- Additional Proxy Soliciting Materials (definitive) (DEFA14A)
June 18 2009 - 3:41PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section
14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant
x
Filed by a Party other than the
Registrant
c
Check the appropriate box:
c
|
|
Preliminary Proxy Statement
|
|
|
|
c
|
|
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
|
|
|
c
|
|
Definitive Proxy Statement
|
|
|
|
x
|
|
Definitive Additional Materials
|
|
|
|
c
|
|
Soliciting Material Pursuant to
§240.14a-12
|
CPI CORP.
|
(Name of Registrant
as Specified In Its Charter)
|
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
|
Payment of Filing Fee (Check the
appropriate box):
x
|
|
No fee required.
|
|
|
|
c
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
|
|
|
|
(1)
|
|
Title
of each class of securities to which transaction applies:
|
|
|
|
(2)
|
|
Aggregate number of securities to which transaction
applies:
|
|
|
|
(3)
|
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the
|
|
|
|
|
filing fee is calculated and state how it was
determined):
|
|
|
|
(4)
|
|
Proposed maximum aggregate value of transaction:
|
|
|
|
(5)
|
|
Total
fee paid:
|
|
c
|
|
Fee paid previously with preliminary materials.
|
|
|
|
c
|
|
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
|
|
|
|
|
|
(1)
|
|
Amount Previously Paid:
|
|
|
|
|
|
|
|
(2)
|
|
Form, Schedule or Registration
Statement No.:
|
|
|
|
|
|
|
|
(3)
|
|
Filing Party:
|
|
|
|
|
|
|
|
(4)
|
|
Date
Filed:
|
CPI Corp.
|
For Immediate
Release
|
CPI CORP. FILES
DEFINITIVE PROXY MATERIALS
AND SENDS LETTER TO
STOCKHOLDERS
Urges Stockholders
to Vote
FOR
the Boards Nominees
on
the
WHITE
Proxy Card
Today
ST. LOUIS, June 18,
2009
CPI Corp. (NYSE: CPY) today announced that it has filed
with the Securities and Exchange Commission (the SEC) definitive proxy
materials in connection with the Companys 2009 Annual Meeting of Stockholders,
scheduled for July 8, 2009, and is mailing the following letter to the Companys
stockholders. CPI stockholders of record as of May 9, 2009 will be entitled to
vote at the Annual Meeting.
The CPI board of
directors recommends that stockholders elect the boards highly-qualified
nominees by telephone, Internet or by signing, dating and returning the
WHITE
proxy card today.
June 18,
2009
IMPORTANT NOTICE
FROM YOUR BOARD OF DIRECTORS
Dear Fellow
Stockholders:
It is unfortunate that
Ramius has chosen to wage a costly and distracting proxy contest for the purpose
of increasing their representation on the CPI Corp. board of directors. Ramius
has asked you to elect their two hand-picked nominees and remove two of the
experienced, highly qualified nominees slated by your board of
directors.
Your board believes
that Ramius is acting in its own self interest contrary to the interests of
CPIs stockholders. Ramius has no plan to improve the Company. Ramius has been
disruptive and does not support CPIs board and management. Ramius has sought a
sale of the Company to achieve its own liquidity goals, irrespective that a sale
at this time would damage the long-run interests of stockholders. Ramius tried
to force a desperation sale of the Company at the worst possible time, when the
stock was trading below $4.00 per share. Yesterday, the stock closed at $16.98
per share.
We believe your
boards director nominees James Abel, Paul Finkelstein, Michael Glazer,
Michael Koeneke, David Meyer and Turner White are best qualified to serve the
interests of all CPI stockholders. Your board has successfully steered the
Company through difficult industry conditions and
substantially outperformed industry peers. CPI is now the unquestioned industry
leader and is poised for substantial gains in earnings, cash flow and
stockholder value. The qualifications of the Companys nominees far exceed those
of Ramiuss nominees. The Ramius nominees were selected solely to represent
Ramiuss self interests.
We believe Ramius and its slate of
director nominees threaten the value of your investment, and we urge you to
support CPI by voting the
WHITE
proxy card. Please
consider the following:
|
(1)
|
|
Ramius
offers no new ideas, plans or strategies and, indeed, acknowledges that
the Company is performing well.
|
|
|
|
|
·
|
|
Ramiuss demand for additional
representation has not come with any suggestions for revisions to the
Companys strategy or operations.
|
|
|
|
|
·
|
|
Ramius has specifically
acknowledged that the Company is performing well in the current
environment and that the integration, digitization and upgrade of the
recently acquired PictureMe Portrait Studio® chain have been
successful.
|
|
|
|
(2)
|
|
Ramiuss
two nominees are substantially less qualified than your boards nominees.
Ramiuss nominees lack relevant qualifications for board service and are
not independent of Ramius.
|
|
|
|
|
·
|
|
There is no comparison between the
experience of Ramiuss current board representative and nominee, Peter
Feld (age 30), and Michael Koeneke (age 62), who Ramius is targeting to be
removed from CPIs board. Mr. Koeneke is formerly the global Head of
Mergers & Acquisitions at Merrill Lynch where he had extensive
experience advising public boards of directors and managing a high
performing, professional service organization. Mr. Feld, by contrast, was
an investment banking analyst at Bank of America Securities only five
years ago, and his brief tenure on the CPI board represents his most
substantial board experience. Mr. Koeneke has been deeply involved in
developing and overseeing CPIs strategies and operational changes that
successfully rehabilitated first the Sears Portrait Studio business and
then the PictureMe Portrait Studio® business amid difficult industry
conditions. Mr. Feld has served on the board only since last July, and was
added at Ramiuss request solely as a surrogate for a more senior Ramius
partner who stepped down due to other priorities.
|
|
|
|
|
·
|
|
Mr. Feld lacks the authority and experience
to act independently. In February, Mr. Feld couldnt vote either for or
against the normal dividend declaration until he checked with his Ramius
superiors. He never actually took a position on the dividend at all since
he couldnt act in a timely fashion. When he did act, joining the rest of
the board in a unanimous endorsement of the incumbent slate of directors
in April, he was overruled the very next day by a Ramius superior who
called to demand board changes to increase Ramiuss representation. We
believe that Mr. Feld is unable to
act
independently and to take action without authorization from his superiors
at Ramius.
|
|
|
|
|
·
|
|
Ramiuss other nominee, Joseph
Izganics, also offers no relevant experience or expertise to the CPI
board. Mr. Izganics is a former field employee of Home Depot with no other
significant employment experience. Home Depots retail operations are
substantially different from operating a photography services business
within a hosted environment. Mr. Izganics has never served on a public
company board and is being paid by Ramius for serving as its nominee.
Ramiuss refusal to submit Mr. Izganics through CPIs established
governance process, and the direct payment, belie Ramiuss assertion that
Mr. Izganics is independent.
|
|
|
|
|
·
|
|
By contrast,
the Companys slate of nominees bring extensive outside business and board
experience. Four of our nominees have five years of highly successful
experience on the CPI board. The Companys two, more recent nominees were
selected through an independent governance process and bring exceptional
capabilities and highly relevant CEO-level and board
experience.
|
|
|
|
|
|
|
|
o
|
|
Paul Finkelstein, who
just joined the CPI slate, is the Chairman and CEO of Regis, a highly
successful operator of professional hair salons, including salons within
2,400 Wal-Mart locations. Regis had $2.5 billion in sales in its most
recent fiscal year. Mr. Finkelstein brings an intimate understanding of
the challenges and opportunities of operating a consumer-centric,
professional services operation within a major, multi-store host. We
welcome Mr.
Finkelstein both for his certain
future contributions to CPIs success and for the vote of confidence he
gives to the present management and board.
|
|
|
|
|
|
|
|
o
|
|
Michael Glazer, who
joined the board in November, was formerly CEO of KB Toys where he focused
on a customer demographic similar to CPIs and also, at one time, operated
leased departments at Sears. He also previously served on the board of
Picture People, a significant portrait studio competitor, and therefore
brings a deep knowledge of our industry. Mr. Glazers public company board
experience includes Stage Stores, where he is currently a director, as
well as Brookstone and Big Lots.
|
|
|
|
(3)
|
|
Ramiuss interests have diverged from those of the other
stockholders.
|
|
|
|
|
·
|
|
Ramius has made repeated declarations to the board and
management of its desire to exit its
CPI
investment since the Summer of 2008.
|
|
|
|
|
·
|
|
Ramius has pressed for getting
liquidity for its CPI stake through a sale of the Company, irrespective of
the damage to the long-term interests of other
stockholders.
|
|
|
|
|
·
|
|
Ramius advocated a sale of the Company
at the worst possible time
. With the financial markets
in disarray, the stock trading at artificially depressed levels and the
Company only starting to reap the benefits of its successful integration
of the PictureMe Portrait Studio® operations, and against the strong
advice of the Companys investment bankers, Ramius pressed repeatedly for a sale
process beginning just after the Company renewed its contract with Sears
last December.
|
|
|
|
|
·
|
|
Ramius filed a 575,000 share SELL program last January when the
stock was below $5.00 and has sold stock pursuant to the plan at prices as
low as $10.00.
|
|
(4)
|
|
Ramius has become a highly
disruptive and destabilizing influence on the board.
In what we
believe was a panicked response to the stock price pressures of the last
year, Ramius
has engaged in a range of disruptive
behaviors:
|
|
|
|
|
·
|
|
Ramius called for
sudden changes in senior management without any suggestions or plans for
improvement;
|
|
|
|
|
·
|
|
Ramius tried to polarize the board and
management and then stack the board with hand-picked
nominees;
|
|
|
|
|
·
|
|
Ramius tried to force the Company to engage
in a sale process at a time when the stock was trading below $4.00 per
share and against the counsel of the Companys investment
bankers.
|
|
|
|
|
|
|
|
These activities, furthermore, have
involved not just disruptive boardroom behavior but also harassing calls
to board members from Ramius executives. The current proxy contest is just
the latest manifestation of Ramiuss distracting, unconstructive and
damaging behavior.
|
|
|
|
(5)
|
|
Ramius expressed its
satisfaction with the board until their interests diverged from the boards and those of the other
stockholders.
|
|
|
|
|
·
|
|
Ramius
supported the directors they now seek to replace in each and every
election over the last five years. As previously mentioned, Ramiuss
representative voted to re-nominate these directors even this
year.
|
|
|
|
|
·
|
|
Ramius
also expressed confidence in the board and management in late 2007 when it
secured permission to increase its holdings above the Companys poison
pill threshold in return for an explicit limitation on its vote and
boardroom influence.
|
|
|
|
|
·
|
|
Ramiuss vote share, as a result, is currently
limited to no more than 17.4%.
Ramius has played no active role in the strategic
development of the business.
|
|
|
|
|
·
|
|
Even as Ramiuss interests started
to diverge, the board accommodated Ramiuss frequent requests for meetings
with Mr. Felds superiors. However, in the last year and despite
significant pressure applied by Ramius, the non-Ramius board members
unanimously opposed Ramiuss ill-conceived efforts to change management,
stack the board and pursue an untimely sale of the
Company.
|
|
|
|
|
|
|
|
|
(6)
|
|
Ramius has shown that it is
not interested in independent or qualified
directors but instead seeks additional influence over
CPI.
|
|
|
|
|
·
|
|
Ramius
initiated the current dispute by insisting that the board accept two
unnamed nominees and remove one incumbent (other than Mr. Feld) from the
Company slate. At that time,
Ramius refused to disclose even the names of its nominees let alone their
qualifications to the CPI board until forced by the nomination
deadline.
|
|
|
|
|
·
|
|
Ramius declined to submit their nominees through the
Companys independent nominating and governance process and refused
Company offers to avoid a proxy contest by working together to identify a
mutually acceptable nominee.
|
|
|
|
|
·
|
|
Ramiuss nominees all have business backgrounds
irrelevant to CPIs hosted-service retail business which is quite
different from ordinary retail.
|
|
|
|
(7)
|
|
CPI is at the forefront of
corporate governance
.
|
|
|
|
|
|
|
|
Since 2004,
the offices of CEO and Chairman of the board have been separate at CPI.
The CEO is not a member of the board, instead participating in meetings in
an ex officio capacity only. The board plays a very active role in
overseeing the management of the Company and setting overall strategy. The
board has focused on building an accountable, performance-oriented culture
and fostering a close alignment of the interests of managers and employees
with those of stockholders by, among other things, tying compensation to
drivers of stockholder value. Turner White, also targeted by Ramius for
removal from the CPI board, has led this effort in his role as Chairman of
the Compensation Committee.
Compensation
matters are carefully and extensively deliberated utilizing the input of
outside advisors. Board fees are modest in comparison with
comparably-sized companies and payable substantially in restricted stock.
The Chairman of the board is paid
exclusively
in restricted stock for his additional
services (and has not sold a single share!), and senior manager bonuses
are paid 50% in restricted stock. All significant compensation
arrangements have been ratified by a
unanimous
vote of the full board after recommendation
from the compensation committee.
The board is
structured for robust debate. The Chairman of the board does not sit on
any committee, and the Chairmen of the Audit, Compensation and Nominating
and Governance committees wield considerable, independent and constructive
influence over financial, compensation and corporate governance matters.
In addition, the Companys recent investment banker-assisted assessment of
strategic alternatives was overseen by Mr. Glazer who joined the board
only last November and played a similar leadership role on other public
company boards.
|
|
|
|
|
|
(8)
|
|
The
board has successfully led the Company through very difficult
industry
conditions.
|
|
|
|
|
|
|
|
Immediately
upon joining in 2004, CPIs new board members initiated a turnaround
process that saved what was then a deeply troubled company. In the face of
extraordinary industry conditions that have ravaged competitors, the board
led the successful conversion and upgrade first of the Sears Portrait
Studio operations and then of the PictureMe Portrait Studio® operations
that were purchased out of bankruptcy. In the process, the board helped to
build an accountable, performance-oriented culture and establish the
management systems necessary for continuing success. Today, the Company is
the unquestioned leader in the portrait studio industry with unrivalled
geographic coverage, digital capabilities and economies of
scale.
|
|
(9)
|
|
The Company
has made substantial progress over the last year and is positioned
for significant gains in
earnings, cash flow and stockholder value.
|
|
|
|
|
·
|
|
We successfully integrated and digitally converted
approximately 2,000 studios in Wal-Mart stores that were acquired as a
part of the PCA acquisition in 2007.
|
|
|
|
|
·
|
|
We extended our cost leadership through the generation
of $30 million in annualized cost savings;
|
|
|
|
|
·
|
|
We enhanced our product and service capability and also
developed new avenues for profitable growth;
|
|
|
|
|
·
|
|
We drove dramatic improvement in a range of customer
indicators (including average sale, satisfaction and
loyalty);
|
|
|
|
|
·
|
|
We enhanced our performance management systems and
expanded our organizational capabilities in key areas including field
management;
|
|
|
|
|
·
|
|
We strengthened our relationships with our retail hosts,
Sears and Wal-Mart, including executing a new six-year agreement with
Sears; and
|
|
|
|
|
·
|
|
We bolstered our financial position by delivering strong
fourth quarter results and obtaining additional flexibility in our lending
agreements
|
|
|
|
|
|
|
|
|
|
|
Our strong first
quarter 2009 earnings are a testament to the success of these efforts as
well as the strength of our business plan and operational execution. Even
in a difficult environment, CPI is poised for solid gains in annual
EBITDA, earnings and free cash flow.
|
It is clear that if
Ramius were to get even its present director renewed, let alone another, it
would ensure further disruption and time-wasting of Company personnel and
directors. It would impair CPIs ability to execute on its business plan and
would result in the loss of two highly experienced and valuable CPI board
members. The long-term interests of stockholders are well-served by continuation
of the current, clearly successful strategies of the present directors and
management. Ramiuss advocacy of a quick sale at a time that would have deprived
stockholders of substantial value and its other unsupportive actions show that
Ramiuss interests are not aligned with stockholders seeking longer term value
accretion. Accordingly, we urge you to vote FOR your highly qualified Company
slate.
CPIS BOARD NOMINEES
ARE THE RIGHT CHOICE
VOTE
FOR
YOUR BOARDS
NOMINEES
ON THE
WHITE
PROXY CARD
TODAY
We urge you to protect
your investment and not risk your Companys future and prospects.
Your Board strongly
recommends that all CPI stockholders vote
FOR
CPIs director nominees on the
WHITE
proxy card and discard Ramius proxy materials.
Your vote is
important, no matter how many or how few shares you own. If you have any
questions or need any assistance voting your shares, please do not hesitate to
contact our proxy solicitor, MacKenzie Partners, Inc., by toll-free telephone at
800-322-2885 or by e-mail at proxy@mackenziepartners.com.
Thank you for your
continuing support.
Sincerely,
/s/ David
Meyer
David
Meyer
Chairman of the
Board
Important
Information
CPI Corp. has filed a
Proxy Statement with the Securities and Exchange Commission ("SEC") and will
furnish to its stockholders a Proxy Statement in connection with the
solicitation of proxies for the 2009 Annual Meeting of stockholders. The Company
advises its stockholders to read the Proxy Statement relating to the 2009 Annual
Meeting because it will contain important information. Stockholders may obtain a
free copy of the Proxy Statement and other documents that CPI files with the SEC
at the SEC's website at www.sec.gov. The Proxy Statement and these other
documents may also be obtained for free from CPI by directing a request to CPI
Corp., 1706 Washington Avenue, St. Louis, Missouri 63103-1717, Attn: Corporate
Secretary, calling (314) 231-1575, or by contacting MacKenzie Partners, Inc., by
toll-free telephone at 800-322-2885 or by e-mail at
proxy@mackenziepartners.com.
Certain Information
Concerning Participants
CPI Corp. and its
directors and executive officers (other than Peter Feld) may be deemed to be
participants in the solicitation of proxies from stockholders in connection with
the Company's 2009 Annual Meeting. Information concerning persons who may be
considered participants in the solicitation of the Company's stockholders under
the rules of the SEC is set forth in public filings by the Company with the SEC,
including the proxy statement relating to the 2009 Annual Meeting of
Stockholders.
Forward-Looking
Statements
The statements contained
herein that are not historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, and involve
risks and uncertainties. The Company identifies forward-looking statements by
using words such as "preliminary," "plan," "expect," "looking ahead,"
"anticipate," "estimate," "believe," "should," "intend" and other similar
expressions. Management wishes to caution the reader that these forward-looking
statements, such as the Company's outlook for portrait studios, net income,
future cash requirements, cost savings, compliance with debt covenants,
valuation allowances, reserves for charges and impairments and capital
expenditures, are only predictions or expectations; actual events or results may
differ materially as a result of risks facing the Company. Such risks include,
but are not limited to: the Company's dependence on Sears and Wal-Mart, the
approval of the Company's business practices and operations by Sears and
Wal-Mart, the termination, breach, limitation or increase of the Company's
expenses by Sears under the license agreements, or Wal-Mart under the lease and
license agreements, customer demand for the Company's products and services, the
economic recession and resulting decrease in consumer spending, compliance with
the NYSE listing requirements, manufacturing interruptions, dependence on
certain suppliers, competition, dependence on key personnel, fluctuations in
operating results, a significant increase in piracy of the Company's
photographs, widespread equipment failure, compliance with debt covenants, high
level of indebtedness, implementation of marketing and operating strategies,
outcome of litigation and other claims, impact of declines in global equity
markets to pension plans and impact of foreign currency translation. The risks
described above do not include events that the Company does not currently
anticipate or that it currently deems immaterial, which may also affect its
results of operations and financial condition. The Company undertakes no
obligation to update or revise publicly any forward-looking statements, whether
as a result of new information, future events or
otherwise.
About CPI
Corp.
CPI Corp. has been
dedicated to helping families conveniently create cherished photography portrait
keepsakes that capture a lifetime of memories for more than 60 years. CPI Corp.
provides portrait photography services in approximately 3,000 locations,
principally in Sears and Wal-Mart stores. As the first in the category to
convert to a fully digital format, CPI Corp. studios offer unique posing
options, creative photography selections, a wide variety of sizes and an
unparalleled assortment of enhancements to customize each portrait - all for an
affordable price. CPI Corp. is based in St. Louis and traded on the New York
Stock Exchange (ticker: CPY).
Contact:
Dan Katcher / Matthew Sherman
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
###
C P I (NYSE:CPY)
Historical Stock Chart
From Jun 2024 to Jul 2024
C P I (NYSE:CPY)
Historical Stock Chart
From Jul 2023 to Jul 2024