EXHIBIT 10.3
AMENDED AND RESTATED SUPPORT AGREEMENT
AMENDED AND RESTATED SUPPORT AGREEMENT (the "Agreement") dated as of
August 6, 2003, between WYNNEFIELD CAPITAL MANAGEMENT, LLC, a Delaware limited
liability company ("Wynnefield"), and CROWN CRAFTS, INC., a Georgia corporation
(the "Company").
WHEREAS, the Company and Wynnefield entered into that certain Support
Agreement dated as of May 7, 2003 (the "Support Agreement") which, among other
things, (i) permitted the Wynnefield Group (as hereinafter defined) to acquire
additional shares of the Company's Series A Common Stock, par value $1.00 per
share (such class of common stock being referred to herein as "Common Stock"),
without triggering the operation of the Company's Shareholder Rights Plan (the
"Rights Plan"), as set forth in that certain Rights Agreement dated as of August
11, 1995 between the Company and SunTrust Bank (successor by merger to Trust
Company Bank), as amended, and (ii) sought to assure the Company of a
constructive and mutually beneficial relationship between it and Wynnefield; and
WHEREAS, the Company and Wynnefield wish to amend and restate the
Support Agreement in its entirety in the manner hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, representations, warranties, covenants and agreements set forth
herein, the parties, intending to be legally bound, hereby agree as follows:
1. TERM OF AGREEMENT
The respective covenants and agreements of Wynnefield and the Company
contained in this Agreement will continue in full force and effect until
December 31, 2008 (the "Termination Date"), unless earlier terminated pursuant
to paragraph 5 or subparagraph 6(b) hereof or pursuant to the mutual written
consent of Wynnefield and the Company.
2. COVENANTS OF WYNNEFIELD
Prior to the Termination Date or earlier termination of this Agreement
and subject to the further provisions hereof:
(a) Neither Wynnefield nor any person controlled by (within the meaning
of Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) Wynnefield (collectively and together with Wynnefield, the
"Wynnefield Group") will, directly or indirectly, acquire any Voting Securities
(as hereinafter defined) (except by way of stock dividends or other
distributions or offerings made available to holders of Voting Securities
generally) if the effect of such acquisition would be to increase the aggregate
voting power in the election of directors of all Voting Securities then owned by
all members of the Wynnefield Group to greater than 20% of such total combined
voting power of all Voting Securities then outstanding; provided that this
subparagraph shall not apply if and to the extent that the aggregate percentage
ownership of the Wynnefield Group is increased as a result of a recapitalization
or reincorporation of the Company,
any redemption of Voting Securities by the Company, or any other action taken by
the Company or its affiliates (as hereinafter defined) other than the Wynnefield
Group.
(b) Wynnefield shall take such action as may be required so that all
Voting Securities owned by any member of the Wynnefield Group are voted (whether
by proxy or otherwise) in favor of a proposal to effect a reincorporation by
merger (the "Reincorporation") of the Company with and into a newly-formed
Delaware corporation wholly-owned by the Company ("Newco") upon the consummation
of which Newco will be substantially identical to the Company, except that the
charter of Newco in effect immediately following the Reincorporation (i) will be
subject to amendment upon the approval of holders owning a majority of the
capital stock of Newco entitled to vote generally in the election of directors
and (ii) will provide for a total authorized capital of 75,000,000 shares,
consisting of (A) 1,000,000 shares of blank check preferred stock, all of which
shall be reserved by Newco for issuance solely pursuant to the Rights Plan,
which Newco will assume in the Reincorporation; (B) 73,500,000 shares designated
as Series A Common Stock (the "Series A Common Stock"); (C) 327,940 shares
designated as Series B Common Stock (the "Series B Common Stock"); and (D)
172,060 shares designated as Series C Common Stock (the "Series C Common
Stock"), with each share of Series B Common Stock and Series C Common Stock to
be non-voting, authorized solely for issuance upon exercise of the Warrants
described in clause (i) below and convertible into 44.69107183 shares of Series
A Common Stock. Newco will reserve out of its authorized but unissued capital
stock (i) 22,345,536 shares of Series A Common Stock for issuance pursuant to
the conversion of shares of Series B Common Stock and Series C Common Stock
issued upon the exercise of Warrants as defined in, and as issued pursuant to,
that certain Subordinated Note and Warrant Purchase Agreement dated as of July
23, 2001 by and among the Company, Bank of America, N.A., The Prudential
Insurance Company of America and Wachovia Bank, N.A., as amended, which Newco
will assume in the Reincorporation; (ii) 3,550,000 shares of Series A Common
Stock for issuance to management pursuant to Section 3.1(c) of the Company's
Amended and Restated Restricted Stock Plan, which Newco will assume in the
Reincorporation; (iii) 1,000,000 shares of Series A Common Stock for issuance
pursuant to the Company's Amended 1995 Stock Option Plan, which Newco will
assume in the Reincorporation; and (iv) 35,250,000 shares of Series A Common
Stock for issuance to the stockholders of Newco pursuant to the Rights Plan.
(c) The members of the Wynnefield Group, as holders of Voting
Securities, shall be present, in person or by proxy, at all meetings of
shareholders of the Company called with respect to the Reincorporation and of
which the Wynnefield Group has received due notice, so that all Voting
Securities beneficially owned by them may be counted for the purpose of
determining the presence of a quorum at such meetings.
(d) No member of the Wynnefield Group shall deposit any Voting
Securities in a voting trust or subject any Voting Securities to any arrangement
or agreement with respect to the voting of such Voting Securities to which any
of the following persons (collectively, the "Xxxxxxxxx Group") is a party: (i)
Xxxxxxx Xxxxxxxxx or any person who any member of the Wynnefield Group knows to
be an affiliate, associate (as hereinafter defined) or relative (whether or not
they occupy the same home as Xx. Xxxxxxxxx) of Xx. Xxxxxxxxx or any 13D Group
(as hereinafter defined) of which Xx. Xxxxxxxxx is a member, (ii) any person
who, to the knowledge of any member of the Wynnefield Group, is employed by any
corporation or other organization (other than the Company and its affiliates and
associates) of which Xx. Xxxxxxxxx is an officer or partner or is, directly or
indirectly, the beneficial owner of 10% or more of any class of equity
securities of such corporation or other organization, or (iii) any person who,
to the knowledge of any member of the Wynnefield Group, is casting votes in
respect of Voting Securities beneficially owned by Xx. Xxxxxxxxx.
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(e) No member of the Wynnefield Group shall solicit proxies or become a
"participant" in a "solicitation" (as such terms are defined in Regulation 14A
under the Exchange Act) made by any member of the Xxxxxxxxx Group.
(f) No member of the Wynnefield Group shall, for the purpose of, or in
connection with, acquiring, holding, voting or disposing of Voting Securities,
(i) join a partnership, limited partnership, syndicate or other group of which,
to its knowledge, any member of the Xxxxxxxxx Group is, directly or indirectly,
a partner, member or participant, or (ii) otherwise act in concert with any
person who it knows to be a member of the Xxxxxxxxx Group, or (iii) otherwise
become, together with any person who it knows to be a member of the Xxxxxxxxx
Group, a "person" within the meaning of Section 13(d)(3) of the Exchange Act (in
each case other than solely with members of the Wynnefield Group).
(g) No member of the Wynnefield Group shall, directly or indirectly,
offer, sell or transfer any Voting Securities to any person who it knows to be a
member of the Xxxxxxxxx Group.
3. REPRESENTATIONS AND WARRANTIES
(a) The Company hereby represents and warrants to Wynnefield as
follows:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia.
(ii) The Company has full legal right, power and authority to
enter into and perform this Agreement, and the execution and delivery
of this Agreement by the Company and the consummation of the
transactions contemplated hereby have been duly authorized by the Board
of Directors of the Company.
(iii) This Agreement constitutes a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms except that (A) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in
effect, affecting creditors' rights generally, and (B) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(b) Wynnefield hereby represents and warrants to the Company as
follows:
(i) Wynnefield is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
(ii) Wynnefield has full legal right, power and authority to
enter into and perform this Agreement, and the execution and delivery
of this Agreement by Wynnefield and the consummation by Wynnefield of
the transactions contemplated hereby have been duly authorized by the
managers of Wynnefield.
(iii) This Agreement constitutes a valid and binding agreement
of Wynnefield, enforceable against Wynnefield in accordance with its
terms except that (A) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in
effect, affecting creditors' rights generally, and (B) the remedy of
specific
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performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iv) As of the date hereof, the Wynnefield Group owns of
record and beneficially an aggregate of 1,395,535 shares of Common
Stock (the "Existing Shares"), and the Existing Shares constitute all
of the shares of the Company's capital stock owned of record or
beneficially by the Wynnefield Group. There are no outstanding options
or other rights to acquire from Wynnefield, or obligations of
Wynnefield to sell or to acquire, any shares of the Company's capital
stock. Wynnefield has, directly or indirectly, the voting power, power
of disposition and power to agree to all of the matters set forth in
this Agreement, in each case with respect to all of the Existing Shares
with no limitations, qualifications or restrictions of any kind
whatsoever, subject to applicable securities laws and the terms of this
Agreement.
4. CERTAIN DEFINITIONS
For purposes of this Voting Agreement:
(a) "Affiliate" and "associate" shall each have the meaning set forth
with respect thereto in Rule 12b-2 under the Exchange Act.
(b) "Beneficially own", "beneficial ownership" and "beneficial owner"
with respect to any securities means having "beneficial ownership" of such
securities, as determined pursuant to Rule 13d-3 under the Exchange Act, without
duplicative counting of the same securities by the same holder. Securities
beneficially owned by a person include securities beneficially owned by all
other persons with whom such person would constitute a "13D Group" with respect
to securities of the same issuer.
(c) "Person" shall mean any individual, partnership, corporation,
limited liability company, trust or other entity or association.
(d) "13D Group" shall mean any group of persons formed for the purpose
of acquiring, holding, voting or disposing of Voting Securities which would be
required under Section 13(d) of the Exchange Act and the rules and regulations
thereunder (as now in effect and based on present legal interpretations thereof)
to file a statement on Schedule 13D with the Securities and Exchange Commission
as a "person" within the meaning of Section 13(d)(3) of the Exchange Act if such
group beneficially owned Voting Securities representing more than 5% of the
total combined voting power of all Voting Securities then outstanding.
(e) "Voting Securities" shall mean all classes of capital stock of the
Company entitled to vote generally in the election of directors.
5. TERMINATION
Notwithstanding any other provision of this Agreement, either party may
terminate this Agreement, in its sole discretion, if (i) the other party fails
to perform or observe any of its obligations pursuant to this Agreement or (ii)
the members of the Wynnefield Group own, in the aggregate, Voting Securities
representing less than 5% of the total combined voting power of all outstanding
Voting Securities.
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6. MISCELLANEOUS
(a) Wynnefield, on the one hand, and the Company, on the other,
acknowledge and agree that irreparable damage would occur in the event any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which they may be entitled at
law or equity.
(b) If any provision of this Agreement is in violation of any statute,
rule, regulation, order or decree of any governmental authority, court or
agency, or subjects any member of the Wynnefield Group to governmental
regulation to which it is not now subject, which violation or regulation would
have a material adverse impact on the operations of the Wynnefield Group taken
as a whole, then such member of the Wynnefield Group shall be relieved of its
obligations under such provision to the minimum extent necessary to cure such
violation or eliminate the applicability of such regulation; provided that this
subparagraph shall not apply to any such violation or regulation resulting from
activities or operations of any member of the Wynnefield Group other than its
ownership of Voting Securities and the consummation of the transactions
contemplated by this Agreement; and provided further that in the event any
member of the Wynnefield Group is relieved of its obligations under any
provision of this Agreement pursuant to this subparagraph, the Company may
terminate this Agreement in its sole discretion.
(c) This Agreement contains the entire understanding of the parties
with respect to the transactions contemplated hereby, and this Agreement may be
amended only by an agreement in writing executed by the parties hereto.
(d) Descriptive headings are for convenience only and shall not control
or affect the meaning or construction of any provision of this Agreement.
(e) For the convenience of the parties, any number of counterparts of
this Agreement may be executed by the parties hereto and each such executed
counterpart shall be, and shall he deemed to be, an original instrument.
(f) All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed given upon (i) transmitter's confirmation of a
receipt of a facsimile transmission, (ii) confirmed delivery by a standard
overnight carrier or when delivered by hand, or (iii) the expiration of five
business days after the day when mailed by certified or registered mail, postage
prepaid, addressed at the following addresses (or at such other address for a
party as shall be specified by like notice):
THE COMPANY:
Crown Crafts, Inc.
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Attn: Chief Executive Officer
Facsimile No.: (000) 000-0000
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WYNNEFIELD:
Wynnefield Capital Management, LLC
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxx
Facsimile No.: (000) 000-0000
(g) From and after the Termination Date or earlier termination of this
Agreement in accordance with the terms hereof, the covenants of the parties set
forth herein shall be of no further force or effect, and the parties shall be
under no further obligation with respect thereto.
(h) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia applicable to contracts made
and to be performed therein.
(i) This Agreement shall become effective as of the day first above
written.
IN WITNESS WHEREOF, Wynnefield and the Company have caused this
Agreement to be duly executed by their respective officers, each of whom is duly
authorized, all as of the day and year first above written.
CROWN CRAFTS, INC.
By: /s/ E. Xxxxxxx Xxxxxxxx
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Name: E. Xxxxxxx Xxxxxxxx
Title: President / CEO
WYNNEFIELD CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: President
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