RiskMetrics Group Supports Ramius for Board Change at CPI Corp.
June 30 2009 - 12:32PM
PR Newswire (US)
The Leading Independent Proxy Voting Advisory Firm Recommends CPI
Stockholders Vote the GOLD Proxy Card to Elect Both Peter A. Feld
and Joseph C. Izganics to Replace Michael Koeneke and Turner White
on the CPI Board NEW YORK, June 30 /PRNewswire/ -- RCG Starboard
Advisors, LLC, a subsidiary of Ramius LLC (collectively, "Ramius"),
today announced that RiskMetrics Group ("RiskMetrics" or "RMG"),
the leading independent proxy voting advisory and risk management
consulting firm to the global financial community, has recommended
that stockholders of CPI Corp. ("CPI" or the "Company") (NYSE:CPY)
vote on Ramius's GOLD proxy card to elect Ramius nominees Peter A.
Feld and Joseph C. Izganics to the Board of Directors of CPI to
replace current CPI directors Michael Koeneke and Turner White.
Ramius is the largest stockholder of CPI, owning approximately 23%
of the Company's outstanding shares of Common Stock. Excerpts of
RiskMetrics's Analysis & Recommendation On the Company's
governance and need for greater Board oversight: -- "We believe the
company's governance as it relates to the COB's (Chairman of the
Board) duties and compensation is not in accordance with best
practices. In particular, given the magnitude of Mr. Meyer's
compensation as a non-executive chairman, the unusual performance
based compensation arrangement and the potential for conflicts of
interest in such an arrangement, we feel greater board oversight is
warranted." On Chairman David Meyer's Troublesome Compensation
Arrangements: -- "In all regards, Mr. Meyer appears to be paid like
an executive chairman but has a non-executive chairman title. That
said, shareholders may be essentially paying for two CEOs as
opposed to one compared to most companies. Paying for two CEOs
raises concerns especially if the level of compensation is similar
and the delineation of duties and authority between the CEO and
chairman are not fully disclosed. In this case, RMG has concerns
with the compensation committee's stewardship, in particular the
lack of justification behind Mr. Meyer's performance-based equity
awards as a non-executive chairman and relatively high
compensation." -- "Being that Mr. Meyer is a non-executive chairman
but paid comparable to a named executive officer, RMG believes that
his compensation should be included in the Summary Compensation
Table instead of the Director Compensation Table so that
shareholders are aware of the potential magnitude of payments." On
Who Should Bear the Responsibility for Chairman Meyer's Troublesome
Compensation Arrangements: -- "Additionally, we note that Mr. Feld
was elected as a director on July 17, 2008 (nominated on June 23,
2008), shortly prior to finalization of Mr. Myers' (sic) 2008
compensation agreement on Sept. 22, 2008. As such, given that the
dissidents had opposed the COB compensation and the fact that Mr.
Feld had been on the board for a relatively short period at the
time of the COB compensation agreement, we believe that he shares
limited responsibility for it. In comparison, Mr. White and Mr.
Koeneke, as long standing members of the compensation committee,
must assume greater responsibility for its stewardship. Finally, we
note while Mr. Koeneke is deemed independent as per RMG and
exchange standards, we note that he has been affiliated with Mr.
Myers' (sic) through Knightspoint Partners LLC, a company they
co-founded in March 2003." (emphasis added) On Ramius's Director
Nominees: -- "In sum, we feel the complimentary (sic) skills in
finance and specialty retail sales and marketing will benefit the
board." -- "Mr. Feld brings finance and investment banking
experience to the board. Further, as a direct representative of the
company's largest shareholder, we feel Mr. Feld's interest will
likely be aligned with shareholders and the board will benefit from
another independent shareholder voice." -- "Mr. Izganics brings
additional specialty retail experience from his 20 years with Home
Depot." On RiskMetrics's Recommendation: -- "We therefore recommend
shareholders vote the dissident GOLD card FOR nominees Feld,
Izganics, Abel, Finkelstein, Glazer and Meyer." Ramius Partner Mark
R. Mitchell stated, "RiskMetrics's support provides significant
validation to our concerns about the current CPI Board,
specifically the undue influence being exerted on the Board by
Knightspoint Partners, material conflicts of interest on the CPI
Board and Chairman Meyer's questionable compensation arrangements.
They clearly recognize that the election of our nominees would help
create a more balanced, independent, and experienced Board, which
is in the best interests of all CPI stockholders." Concluded
Mitchell, "We urge our fellow stockholders to send a message to the
current Board by voting their GOLD proxy card today to elect
Ramius's director nominees who are firmly committed to the future
success of CPI Corp." About Ramius LLC Ramius LLC is a registered
investment advisor that manages assets in a variety of alternative
investment strategies. Ramius LLC is headquartered in New York with
offices located in London, Tokyo, Hong Kong, Munich, and
Luxembourg. Media Contact: Peter Feld Ramius LLC (212) 201-4878
CERTAIN INFORMATION CONCERNING PARTICIPANTS Ramius Value and
Opportunity Master Fund Ltd ("Value and Opportunity Master Fund"),
together with the other participants named herein, has made a
definitive filing with the Securities and Exchange Commission
("SEC") of a proxy statement and accompanying GOLD proxy card to be
used to solicit votes for the election of a slate of director
nominees at the 2009 annual meeting of stockholders of CPI Corp., a
Delaware corporation (the "Company"). VALUE AND OPPORTUNITY MASTER
FUND ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY
MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT
http://www.sec.gov/. IN ADDITION, THE PARTICIPANTS IN THIS PROXY
SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT
CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE
PARTICIPANTS' PROXY SOLICITOR. The participants in this proxy
solicitation are Value and Opportunity Master Fund, Ramius
Enterprise Master Fund Ltd ("Enterprise Master Fund"), Starboard
Value & Opportunity Fund, LLC ("Starboard Value &
Opportunity Fund"), Ramius Merger Arbitrage Master Fund Ltd
("Merger Arbitrage Master Fund"), Ramius Multi-Strategy Master Fund
Ltd ("Multi-Strategy Master Fund"), Ramius Leveraged Multi-Strategy
Master Fund Ltd ("Leveraged Multi-Strategy Master Fund"), Ramius
Advisors, LLC ("Ramius Advisors"), RCG Starboard Advisors, LLC
("RCG Starboard Advisors"), Ramius LLC ("Ramius"), C4S & Co.,
L.L.C. ("C4S"), Peter A. Cohen ("Mr. Cohen"), Morgan B. Stark ("Mr.
Stark"), Thomas W. Strauss ("Mr. Strauss"), Jeffrey M. Solomon
("Mr. Solomon"), Peter A. Feld ("Mr. Feld") and Joseph C. Izganics
("Mr. Izganics"). As of the date hereof, Value and Opportunity
Master Fund beneficially owned 797,988 shares of Common Stock,
Starboard Value and Opportunity Fund beneficially owned 212,040
shares of Common Stock, Merger Arbitrage Master Fund beneficially
owned 192,000 shares of Common Stock, Leveraged Multi-Strategy
Master Fund beneficially owned 29,213 shares of Common Stock,
Multi-Strategy Master Fund beneficially owned 179,614 shares of
Common Stock and Enterprise Master Fund beneficially owned 202,054
shares of Common Stock. As of the date hereof, RCG Starboard
Advisors (as the investment manager of Value and Opportunity Master
Fund and the managing member of Starboard Value and Opportunity
Fund) is deemed to be the beneficial owner of the (i) 797,988
shares of Common Stock owned by Value and Opportunity Master Fund
and (ii) 212,040 shares of Common Stock owned by Starboard Value
and Opportunity Fund. As of the date hereof, Ramius Advisors (as
the investment advisor of Multi-Strategy Master Fund, Merger
Arbitrage Master Fund, Leveraged Multi-Strategy Master Fund and
Enterprise Master Fund) is deemed to be the beneficial owner of the
(i) 179,614 shares of Common Stock owned by Multi-Strategy Master
Fund, (ii) 192,000 shares of Common Stock owned by Merger Arbitrage
Master Fund, (iii) 29,213 shares of Common Stock owned by Leveraged
Multi-Strategy Master Fund, and (iv) 202,054 shares of Common Stock
owned by Enterprise Master Fund. As of the date hereof, Ramius (as
the sole member of each of RCG Starboard Advisors and Ramius
Advisors), C4S (as the managing member of Ramius) and Messrs.
Cohen, Stark, Strauss and Solomon (as the managing members of C4S)
are deemed to be the beneficial owners of the (i) 797,988 shares of
Common Stock owned by Value and Opportunity Master Fund, (ii)
212,040 shares of Common Stock owned by Starboard Value and
Opportunity Fund, (iii) 179,614 shares of Common Stock owned by
Multi-Strategy Master Fund, (iv) 192,000 shares of Common Stock
owned by Merger Arbitrage Master Fund, (v) 29,213 shares of Common
Stock owned by Leveraged Multi-Strategy Master Fund, and (vi)
202,054 shares of Common Stock owned by Enterprise Master Fund.
Messrs. Cohen, Stark, Strauss and Solomon share voting and
dispositive power with respect to the shares of Common Stock owned
by Value and Opportunity Master Fund, Starboard Value and
Opportunity Fund, Multi-Strategy Master Fund, Merger Arbitrage
Master Fund, Leveraged Multi-Strategy Master Fund and Enterprise
Master Fund by virtue of their shared authority to vote and dispose
of such shares of Common Stock. As of the date hereof, Mr. Feld
holds 5,252 shares of restricted stock awarded under the Company's
Omnibus Incentive Plan that vest in full on February 6, 2010. As of
the date hereof, Mr. Izganics directly owns 500 shares of Common
Stock. As members of a "group" for the purposes of Rule 13d-5(b)(1)
of the Securities Exchange Act of 1934, as amended, each of the
participants in this proxy solicitation is deemed to beneficially
own the shares of Common Stock of the Company beneficially owned in
the aggregate by the other participants. Each of the participants
in this proxy solicitation disclaims beneficial ownership of such
shares of Common Stock except to the extent of his or its pecuniary
interest therein. DATASOURCE: Ramius LLC CONTACT: Peter Feld of
Ramius LLC, +1-212-201-4878
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