(PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)
 
EXHIBIT 10.51
 

April 19, 2010

Mr. David M. Meyer, Managing Director
Knightspoint Partners, LLC
1325 Avenue of the Americas, 27th Floor
New York, NY 10019

Dear David:

This will confirm your agreement with CPI Corp. (the “Company”) regarding your
compensation as Executive Chairman (the “Chairman”) of the Board of Directors of
the Company (the “Board”) during the fiscal year ended February 5, 2011
(“FY2010”).

1.  Chairman.

a.           During the term of this agreement, you hereby agree to oversee and
supervise executive management of the Company relating to the following
strategic goals for the Company:

i. effective implementation of the Company’s strategic direction as established
by the Company’s Board and as evidenced by achievement of EBITDA targets
established by the Board in each fiscal year;

ii. assisting the Board and management in developing a long-range strategic plan
for protecting and increasing shareholder value over time including new sources
of revenue;

iii. moderation of sits decline toward a level flat to increasing as compared
with the previous year, and, a minimum of flat to higher net sales revenue over
the previous year and over a comparable number of same stores; and

iv. development and implementation of value-creating financial strategies.

The Compensation Committee of the Company’s Board of Directors (the “Committee”)
shall periodically review, adjust and mutually agree on the specific goals and
guidelines for your position as Executive Chairman hereunder.

b.           In consideration of your agreement hereunder, you shall be entitled
to the compensation described in Paragraphs 2 and 3 hereof.

2.  Retainer and Bonus.

a.           Retainer:  You will be eligible to receive a quarterly retainer of
$50,000 during the term of this agreement, payable on the first day of each
quarter of the Company’s fiscal year during the term of this agreement,
beginning with the second fiscal quarter of FY2010.  

b.           Performance Bonus:  You will be eligible to receive a performance
bonus for FY2010 based on the Consolidated Adjusted EBITDA targets and payouts
set out in Schedule A attached to this agreement.  For purposes of this
agreement, Consolidated Adjusted EBITDA will be calculated in the same manner as
determined for purposes of the Company’s annual management incentive plan.  

c.           Payment of Performance Bonus.  The amount of your FY2010
performance bonus (if any) determined in accordance with Schedule A to this
agreement will be paid to you in the form of shares of the Company’s common
stock to be delivered to you not later than ninety (90) days following the last
day of FY2010.  The number of shares to be delivered to you with respect to your
performance bonus will be determined by dividing (i) the amount determined under
Paragraph 2(b) and Schedule A by (ii) the closing price of a share of the
Company’s common stock on the last trading day of FY2010.  Any such shares shall
be subject to the terms of the Company’s Omnibus Incentive Plan, adopted as of
May 29, 2008 and approved by the Company’s stockholders on July 17, 2008 (the
“Plan”) and/or such other terms and conditions as the Committee shall
determine.  Any shares awarded to you with respect to your performance bonus
will be fully vested as of the date of such award.

 
 
 
 
d.           Discretionary Bonus.  In addition to the performance bonus
described in Paragraphs 2(b) and 2(c), the Committee, in its sole discretion,
may provide you with an additional bonus of up to $200,000.00 for FY2010 in the
event the “Total Return” in the Company’s common stock price performance for
such fiscal year is greater than 50%.  The amount of your discretionary bonus
(if any) pursuant to this Paragraph 2(d) will be paid to you in the form of
shares of the Company’s common stock to be delivered to you not later than
ninety (90) days following the last day of FY 2010.  The number of shares to be
delivered to you with respect to your performance bonus will be determined by
dividing (i) the amount of the discretionary bonus by (ii) the closing price of
a share of the Company’s common stock on the last trading day of FY2010.  Any
such shares shall be subject to the terms of the Company’s Omnibus Incentive
Plan, adopted as of May 29, 2008 and approved by the Company’s stockholders on
July 17, 2008 (the “Plan”) and/or such other terms and conditions as the
Committee shall determine. Any shares awarded to you with respect to your
discretionary bonus will be fully vested as of the date of such award.  For
purposes of this agreement, Total Return means the percentage determined by
dividing (1) the sum of (a) any dividends paid by the Company to its common
shareholders during FY2010 plus (b) the positive excess, if any, of the closing
price of a share of the Company’s common stock on the last trading day of the
relevant fiscal year over the closing price of a share of the Company’s common
stock on the last trading day of the previous fiscal year, divided by (2) the
closing price of a share of the Company’s common stock on the last trading day
of the previous fiscal year.  The Committee has full and absolute discretion to
award all or part of the discretionary bonus under this Paragraph 2(d) to the
extent the Total Return threshold for such fiscal year is achieved, it being
acknowledged and understood by you that the Committee retains sole and absolute
discretion to determine that no portion of the discretionary bonus will be paid
regardless of whether or to what extent the Total Return threshold is met.

e.           In the event you voluntarily terminate this agreement prior to the
last day of FY2010, you will forfeit any compensation payable under Paragraph
2(b) and will reimburse the Company for any compensation already paid to you
under Paragraph 2(a) that was unearned as of the date of termination on a
prorated basis.

3.  Restricted Stock Grant.  You will be awarded 17,162 shares of restricted
stock effective April 19, 2010 (the “Grant Date”), subject to the terms,
conditions and restrictions set out in the Plan and in the attached Restricted
Stock Award Agreement.  The restricted shares awarded to you pursuant to this
Paragraph 3 shall vest in four equal annual installments of 25% beginning on the
last day of FY2010, provided that you continue to provide services to the
Company through each relevant vesting date.  In the event of a termination of
your service on the Board at any time by reason of your death, permanent
disability or an involuntary termination of this Agreement by the Company other
than for Cause, however, the restrictions on any remaining restricted shares
shall immediately lapse.  For purposes of this agreement, “Cause” shall mean a
termination of your services as Executive Chairman by the Company by reason of
any of the following acts by or other circumstances regarding you:  (i) an act
committed, after the date of this agreement, in bad faith and to the detriment
of the Company or any of its affiliates, (ii) refusal or failure to act in
substantial accordance with any written material direction or order of the
Company, (iii) repeated unfitness or unavailability for service, disregard of
the Company’s rules or policies after reasonable notice and opportunity to cure,
or misconduct, but not incapacity, (iv) entry of a final order of judgment
affirming the conviction of a crime involving dishonesty, breach of trust, or
physical or emotional harm to any person,  or (v) material breach or violation
of any other provision of this agreement or of any other contractual obligation
to the Company or any of its affiliates.  Notwithstanding anything herein to the
contrary, in the event you cease to be Executive Chairman of the Company anytime
after the termination or expiration of this agreement but remain a member of the
Board, any then remaining unvested restricted shares shall immediately vest in
full upon your ceasing to be the Executive Chairman.

 
2
 
 
4.  Term; Termination.

a.           This agreement will take effect immediately and will continue for a
term expiring on the last day of FY2010, subject to earlier termination under
Paragraph 4(b) or 4(c), below.

b.           This agreement shall terminate immediately in the event of your
death or permanent disability at any time prior to the last day of FY2010.
 
 
c.           Either party may terminate this agreement at any time, with or
without Cause, upon sixty (60) days prior written notice to the other party.

d.           Except as specifically provided in Paragraphs 2(e) or 3, expiration
or termination of this agreement will not relieve either party of any liability
or obligation which accrued hereunder prior to the effective date of such
termination, nor preclude either party from pursuing all rights and remedies it
may have hereunder or at law or in equity with respect to any breach of this
agreement, nor prejudice either party’s right to obtain performance of any
obligation.

5.  Reimbursement of Expenses.  The Company will reimburse you for all
reasonable, documented expenses incurred at the Company’s request in connection
with this agreement (including travel expenses, which will be reimbursed in
accordance with the Company’s standard travel policy), subject to your
submission of invoices or other customary proof of expense.  Invoices for
expenses and accompanying documentation must be submitted within thirty (30)
days of the end of the month in which such expenses were incurred.  The Company
will pay correct invoices within thirty (30) days of receipt.

6.  Assignment; Binding Agreement.
 
a.           You may not assign this agreement or any part hereof.
 
b.           The Company may assign all rights and liabilities under this
agreement to a subsidiary or an affiliate or to a successor to all or a
substantial part of its business and assets without your consent.
 
c.           Subject to the foregoing, this agreement will inure to the benefit
of and be binding upon each of the heirs, assigns and successors of the
respective parties.  Any purported assignment that does not comport with this
Paragraph 6 will be null, void and of no effect.
 
d.           This agreement shall constitute the entire agreement between the
parties with respect to the subject matter hereof.  This agreement shall
supercede any and all prior agreements or understandings related to the subject
matter hereof, including but not limited to that letter agreement between you
and the Company dated as of September 22, 2008, as the same was amended as of
September 25, 2009, and extended on February 12, 2010.  Any term or provision of
this Agreement may be waived at any time by the party which is entitled to the
benefits thereof, and any term or provision of this agreement may be amended or
supplemented at any time by the mutual consent of the parties hereto, except
that any waiver of any term or condition, or any amendment, of this agreement
must be in writing.
 
e.           The laws of the State of Missouri shall govern the interpretation,
validity and performance of the terms of this agreement regardless of the law
that might be applied under principles of conflict of laws.
 
7.           Consent of the Board.  This agreement is subject to ratification by
the Board, and you shall be recused from voting on the matter.

 
3
 
 
Please acknowledge your agreement to the terms set forth herein by signing and
returning one copy of this letter to me.
 

  Sincerely,             CPI Corp.          
 
By:
/s/Turner White       Turner White       Chairman, Compensation Committee      
   

 

Agreed to this 19th day of April  2010
 
/s/David M. Meyer
David M. Meyer

 
 
4
 
 

SCHEDULE A
TO AGREEMENT DATED APRIL 19, 2010

Performance Bonus Criteria for Fiscal Year
Ending February 5, 2011 (“FY 2010”)

Your performance bonus for FY 2010 will be determined based on the following
EBITDA criteria:

•  you will not be entitled to a performance bonus for FY 2010 to the extent the
Company’s Consolidated Adjusted EBITDA for FY 2010 is less than $58,000,000.00;
 
•  you will be entitled to a performance bonus of $125,000.00 for FY 2010 to the
extent the Company’s Consolidated Adjusted  EBITDA for FY 2010 equals or exceeds
$58,000,000.00, and is less than $65,000,000.00;
 
•  you will be entitled to an annual performance bonus of $180,000.00 for FY
2010 to the extent the Company’s Consolidated Adjusted EBITDA for FY 2010 equals
or exceeds $65,000,000.00, and is less than $70,000,000.00; and
 
•  you will be entitled to an annual performance bonus of $250,000.00 for FY
2010 to the extent the Company’s Consolidated Adjusted EBITDA for FY 2010 equals
or exceeds $70,000,000.00.
 
 
 
 
 
 
 
5