Document:

exh10_43.htm

EXHIBIT 10.43

December 23, 2005

Mr. Keith W. Laakko

934 Audubon Drive

St. Louis, MO 63105

RE: Offer of Employment

Dear Keith:

I am pleased to offer you the position of Chief Marketing Officer commencing on January 9, 2006.  You will report directly to me and serve as a member of the senior management team of CPI Corp. (the “Company”), involved in planning, implementing and achieving the strategies and goals of the Company as reviewed and established by the Board of Directors.  Your principal place of employment will be St. Louis, Missouri, at the Company’s headquarters office.  This offer includes the following terms and conditions:

	
1.  

	
Base Cash Salary:  Your base cash salary initially will be $175,000 annually. Your base cash salary will be reviewed with you no less than annually and may be adjusted from time to time.

	
2.  

	
Restricted Stock Grant:  Subject to Compensation Committee approval, you will be granted Restricted Stock of CPI in the amount of $50,000 priced at the closing price of the Company’s common stock on the first trading day immediately prior to the commencement date of your full-time employment with the Company.  The Restricted Stock will vest (subject to your continued employment on each vesting date) in five equal increments at the close of each Fiscal Year during the period of your employment, beginning with the Fiscal Year ended February, 2007.

	
3.  

	
Annual Bonus:  You will be eligible to participate in the Performance Incentive Plan of the Company as a key executive of the Company.  It is anticipated that any payment due you under this plan will be paid substantially in Restricted Stock with annual vesting as determined by the Compensation Committee of the Board.

	
4.  

	
Other Benefits:  As a CPI executive, you will generally be entitled to participate in other active benefit plans and programs on the same terms as the other executives in the Company.  These benefits currently include:

	
        a.  

	
401(k) Plan:  This qualified plan generally allows employees to contribute up to 25% of base salary annually.  The company generally matches 50% of employee contributions up to a maximum of 5% of salary in common stock.  However, the required discrimination testing substantially limits the amount highly compensated executives may contribute.  The plan is administered by Ameriprise Financial and offers a range of investment options.

	
        b.  

	
Health/Disability:  The Company's benefit plan provides for competitive health care coverage and short-term disability insurance.  Employee premiums are adjusted annually.    Long-term disability insurance is also available.

	
        c.

	
Life Insurance:  Key managers of the Company are eligible for life insurance equal to two times annual base salary to a maximum benefit of $400,000.  Once per year, the key managers are offered an option to convert group term insurance in excess of $50,000 to a permanent cash value policy.  Contributions that the Company would have paid on the term life premiums are paid towards the permanent insurance premium, and the key manager pays the balance.

	
        d.  

	
Vacation:  You will be entitled to four weeks of paid vacation per year.

  

  

 

  

 

 

	
5.  

	
Termination and Severance:  If your employment is terminated by the Company without Cause at any time after July 9, 2006, you will be entitled to a severance amount equal to six months base salary provided you execute and deliver a release of all claims arising from or related to your employment and the termination of your employment in a form satisfactory to the Company.  Your severance amount will be payable in a lump sum upon receipt of your signed release of the Company.  If your employment is terminated (a) prior to July 10, 2006 or (b) at any time for Cause, you will be entitled to no benefits, except as provided by law or under the specific terms of the Company’s benefit programs in which you are then participating.  “Cause” as used herein shall mean any of the following acts by or other circumstances regarding the employee: (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, (v) any breach or threatened breach by the employee of Sections 6, 7, 8 or 9 of this Agreement, or (vi) 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.

	
6.

	
Insider Status. As a key executive of the Company, you will be considered an “insider” subject to SEC reporting of all stock transactions and to pre-clearance of all transactions through the Company’s General Counsel.

	
7.

	
Confidentiality. You will maintain in confidence all non-public information you learn about the Company and its business, including strategies, plans, prospects and financial, employee, vendor and customer information.  You will not use, copy or disclose any such information except as necessary to perform the functions of your job or with the prior consent of the company.

	
8.

	
Non-Compete and Non-Solicitation.  It is agreed that you will not be employed directly by or act in an advisory role for any direct competitor of the Company during the period of your employment and for a period of one year from the date of termination.

	
9.

	
Work for Hire.  As an employee, you agree that your ideas, concepts, graphics, creative or other products of your work will be owned by the Company, and you agree to acknowledge the company’s ownership in writing upon request from the Company.

I hope you find this offer acceptable as we all look forward to working with you.  I ask that you kindly respond no later than Wednesday, December 28, 2005.   Please acknowledge your acceptance of this offer by signing this letter in the space provided below and returning a signed copy to me via facsimile at 314/231-4233.

If you have any questions or wish to discuss this offer, please call me at 314/231-1575, extension 3223 or 314/629-5850.  I look forward to hearing from you.

Sincerely,

/s/Paul C.Rasmussen

_________________________________

Paul C. Rasmussen

Chief Executive Officer

Accepted this 28th  day of December, 2005.

/s/Keith W. Laakko

__________________________________

Keith W. Laakkoexh10_44.htm

EXHIBIT 10.44

Confidentiality, Noncompetition and Nonsolicitation Agreement

In consideration of my employment by CPI Corp., a Missouri corporation (the “Company”), as reflected in the Offer of Employment between myself and the Company dated December 23, 2005, which is attached hereto, I hereby agree as follows:

 

    1.          During the term of my employment and thereafter, I agree that all records, data lists, lists of actual or potential customers or suppliers, account information, pricing policies, sales and promotional techniques and practices, services and products, files, reports, notes, strategic or business plans, compilations or other recorded matter and copies or reproductions thereof, relating to the operation and activities of the Company and/or its affiliates which are not generally known to the public or those persons engaged in (a) business(es) similar to that/those conducted by the Company and/or its affiliates and which were made or received by, or which become known to, me during the term of my employment (hereinafter referred to as “Confidential Information”) are, respectively, the exclusive property of the Company and/or its affiliates and I hold the same as trustee for the Company and/or its affiliates and subject to the respective control of the Company and/or its affiliates.  I therefore agree that:

	
                        (i)

	
I will abide by any and all policies regarding confidentiality and with the terms and provisions of this Confidentiality, Noncompetition and Nonsolicitation Agreement (the “Agreement”);

	
                        (ii)

	
I will not at any time during the term of this Agreement or thereafter, except in the performance of my duties hereunder, use or permit any third person to use or disclose directly or indirectly any such Confidential Information or any trade secrets (including, but not limited to, using or permitting any third person to use Confidential Information or trade secrets to solicit any customer of the Company or any of its affiliates);

	
                        (iii)

	
I will return promptly upon termination of my employment for whatever reason, or at any time at the request of the board of directors or the Chief Executive Officer of the Company (or in the event of my death, my personal representative will return promptly) to the Chief Executive Officer, all Company property in my possession or control including, without limitation, personal computer(s), keys, credit cards, and records (whether stored electronically or otherwise) and including any and all copies of records, drawings, writings, blueprints, materials, memoranda and other tangible manifestations of and pertaining to Confidential Information or trade secrets, regardless of by or for whom the same were prepared;

	
                        (iv)

	
in the event any of the restrictions contained in the covenants set forth in this Section 1 are deemed unreasonable by any court, the Company and I agree that the court may reduce such restriction(s) to ones it deems reasonable to protect the Company and/or its affiliates; and

	
                        (v)

	
the Company and I agree that the provisions of this Section 1 will be enforced pursuant to Section 3 below.

For purposes of this Agreement, an “affiliate” of the Company means a company which either controls, is controlled by or is under common control with the Company.

    2.          (a)    During the term of my employment with the Company, and for a period ending one (1) year following the effective date of my termination of employment by the Company (the “Non-Compete Period”), I agree that I will not directly or indirectly:

 

	
                                         (i)

	without the prior written authorization of the Company, whether alone or as an employee, officer, agent, consultant, entrepreneur, venturer, owner,  partner or stockholder, engage in any business in direct competition with the Company or any of its affiliates;

	
                                         (ii)

	solicit business from any individual or entity that is a client, customer or supplier of the Company or any affiliate on the date of termination (or who was such a client, customer or supplier of the Company within the one (1) year prior to the effective date of my termination of employment by the Company);

 

 

  

  

 

  

 

	
                                         (iii)

	request, induce or advise any such customer, or any distributor or supplier of the Company or any affiliate to withdraw, curtail or cancel their business with the Company or any affiliate;

	
                                         (iv)

	request, induce, attempt to induce or advise any employees, consultants, or other personnel to terminate their relationships or breach their agreements with the Company or any affiliate; and

	
                                         (v)

	solicit for employment or employ any individual employed by the Company or any affiliate as of the date of termination; or

 

	
                                         (vi)

	directly or indirectly, aid or abet any other person or entity to undertake any of the activities described in paragraphs (i) through (v) above.

 

        (b)           Notwithstanding anything stated herein to the contrary, the covenants set forth in this Section 2 will not apply to the passive ownership of up to five percent (5%) of the securities of any publicly-traded corporation listed on a national securities exchange or traded on the over-the-counter markets.

        (c)           I hereby agree and acknowledge that the duration and scope applicable to the covenant not to compete or solicit described in this Section 2 are fair, reasonable and necessary, that I have received adequate compensation for such obligations, and that these obligations would not prevent me from earning a livelihood.  If, however, for any reason any court determines that the restrictions in this Section 2 are not reasonable, that the consideration is inadequate or that I have been prevented from earning a livelihood, such restrictions will be interpreted, modified or rewritten to include as much of the duration and scope identified in this Section 2 as will render such restrictions valid and enforceable.

         (d)           The Company and I agree that the provisions of this Section 2 will be enforced pursuant to Section 3 below.

 

    3.          I agree that in the event of my breach or violation or attempted breach or violation of Sections 1 and/or 2, the provisions may be enforced by an injunction in a suit in equity, and that a temporary or preliminary injunction or restraining order may be granted immediately upon the commencement of any such suit and without notice.  In the event of a breach or violation or attempted breach or violation by me of the provisions of Section 2, I agree that an amount of time equal to the time period during which such a breach or violation exists will be added to the duration of the restrictions in Section 2.  The existence of any claim or cause of action I may have against the Company or an affiliate, whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement of my obligations hereunder.

 

    4.          I hereby acknowledge that upon my breach of any of the covenants contained in this Agreement, the Company will suffer irreparable damages for which the remedy at law will be inadequate.  I agree and acknowledge that my violation of any of the provisions of this Agreement shall result in a forfeiture by me of any amounts potentially payable under the Plan, whether vested or otherwise.

 

    5.          I recognize that this Agreement does not set forth all terms of my employment by the Company and that during my employment with the Company I will be required to comply with all reasonable rules and regulations relating to such employment as may from time to time be promulgated by the Company.  It is my understanding that the Company may terminate my employment by it at any time, with or without Cause (as such term is defined in the Offer of Employment).  The Company hereby acknowledges that, except for the express covenants and conditions set forth herein and in the Offer of Employment, I have not agreed to waive or otherwise relinquish any rights I may otherwise have under applicable employment and/or labor laws or pursuant to other agreements with or policies of the Company, regarding or arising out of the termination of my employment.

 

    6.          This Agreement contains the entire understanding and agreement between the parties as to the subject matter hereof and cannot be amended, modified or supplemented in any respect, except by a subsequent written agreement entered into by both parties.

 

    7.          This Agreement is binding upon and will inure to the benefit of any successor to the Company whether by way of a merger, purchase, consolidation or otherwise.  All of the Company’s affiliates and all successors and assigns of the Company are third-party beneficiaries of the covenants contained herein.  Such restrictive covenants are intended for the benefit of, and may be enforced by, the Company’s successors and assigns and any of the Company’s affiliates.

 

    8.          The Company and I further agree that, in the event of any litigation at law or at equity with regard to the enforcement or interpretation of this Agreement, the prevailing party shall be entitled to be reimbursed for all reasonable attorneys’ fees and costs incurred, at trial and through all levels of appeal, as a result of such litigation.

 

    9.          This Agreement shall be construed in accordance with and governed by the substantive laws of the State of Missouri (regardless of the law that might otherwise govern under applicable Missouri principles of conflicts of laws).

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date shown below.

 

EXECUTIVE:                            CPI CORP.

	 	 	 	 	 
	
/s/Keith W. Laakko

	 	 	
By: /s/Paul C. Rasmussen

	 
	
Keith W. Laakko

	 	 	
Paul C. Rasmussen

	 
	
 

	 	 	
Its: Chief Exeuctive Officer

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