Now
that
the dust has settled, I am writing you to outline Wynnefield's view of how
the
Board
should proceed and our expectations with respect to governance and the creation
and release of shareholder value.
Wynnefield
has been a strong advocate of establishing a Strategic Alternatives Committee
(SAC) and we feel this notion was endorsed by your shareholders in the
August
election. Crown Crafts Inc. ("the Company") should take prompt action to form
a
truly
independent SAC and, consistent with this notion, employ a competent outside
"arm's length" firm to undertake an analysis of all the options available to
the
Company. This analysis must include a sale or merger of the Company to be
undertaken in the event that
adequate risk adjusted returns on invested capital for new initiatives can
not
be identified. No significant acquisition should be undertaken until this
process is completed.
We
are
also concerned about the governance of CRWS and, as Wynnefield articulated
in
the
proxy
materials, request that you promptly unstagger the Board, articulate and
implement
a
succession
plan for yourself and other senior executives and orient Board compensation
away
from cash and toward equity participation in the form of a combination
of option grants at market and restricted stock.
It
is
unfortunate that we had to undertake our successful but expensive proxy campaign
to have
a
Wynnefield nominated voting director
in light of the many years of cooperation between
us. This should have been something that you were more than happy to do as
a
matter of course. However, that is in the past and we are prepared to move
ahead
to meet the
many
opportunities and challenges that the Company is facing with respect to its
products,
customer base and strategic future.
The
things that need to be done should be undertaken in a manner that indicates
absolute sincerity
and reality of purpose; we are beyond the "window dressing" phase. I was
not
elected
to the Board and Mr. Rick Wasserman is an independent director. Since we
are
not
insiders, we believe it is in the best interests of all shareholders that
there
be a public response
to this letter. As always, Wynnefield, as your largest shareholder, stands
by to
offer
advice, assistance, access to our wide range of contacts and anything else
we
can reasonably do to assist in increasing value for the outside
shareholder.
Nelson
Obus
General
Partner, Managing Member
Dates Referenced Herein and Documents Incorporated by Reference
