RISKMETRICS
GROUP SUPPORTS RAMIUS FOR BOARD CHANGE AT CPI CORP
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
Expresses
Concerns with Chairman David Meyer’s Compensation Arrangements and CPI’s
Corporate Governance Practices
States
that Mr. Meyer’s Performance-Based Equity Awards as a Non-Executive Chairman and
Relatively High Compensation are
Not Justified
and
that Greater Board Oversight is Warranted
NEW YORK, NY – June 30, 2009 –
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’ 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’
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’ 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.