The Wynnefield Group, the largest stockholder in Crown Crafts Inc. (NASDAQ: CRWS), today announced that leading independent proxy voting and corporate governance advisory firms ISS Proxy Advisory Services and PROXY Governance, Inc. have recommended that Crown Crafts stockholders vote Wynnefield’s GOLD proxy card in connection with the Company’s August 10, 2010 Annual Meeting of Stockholders. ISS recommended that Crown Crafts stockholders vote on Wynnefield’s GOLD proxy card for both Wynnefield nominees – Jon C. Biro and Melvin L. Keating. ISS noted that “ both dissident nominees are seasoned executives that have a high degree of finance acumen and multiple public board experience” (emphasis added). In determining that change is warranted at Crown Crafts, ISS wrote of the management-endorsed Board majority that, “ We have also noted a history of problematic compensation and governance practices which seem poorly aligned with the long-term interests of shareholders” (emphasis added). In its recommendation for Wynnefield’s nominees, ISS pointed to several factors, including:
Of Wynnefield’s nominees, ISS wrote that, “Mr. Biro has demonstrated a sense of urgency addressing shareholder unfriendly corporate governance issues,” highlighting that “within the first years while serving as director and interim CEO at ICO, Mr. Biro was part of a management team that successfully accelerated…the expiration of the poison pill.” It also notes that Mr. Keating “has experience serving on and leading committees including: audit (chair) and strategic alternative review committee at Infologix and the audit and operations committee at White Electronic Designs Corp.”In its report recommending that stockholders vote on Wynnefield’s GOLD card, PROXY Governance pointed to the “ inward-looking board culture, which, together with the formal governance structure, handicaps its ability to take full-stock of the strategic challenges” (emphasis added). The report goes on to state that, “ To this end, we favor further changes to the board and the creation of a standing Strategic Review Committee which is empowered to retain an independent consultant” (emphasis added). The firm adds that it has doubts “ over the board’s ability to objectively review [the Company’s] challenges and strategic options” (emphasis added) and is “concerned about [Crown Crafts’] ability to drive long-term value.” PROXY Governance states that, “… as a percentage of pre-tax income, [Crown Crafts’ executive severance] payouts are excessive. Further, we disagree as a matter of principle with the gross-up provisions that are provided under the agreements” (emphasis added).* These independent reports validate Wynnefield’s critique of Crown Crafts’ business performance, lack of a strategic plan and sub-standard corporate governance. VOTE THE GOLD PROXY CARD FOR STOCKHOLDER VALUE For additional information, Crown Crafts stockholders should contact Wynnefield’s proxy solicitor Okapi Partners at (877) 285-5990 (Toll-Free) or (212) 297-0720 (Call Collect). *Permission to use quotations was neither sought nor obtained.
ABOUT THE WYNNEFIELD GROUPThe 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.