SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 11, 1999
CPI CORP.
______________________________________________________________
(exact name of registrant as specified in its charter)
Delaware 0-11227 43-1256674
_______________________________________________________________
(State or other jurisdiction (Commission file (IRS Employer
of incorporation) Number) Identification No.)
1706 Washington Avenue, St. Louis, Missouri 63103-1790
_______________________________________________________________
(Address of principal executive offices) (Zip code)
Registrants' telephone number including area code (314)231-1575
_______________________________________________________________
_______________________________________________________________
(Former name or former address, if changes since last report.)
<PAGE>
ITEM 5. OTHER EVENTS
On June 11, 1999, CPI Corp. entered into agreements to
amend its license agreements between its subsidiary Consumer
Programs Incorporated and Sears, Roebuck and Co. (for in-store
and off mall studios) and Sears, Roebuck De Puerto Rico, Inc.
(for studios located in Puerto Rico) (collectively, the "First
Amendments"). These First Amendments, which are contingent
upon the closing of the sale of CPI Corp. to affiliates of
American Securities Capital Partners, L.P., on or before
December 31, 1999, extend the terms of the license agreements
to ten (10) years beginning January 1, 1999 and ending at the
close of business December 31, 2008.
In addition, these First Amendments also include a
covenant by the Company not to compete in the portrait
photography business in the United States, Canada or Puerto
Rico during the term of the license agreements and, if the
relationship between the Company and Sears is terminated with
cause by Sears or without cause by the Company, for two (2)
years thereafater.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
Exhibit 10.34 - First Amendment to License Agreement
between Sears, Roebuck and Co. and
Consumer Programs, Incorporated
Exhibit 10.35 - First Amendment to License Agreement
between Sears, Roebuck and Co. (Off
Mall) and Consumer Programs,
Incorporated
Exhibit 10.36 - First Amendment to License Agreement
between Sears, Roebuck De Puerto
Rico, Inc. and Consumer Programs,
Incorporated
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
CPI CORP.
(Registrant)
/s/ Barry Arthur
-----------------------------
Barry Arthur
Authorized Officer and
Principal Financial Officer
Dated: August 4, 1999
<PAGE>
CPI CORP.
EXHIBIT INDEX
Exhibit 10.34 - First Amendment to License Agreement between
Sears, Roebuck and Co. and Consumer Programs,
Incorporated
Exhibit 10.35 - First Amendment to License Agreement between
Sears, Roebuck and Co. (Off Mall) and
Consumer Programs, Incorporated
Exhibit 10.36 - First Amendment to License Agreement between
Sears, Roebuck De Puerto Rico, Inc. and
Consumer Programs, Incorporated
EXHIBIT 10.34
FIRST AMENDMENT TO LICENSE AGREEMENT
THIS FIRST AMENDMENT TO LICENSE AGREEMENT ("First
Amendment"), by and between SEARS, ROEBUCK AND CO., a New York
corporation ("Sears") and CONSUMER PROGRAMS INCORPORATED, a
Missouri corporation, ("Licensee") is made as of this 11th day
of June, 1999.
WHEREAS, Sears and Licensee are parties to that certain
license agreement, dated as of January 1, 1999 (the "License
Agreement"); and
WHEREAS, the License Agreement is the latest and current
in a series of agreements under which Sears and Licensee have
enjoyed a long and mutually beneficial relationship; and
WHEREAS, Sears and Licensee desire to amend the License
Agreement and to strengthen their mutual commitment to continue
their cooperative relationship;
NOW THEREFORE, in consideration of the mutual covenants
set forth herein, Sears and Licensee hereby agree to amend the
License Agreement as follows:
1. Article III of the License Agreement shall be amended
in its entirety to read as follows:
The term of this Agreement ("Term") shall be for
a ten (10) year period beginning on January 1,
1999, and ending at the close of business on
December 31, 2008, unless sooner terminated under
any provisions of this Agreement.
2. Article V of the License Agreement shall be amended by
adding a new Section 5.11 to read as follows:
5.11 EXCLUSIVE RELATIONSHIP
Except for the three (3) "Mainstreet Portrait"
businesses currently owned and operated by
Licensee's affiliate, Licensee agrees that during
the term of this Agreement, neither Licensee,
CPI Corp, nor any of their respective affiliates
controlling, controlled by, or under common
<PAGE>
control with Licensee or CPI Corp., shall perform
or license the services or have any direct or
indirect, controlling or non-controlling interest
as a disclosed or beneficial owner, investor,
partner, director, officer, employee, manager,
consultant, representative, or agent, or in any
other capacity, in any business offering or
selling professional portrait photography studio
services and related portrait products in the
United States, Puerto Rico or Canada
("Competitive Business"), which is:
(1) located in any specialty store, department
store, discount store or other similar
retail format;
(2) located within twenty (20) miles of a
Licensed Business licensed under this
Agreement or the Off-Premises License
Agreement between Licensee and Sears (the
"Off-Premises Agreement"); or
(3) offered or promoted through the following
media:
(a) World Wide Web sites available to the
public over the Internet;
(b) Secured Internet sites or Intranet
sites;
(c) other interactive media for use in the
Licensed Businesses; and
(d) in electronic processing, data
interchange and other communications done
or made in connection with any commercial
transaction consummated through the Internet
or Intranet.
If, during the term of this Agreement, Sears develops
Competitive Businesses in any territory or country outside of
the United States, Puerto Rico or Canada and Licensee has no
professional portrait businesses located within that country or
territory at the time of this development, Licensee shall no
longer have the right to develop Competitive Businesses in that
country or territory throughout the remainder of the term of
this Agreement in accordance with Section 5.18. Licensee and
Sears agree to use reasonable efforts to discuss their
respective global strategies with each other as they develop.
<PAGE>
3. Section 9.4 shall be deleted in its entirety and the
following substituted in its place:
9.4 REPORTS
If requested by Sears, Licensee shall provide to Sears
reports of sales and income and Sears commissions paid
in the manner and form prescribed by Sears, together
with any other information Sears may require for its
records or auditing purposes. If requested by Sears,
Licensee shall promptly submit its financial report to
Sears after the close of Licensee's fiscal year. Such
report shall be audited by a certified public
accountant. Such report shall include, but shall not
be limited to, Licensee's profit and loss statement
for such fiscal year and balance sheet at the end of
such fiscal year, and shall be prepared in accordance
with generally accepted accounting principles. If
Licensee is a publicly held corporation, this
requirement may be fulfilled by submission of
Licensee's Annual Report on Form 10-K. Sears shall
not disclose any such information that is not
available to the public to any third parties without
Licensee's prior consent.
4. Section 14.1 of the License Agreement is hereby
deleted in its entirety.
5. Article XIV of the License Agreement shall be amended
by adding a new Section 14.5 to read as follows:
14.5 COVENANT NOT TO COMPETE
Except for the three (3) Mainstreet Portrait
businesses currently owned and operated by
Licensee's affiliate, upon:
(1) termination of this Agreement by Sears in
accordance with its terms and conditions, or
(2) termination of this Agreement by Licensee
without cause,
Licensee and its affiliates agree, that for a
period of two (2) years commencing on the
effective date of termination, neither Licensee,
CPI Corp., nor any of their affiliates
controlling, controlled by or under common
control with Licensee or CPI Corp., will
perform or license the services or have any
direct or indirect interest as a disclosed or
beneficial owner, employee, investor, partner,
<PAGE>
director, officer, employee, consultant,
representative, or agent or in any other capacity
in any Competitive Business:
(a) operating within ten (10) miles of any
Licensed Business licensed under this
Agreement or the Off-Premises Agreement; or
(b) offered or promoted through the
following media:
(i) World Wide Web sites available to
the public over the Internet;
(ii) Secured Internet sites or Intranet
sites;
(iii) other interactive media for use in
the Licensed Businesses; and
(iv) in electronic processing, data
interchange and other communications
done or made in connection with any
commercial transaction consummated
through the Internet or Intranet.
6. Sears and Licensee hereby affirms the License
Agreement as amended by this First Amendment to the
License Agreement.
7. The effectiveness of this Amendment to License
Agreement is contingent upon the closing of the sale
of Licensee's parent corporation, CPI Corp., to
American Securities Capital Partners, L.P. or one of
its affiliates on or before December 31, 1999. If the
closing does not occur on or before this date, this
Amendment shall be null and void.
IN WITNESS WHEREOF, the parties have executed and delivered
this First Amendment to the License Agreement as if the date
first written above.
SEARS, ROEBUCK AND CO. CONSUMER PROGRAMS INCORPORATED
By: /s/ James R. Clifford By: /s/ Alyn V. Essman
----------------------- -------------------------
Its: President and Chief Its: Chairman and Chief
Operating Officer, Executive Officer
Full-Line Stores -------------------------
-----------------------
EXHIBIT 10.35
FIRST AMENDMENT TO LICENSE AGREEMENT
THIS FIRST AMENDMENT TO LICENSE AGREEMENT ("First
Amendment"), by and between SEARS, ROEBUCK AND CO., a New York
corporation ("Sears") and CONSUMER PROGRAMS INCORPORATED, a
Missouri corporation, ("Licensee") is made as of this 11th day
of June, 1999.
WHEREAS, Sears and Licensee are parties to that certain
license agreement, dated as of January 1, 1999 (the "License
Agreement"); and
WHEREAS, the License Agreement is the latest and current
in a series of agreements under which Sears and Licensee have
enjoyed a long and mutually beneficial relationship; and
WHEREAS, Sears and Licensee desire to amend the License
Agreement and to strengthen their mutual commitment to continue
their cooperative relationship;
NOW THEREFORE, in consideration of the mutual covenants
set forth herein, Sears and Licensee hereby agree to amend the
License Agreement as follows:
1. Article III of the License Agreement shall be amended
in its entirety to read as follows:
The term of this Agreement ("Term") shall be for
a ten (10) year period beginning on January 1,
1999, and ending at the close of business on
December 31, 2008, unless sooner terminated under
any provisions of this Agreement.
2. Article V of the License Agreement shall be amended by
adding a new Section 5.18 to read as follows:
5.18 EXCLUSIVE RELATIONSHIP
Except for the three (3) "Mainstreet Portrait"
businesses currently owned and operated by
Licensee's affiliate, Licensee agrees that during
the term of this Agreement, neither Licensee,
CPI Corp, nor any of their respective affiliates
controlling, controlled by, or under common
<PAGE>
control with Licensee or CPI Corp., shall perform
or license the services or have any direct or
indirect, controlling or non-controlling interest
as a disclosed or beneficial owner, investor,
partner, director, officer, employee, manager,
consultant, representative, or agent, or in any
other capacity, in any business offering or
selling professional portrait photography studio
services and related portrait products in the
United States, Puerto Rico or Canada
("Competitive Business"), which is:
(1) located in any specialty store, department
store, discount store or other similar
retail format;
(2) located within twenty (20) miles of a
Licensed Business licensed under this
Agreement or the Off-Premises License
Agreement between Licensee and Sears (the
"Off-Premises Agreement"); or
(3) offered or promoted through the following
media:
(a) World Wide Web sites available to the
public over the Internet;
(b) Secured Internet sites or Intranet
sites;
(c) other interactive media for use in the
Licensed Businesses; and
(d) in electronic processing, data
interchange and other communications done
or made in connection with any commercial
transaction consummated through the Internet
or Intranet.
If, during the term of this Agreement, Sears develops
Competitive Businesses in any territory or country outside of
the United States, Puerto Rico or Canada and Licensee has no
professional portrait businesses located within that country or
territory at the time of this development, Licensee shall no
longer have the right to develop Competitive Businesses in that
country or territory throughout the remainder of the term of
this Agreement in accordance with Section 5.18. Licensee and
Sears agree to use reasonable efforts to discuss their
respective global strategies with each other as they develop.
<PAGE>
3. Section 9.5 shall be deleted in its entirety and the
following substituted in its place:
9.5 REPORTS
If requested by Sears, Licensee shall provide to Sears
reports of sales and income and Sears commissions paid
in the manner and form prescribed by Sears, together
with any other information Sears may require for its
records or auditing purposes. If requested by Sears,
Licensee shall promptly submit its financial report to
Sears after the close of Licensee's fiscal year. Such
report shall be audited by a certified public
accountant. Such report shall include, but shall not
be limited to, Licensee's profit and loss statement
for such fiscal year and balance sheet at the end of
such fiscal year, and shall be prepared in accordance
with generally accepted accounting principles. If
Licensee is a publicly held corporation, this
requirement may be fulfilled by submission of
Licensee's Annual Report on Form 10-K. Sears shall
not disclose any such information that is not
available to the public to any third parties without
Licensee's prior consent.
4. Section 14.1 of the License Agreement is hereby
deleted in its entirety.
5. Article XIV of the License Agreement shall be amended
by adding a new Section 14.7 to read as follows:
14.7 COVENANT NOT TO COMPETE
Except for the three (3) Mainstreet Portrait
businesses currently owned and operated by
Licensee's affiliate, upon:
(1) termination of this Agreement by Sears in
accordance with its terms and conditions, or
(2) termination of this Agreement by Licensee
without cause,
Licensee and its affiliates agree, that for a
period of two (2) years commencing on the
effective date of termination, neither Licensee,
CPI Corp., nor any of their affiliates
controlling, controlled by or under common
control with Licensee or CPI Corp., will
perform or license the services or have any
direct or indirect interest as a disclosed or
beneficial owner, employee, investor, partner,
<PAGE>
director, officer, employee, consultant,
representative, or agent or in any other capacity
in any Competitive Business:
(a) operating within ten (10) miles of any
Licensed Business licensed under this
Agreement or the Off-Premises Agreement; or
(b) offered or promoted through the
following media:
(i) World Wide Web sites available to
the public over the Internet;
(ii) Secured Internet sites or Intranet
sites;
(iii) other interactive media for use in
the Licensed Businesses; and
(iv) in electronic processing, data
interchange and other communications
done or made in connection with any
commercial transaction consummated
through the Internet or Intranet.
6. Sears and Licensee hereby affirms the License
Agreement as amended by this First Amendment to the
License Agreement.
7. The effectiveness of this Amendment to License
Agreement is contingent upon the closing of the sale
of Licensee's parent corporation, CPI Corp., to
American Securities Capital Partners, L.P. or one of
its affiliates on or before December 31, 1999. If the
closing does not occur on or before this date, this
Amendment shall be null and void.
IN WITNESS WHEREOF, the parties have executed and delivered
this First Amendment to the License Agreement as if the date
first written above.
SEARS, ROEBUCK AND CO. CONSUMER PROGRAMS INCORPORATED
By: /s/ James R. Clifford By: /s/ Alyn V. Essman
----------------------- -------------------------
Its: President and Chief Its: Chairman and Chief
Operating Officer, Executive Officer
Full-Line Stores -------------------------
-----------------------
EXHIBIT 10.36
FIRST AMENDMENT TO LICENSE AGREEMENT
THIS FIRST AMENDMENT TO LICENSE AGREEMENT ("First
Amendment"), by and between SEARS, ROEBUCK DE PUERTO RICO., a
New York corporation ("Sears") and CONSUMER PROGRAMS
INCORPORATED, a Missouri corporation, ("Licensee") is made as
of this 11th day of June, 1999.
WHEREAS, Sears and Licensee are parties to that certain
license agreement, dated as of January 1, 1999 (the "License
Agreement"); and
WHEREAS, the License Agreement is the latest and current
in a series of agreements under which Sears and Licensee have
enjoyed a long and mutually beneficial relationship; and
WHEREAS, Sears and Licensee desire to amend the License
Agreement and to strengthen their mutual commitment to continue
their cooperative relationship;
NOW THEREFORE, in consideration of the mutual covenants
set forth herein, Sears and Licensee hereby agree to amend the
License Agreement as follows:
1. Article III of the License Agreement shall be amended
in its entirety to read as follows:
The term of this Agreement ("Term") shall be for
a ten (10) year period beginning on January 1,
1999, and ending at the close of business on
December 31, 2008, unless sooner terminated under
any provisions of this Agreement.
2. Article V of the License Agreement shall be amended by
adding a new Section 5.18 to read as follows:
5.18 EXCLUSIVE RELATIONSHIP
Except for the three (3) "Mainstreet Portrait"
businesses currently owned and operated by
Licensee's affiliate, Licensee agrees that during
the term of this Agreement, neither Licensee,
CPI Corp, nor any of their respective affiliates
controlling, controlled by, or under common
<PAGE>
control with Licensee or CPI Corp., shall perform
or license the services or have any direct or
indirect, controlling or non-controlling interest
as a disclosed or beneficial owner, investor,
partner, director, officer, employee, manager,
consultant, representative, or agent, or in any
other capacity, in any business offering or
selling professional portrait photography studio
services and related portrait products in the
United States, Puerto Rico or Canada
("Competitive Business"), which is:
(1) located in any specialty store, department
store, discount store or other similar
retail format;
(2) located within twenty (20) miles of a
Licensed Business licensed under this
Agreement or the Off-Premises License
Agreement between Licensee and Sears (the
"Off-Premises Agreement"); or
(3) offered or promoted through the following
media:
(a) World Wide Web sites available to the
public over the Internet;
(b) Secured Internet sites or Intranet
sites;
(c) other interactive media for use in the
Licensed Businesses; and
(d) in electronic processing, data
interchange and other communications done
or made in connection with any commercial
transaction consummated through the Internet
or Intranet.
If, during the term of this Agreement, Sears develops
Competitive Businesses in any territory or country outside of
the United States, Puerto Rico or Canada and Licensee has no
professional portrait businesses located within that country or
territory at the time of this development, Licensee shall no
longer have the right to develop Competitive Businesses in that
country or territory throughout the remainder of the term of
this Agreement in accordance with Section 5.18. Licensee and
Sears agree to use reasonable efforts to discuss their
respective global strategies with each other as they develop.
<PAGE>
3. Section 9.5 shall be deleted in its entirety and the
following substituted in its place:
9.5 REPORTS
If requested by Sears, Licensee shall provide to Sears
reports of sales and income and Sears commissions paid
in the manner and form prescribed by Sears, together
with any other information Sears may require for its
records or auditing purposes. If requested by Sears,
Licensee shall promptly submit its financial report to
Sears after the close of Licensee's fiscal year. Such
report shall be audited by a certified public
accountant. Such report shall include, but shall not
be limited to, Licensee's profit and loss statement
for such fiscal year and balance sheet at the end of
such fiscal year, and shall be prepared in accordance
with generally accepted accounting principles. If
Licensee is a publicly held corporation, this
requirement may be fulfilled by submission of
Licensee's Annual Report on Form 10-K. Sears shall
not disclose any such information that is not
available to the public to any third parties without
Licensee's prior consent.
4. Section 14.1 of the License Agreement is hereby
deleted in its entirety.
5. Article XIV of the License Agreement shall be amended
by adding a new Section 14.7 to read as follows:
14.7 COVENANT NOT TO COMPETE
Except for the three (3) Mainstreet Portrait
businesses currently owned and operated by
Licensee's affiliate, upon:
(1) termination of this Agreement by Sears in
accordance with its terms and conditions, or
(2) termination of this Agreement by Licensee
without cause,
Licensee and its affiliates agree, that for a
period of two (2) years commencing on the
effective date of termination, neither Licensee,
CPI Corp., nor any of their affiliates
controlling, controlled by or under common
control with Licensee or CPI Corp., will
perform or license the services or have any
direct or indirect interest as a disclosed or
beneficial owner, employee, investor, partner,
<PAGE>
director, officer, employee, consultant,
representative, or agent or in any other capacity
in any Competitive Business:
(a) operating within ten (10) miles of any
Licensed Business licensed under this
Agreement or the Off-Premises Agreement; or
(b) offered or promoted through the
following media:
(i) World Wide Web sites available to
the public over the Internet;
(ii) Secured Internet sites or Intranet
sites;
(iii) other interactive media for use in
the Licensed Businesses; and
(iv) in electronic processing, data
interchange and other communications
done or made in connection with any
commercial transaction consummated
through the Internet or Intranet.
6. Sears and Licensee hereby affirms the License
Agreement as amended by this First Amendment to the
License Agreement.
7. The effectiveness of this Amendment to License
Agreement is contingent upon the closing of the sale
of Licensee's parent corporation, CPI Corp., to
American Securities Capital Partners, L.P. or one of
its affiliates on or before December 31, 1999. If the
closing does not occur on or before this date, this
Amendment shall be null and void.
IN WITNESS WHEREOF, the parties have executed and delivered
this First Amendment to the License Agreement as if the date
first written above.
SEARS, ROEBUCK DE PUERTO RICO CONSUMER PROGRAMS INCORPORATED
By: /s/ Daniel F. Laughlin By: /s/ Alyn V. Essman
----------------------- -------------------------
Its: President Its: Chairman and Chief
----------------------- Executive Officer
-------------------------
<PAGE>
