Just two months ago, Crown Crafts’ director-nominee Richard Solar was among the defendants forced to settle a stockholder litigation in connection with his duty on the Marvel Entertainment Board of Directors. Stockholders successfully settled a lawsuit alleging that the Board on which Mr. Solar sat violated its fiduciary duty to that company’s stockholders in connection with the company’s sale to Disney. As a result, without admitting guilt, Mr. Solar and the other defendants agreed to provide additional disclosures in Marvel Entertainment’s proxy statement and to pay the plaintiffs $800,000 for attorneys’ fees.Board Compensation and Corporate Governance Wynnefield’s director-nominees are committed to implementing “best practices” by supporting: (i) the elimination of the staggered Board; (ii) adopting and publicly disclosing emergency and non-emergency CEO succession plans; (iii) linking executive compensation to Company performance through the grant of equity-related compensation with appropriate financial targets and vesting schedules in order to better align executive compensation with stockholder interests; (iv) splitting the roles of CEO and Chairman; (v) amending the non-employee director fee structure by reducing the annual cash retainer currently paid to non-employee directors; and (vi) modifying management’s change-in-control agreements to align them with stockholders’ interests. Our Nominees have pledged to accept only 50% of the annual cash retainer currently paid to directors and have pledged to donate any cash compensation the Company may compel them to accept in excess of $20,000 (after payment of taxes) to the American SIDS Institute, a national nonprofit organization dedicated to the prevention of Sudden Infant Death Syndrome. These best practices are consistent with Wynnefield’s philosophy of aligning directors with the interests of all stockholders. One such example, Wynnefield’s engagement with Cornell Companies, was referenced in a recent Crown Crafts’ letter to stockholders. The comparison between Cornell Companies and Crown Crafts is simply wishful thinking on behalf of the management-controlled Board majority.
Crown Crafts has an Enterprise Value of $42.5 million or 6% of Cornell Companies’ Enterprise Value of $685 million.
Wynnefield’s nominees will protect all stockholders’ interests and will not be held hostage by management.VOTE THE GOLD PROXY CARD FOR STOCKHOLDER VALUE. If you have any questions or need additional information, please feel free to contact our proxy solicitor Okapi Partners at (877) 285-5990 (Toll-Free) or (212) 297-0720 (Call Collect). ABOUT THE WYNNEFIELD GROUP The Wynnefield Group is Crown Crafts’ largest stockholder, holding approximately 17% of the Company’s outstanding common stock. Established in 1992, the Wynnefield Group includes several affiliates of Wynnefield Capital, Inc., a value investor specializing in U.S. small cap situations that have company- or industry-specific catalysts.