and in the United States, the United Kingdom, and Asia. The Company had sales of $5.0 billion in 2010.

SOURCE Maple Leaf Foods Inc.