Proxy Advisory Firms Glass Lewis and Egan-Jones Recommend CPI Corp. Stockholders Vote for all Six of CPI's Director Nominees on
01 July 2009 - 3:47AM
PR Newswire (US)
ST. LOUIS, June 30 /PRNewswire-FirstCall/ -- CPI Corp. (NYSE:CPY)
today announced that two independent proxy advisory firms, Glass
Lewis & Co. and Egan-Jones Proxy Services, have recommended
that CPI stockholders vote for all six of CPI's nominees - James
Abel, Paul Finkelstein, Michael Glazer, Michael Koeneke, David
Meyer and Turner White - on the WHITE proxy card at CPI's 2009
Annual Meeting of Stockholders to be held on July 8, 2009. Glass
Lewis and Egan-Jones are proxy advisory firms whose recommendations
are relied upon by hundreds of major institutional investment
firms, mutual funds and other fiduciaries. 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." David Meyer, Chairman of CPI, said, "We
welcome the support of both Glass Lewis and Egan-Jones, which
recommend that CPI stockholders vote to elect all six of CPI's
director nominees. These recommendations reaffirm our strong belief
that CPI has the right Board and management team to implement CPI's
strategic plan of focusing on operational efficiency, customer
service, and cash generation while developing new avenues for
profitable growth. Glass Lewis and Egan-Jones recognize, as we do,
that our director nominees are the best choice to lead CPI and to
deliver value to all stockholders." 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 David Meyer should be
designated Executive rather than Non-Executive Chairman, and
therefore deemed not to be independent. It should be noted that Mr.
Meyer, irrespective of his non-Executive designation, has not
served on any board committees and that all committees consist
solely of directors who are deemed independent under NYSE rules.
CPI noted that while PROXY Governance stated that 'we do not
believe shareholder support for the dissident slate is warranted,'
its decision to withhold votes for Messrs. White and Abel as chairs
of the board's Compensation and Nominating and Governance
Committees, respectively, was made on the basis of its differing
view of Mr. Meyer's independence. "We believe RiskMetrics'
conclusion is based on Ramius's opposition to a compensation
payment to Mr. Meyer in 2007 of $300,000 in restricted shares. CPI
is surprised by RiskMetrics' reasoning given that Mr. Meyer's 2007
compensation was in accordance with a plan that was approved by all
directors, including the Ramius director then serving." 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 May
9, 2009 record date, have publicly pledged to vote their shares for
CPI's director nominees. 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 . *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 http://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 . 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 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 St. Louis and
traded on the New York Stock Exchange (ticker: CPY). Contact:
Matthew Sherman / Eric Brielmann Joele Frank, Wilkinson Brimmer
Katcher (212) 355-4449 DATASOURCE: CPI Corp. CONTACT: Matthew
Sherman, or Eric Brielmann, both of Joele Frank, Wilkinson Brimmer
Katcher, +1-212-355-4449
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