Glass Lewis, in its report recommending that CPI stockholders vote FOR CPI's director nominees, stated*:
-- "Given the recent improvements in the Company's financial performance and the Dissident's lack of a substantive strategic plan for the Company, we see no reason to believe that the election of the Dissident nominees would result in more meaningful returns to shareholders than management's current strategy."
-- " ... recent improvement gives us confidence that the current board is taking internal steps to address the Company's performance challenges."
-- "In our view, the Dissident has failed to identify significant issues of concern which indicate that the current board is not acting in the interests of all shareholders. Additionally, we feel that the Dissident has not presented any specific initiatives or substantive plans for improvement at the Company, other than a vague intention to "improve financial performance" and "enhance shareholder value."
-- " ... without compelling evidence that the current board (and in particular the Knightspoint nominees) have failed to act in the best interests of shareholders, we do not believe the Ramius Group's desire for representation on the board is sufficient reason to replace any of the current nominees with a Dissident candidate."
Egan-Jones, in its report recommending that CPI stockholders vote FOR CPI's director nominees, stated*:
-- "We believe that our support for the management ballot is merited and that voting the management ballot is in the best interest of the Company and its shareholders."
-- "We believe that the Company is pursuing the correct strategy and that the board of directors has demonstrated responsible oversight of management."
-- "We are not convinced that election of the dissidents' slate to the board of directors would work to the benefit of shareholders."
Mr. Meyer continued, "We are pleased that PROXY Governance recommends that CPI stockholders vote the WHITE proxy card, even though for only four of our six nominees. We are also pleased that all four independent proxy advisory firms, including RiskMetrics and PROXY Governance, acknowledge the successful development and execution of CPI's strategic plan and strong operating results in a difficult economic environment."
In its report, RiskMetrics stated*:
-- "The improvement in recent share price and underlying operating performance reflect positively on management's ability to develop and execute its strategic plan. This has been reflected in the company's one, four, and five year relative TSR, the improving operating metrics, the favorable market reaction to past financial decisions, and the positive analyst sentiment."
In its report, PROXY Governance stated*:
-- "Given this board's proven success in delivering superior shareholder value over the past five years, however, and its demonstrated willingness to add new directors with highly relevant experience, we do not believe shareholder support for the dissident slate is warranted."
CPI issued the following comments in response to the RiskMetrics and PROXY Governance reports:
"We disagree with RiskMetrics' decision to support the dissident nominees. Notwithstanding RiskMetrics' known bias for supporting dissident director candidates, we believe that RiskMetrics failed to fully consider a number of important issues, including: the disruptive behavior exhibited by Ramius, which has been destabilizing to management and hinders execution of CPI's strategic plan; Ramius's divergent interests from those of other CPI stockholders; Ramius's pursuit of liquidity through a sale of CPI to the detriment of other stockholders; and the lack of relevant qualifications of Ramius's nominees. It is also important to note that even RiskMetrics acknowledges the improvement in CPI's share price, underlying operating performance and management's ability to develop and execute its strategic plan.
"RiskMetrics and PROXY Governance each expressed the view that
"We believe RiskMetrics' conclusion is based on Ramius's opposition to a compensation payment to Mr. Meyer in 2007 of
As previously announced, CPI's two largest, unaffiliated stockholders Century Management and its affiliate, Van Den Berg Management, and Lafitte Capital Management, which in the aggregate owned approximately 23% of the Company's outstanding shares as of the
CPI urges stockholders to follow the recommendation of Glass Lewis and Egan-Jones by signing, dating and returning the WHITE proxy card today.
Stockholders with any questions or in need assistance voting their shares should contact CPI's proxy solicitor, MacKenzie Partners, Inc., by toll-free telephone at 800-322-2885 or by e-mail at proxy@mackenziepartners.com.
*Permission to use quotations from the Glass Lewis, Egan-Jones, RiskMetrics and PROXY Governance reports were neither sought nor obtained.
Important Information
CPI Corp. has filed a definitive Proxy Statement with the Securities and Exchange Commission ("SEC") and has furnished 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 contains 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,
Certain Information Concerning Participants
CPI Corp. and its directors and executive officers (other than
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 Walmart, the approval of the Company's business practices and operations by Sears and Walmart, 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 Walmart 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
Contact: Matthew Sherman / Eric Brielmann Joele Frank, Wilkinson Brimmer Katcher (212) 355-4449
SOURCE CPI Corp.