EXHIBIT 10.1
GOVERNANCE AND STANDSTILL AGREEMENT
     THIS GOVERNANCE AND STANDSTILL AGREEMENT (the “Agreement”) is made and
entered into as of the 1st day of July, 2008, by and among the Persons listed on
Schedule I attached hereto (collectively, the “Wynnefield Group”, and
individually, a “member” of the Wynnefield Group) and CROWN CRAFTS, INC., a
Delaware corporation (the “Company”).
WITNESSETH:
     WHEREAS, the Company is scheduled to hold its 2008 annual meeting of
stockholders on August 12, 2008 (the “2008 Annual Meeting”);
     WHEREAS, the Wynnefield Group beneficially owns in the aggregate 1,463,325
shares of the Company’s Series A Common Stock, par value $0.01 per share (such
class of common stock being referred to herein as “Common Stock”);
     WHEREAS, the Wynnefield Group has provided notice to the Company of its
intention to nominate two persons to the board of directors of the Company (the
“Board”) at the 2008 Annual Meeting and to communicate with stockholders of the
Company in connection with the election of directors of the Company at the 2008
Annual Meeting; and
     WHEREAS, the parties hereto agree that it is in the best interests of all
stockholders of the Company for the Company and the Wynnefield Group to come to
an amicable agreement with respect to the matters addressed herein, including,
without limitation, the election of directors at the 2008 Annual Meeting and
certain matters with respect to the future composition of the Board;
     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
     1. Defined Terms. In addition to the words and terms elsewhere defined
herein, the following words and terms as used herein shall have the following
meanings:
          (a) “2009 Annual Meeting” shall mean the Company’s annual meeting of
stockholders for the 2009 calendar year.
          (b) “2010 Annual Meeting” shall mean the Company’s annual meeting of
stockholders for the 2010 calendar year.
          (c) “Affiliate” and “Associate” shall each have the meaning set forth
with respect thereto in Rule 12b-2 under the Exchange Act; provided, however,
that for purposes of this Agreement, the Company shall not be deemed an
Affiliate of the Wynnefield Group and the Wynnefield Group shall not be deemed
an Affiliate of the Company.
          (d) “Beneficially own”, “beneficial ownership” and “beneficial owner”
with respect to any securities means having “beneficial ownership” of such
securities, as determined

 

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pursuant to Rule 13d-3 under the Exchange Act, without duplicative counting of
the same securities by the same holder. Securities beneficially owned by a
person include securities beneficially owned by all other persons with whom such
person would constitute a 13D Group with respect to securities of the same
issuer.
          (e) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
          (f) “Person” shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization, joint venture,
limited liability company, governmental authority or other entity.
          (g) “13D Group” shall mean any group of Persons formed for the purpose
of acquiring, holding, voting or disposing of Voting Securities which would be
required under Section 13(d) of the Exchange Act and the rules and regulations
thereunder (as now in effect and based on present legal interpretations thereof)
to file a statement on Schedule 13D with the SEC as a “person” within the
meaning of Section 13(d)(3) of the Exchange Act if such group beneficially owned
Voting Securities representing more than 5% of the total combined voting power
of all Voting Securities then outstanding.
          (h) “Voting Securities” shall mean all classes of capital stock of the
Company entitled to vote generally in the election of directors.
          (i) “Restricted Period” shall mean the period beginning on the date of
this Agreement and ending on the earlier of (A) the date immediately following
the date of the 2009 Annual Meeting and (B) August 31, 2009.
          (j) “SEC” shall mean the U.S. Securities and Exchange Commission.
     2. Covenants of the Company.
          (a) The Company hereby (i) confirms that the Board has formed a
Strategic Review Committee (the “Committee”), the members of which are Sidney
Kirschner (Chairman), E. Randall Chestnut and Frederick G. Wasserman, and that
the Committee has approved and adopted a charter (the “Charter”), a copy of
which is attached hereto as Exhibit A; (ii) covenants and agrees that the
Committee shall actively undertake to discharge its responsibilities and fulfill
its purpose as set forth in the Charter and shall present its final report to
the Board no later than March 1, 2009 (the “Final Report Date”) setting forth
its analysis and recommendations with respect to strategic options available to
the Company to enhance stockholder value (the “Report”); and (iii) covenants and
agrees that the Committee shall remain in place until such time as it presents
the Report to the Board and thereafter as may determined by the Board. The
Wynnefield Group shall have the right, in its sole discretion, to designate a
member of the Board to fill any vacancy on the Committee created prior to the
expiration of the Restricted Period by the resignation, death or removal of
Frederick G. Wasserman. If there shall occur any vacancy in the Committee prior
to the expiration of the Restricted Period as a result of the resignation, death
or removal of either of the members of the Committee other than Frederick G.
Wasserman, then such vacancy shall be filled by an independent non-employee
member of the Board (other than the Wynnefield Designee (as hereinafter
defined)) reasonably acceptable to the Wynnefield

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Group. At all times prior to the expiration of the Restricted Period, the
chairperson of the Committee shall be an independent non-employee member of the
Board. In the event the Committee fails to present the Report to the Board on or
before the Final Report Date, members of the Board and/or the Wynnefield Group
are authorized to publicly disclose the status of the Committee’s activities and
the reasons why the Committee has been unable to issue the Report to the Board
by the Final Report Date.
          (b) The Company hereby confirms that James A. Verbrugge, a Class III
director, has notified the Company that he does not intend to stand for
re-election at the 2008 Annual Meeting, and the Company agrees that it will not
nominate him for re-election, or nominate anyone else in his stead, at the 2008
Annual Meeting.
          (c) The Company agrees to (i) temporarily increase the size of the
Board to eight (8) directors until the 2008 Annual Meeting, and immediately
following such meeting the Board shall reduce the size of the Board to seven
(7) directors; (ii) cause its directors to elect Joseph Kling (the “Wynnefield
Designee”) to the Board simultaneously with the execution of this Agreement to
fill the vacancy created by the increase in the number of directors;
(iii) include the Wynnefield Designee in its slate of nominees for election as
Class III directors of the Company at the 2008 Annual Meeting; and (iv) use its
reasonable best efforts to cause the re-election of the Wynnefield Designee to
the Board at the 2008 Annual Meeting (including, without limitation,
recommending that the Company’s stockholders vote in favor of the re-election of
the Wynnefield Designee in the Company’s proxy statement with respect to the
2008 Annual Meeting). The Wynnefield Group shall have the right to designate an
individual reasonably acceptable to the Company (the “Alternate Designee”) to
fill any vacancy in the Board created prior to the expiration of the Restricted
Period by the resignation, death or removal of the Wynnefield Designee or
resulting from the failure of the Wynnefield Designee to be re-elected to the
Board at the 2008 Annual Meeting, in which event the Company will
(x) immediately appoint the Alternate Designee to fill any vacancy created by
the resignation, death or removal of the Wynnefield Designee or resulting from
the failure of the Wynnefield Designee to be re-elected to the Board at the 2008
Annual Meeting, (y) include such Alternate Designee in its slate of nominees for
election as Class II directors of the Company at the 2009 Annual Meeting and
(z) use its reasonable best efforts to cause the re-election of the Alternate
Designee to the Board at the 2009 Annual Meeting (including, without limitation,
recommending in the Company’s proxy statement with respect to the 2009 Annual
Meeting that the Company’s stockholders vote in favor of the re-election of the
Alternate Designee).
          (d) Upon the written request of the Wynnefield Group delivered to the
Company on or before May 1, 2010, the Company shall use its reasonable best
efforts to obtain the resignation from the Board (the “Resignation”), effective
thirty (30) days prior to the latest date that notice of a stockholder’s
intention to nominate an individual must be provided to the Company with respect
to the election of directors at the 2010 Annual Meeting (the “2010 Nomination
Date”), of one (1) director to be chosen by the Company, other than the
Wynnefield Designee (or Alternate Designee, as applicable) or a Class I
Director, and the vacancy resulting from the Resignation shall be filled only by
election of the Company’s stockholders at the 2010 Annual Meeting (for purposes
of clarity only, at the 2010 Annual Meeting, the Company’s stockholders will
vote for the election of four (4) directors, one (1) of whom will fill the
vacancy resulting from the Resignation and three (3) of whom will be Class I
directors), provided that this

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Agreement continues to be in effect at such time and that no member of the
Wynnefield Group is in breach of the terms of this Agreement. The parties
acknowledge and agree that the Board, in connection with the 2010 Annual
Meeting, may nominate the director so resigning for election as a director at
the 2010 Annual Meeting to fill the vacancy resulting from the Resignation. If
for any reason no director resigns on or before thirty (30) days prior to the
2010 Nomination Date, then the Company shall, and shall cause its directors,
officers and other representatives to, take all necessary actions to increase
the size of the Board to nine (9) members not less than thirty (30) days prior
to the 2010 Nomination Date.
          (e) The Company shall not, and shall cause its directors, officers and
other representatives not to, prior to or at the 2010 Annual Meeting,
(i) increase the size of the Board to more than seven (7) directors, unless such
increase is pursuant to the provisions of Sections 2(c)(i) or 2(d) hereof;
(ii) create any new class of directors of the Board; (iii) create any new class
of Voting Securities; (iv) except as otherwise mandated or necessitated by
applicable law, change any process by which the Company’s stockholders may
nominate or vote for an individual with respect to the election of directors; or
(v) otherwise amend the Company’s bylaws or certificate of incorporation for the
purpose of accomplishing any of the foregoing.
     3. Covenants of Wynnefield. Prior to the expiration of the Restricted
Period and subject to the further provisions hereof:
          (a) No member of the Wynnefield Group or any Affiliate or Associate of
any such members (such Affiliates and Associates, collectively and individually,
the “Wynnefield Affiliates”) shall:
          (i) solicit proxies or written consents of stockholders, engage in a
proxy contest, present any proposal for consideration or conduct any other type
of referendum (binding or non-binding) with respect to, or from the holders of,
the Common Stock, or make, or in any way participate in (other than by voting
its shares of Common Stock in a way that does not violate this Agreement), any
“solicitation” of any proxy, consent or other authority to vote any shares of
Common Stock with respect to any matter, or become a participant in any
contested solicitation with respect to the Company, including, without
limitation, relating to the removal or the election of directors, or encourage
any other Person to engage in any of the foregoing;
          (ii) form or join in a partnership, limited partnership, syndicate or
other group that would constitute a 13D Group, with respect to the Common Stock
or with respect to the matters set forth in Section 3(a)(i) hereof, or deposit
any shares of Common Stock in a voting trust or subject any shares of Common
Stock to any voting agreement, other than solely with other members of the
Wynnefield Group or other Wynnefield Affiliates with respect to the shares of
Common Stock now or hereafter owned by them or pursuant to this Agreement; or
          (iii) provided that this Agreement continues to be in effect at such
time and that the Company is not in breach of the terms of this Agreement, make,
or cause to be made, any statement or announcement that constitutes an ad
hominem attack on the Company, its officers or its directors in any document or
report filed with or furnished to

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the SEC or any other governmental agency or in any press release or other
publicly available format. Nothing in this Agreement shall prohibit or be
construed to prohibit any member of the Wynnefield Group or any Wynnefield
Affiliate from commenting or presenting its views on any issue or matter
publicly disclosed by the Company and making any filings with the SEC which any
of the foregoing parties reasonably determines it is required to make in
connection therewith.
          (b) No member of the Wynnefield Group or any Wynnefield Affiliate
will, directly or indirectly, acquire any Voting Securities (except by way of
stock dividends or other distributions or offerings made available to holders of
Voting Securities generally) if the effect of such acquisition would be to
increase the aggregate voting power in the election of directors of all Voting
Securities then owned by all members of the Wynnefield Group and the Wynnefield
Affiliates to greater than 20% of such total combined voting power of all Voting
Securities then outstanding; provided, however, that this Section 3(b) shall not
apply if and to the extent that the aggregate percentage ownership of the
Wynnefield Group and the Wynnefield Affiliates is increased as a result of a
recapitalization or reincorporation of the Company, any redemption of Voting
Securities by the Company or any other action taken by the Company or its
Affiliates. The Company acknowledges and agrees that the acquisition (prior to
the expiration of the Restricted Period or the earlier termination of this
Agreement) and holding of Voting Securities by the Wynnefield Group or the
Wynnefield Affiliates in compliance with this Section 3(b) shall not result in
any member of the Wynnefield Group or any Wynnefield Affiliate being an
“Acquiring Person” under that certain Amended and Restated Rights Agreement
between the Company and Computershare Investor Services, LLC dated as of
August 6, 2003, as the same may be amended from time to time. Notwithstanding
the foregoing, during the Restricted Period, each member of the Wynnefield Group
acknowledges and agrees (i) that such member will be deemed to be an “insider”
of the Company and that the Wynnefield Group shall have the right to obtain
non-public information from the Company’s directors and management and receive
all information (written or oral) discussed with or provided to the Board in
connection with its meetings, all of which the Wynnefield Group agrees to keep
strictly confidential; and (ii) that neither such member nor any Wynnefield
Affiliate may buy or sell any securities of the Company, either in the open
market or in private transactions, other than in compliance with all applicable
laws and with such policies and procedures of the Company as may be in effect
from time to time relating thereto to which all of the Company’s directors are
subject.
     4. Additional Meeting Matters.
          (a) In furtherance of the covenants and agreements set forth in
Section 3 hereof, (i) Wynnefield Partners Small Cap Value, L.P. hereby withdraws
each of its two letters to the Company dated June 20, 2008, requesting the
opportunity to inspect and review certain books and records of the Company and
providing notice to the Company of its intention to nominate certain individuals
for election as directors of the Company at the 2008 Annual Meeting (the
“Stockholder Nomination”); (ii) the Wynnefield Group and all Wynnefield
Affiliates shall immediately cease all efforts, direct or indirect, in
furtherance of the Stockholder Nomination and any related solicitation and shall
not vote, deliver or otherwise use any proxies heretofore obtained in connection
with the Stockholder Nomination; and (iii) no member of the Wynnefield Group or
any Wynnefield Affiliate shall make any request to inspect or review the books
and records of the Company prior to the expiration of the Restricted Period.

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          (b) Each member of the Wynnefield Group shall cause all shares of
Common Stock beneficially owned, directly or indirectly, by it, or by any
Wynnefield Affiliate, as of the record date for the 2008 Annual Meeting and as
of the record date for the 2009 Annual Meeting, to be present for quorum
purposes and to be voted, at the 2008 Annual Meeting and the 2009 Annual
Meeting, respectively, or at any adjournments or postponements thereof, (i) in
favor of the directors nominated by the Board for election at the 2008 Annual
Meeting (including the Wynnefield Designee) and the 2009 Annual Meeting and
(ii) with respect to all other matters to be voted on by the holders of Voting
Securities in the same proportion as the votes cast by all holders of Voting
Securities other than Affiliates of the Company.
     5. Representations and Warranties.
          (a) The Company represents and warrants to the Wynnefield Group that
(i) the Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby, (ii) this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action of the Company, and (iii) this
Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
          (b) Each member of the Wynnefield Group represents and warrants to the
Company that (i) if such member is an entity, such member is duly organized,
validly existing and in good standing under the laws of the state of its
organization, with full power and authority to execute and deliver this
Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby, (ii) this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action of such member, and (iii) this Agreement has been duly executed and
delivered by such member and constitutes a legal, valid and binding obligation
of such member, enforceable against such member in accordance with its terms.
     6. Specific Performance; Attorneys’ Fees. Each of the Company, on the one
hand, and the members of the Wynnefield Group, on the other hand, acknowledge
and agree that irreparable damage would occur in the event any of the provisions
of this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties will be
entitled to seek specific relief hereunder, including, without limitation, an
injunction or injunctions to prevent and enjoin breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof in
any state or federal court in the State of Delaware, in addition to any other
remedy to which they may be entitled at law or in equity. Any requirements for
the securing or posting of any bond with such remedy are hereby waived. In the
event either party institutes any legal action to enforce such party’s rights
under, or recover damages for breach of, this Agreement, the prevailing party or
parties in such action shall be entitled to recover from the other party or
parties all costs and expenses, including, without limitation, reasonable
attorneys’ fees, court costs, witness fees, disbursements and any other expenses
of litigation or negotiation incurred by such prevailing party or parties.

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     7. Miscellaneous.
          (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to any conflict of
law rules that would otherwise cause the application of the laws of any other
state.
          (b) The parties to this Agreement agree that any suit, action or
proceeding to enforce any provision of, or based on any matter arising out of or
in connection with, this Agreement may be brought only in a federal court
located in Delaware or in any Delaware state court, and each party irrevocably
consents to the jurisdiction of such courts (and of the appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives any
objection it may now or hereafter have to the laying of venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
          (c) If at any time subsequent to the date hereof any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon the
legality or enforceability of any other provision of this Agreement, provided
that the provision determined to be unenforceable shall not deprive any party
hereto of the substantial benefits of this Agreement. Neither party hereto shall
directly or indirectly institute any proceeding questioning the enforceability
of this Agreement or any provision hereof.
          (d) This Agreement contains the entire understanding of the parties
with respect to the transactions contemplated hereby, and this Agreement may be
amended only by an agreement in writing executed by all parties hereto. Any of
the terms, covenants and conditions of this Agreement may be waived at any time
by the party entitled to the benefit of such term, covenant or condition.
          (e) Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement.
          (f) For the convenience of the parties, any number of counterparts of
this Agreement may be executed by the parties hereto and each such executed
counterpart shall be, and shall be deemed to be, an original instrument.
Executed counterparts may be delivered by facsimile transmission or in portable
document format.
          (g) All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed given upon (i) the transmitter’s confirmation
of a receipt of a facsimile transmission, (ii) confirmed delivery by a standard
overnight carrier or when delivered by hand, or (iii) the expiration of five
(5) business days after the day when mailed by certified or registered mail,
postage prepaid, addressed at the following addresses (or at such other address
for a party as shall be specified by like notice):

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          If to the Company, to:
Crown Crafts, Inc.
916 S. Burnside Avenue
Gonzales, Louisiana 70737
Attention: Mr. E. Randall Chestnut
Facsimile: (225) 647-9112
with a copy to (which shall not constitute notice):
Rogers & Hardin LLP
2700 International Tower
229 Peachtree Street, NE
Atlanta, Georgia 30303
Attention: Steven E. Fox, Esq.
Facsimile: (404) 230-0938
          If to any member of the Wynnefield Group, to:
Wynnefield Partners Small Cap Value, L.P.
450 Seventh Avenue, Suite 509
New York, New York 10123
Attention: Mr. Nelson Obus
Facsimile: (212) 760-0824
with a copy to (which shall not constitute notice):
Kane Kessler PC
1350 Avenue of the Americas
New York, New York 10019
Attention: Jeffrey S. Tullman, Esq.
Facsimile: (212) 245-3009
          (h) This Agreement and all the provisions hereof are binding upon and
will inure to the benefit of the parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
and obligations hereunder may be assigned or delegated by either party without
the prior written consent of the other party. Nothing in this Agreement, whether
expressed or implied, may be construed to give any Person other than the parties
any legal or equitable right, remedy or claim under or in respect of this
Agreement.
          (i) Each of the parties hereto acknowledges that it has been
represented by counsel of its choice throughout all negotiations that have
preceded the execution of this Agreement and that it has executed the same with
the advice of said independent counsel. Each party and its counsel cooperated
and participated in the drafting and preparation of this Agreement and the
documents referred to herein, and any and all drafts relating thereto exchanged
among the parties shall be deemed the work product of all of the parties and may
not be construed against any party by reason of its drafting or preparation.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this Agreement

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against any party that drafted or prepared it is of no application and is hereby
expressly waived by each of the parties hereto, and any controversy over
interpretations of this Agreement shall be decided without regards to events of
drafting or preparation.
          (j) The Company agrees to reimburse the Wynnefield Group its
documented out-of-pocket fees and expenses (including legal fees) in connection
with the settlement of its intention to nominate directors and the negotiation
of this Agreement, in an amount not to exceed $32,500 in the aggregate.
[Signature pages follow.]

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     IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be duly executed by their respective officers, each of
whom is duly authorized, all as of the day and year first above written.

            CROWN CRAFTS, INC.
      By:   /s/ E. Randall Chestnut         E. Randall Chestnut, Chairman of the
Board,        President and Chief Executive Officer     

[Signatures continue on following pages.]

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            WYNNEFIELD PARTNERS SMALL CAP
VALUE, L.P.
      By:   Wynnefield Capital Management, LLC,
its general partner               By:   /s/ Nelson Obus         Nelson Obus,
Co-Managing Member                WYNNEFIELD PARTNERS SMALL CAP
VALUE OFFSHORE FUND, LTD.
      By:   Wynnefield Capital, Inc.               By:   /s/ Nelson Obus        
Nelson Obus, President                WYNNEFIELD PARTNERS SMALL CAP
VALUE, L.P. I
      By:   Wynnefield Capital Management, LLC,
its general partner               By:   /s/ Nelson Obus         Nelson Obus,
Co-Managing Member                WYNNEFIELD CAPITAL MANAGEMENT,
LLC
      By:   /s/ Nelson Obus         Nelson Obus, Co-Managing Member           

 

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            WYNNEFIELD CAPITAL, INC.
      By:   /s/ Nelson Obus         Nelson Obus, President               
CHANNEL PARTNERSHIP II, L.P.
      By:   /s/ Nelson Obus         Nelson Obus, General Partner               
         /s/ Nelson Obus         NELSON OBUS           

 

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Schedule I
Wynnefield Small Cap Value, L.P.
Wynnefield Partners Small Cap Value Offshore Fund, Ltd.
Wynnefield Partners Small Cap Value, L.P. I
Wynnefield Capital Management, LLC
Wynnefield Capital, Inc.
Channel Partnership II, L.P.
Nelson Obus

 

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Exhibit A
CHARTER
STRATEGIC REVIEW COMMITTEE
CROWN CRAFTS, INC.
     The Board of Directors (the “Board”) of Crown Crafts, Inc. (the
“Corporation”) has adopted this charter (the “Charter”) for its Strategic Review
Committee (the “Committee”).
Composition of the Committee
     Number. The Committee shall consist of three (3) members of the Board, two
(2) of whom shall be independent and free from any relationship that, in the
opinion of the Board, would interfere with the exercise of the independent
judgment of such members in serving on the Committee.
     Appointment. The Board, upon the recommendation of the Committee, shall
elect the Chairperson and other members of the Committee. The Board may remove a
member of the Committee, or replace the Chairperson, only for cause, provided
that the Board must, at all times, assure that the Committee will have a
Chairperson and sufficient members to satisfy the requirements set forth herein
relating to the composition of the Committee and number of Committee members.
Purpose and Responsibility
     The Committee shall have responsibility for developing, and for reviewing,
evaluating and recommending to the Board the merits of, the various strategic
options available to the Corporation to enhance stockholder value, including,
but not limited to, exiting from existing lines of business, entering into new
lines of business and effecting other changes in the Corporation’s operations;
entering into joint ventures and other strategic alliances; engaging in
selective acquisitions, dispositions and other capital transactions; and
entering into a merger, sale or other extraordinary transaction involving the
Corporation. The Committee shall review the strategic planning process of the
Corporation and strategic plans developed and implemented by management and
perform such other functions as may from time to time be delegated by the Board
to the Committee.
Committee Operations
     Meeting Schedule. The Committee shall meet as often as it deems appropriate
to carry out its responsibilities. Meetings shall be held on at least two
(2) business days prior notice. The Committee may meet in person or by telephone
conference call and may act by unanimous written consent. The Committee shall
maintain written minutes of its meetings, which minutes shall be filed in the
Corporation’s minute book.
     Agenda and Materials. The Committee Chairperson shall approve the agenda
for the meetings, and any Committee member may suggest items for the Committee’s
consideration.

 

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     Attendance at Meetings. The Committee may, in the discretion of its
Chairperson, invite members of management, employees, external advisors and
other experts to attend the Committee’s meetings.
     Voting. A majority of the Committee members shall constitute a quorum. Each
Committee member shall have one vote, and actions at meetings may be approved by
a majority of the members present; provided, however, that any amendment of the
Charter shall require the unanimous approval of the Committee members.
     Reporting to the Board. At the Board meeting following each Committee
meeting, the Committee Chairperson (or the Chairperson’s designee) shall report
to the full Board on the Committee’s actions.
Committee Resources
     To assist the Committee in fulfilling its responsibilities, (i) each
Committee member shall have full access to members of management, and (ii) the
Committee may retain and terminate independent consultants, counsel,
accountants, investment banking firms and other advisors, subject to the Board’s
approval of all such advisors and the terms of their engagement, such approval
not to be unreasonably withheld, conditioned or delayed. The Corporation will
bear the expense of advisors engaged with the Board’s approval. Committee
members shall be reimbursed for all of their reasonable out of pocket expenses,
and non-employee members of the Committee shall receive such fees and
compensation as may be determined by the Board.

A-2

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JOINDER
TO
GOVERNANCE AND STANDSTILL AGREEMENT
     The undersigned, as of July 1, 2008, hereby (i) joins in the execution of,
and agrees to be bound by, that certain Governance and Standstill Agreement
dated as of July 1, 2008 by and among Crown Crafts, Inc. and the members of the
Wynnefield Group (as defined therein) parties thereto and (ii) agrees that he
shall be included within the term “members” of the Wynnefield Group for all
purposes of such Governance and Standstill Agreement.

                  /s/ Joshua Landes       JOSHUA LANDES