GOVERNANCE AND STANDSTILL AGREEMENT
Exhibit
7
THIS
GOVERNANCE AND STANDSTILL AGREEMENT
(the
“Agreement”)
is
made and entered into as of the 1st day of July, 2008, by and among the Persons
listed on Schedule
I
attached
hereto (collectively, the “Wynnefield
Group”,
and
individually, a “member”
of
the
Wynnefield Group) and CROWN
CRAFTS, INC.,
a
Delaware corporation (the “Company”).
W I T N E S S E T H:
WHEREAS,
the
Company is scheduled to hold its 2008 annual meeting of stockholders on August
12, 2008 (the “2008
Annual Meeting”);
WHEREAS,
the
Wynnefield Group beneficially owns in the aggregate 1,463,325 shares of the
Company’s Series A Common Stock, par value $0.01 per share (such class of common
stock being referred to herein as “Common
Stock”);
WHEREAS,
the
Wynnefield Group has provided notice to the Company of its intention to nominate
two persons to the board of directors of the Company (the “Board”)
at the
2008 Annual Meeting and to communicate with stockholders of the Company in
connection with the election of directors of the Company at the 2008 Annual
Meeting; and
WHEREAS,
the
parties hereto agree that it is in the best interests of all stockholders of
the
Company for the Company and the Wynnefield Group to come to an amicable
agreement with respect to the matters addressed herein, including, without
limitation, the election of directors at the 2008 Annual Meeting and certain
matters with respect to the future composition of the Board;
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements contained herein, and
for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties hereby agree as follows:
1. Defined
Terms.
In
addition to the words and terms elsewhere defined herein, the following words
and terms as used herein shall have the following meanings:
(a) “2009
Annual Meeting”
shall
mean the Company’s annual meeting of stockholders for the 2009 calendar
year.
(b) “2010
Annual Meeting”
shall
mean the Company’s annual meeting of stockholders for the 2010 calendar
year.
(c) “Affiliate”
and
“Associate”
shall
each have the meaning set forth with respect thereto in Rule 12b-2 under the
Exchange Act; provided,
however,
that
for purposes of this Agreement, the Company shall not be deemed an Affiliate
of
the Wynnefield Group and the Wynnefield Group shall not be deemed an Affiliate
of the Company.
(d) “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.
(e) “Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
(f) “Person”
shall
mean any individual, partnership, firm, corporation, association, trust,
unincorporated organization, joint venture, limited liability company,
governmental authority or other entity.
(g) “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 SEC 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.
(h) “Voting
Securities”
shall
mean all classes of capital stock of the Company entitled to vote generally
in
the election of directors.
(i) “Restricted
Period”
shall
mean the period beginning on the date of this Agreement and ending on the
earlier of (A) the date immediately following the date of the 2009 Annual
Meeting and (B) August 31, 2009.
(j) “SEC”
shall
mean the U.S. Securities and Exchange Commission.
2. Covenants
of the Company.
(a) The
Company hereby (i) confirms that the Board has formed a Strategic Review
Committee (the “Committee”),
the
members of which are Xxxxxx Xxxxxxxxx (Chairman), E. Xxxxxxx Xxxxxxxx and
Xxxxxxxxx X. Xxxxxxxxx, and that the Committee has approved and adopted a
charter (the “Charter”),
a
copy of which is attached hereto as Exhibit
A;
(ii)
covenants and agrees that the Committee shall actively undertake to discharge
its responsibilities and fulfill its purpose as set forth in the Charter and
shall present its final report to the Board no later than March 1, 2009 (the
“Final
Report Date”)
setting forth its analysis and recommendations with respect to strategic options
available to the Company to enhance stockholder value (the “Report”);
and
(iii) covenants and agrees that the Committee shall remain in place until such
time as it presents the Report to the Board and thereafter as may determined
by
the Board. The Wynnefield Group shall have the right, in its sole discretion,
to
designate a member of the Board to fill any vacancy on the Committee created
prior to the expiration of the Restricted Period by the resignation, death
or
removal of Xxxxxxxxx X. Xxxxxxxxx. If there shall occur any vacancy in the
Committee prior to the expiration of the Restricted Period as a result of the
resignation, death or removal of either of the members of the Committee other
than Xxxxxxxxx X. Xxxxxxxxx, then such vacancy shall be filled by an independent
non-employee member of the Board (other than the Wynnefield Designee (as
hereinafter defined)) reasonably acceptable to the Wynnefield Group. At all
times prior to the expiration of the Restricted Period, the chairperson of
the
Committee shall be an independent non-employee member of the Board. In the
event
the Committee fails to present the Report to the Board on or before the Final
Report Date, members of the Board and/or the Wynnefield Group are authorized
to
publicly disclose the status of the Committee’s activities and the reasons why
the Committee has been unable to issue the Report to the Board by the Final
Report Date.
(b) The
Company hereby confirms that Xxxxx X. Xxxxxxxxx, a Class III director, has
notified the Company that he does not intend to stand for re-election at the
2008 Annual Meeting, and the Company agrees that it will not nominate him for
re-election, or nominate anyone else in his stead, at the 2008 Annual Meeting.
(c) The
Company agrees to (i) temporarily increase the size of the Board to eight (8)
directors until the 2008 Annual Meeting, and immediately following such meeting
the Board shall reduce the size of the Board to seven (7) directors; (ii) cause
its directors to elect Xxxxxx Xxxxx (the “Wynnefield
Designee”)
to the
Board simultaneously with the execution of this Agreement to fill the vacancy
created by the increase in the number of directors; (iii) include the Wynnefield
Designee in its slate of nominees for election as Class III directors of the
Company at the 2008 Annual Meeting; and (iv) use its reasonable best efforts
to
cause the re-election of the Wynnefield Designee to the Board at the 2008 Annual
Meeting (including, without limitation, recommending that the Company’s
stockholders vote in favor of the re-election of the Wynnefield Designee in
the
Company’s proxy statement with respect to the 2008 Annual Meeting). The
Wynnefield Group shall have the right to designate an individual reasonably
acceptable to the Company (the “Alternate
Designee”)
to
fill any vacancy in the Board created prior to the expiration of the Restricted
Period by the resignation, death or removal of the Wynnefield Designee or
resulting from the failure of the Wynnefield Designee to be re-elected to the
Board at the 2008 Annual Meeting, in which event the Company will (x)
immediately appoint the Alternate Designee to fill any vacancy created by the
resignation, death or removal of the Wynnefield Designee or resulting from
the
failure of the Wynnefield Designee to be re-elected to the Board at the 2008
Annual Meeting, (y) include such Alternate Designee in its slate of nominees
for
election as Class II directors of the Company at the 2009 Annual Meeting and
(z)
use its reasonable best efforts to cause the re-election of the Alternate
Designee to the Board at the 2009 Annual Meeting (including, without limitation,
recommending in the Company’s proxy statement with respect to the 2009 Annual
Meeting that the Company’s stockholders vote in favor of the re-election of the
Alternate Designee).
(d) Upon
the
written request of the Wynnefield Group delivered to the Company on or before
May 1, 2010, the Company shall use its reasonable best efforts to obtain the
resignation from the Board (the “Resignation”),
effective thirty (30) days prior to the latest date that notice of a
stockholder’s intention to nominate an individual must be provided to the
Company with respect to the election of directors at the 2010 Annual Meeting
(the “2010
Nomination Date”),
of
one (1) director to be chosen by the Company, other than the Wynnefield Designee
(or Alternate Designee, as applicable) or a Class I Director, and the vacancy
resulting from the Resignation shall be filled only by election of the Company’s
stockholders at the 2010 Annual Meeting (for purposes of clarity only, at the
2010 Annual Meeting, the Company’s stockholders will vote for the election of
four (4) directors, one (1) of whom will fill the vacancy resulting from the
Resignation and three (3) of whom will be Class I directors), provided
that
this Agreement continues to be in effect at such time and that no member of
the
Wynnefield Group is in breach of the terms of this Agreement. The parties
acknowledge and agree that the Board, in connection with the 2010 Annual
Meeting, may nominate the director so resigning for election as a director
at
the 2010 Annual Meeting to fill the vacancy resulting from the Resignation.
If
for any reason no director resigns on or before thirty (30) days prior to the
2010 Nomination Date, then the Company shall, and shall cause its directors,
officers and other representatives to, take all necessary actions to increase
the size of the Board to nine (9) members not less than thirty (30) days prior
to the 2010 Nomination Date.
(e) The
Company shall not, and shall cause its directors, officers and other
representatives not to, prior to or at the 2010 Annual Meeting, (i) increase
the
size of the Board to more than seven (7) directors, unless such increase is
pursuant to the provisions of Sections 2(c)(i) or 2(d) hereof; (ii) create
any
new class of directors of the Board; (iii) create any new class of Voting
Securities; (iv) except as otherwise mandated or necessitated by applicable
law,
change any process by which the Company’s stockholders may nominate or vote for
an individual with respect to the election of directors; or (v) otherwise amend
the Company’s bylaws or certificate of incorporation for the purpose of
accomplishing any of the foregoing.
3. Covenants
of Wynnefield.
Prior
to the expiration of the Restricted Period and subject to the further provisions
hereof:
(a) No
member
of the Wynnefield Group or any Affiliate or Associate of any such members (such
Affiliates and Associates, collectively and individually, the “Wynnefield
Affiliates”)
shall:
(i) solicit
proxies or written consents of stockholders, engage in a proxy contest, present
any proposal for consideration or conduct any other type of referendum (binding
or non-binding) with respect to, or from the holders of, the Common Stock,
or
make, or in any way participate in (other than by voting its shares of Common
Stock in a way that does not violate this Agreement), any “solicitation” of any
proxy, consent or other authority to vote any shares of Common Stock with
respect to any matter, or become a participant in any contested solicitation
with respect to the Company, including, without limitation, relating to the
removal or the election of directors, or encourage any other Person to engage
in
any of the foregoing;
(ii) form
or
join in a partnership, limited partnership, syndicate or other group that would
constitute a 13D Group, with respect to the Common Stock or with respect to
the
matters set forth in Section 3(a)(i) hereof, or deposit any shares of Common
Stock in a voting trust or subject any shares of Common Stock to any voting
agreement, other than solely with other members of the Wynnefield Group or
other
Wynnefield Affiliates with respect to the shares of Common Stock now or
hereafter owned by them or pursuant to this Agreement; or
(iii) provided
that this Agreement continues to be in effect at such time and that the Company
is not in breach of the terms of this Agreement,
make, or
cause to be made, any statement or announcement that constitutes an ad hominem
attack on the Company, its officers or its directors in any document or report
filed with or furnished to the SEC or any other governmental agency or in any
press release or other publicly available format. Nothing in this Agreement
shall prohibit or be construed to prohibit any member of the Wynnefield Group
or
any Wynnefield Affiliate from commenting or presenting its views on any issue
or
matter publicly disclosed by the Company and making any filings with the SEC
which any of the foregoing parties reasonably determines it is required to
make
in connection therewith.
(b) No
member
of the Wynnefield Group or any Wynnefield Affiliate will, directly or
indirectly, acquire any Voting Securities (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 and the Wynnefield Affiliates to greater
than 20% of such total combined voting power of all Voting Securities then
outstanding; provided,
however,
that
this Section 3(b) shall not apply if and to the extent that the aggregate
percentage ownership of the Wynnefield Group and the Wynnefield Affiliates
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. The Company acknowledges and agrees that the
acquisition (prior to the expiration of the Restricted Period or the earlier
termination of this Agreement) and holding of Voting Securities by the
Wynnefield Group or the Wynnefield Affiliates in compliance with this Section
3(b) shall not result in any member of the Wynnefield Group or any Wynnefield
Affiliate being an “Acquiring Person” under that certain Amended and Restated
Rights Agreement between the Company and Computershare Investor Services, LLC
dated as of August 6, 2003, as the same may be amended from time to time.
Notwithstanding the foregoing, during the Restricted Period, each member of
the
Wynnefield Group acknowledges and agrees (i) that such member will be deemed
to
be an “insider” of the Company and that the Wynnefield Group shall have the
right to obtain non-public information from the Company’s directors and
management and receive all information (written or oral) discussed with or
provided to the Board in connection with its meetings, all of which the
Wynnefield Group agrees to keep strictly confidential; and (ii) that neither
such member nor any Wynnefield Affiliate may buy or sell any securities of
the
Company, either in the open market or in private transactions, other than in
compliance with all applicable laws and with such policies and procedures of
the
Company as may be in effect from time to time relating thereto to which all
of
the Company’s directors are subject.
4. Additional
Meeting Matters.
(a) In
furtherance of the covenants and agreements set forth in Section 3 hereof,
(i)
Wynnefield Partners Small Cap Value, L.P. hereby withdraws each of its two
letters to the Company dated June 20, 2008, requesting the opportunity to
inspect and review certain books and records of the Company and providing notice
to the Company of its intention to nominate certain individuals for election
as
directors of the Company at the 2008 Annual Meeting (the “Stockholder
Nomination”);
(ii)
the Wynnefield Group and all Wynnefield Affiliates shall immediately cease
all
efforts, direct
or
indirect, in furtherance of the Stockholder Nomination and any related
solicitation and shall not vote, deliver or otherwise use any proxies heretofore
obtained in connection with the Stockholder Nomination; and (iii) no member
of
the Wynnefield Group or any Wynnefield Affiliate shall make any request to
inspect or review the books and records of the Company prior to the expiration
of the Restricted Period.
(b) Each
member of the Wynnefield Group shall cause all shares of Common Stock
beneficially owned, directly or indirectly, by it, or by any Wynnefield
Affiliate, as of the record date for the 2008 Annual Meeting and as of the
record date for the 2009 Annual Meeting, to be present for quorum purposes
and
to be voted, at the 2008 Annual Meeting and the 2009 Annual Meeting,
respectively, or at any adjournments or postponements thereof, (i) in favor
of
the directors nominated by the Board for election at the 2008 Annual Meeting
(including the Wynnefield Designee) and the 2009 Annual Meeting and (ii) with
respect to all other matters to be voted on by the holders of Voting Securities
in the same proportion as the votes cast by all holders of Voting Securities
other than Affiliates of the Company.
5. Representations
and Warranties.
(a) The
Company represents and warrants to the Wynnefield Group that (i) the Company
is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, with full corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder, and
to
consummate the transactions contemplated hereby, (ii) this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action of the Company, and (iii) this Agreement
has
been duly executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(b) Each
member of the Wynnefield Group represents and warrants to the Company that
(i)
if such member is an entity, such member is duly organized, validly existing
and
in good standing under the laws of the state of its organization, with full
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby,
(ii) this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action of such member, and (iii)
this
Agreement has been duly executed and delivered by such member and constitutes
a
legal, valid and binding obligation of such member, enforceable against such
member in accordance with its terms.
6. Specific
Performance; Attorneys’ Fees.
Each of
the Company, on the one hand, and the members of the Wynnefield Group, on the
other hand, 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 will be entitled to seek specific relief hereunder, including,
without limitation, an injunction or injunctions to prevent and enjoin breaches
of the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any state or federal court in the State of Delaware, in
addition to any other remedy to which they may be entitled at law or in equity.
Any requirements for the securing or posting of any bond with such remedy are
hereby waived. In the event either party institutes any legal action to enforce
such party’s rights under, or recover damages for breach of, this Agreement, the
prevailing party or parties in such action shall be entitled to recover from
the
other party or parties all costs and expenses, including, without limitation,
reasonable attorneys’ fees, court costs, witness fees, disbursements and any
other expenses of litigation or negotiation incurred by such prevailing party
or
parties.
7. Miscellaneous.
(a) This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware without giving effect to any conflict of law rules that would
otherwise cause the application of the laws of any other state.
(b) The
parties to this Agreement agree that any suit, action or proceeding to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement may be brought only in a federal court located in Delaware or
in
any Delaware state court, and each party irrevocably consents to the
jurisdiction of such courts (and of the appellate courts therefrom) in any
such
suit, action or proceeding and irrevocably waives any objection it may now
or
hereafter have to the laying of venue of any such suit, action or proceeding
in
any such court or that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
(c) If
at any
time subsequent to the date hereof any provision of this Agreement shall be held
by any court of competent jurisdiction to be illegal, void or unenforceable,
such provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon the legality or
enforceability of any other provision of this Agreement, provided that the
provision determined to be unenforceable shall not deprive any party hereto
of
the substantial benefits of this Agreement. Neither party hereto shall directly
or indirectly institute any proceeding questioning the enforceability of this
Agreement or any provision hereof.
(d) 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 all parties hereto. Any of the terms, covenants
and conditions of this Agreement may be waived at any time by the party entitled
to the benefit of such term, covenant or condition.
(e) Descriptive
headings are for convenience only and shall not control or affect the meaning
or
construction of any provision of this Agreement.
(f) 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 be deemed to be, an original instrument. Executed counterparts may be
delivered by facsimile transmission or in portable document format.
(g) 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) the 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 (5) 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):
If
to the
Company, to:
Crown
Crafts, Inc.
000
X.
Xxxxxxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxxx 00000
Attention:
Mr. E. Xxxxxxx Xxxxxxxx
Facsimile:
(000) 000-0000
with
a
copy to (which shall not constitute notice):
Xxxxxx
& Xxxxxx LLP
2700
International Tower
000
Xxxxxxxxx Xxxxxx, XX
Xxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxx X. Xxx, Esq.
Facsimile:
(000) 000-0000
If
to any
member of the Wynnefield Group, to:
Wynnefield
Partners Small Cap Value, L.P.
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Mr. Xxxxxx Xxxx
Facsimile:
(000) 000-0000
with
a
copy to (which shall not constitute notice):
Xxxx
Xxxxxxx PC
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
Facsimile:
(000) 000-0000
(h) This
Agreement and all the provisions hereof are binding upon and will inure to
the
benefit of the parties and their respective successors and permitted assigns,
but neither this Agreement nor any of the rights, interests and obligations
hereunder may be assigned or delegated by either party without the prior written
consent of the other party. Nothing in this Agreement, whether expressed or
implied, may be construed to give any Person other than the parties any legal
or
equitable right, remedy or claim under or in respect of this
Agreement.
(i) Each
of
the parties hereto acknowledges that it has been represented by counsel of
its
choice throughout all negotiations that have preceded the execution of this
Agreement and that it has executed the same with the advice of said independent
counsel. Each party and its counsel cooperated and participated in the drafting
and preparation of this Agreement and the documents referred to herein, and
any
and all drafts relating thereto exchanged among the parties shall be deemed
the
work product of all of the parties and may not be construed against any party
by
reason of its drafting or preparation. Accordingly, any rule of law or any
legal
decision that would require interpretation of any ambiguities in this Agreement
against any party that drafted or prepared it is of no application and is hereby
expressly waived by each of the parties hereto, and any controversy over
interpretations of this Agreement shall be decided without regards to events
of
drafting or preparation.
(j) The
Company agrees to reimburse the Wynnefield Group its documented out-of-pocket
fees and expenses (including legal fees) in connection with the settlement
of
its intention to nominate directors and the negotiation of this Agreement,
in an
amount not to exceed $32,500 in the aggregate.
[Signature
pages follow.]
IN
WITNESS WHEREOF,
each of
the undersigned has executed this Agreement or 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 | |
|
|
||
| E. Xxxxxxx Xxxxxxxx, Chairman of the Board, President and Chief Executive Officer | ||
[Signatures
continue on following pages.]
|
WYNNEFIELD
PARTNERS SMALL CAP VALUE, L.P.
By: Wynnefield
Capital Management, LLC,its
general partner
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxx | |
|
Xxxxxx Xxxx, Co-Managing Member |
||
|
WYNNEFIELD
PARTNERS SMALL CAP VALUE OFFSHORE FUND, LTD.
By: Wynnefield
Capital, Inc.
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxx | |
|
Xxxxxx Xxxx, President |
||
| Title | ||
|
WYNNEFIELD
PARTNERS SMALL CAP VALUE, L.P. I
By: Wynnefield
Capital Management, LLC,its
general partner
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxx | |
|
Xxxxxx Xxxx, Co-Managing Member |
||
| WYNNEFIELD CAPITAL MANAGEMENT, LLC | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxx | |
|
Xxxxxx Xxxx, Co-Managing Member |
||
|
WYNNEFIELD
CAPITAL, INC.
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxx | |
|
Xxxxxx Xxxx, President |
||
| CHANNEL PARTNERSHIP II, L.P. | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxx | |
|
Xxxxxx Xxxx, General Partner |
||
| |
|
|
| /s/ Xxxxxx Xxxx | ||
|
XXXXXX XXXX |
||
Schedule
I
Wynnefield
Small Cap Value, L.P.
Wynnefield
Partners Small Cap Value Offshore Fund, Ltd.
Wynnefield
Partners Small Cap Value, L.P. I
Wynnefield
Capital Management, LLC
Wynnefield
Capital, Inc.
Channel
Partnership II, L.P.
Xxxxxx
Xxxx
Exhibit
A
CHARTER
STRATEGIC
REVIEW COMMITTEE
CROWN
CRAFTS, INC.
The
Board
of Directors (the “Board”) of Crown Crafts, Inc. (the “Corporation”) has adopted
this charter (the “Charter”) for its Strategic Review Committee (the
“Committee”).
Composition
of the Committee
Number.
The
Committee shall consist of three (3) members of the Board, two (2) of whom
shall
be independent and free from any relationship that, in the opinion of the Board,
would interfere with the exercise of the independent judgment of such members
in
serving on the Committee.
Appointment.
The
Board, upon the recommendation of the Committee, shall elect the Chairperson
and
other members of the Committee. The Board may remove a member of the Committee,
or replace the Chairperson, only for cause, provided that the Board must, at
all
times, assure that the Committee will have a Chairperson and sufficient members
to satisfy the requirements set forth herein relating to the composition of
the
Committee and number of Committee members.
Purpose
and Responsibility
The
Committee shall have responsibility for developing, and for reviewing,
evaluating and recommending to the Board the merits of, the various strategic
options available to the Corporation to enhance stockholder value, including,
but not limited to, exiting from existing lines of business, entering into
new
lines of business and effecting other changes in the Corporation’s operations;
entering into joint ventures and other strategic alliances; engaging in
selective acquisitions, dispositions and other capital transactions; and
entering into a merger, sale or other extraordinary transaction involving the
Corporation. The Committee shall review the strategic planning process of the
Corporation and strategic plans developed and implemented by management and
perform such other functions as may from time to time be delegated by the Board
to the Committee.
Committee
Operations
Meeting
Schedule. The
Committee shall meet as often as it deems appropriate to carry out its
responsibilities. Meetings shall be held on at least two (2) business days
prior
notice. The Committee may meet in person or by telephone conference call and
may
act by unanimous written consent. The Committee shall maintain written minutes
of its meetings, which minutes shall be filed in the Corporation’s minute
book.
Agenda
and Materials. The
Committee Chairperson shall approve the agenda for the meetings, and any
Committee member may suggest items for the Committee’s consideration.
Attendance
at Meetings. The
Committee may, in the discretion of its Chairperson, invite members of
management, employees, external advisors and other experts to attend the
Committee’s meetings.
Voting.
A
majority of the Committee members shall constitute a quorum. Each Committee
member shall have one vote, and actions at meetings may be approved by a
majority of the members present; provided,
however,
that
any amendment of the Charter shall require the unanimous approval of the
Committee members.
Reporting
to the Board. At
the
Board meeting following each Committee meeting, the Committee Chairperson (or
the Chairperson’s designee) shall report to the full Board on the Committee’s
actions.
Committee
Resources
To
assist
the Committee in fulfilling its responsibilities, (i) each Committee member
shall have full access to members of management, and (ii) the Committee may
retain and terminate independent consultants, counsel, accountants, investment
banking firms and other advisors, subject to the Board’s approval of all such
advisors and the terms of their engagement, such approval not to be unreasonably
withheld, conditioned or delayed. The Corporation will bear the expense of
advisors engaged with the Board’s approval. Committee members shall be
reimbursed for all of their reasonable out of pocket expenses, and non-employee
members of the Committee shall receive such fees and compensation as may be
determined by the Board.
JOINDER
TO
The
undersigned, as of July 1, 2008, hereby (i) joins in the execution of, and
agrees to be bound by, that certain Governance and Standstill Agreement dated
as
of July 1, 2008 by and among Crown Crafts, Inc. and the members of the
Wynnefield Group (as defined therein) parties thereto and (ii) agrees that
he
shall be included within the term “members” of the Wynnefield Group for all
purposes of such Governance and Standstill Agreement.
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