CPI shareholder Ramius nominates two for election to board on July 8

By Lisa Kerner

Charlotte, N.C., May 27 - Ramius LLC affiliate RCG Starboard Advisors, LLC filed preliminary proxy materials with the Securities and Exchange Commission in connection with its nomination of two director candidates for election to CPI Corp.'s board of directors, it was announced on Wednesday.

According to the filing, RCG is nominating Ramius managing director Peter A. Feld and Joseph C. Izganics, former southern division president of Home Depot, Inc.

CPI will hold the election of directors at its annual meeting on July 8.

Ramius, a 23% CPI shareholder, sent a letter to CPI chairman David Meyer expressing disappointment with the board's decision not to re-nominate Feld for election.

In the Wednesday letter, Ramius addressed what it said were mischaracterizations CPI made in its preliminary proxy statement filed with the SEC on May 20.

"Frankly, we find it disingenuous that you would accuse Ramius of trying to assert 'additional influence' on the board of CPI," the letter said.

Ramius said its proposed changes "will create a balanced board composed of truly independent directors with relevant industry expertise as well as shareholder representation that is not disproportionate with respect to ownership."

According to Ramius it has not, as CPI alleges in its preliminary proxy statement, "pressed the board for a sale of the company despite the current difficult environment."

Ramius said the purpose of its 10b-5 trading plan filed with the SEC in January is to allow the investor to rebalance its portfolios and does not, as CPI implies, demonstrate an interest in "gaining liquidity for its investment."

As reported in April, Ramius outlined a proposed offer to settle a proxy battle with the St. Louis-based portrait studio operator.

The settlement offer would:

• Increase CPI's board of directors to seven members;

• Preserve Feld's re-nomination as an incumbent director for election at the 2009 annual meeting;

• Withdraw CPI's re-nomination of one other incumbent director for election at the 2009 annual meeting; and

• Include two of the three Ramius nominees in CPI's slate of directors at the 2009 annual meeting.

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