STOCK AWARD AND RESTRICTION AGREEMENT

 

THIS STOCK AWARD AND RESTRICTION AGREEMENT (“Agreement”), is entered into
effective as of April 6, 2006, between CPI Corp., a Missouri corporation (the
“Company”), and David M. Meyer (the “Director”).

 

RECITALS

 

WHEREAS, the Company believes it to be in the best interests of the Company, its
subsidiaries and its stockholders for nonemployee members of the Company’s Board
of Directors (the “Board”) to obtain or increase their stock ownership interest
in the Company, thereby attracting, retaining and rewarding such directors and
strengthening the mutuality of interest between the directors and the Company's
stockholders;

 

WHEREAS, the Director is currently the Chairman of the Company’s Board of
Directors and is not an employee of the Company or one of its subsidiaries; and

 

WHEREAS, the Director served as interim lead executive in the Office of the
Chief Executive until a Chief Executive Officer was appointed on August 15,
2005;

 

WHEREAS, from the arrival of the new Chief Executive Officer through the end of
the Company’s fiscal year 2005, the Director devoted extraordinary time and
effort to transition, strategic direction and other matters critical to the
Company’s performance; and

 

WHEREAS, the Company desires to compensate the Director for his services by
awarding shares of the Company’s common stock to Director pursuant to the CPI
Corp. Restricted Stock Plan, as amended and restated from time to time (the
“Plan”); and

 

WHEREAS, the Company and the Director desire to set forth the terms and
conditions of the award.

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:

 

 

1. Award of Shares; Deliveries.

 

 

(a)

As of the date of this Agreement, the Company hereby grants to the Director an
award of 5,408 shares of common stock of the Company, par value $.40 per share
(collectively, the “Restricted Shares”), upon the terms and conditions set forth
in this Agreement.

 

 

(b) Concurrently with the execution of this Agreement:

 

 

1

 

--------------------------------------------------------------------------------

 

 

(i) subject to Section 5 hereof, the Company shall deliver to the Director a
copy of a share certificate or certificates representing the Restricted Shares,
which certificate(s) shall contain the legend set forth in Section 5 hereof; and

 

(ii) the Director shall deliver to the Company a duly signed stock power,
endorsed in blank, relating to the Restricted Shares.

 

If the Director shall have elected to file a Section 83(b) election with respect
to the Restricted Shares, the Director shall have delivered, or within 30 days
of the date of this Agreement shall deliver, to the Company a copy of a duly
executed Section 83(b) election.

 

 

2. Representations and Acknowledgements of Director. The Director hereby:

 

(i) acknowledges and accepts the Restricted Shares described in Section 1;

 

(ii) represents that he is acquiring the Restricted Shares for investment and
not with a view to or for resale or distribution thereof;

 

(iii) agrees and acknowledges that the Restricted Shares are issued pursuant to,
and subject to the terms and conditions set forth in, the Plan; and

 

(iv) agrees that the Restricted Shares will be held by Director and his
successors and assigns subject to all of the restrictions, terms and conditions
contained in this Agreement, and that the Restricted Shares will be disposed of
only in accordance with the terms of this Agreement.

 

3. Restrictions. The Restricted Shares are subject to the Transfer Restrictions
and Forfeiture Restrictions set forth in Sections 3(a) and 3(b) below
(collectively, the “Restrictions”). The restrictions set out in Section 3(a) are
hereinafter referred to in this Agreement as the “Transfer Restrictions,” and
the restrictions set out in Section 3(b) are hereinafter referred to in this
Agreement as the “Forfeiture Restrictions.”

 

(a) Transfer Restrictions. Except as otherwise permitted under this Agreement,
Director agrees not to sell, transfer, assign, give, pledge, or otherwise
dispose of or encumber any part or all of the Restricted Shares, whether
voluntarily, by operation of law, or otherwise, prior to the lapse of the
Transfer Restrictions thereon pursuant to Section 4 hereof. Any attempted
transfer of all or any portion of the Restricted Shares that remain subject to
the Transfer Restrictions shall be considered null and void and the Director
shall continue to be bound by all of the terms and provisions hereof.

 

(b) Forfeiture Restrictions. Upon any termination of the Director’s membership
on the Board, all of the Restricted Shares that have not yet become Vested
Shares (as defined below) at the effective time of such termination (determined
after taking into account the lapse of the Restrictions under Section 4 hereof),
shall be returned to and canceled by the Company and shall be deemed to have
been forfeited by Director. Upon a forfeiture by Director of any Restricted

 

2

 

--------------------------------------------------------------------------------

 

Shares under this Section 3(b), the Company will not be obligated to pay
Director any consideration whatsoever for the forfeited Restricted Shares.

 

 

4. Lapse of Restrictions.

 

(a) The Restrictions shall lapse with respect to the Restricted Shares on
February 3, 2007, provided that the Director remains a member of the Board at
all times during such period. In the event the Director’s membership on the
Board is terminated for any reason prior to February 3, 2007 other than as
described in Section 4(c) below, no further vesting (pro rata or otherwise)
shall occur from and after the effective date of such termination.

 

(b) To the extent the Forfeiture Restrictions shall have lapsed under Section
4(a) with respect to any portion of the Restricted Shares subject to this Award,
those shares (“Vested Shares”) will, from and after the applicable vesting date,
thereafter be free of the Restrictions set forth in Section 3 hereof. Any
Restricted Shares for which the Restrictions have not yet lapsed in accordance
with this Section 4 shall, for all purposes of this Agreement, continue to be
considered Restricted Shares, and will be subject to all of the terms and
conditions of this Agreement, including but not limited to the Restrictions set
forth in Section 3.

 

(c) Notwithstanding Section 4(a), the Restrictions shall lapse as to any
Restricted Shares held by the Director immediately prior to the earlier to occur
of (1) the effective date of a “Change in Control” of the Company or (2) the
effective date of any termination other than for Cause that is the result of
Company action or inaction. "Cause" as used herein shall mean any of the
following acts by or other circumstances regarding the Director: (i) an act
committed in bad faith to the detriment of the Company or 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, (v)
any breach or threatened breach or violation of any other provision of this
Agreement or of any other contractual obligation to the Company or any of its
affiliates.

 

5. Restrictive Legend. Director will be issued a stock certificate or
certificates in respect of the Restricted Shares, which certificate(s) will be
registered in the Director’s name and may bear such legend(s) as may be required
or necessary to comply with the Securities Act of 1933, as amended, and any
applicable state securities laws. Any certificate or certificates relating to
the Restricted Shares shall also be inscribed with a legend evidencing the
Restrictions. Notwithstanding anything to the contrary herein whether express or
implied, the Company in its sole discretion may issue Restricted Shares in
uncertificated format pursuant to procedures established between the Company and
the Company’s stock transfer agent and in accordance with Section 158 of the
Delaware General Corporation Law.

 

6. Custody. All certificates representing the Restricted Shares shall be
deposited, together with stock powers executed by Director, in proper form for
transfer, with the Company.

 

3

 

--------------------------------------------------------------------------------

 

The Company is hereby authorized to cause the transfer to come into its name of
all certificates representing the Restricted Shares which are forfeited to the
Company pursuant to Section 3(b) hereof.

 

7. Voting and Dividends; Adjustments. Subject to the Restrictions and the
limitations imposed by this Section 7, Director shall have all of the rights of
a shareholder of the Company with respect to the Restricted Shares, including
the right to vote the Restricted Shares and to receive dividends thereon. Stock
dividends and shares, if any, issued as a result of any stock-split,
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or any similar change affecting the capital stock of the
Company, which has occurred after the date hereof, issued with respect to the
Restricted Shares shall be treated as additional Restricted Shares and shall be
subject to the same Restrictions and other terms and conditions that apply with
respect to, and shall vest or be forfeited at the same time as, the Restricted
Shares with respect to which such stock dividends or shares are issued.

 

8. No Right to Continue Relationship. Nothing in this Agreement shall confer
upon the Director any right to continue to serve as a member of the Board or as
the Chairman of the Board.

 

 

9. Entire Agreement.

 

(a) This Agreement shall constitute the entire agreement between the parties
with respect to the subject matter hereof. 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.

 

(b) This Agreement shall not affect in any way the right or power of the Company
or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or other securities with preference ahead
of or convertible into, or otherwise affecting the Restricted Shares or the
rights thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of the Company’s assets or business, or any other
act or proceeding, whether of a similar character or otherwise.

 

(c) In the event that any term or provision of this Agreement shall be finally
determined to be superseded, invalid, illegal or otherwise unenforceable
pursuant to applicable law by a governmental authority having jurisdiction and
venue, that determination shall not impair or otherwise affect the validity,
legality or enforceability, to the maximum extent permissible by law, (a) by or
before that authority of the remaining terms and provisions of this Agreement,
which shall be enforced as if the unenforceable term or provision were deleted,
or (b) by or before any other authority of any of the terms and provisions of
this Agreement.

 

 

4

 

--------------------------------------------------------------------------------

 

 

(d) Capitalized terms not otherwise defined in this Agreement shall have the
same meaning as set forth in the Plan.

 

10. Governing Law. 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.

 

11. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the successors, assigns and heirs of the respective parties.

 

12. Notices. All notices and other communications required or permitted under
this Agreement shall be written and shall be delivered personally or sent by
registered or certified first-class mail, postage prepaid and return receipt
required, addressed as follows: if to the Company, to the Company’s executive
offices at 1706 Washington Avenue, St. Louis, MO 63103 attention: Chief
Financial Officer, and if to the Director or its successor, to the address last
furnished by the Director to the Company. Each notice and communication shall be
deemed to have been given when received by the Company or the Director.

 

13. No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.

 

14. Titles. Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of the Agreement. The masculine
pronoun shall include the feminine and neuter and the singular shall include the
plural, when the context so indicates.

 

[Signature page follows]

 

 

5

 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

CPI CORP.

 

 

 

By:        /s/ Paul Rasmussen                                                 

 

Its:     Chief Executive Officer                             

 

 

 

The undersigned Director hereby accepts, and agrees to, all terms and provisions
of the foregoing Agreement.

 

 

/s/ David M.
Meyer                                                                         

David M. Meyer

 

 

 

6