Makeup of board of directors at center of dispute

The Wynnefield Group, dissident shareholder of infant and juvenile products manufacturer Crown Crafts, sent a letter Monday offering what it called “a compromise agreement allowing for an amicable resolution” of the proxy struggle over the makeup of the Crown Crafts board of directors.


In what has become a tit-for-tat exchange, Crown Crafts had earlier in the day sent a letter signed by chairman, president and CEO E. Randall Chestnut urging care on the part of stockholders as they consider the alternate “White” and “Gold” proxy slates for director seats issued by itself and Wynnefield, respectively.

Wynnefield has now broadened its tactics, making specific proposals for changes to the structure, remuneration, and duties of the board of directors. These proposals include:

“(i) immediately increase the size of the current board from seven (7) members to nine (9) members;”

“(ii) elect [Wynnefield members] Nelson Obus and Frederick G. Wasserman as directors to fill the vacancies thereby created;

“(iii) form a nominating and governance committee immediately, with either Nelson Obus or Frederick G. Wasserman as one of the members;

“(iv) form a strategic planning committee immediately, with E. Randall Chestnut as one of the members and either Nelson Obus or Frederick G. Wasserman as one of other members, with the intention of hiring a qualified independent consultant to assist management and the Board in determining a future strategic path and aligning future capital allocations to fulfill the agreed upon strategic plan;

“(v) commit to putting to a stockholder vote at the 2015 Annual Meeting of stockholders, and supporting, a binding resolution to de-classify the Board; and
 
“(vi) amend the non-employee director fee structure to provide that the cash fees paid to non-employee directors, which currently consist of payments of $20,000 per year, plus $2,500 for each Board meeting attended, $2,000 for each committee meeting held not in conjunction with a Board meeting, plus $2,500 for travel time, be paid 50% in cash and 50% in restricted stock of the Company.”

For his part, Chestnut has asserted that the ultimate goal of Wynnefield is not so much to develop the company’s business, as it is to “explore strategic alternatives for the company, which I believe means that Wynnefield wants us to hang a ‘For Sale’ sign on the company,” a move of which Chestnut said: “if pursued, would seriously disrupt and harm our business and customer relationships and cause many of our key employees to leave the company.”