SECURITIES AND EXCHANGE COMISSION
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):
March 13, 2000
CPI CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State of Jurisdiction of Incorporation)
005-33916 431256674
(Commission File Number) (I.R.S. Employer Identification Number)
1706 Washington Avenue 63103
St. Louis, Missouri (Zip Code)
(Address of Principal Executive Offices)
(314) 231-1757
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 1. Changes in Control of Registrant
Not Applicable.
Item 2. Acquisition or Disposition of Assets
Not Applicable.
Item 3. Bankruptcy or Receivership
Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable.
Item 5. Other Events
(a) The attached Press Release of CPI CORP., dated March 13, 2000, is
incorporated by reference herein.
(b) Rights Agreement between CPI CORP. and Harris Trust and Savings Bank.
On March 13, 2000, the Board of Directors of CPI CORP., a Delaware
corporation (the "Company"), declared a dividend distribution of one Right for
each outstanding share of common stock, $ .40 par value (the "Common Shares"),
of the Company, to stockholders of record at the close of business on March 23,
2000 (the "Record Date"). Each Right entitles the record holder to purchase from
the Company one one-hundredth of a share ("Preferred Stock Fraction") of the
Company's Series A Participating Preferred Stock, without par value (the "Series
A Preferred Stock") at a price of Ninety-six Dollars ($96.00) (the "Purchase
Price"), subject to adjustment in certain circumstances. Except as otherwise
provided in the Rights Agreement, the Purchase Price may be paid, at the
election of the registered holder, in cash or by certified bank check or money
order payable to the order of the Company. The description and terms of the
Rights are set forth in a Rights Agreement, dated as of March 13, 2000 (as it
may be amended, modified or supplemented from time to time, the "Rights
Agreement"), between the Company and Harris Trust and Savings Bank, as Rights
Agent.
Initially, the Rights will be attached to the certificates representing
outstanding Common Shares, and no Rights Certificates will be distributed. The
Rights will separate from the Common Shares and a "Distribution Date" will occur
upon the earlier of (i) the close of business on the tenth day after the date
(the "Stock Acquisition Date") of a public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the
outstanding Common Shares, or (ii) the close of business on the tenth Business
Day (or such later date as may be determined by the Company's Board of Directors
prior to such time as any person becomes an Acquiring Person) after the
commencement of a tender offer or exchange offer if, upon consummation thereof,
the person or group making such offer would be the beneficial owner of 20% or
more of the Common Shares. Until the Distribution Date, the Rights will be
evidenced by the Common Share certificates and will be transferred with and only
with such Common Share certificates, (ii) new Common Share certificates issued
after the Record Date will contain a notation incorporating the Rights Agreement
by reference and (iii) the surrender for transfer of any certificates for Common
Shares outstanding will also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, Rights Certificates will be mailed to holders
of record of the Common Shares as of the close of business on the Distribution
Date and, thereafter, such separate Rights Certificates alone will evidence the
Rights. Except in certain limited circumstances, only Common Shares issued prior
to the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 13, 2010 unless earlier redeemed by the
Company as described below.
Except in the circumstances described below, after the Distribution Date
each Right will be exercisable into a Series A Preferred Stock Fraction. Each
Series A Preferred Stock Fraction carries voting and dividend rights that are
intended to produce the equivalent of one Common Share. The voting and dividend
rights of the Series A Preferred Stock are subject to adjustment in the event of
dividends, subdivisions and combinations with respect to the Common Shares of
the Company. In lieu of issuing certificates for fractions of shares of Series A
Preferred Stock (other than fractions which are integral multiples of Series A
Preferred Stock Fractions), the Company may pay cash in accordance with the
Rights Agreement. In the event that, at any time following the Distribution
Date, a Person becomes an Acquiring Person (other than pursuant to an offer for
all outstanding Common Shares at a price and on terms which the majority of the
independent Directors determine to be fair to, and otherwise in the best
interests of, stockholders), the Rights Agreement provides that proper provision
shall be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof, Common Shares (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
(2) times the exercise price of the Right. In lieu of requiring payment of the
Purchase Price upon exercise of the Rights following any such event, the Company
may provide that each Right be exchanged for one Common Share (or cash, property
or other securities, as the case may be). The only right of a holder of Rights
following the Company's election to provide for such exchange shall be to
receive the above described securities. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, any
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by an Acquiring Person shall immediately
become null and void.
For example, at an exercise price of $96 per Right, each Right not owned by
an Acquiring Person (or by certain related parties) following an event set forth
in the preceding paragraph would entitle its holder to purchase $192 worth of
Common Shares (or other consideration, as noted above) for $96. Assuming that
the Common Shares had a per share value of $24 at such time, the holder of each
valid Right would be entitled to purchase eight Common Shares for $96.
Alternatively, the Company could permit the holder to surrender each Right in
exchange for one Common Share (with a value of $24) without the payment of any
consideration other than the surrender of the Right.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company engages in a merger or consolidation in which the Company is not the
surviving corporation, (ii) the Company engages in a merger or consolidation
with another person in which the Company is the surviving corporation, but in
which all or part of its Common Shares are changed or exchanged, or (iii) 50% or
more of the Company's assets or earning power is sold or transferred (except
with respect to clauses M and (ii), a merger or consolidation (a) which follows
an offer described in the second preceding paragraph and (b) in which the amount
and form of consideration is the same as was paid in such offer), the Rights
Agreement provides that proper provision shall be made so that each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon the exercise thereof, common stock of
the acquiring company having a value equal to two (2) times the exercise price
of the Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Preferred Stock Fractions or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on the Series A Preferred Stock or other capital stock, or a
subdivision, combination or reclassification of the Series A Preferred Stock,
(ii) upon the grant to holders of the Series A Preferred Stock of certain rights
or warrants to Subscribe for Series A Preferred Stock or securities convertible
into Series A Preferred Stock at less than the current market price of the
Series A Preferred Stock, or (iii) upon the distribution to holders of the
Series A Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends or dividends payable in Series A Preferred
Stock) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Series A Preferred Stock (other
than fractions which are integral multiples of Series A Preferred Stock
Fractions) will be issued upon exercise of the Rights and, in lieu thereof, a
cash payment will be made based on the market price of the Series A Preferred
Stock on the last trading date prior to the date of exercise.
At any time prior to the earlier of (i) the date on which a Section 11 (a)
(ii) Event (as defined in the Rights Agreement) occurs and (ii) the Final
Expiration Date, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right, payable in cash or
securities or both (the "Redemption Price") . Immediately upon the action of the
Board of Directors of the Company ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Issuance of Common Shares upon exercise of Rights is subject to regulatory
approval. Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Any of the provisions of the Rights Agreement, other than certain
provisions relating to the principal economic terms of the Rights, may be
amended by the Board of Directors of the Company prior to the Distribution Date.
Thereafter, the provisions of the Rights Agreement may be amended by the Board
in order: to cure any ambiguity, defect or inconsistency; to shorten or lengthen
any time period under the Rights Agreement; or in any other respect that will
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person); provided that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
As of March 13, 2000, there were 17,821,473 Common Shares outstanding,
9,729,111 shares in the treasury, and 1,098,441 shares reserved for issuance
under stock option plans and other stock plans of the Company. Each outstanding
Common Share on March 13, 2000 will receive one Right. As long as the Rights are
attached to the Common Shares and in certain other limited circumstances, the
Company will issue one Right with each new Common Share so that all such shares
will have attached Rights. Two hundred thousand (200,000) shares of Series A
Preferred Stock have initially been reserved for issuance upon exercise of the
Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the Rights being redeemed or a substantial
number of Rights being acquired. The Rights should not interfere with any merger
or other business combination approved by the Board of Directors of the Company.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibits the Certificate
of Designations, Preferences and Rights of Series A Preferred Stock (setting
forth the terms of the Series A Preferred Stock), the form of Rights Certificate
and the form of Summary of Rights to Purchase Series A Shares, is incorporated
herein by reference as an Exhibit. The foregoing description of the Rights is
qualified by reference to such Exhibit.
Item 6. Resignation of Registrant's Directors
Not Applicable.
Item 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable.
(c) Exhibits.
Exhibit 10.1 Form of Rights Agreement, dated as of March 13, 2000,
between CPI CORP. and Harris Trust and Savings Bank
(Incorporated by reference to the Registration Statement
on Form 8-A of the Company dated March 14, 2000.)
Exhibit 99 Press Release of CPI CORP., dated March 13, 2000.
Item 8. Change in Fiscal Year.
Not applicable.
SIGNATURES
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 hereunto duly authorized.
CPI CORP.
By:/s/ Russell Isaak
-----------------------------------------
Name: Russell Isaak
Title: President
Dated: March 14, 2000
CPI Corp.
news for immediate release FOR RELEASE_________________
FOR FURTHER INFORMATION, CONTACT:
NAME Alyn V. Essman FROM CPI Corporation
ADDRESS 1706 Washington Ave. CITY St. Louis
STATE, ZIP Missouri 63103 TELEPHONE (314) 231-1575
FOR FURTHER INFORMATION
AT THE FINANCIAL RELATIONS BOARD
George Zagoudis, Chicago 312/266-7800
After 6:00 p.m. 708/705-7240
Kathy Phelan, New York, NY 212/661-8030
CPI CORP. RENEWS SHAREHOLDER RIGHTS PLAN
ST. LOUIS, MO - MARCH 13, 2000 - CPI Corp. (NYSE:CPY) ("CPI") announced
that it had renewed its Shareholder Rights Plan, which is designed to ensure
that all shareholders receive fair and equal treatment in the event of an
attempted takeover. The plan is not being adopted in response to any specific
effort to acquire control of the Company, and the Company is not aware of any
such effort. The plan is substantially similar to CPI's former rights plan that
the Company permitted to expire in 1999 in light of its then pending merger.
Under the Rights Plan, each stockholder of CPI Corp. Common Stock, after
the close of business on March 23, 2000, will receive a dividend distribution of
one Right for each share of Company Common Stock held. Each Right entitles
stockholders to buy 1/100th of a share of Series A Participating Preferred Stock
of the Company at an exercise price of $96.00. Each preferred share fraction is
designed to be equivalent in voting and dividend rights to one share of Common
Stock.
The Rights will be exercisable and will trade separately from the shares of
Common Stock only if a person or group, with certain exceptions, acquires
beneficial ownership of 20% or more of the shares of Common Stock or commences a
tender or exchange offer that would result in such person or group beneficially
owning 20% or more of the shares of Common Stock. Prior to this time, the Rights
will not trade separately from the Common Stock. The Company may redeem the
Rights at $ .001 per Right at any time prior to the occurrence of one of these
events. All Rights expire on March 13, 2010.
Each Right will entitle its holder to purchase, at the Right's then-current
exercise price, Common Stock of CPI Corp. having a value of twice the Right's
exercise price. This amounts to the right to buy Common Stock of the Company at
half price. Rights owned by the party triggering the exercise price of Rights
will not be exercisable.
In addition, if, after any person has become a 20%-or-more stockholder, the
Company is involved in a merger or other business combination transaction with
another person in which its shares of Common Stock are changed or converted, or
sells 50% or more of its assets or earning power to another person, each Right
will entitle its holder to purchase, at the Right's then-current exercise price,
shares of Common Stock of such other person having a value of twice the Right's
exercise price.
Details of the Shareholder Rights Plan will be mailed to stockholders.
CPI is a consumer services company with $389 million in fiscal 1998 sales,
operating approximately 1,180 retail locations, including 1,024 Sears Portrait
Studios in the U.S., Puerto Rico and Canada and 152 Prints Plus wall decor
stores.
