Crown Crafts rejects shareholder's settlement plan; Wynnefield launches proxy contest

By Lisa Kerner

Charlotte, N.C., Aug. 1 - Crown Crafts Inc. rejected an offer from its largest stockholder, the Wynnefield Group, to withdraw its proxy contest to elect two nominees to the board in return for a series of changes to the company's corporate governance and director compensation.

The rejection of the offer "demonstrates the entrenchment of Crown Crafts' current directors and management, which has harmed shareholder value and put the company's prospects at risk," according to a Wynnefield statement released on Wednesday. The long-term investor holds some 14.6% of Crown Craft's outstanding shares.

Crown Crafts offered what Wynnefield called a "fig-leaf" proposal to elect its two director nominees in exchange for the election of one director not affiliated with Wynnefield by 2008.

Wynnefield's proposal included the election of Nelson Obus and Frederick G. Wasserman as directors to an expanded Crown Crafts board.

"These guys don't get it; this is too little, too late," Obus and Wasserman said in Wynnefield's release.

"The stockholders are the owners of this company, and outside stockholders need a voice on the board now. This isn't about expanding the board for the sake of expanding the board."

Wynnefield encouraged fellow stockholders to vote for its independent nominees, William Deyo and Steven Fox, in a proxy solicitation campaign it began "as a last resort."

Crown Crafts, a Gonzales, La., distributor of infant and juvenile products, will hold its annual meeting on Aug. 14.

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