UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 1, 2008
Crown Crafts, Inc.
(Exact Name of Registrant as Specified in Charter)
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| Delaware
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1-7604
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58-0678148 |
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(State or Other
Jurisdiction of
Incorporation)
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(Commission File Number)
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(IRS Employer
Identification
No.) |
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| 916 South Burnside Avenue, Gonzales, LA
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70737 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (225) 647-9100
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
The information set forth in Item 5.02 with respect to the Agreement described therein is
incorporated in this Item 1.01 by reference.
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| Item 5.02. |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers. |
On July 1, 2008, pursuant to a Governance and Standstill Agreement (the “Agreement”) dated
July 1, 2008 by and among Crown Crafts, Inc. (the “Company”) and 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.,
Nelson Obus and Joshua Landes (collectively, the “Wynnefield Group”), the Company expanded its
board of directors (the “Board”) to eight members and appointed Joseph Kling as a director
effective immediately. Pursuant to the Agreement, the Company agreed that Mr. Kling will be
nominated for re-election as a director at the Company’s 2008 annual meeting of stockholders. The
Company also agreed to use its reasonable best efforts, upon the request of the Wynnefield Group
delivered to the Company on or before May 1, 2010, to obtain the resignation from the Board
(effective 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
Company’s 2010 annual meeting of stockholders) of one director chosen by the Company other than Mr.
Kling or a Class I director of the Company. If the Company is unable to obtain such resignation,
then under the Agreement it is required to increase the size of the Board to nine members at that
time.
The Agreement also requires that the Board’s Strategic Review Committee present a final report
to the Board no later than March 1, 2009 setting forth its analysis and recommendations with
respect to strategic options available to the Company to enhance stockholder value.
In addition, pursuant to the Agreement, the Wynnefield Group has agreed to cease efforts
related to its own proxy solicitation, which was described in the Wynnefield Group’s Schedule 13D/A
report of beneficial ownership filed with the Securities and Exchange Commission (the “SEC”) on
June 30, 2008. The Wynnefield Group has also agreed, during the period beginning July 1, 2008 and
ending on the earlier of (x) the date immediately following the date of the Company’s 2009 annual
meeting of stockholders and (y) August 31, 2009, (i) not to conduct, support or participate (as
part of a group or otherwise) in any proxy or consent solicitations, including, without limitation,
with respect to the removal or election of directors, and (ii) not to make statements or
announcements that constitute an ad hominem attack on the Company, its officers or its directors.
During that period, the Wynnefield Group is permitted by the Agreement to acquire, in the
aggregate, up to 20% of the outstanding shares of the capital stock of the Company. Based upon its
Schedule 13D/A filed with the SEC on June 30, 2008, the Wynnefield Group owns beneficially
approximately 15.6% of the Company’s outstanding common stock as of the date of the Agreement.
Mr. Kling is currently, and has been since 1989, a consultant to various companies in the toy
industry and the infant and juvenile apparel industries, providing consulting and advisory services
to companies in connection with mergers and acquisitions, as well as acquisitions of intellectual
property licenses and rights. Since April 1991, Mr. Kling has served as president and chief
executive officer of MLJ, Inc., his privately-held consulting company. From 1988 to 2007, Mr.
Kling served as a member of the board of directors of Russ Berrie and Company, Inc., an NYSE-listed
company and a leader in the gift and juvenile products industry. He also served as a member of the
compensation committee and audit committee of the board of directors of Russ Berrie. From 1985 to
1989, Mr. Kling also served as Chief Executive Officer of View-Master-Ideal, a toy manufacturer.
Mr. Kling will receive the standard compensation received by non-employee directors. These
compensation arrangements will be described in the Company’s definitive proxy statement to be filed
with the SEC with respect to the Company’s 2008 annual meeting of stockholders.
On July 1, 2008, the Company was also informed that James A. Verbrugge, a Class III director
of the Company, has decided that he will not stand for re-election at the Company’s 2008 annual
meeting of stockholders so that he may devote more time to other matters. Mr. Verbrugge has served
as a director of the Company since July 2001 and is a member of the Audit Committee. Mr. Verbrugge
will continue to serve as a director and a member of the Audit Committee until the expiration of
his term at the 2008 annual meeting of stockholders. Upon the expiration of his term, the size of
the Board will be reduced to seven members.
The full text of the Agreement is included as Exhibit 10.1 hereto and is incorporated herein
by reference. The description contained herein of the Agreement is qualified in its entirety by
reference to the terms of such document. The press release issued by the Company regarding these
matters is attached as Exhibit 99.2 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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10.1 |
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Governance and Standstill Agreement dated July 1, 2008 by and among
Crown Crafts, Inc., 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., Nelson Obus
and Joshua Landes |
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99.1 |
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Press Release dated July 2, 2008 |