SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Crown Crafts, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
/ / Fee paid previously with preliminary materials:
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
CROWN CRAFTS, INC.
1600 RIVEREDGE PARKWAY, SUITE 200
ATLANTA, GEORGIA 30328
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Crown
Crafts, Inc., a Georgia corporation (the "Company") will be held August 8, 1996
at 10:00 a.m. at the Company's Atlanta, Georgia Corporate Office, 1600 RiverEdge
Parkway, Suite 200, Atlanta, Georgia 30328, for the following purposes:
1. To elect three Class I directors for a three-year term of office;
2. To consider and act upon such other business as may properly come
before the meeting or any adjournment thereof.
The Proxy Statement dated June 28, 1996 is attached. Common Stock
shareholders of record on the books of the Company at the close of business on
June 21, 1996 are entitled to notice of and to vote at the meeting.
We hope you will be able to attend the meeting in person, but, if you
cannot be present, it is important that you sign, date and promptly return the
enclosed proxy in the enclosed postage-paid envelope in order that your vote may
be cast at the meeting.
By Order of the Board of Directors
/s/ Roger D. Chittum
Roger D. Chittum
Secretary
June 28, 1996
Atlanta, Georgia
CROWN CRAFTS, INC.
1600 RIVEREDGE PARKWAY, SUITE 200
ATLANTA, GEORGIA 30328
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
Board of Directors of Crown Crafts, Inc. (the "Company") of proxies to be voted
at the annual meeting of shareholders of the Company (the "Annual Meeting") to
be held August 8, 1996 at 10:00 a.m. at the Company's Atlanta Corporate Office,
1600 RiverEdge Parkway, Suite 200, Atlanta, Georgia 30328, and at any and all
adjournments or postponements of such meeting.
PROXY SOLICITATION
Any shareholder who executes and delivers a proxy has the right to revoke
the proxy at any time before it is voted. A proxy may be revoked by (i) filing
an instrument revoking the proxy with the Secretary of the Company, (ii)
executing a proxy bearing a later date, or (iii) by attending and voting at the
Annual Meeting. Properly executed proxies, timely returned, will be voted in
accordance with the choices made by the shareholder with respect to the proposal
listed thereon.
If a choice is not made with respect to any proposal, the proxy will be
voted "FOR" the election of directors as described under "PROPOSAL 1 -- ELECTION
OF DIRECTORS" below.
Directors are elected by a vote of a plurality of the shares of Common
Stock represented at the meeting.
Other than the matters set forth herein, management of the Company is not
aware of any matters that may come before the meeting. If any other business
should properly come before the meeting, the persons named in the enclosed proxy
will have the discretionary authority to vote the shares represented by the
effective proxies and intend to vote them in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by the use of the mails, the directors
and officers of the Company may solicit proxies on behalf of management by
telephone, telegram and personal interview. Such persons will receive no
additional compensation for their solicitation activities and will be reimbursed
only for their actual expenses in connection therewith. The Company will
authorize banks, brokerage houses and other custodians, nominees or fiduciaries
to forward copies of proxy material to the beneficial owners of shares or to
request authority for the execution of the proxies and will reimburse such
banks, brokerage houses and other custodians, nominees or fiduciaries for their
out-of-pocket expenses incurred in connection therewith. The Notice of the
Meeting, this Proxy Statement and the form of proxy were first mailed to
shareholders on or about June 28, 1996.
VOTING RIGHTS AND PRINCIPAL SHAREHOLDERS
At the close of business on June 21, 1996, the record date for determining
the shareholders entitled to notice of and to vote at the meeting, there were
7,944,201 shares of common stock, $1.00 par value, of the Company (the "Common
Stock") outstanding. Each share of Common Stock is entitled to one vote (non-
cumulative) on all matters presented for shareholder vote. The presence in
person or by proxy of the holders of a majority of the outstanding Common Stock
constitutes a quorum for the transaction of business.
Abstentions and broker non-votes are counted for purposes of determining
the presence or absence of a quorum for the transaction of business. Abstentions
are counted separately as neither a vote "FOR" nor a vote "AGAINST" in
tabulations of the votes cast on proposals presented to shareholders. Broker
non-votes (shares held by a broker or nominee which are represented at the
Annual Meeting, but with respect to which such broker or nominee does not have
discretionary authority to vote on a particular proposal) are not counted at all
for purposes of determining whether a proposal has been approved.
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of June 1, 1996, by (i) each director of the
Company, (ii) the five most highly compensated executive officers, (iii) all
officers and directors as a group, and (iv) all persons known to the Company who
may be deemed beneficial owners of more than five percent (5%) of such
outstanding shares. Under the rules of the Securities and Exchange Commission, a
person is deemed to be a "beneficial owner" of a security if he or she has or
shares the power to vote or direct the voting of such security or the power to
dispose or to direct the disposition of such security. A person is also deemed
to be a beneficial owner of any securities of which that person has the right to
acquire beneficial ownership within 60 days. An asterisk indicates beneficial
ownership of less than one percent (1%).
NUMBER OF SHARES PERCENT OF
BENEFICIALLY OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) SHARES(2)
- ----------------------------------------------------------------- ---------------- -----------
Michael H. Bernstein............................................. 750,971(3) 9.4%
1600 RiverEdge Parkway
Suite 200
Atlanta, Georgia 30328
Philip Bernstein................................................. 533,492(4) 6.7%
21126 Escondido Way
Boca Raton, Florida 33433
E. Randall Chestnut.............................................. 5,191(5) *%
1600 RiverEdge Parkway
Suite 200
Atlanta, Georgia 30328
Roger D. Chittum................................................. 863(6) *%
1600 RiverEdge Parkway
Suite 200
Atlanta, Georgia 30328
Paul A. Criscillis, Jr........................................... 69,893(7) *%
1600 RiverEdge Parkway
Suite 200
Atlanta, Georgia 30328
Patricia G. Knoll................................................ 24,202(8) *%
Edmond Street
Calhoun, Georgia 30701
Rudolph J. Schmatz............................................... 118,504(9) 1.5%
1600 RiverEdge Parkway
Suite 200
Atlanta, Georgia 30328
Jane E. Shivers.................................................. 170 *%
999 Peachtree Street
Suite 1850
Atlanta, Georgia 30309
Alfred M. Swiren................................................. 9,020(10) *%
4405 Granada Blvd.
Coral Gables, Florida 33146
Richard N. Toub.................................................. 40,660(11) *%
8A Motcomb Street
London, England SW1X8JU
All Officers and Directors of the Company as a Group (13 1,566,957(12) 19.6%
persons).......................................................
Wachovia Bank of Georgia, N.A, as Trustee for the Crown Crafts, 995,141(13) 12.5%
Inc............................................................
Employee Stock Ownership Plan
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
- ---------------
(1) Unless otherwise specified in the footnotes, the shareholder has sole
voting and dispositive power.
2
(2) The computation of percentage of ownership includes shares of Common Stock
which may be acquired within 60 days of the June 1, 1996 date of this table
by exercise of options.
(3) Includes 323,871 shares of Common Stock owned individually by Mr. Michael
H. Bernstein. Includes 14,882 shares held by Mr. Bernstein's spouse, 89,490
shares held by his adult daughter and 134,412 shares held by Mr. Bernstein
as custodian or trustee for his minor children, as to all of which he
disclaims beneficial ownership. Includes options for 20,000 shares of
Common Stock which are or will become exercisable by Mr. Bernstein within
the 60 day period following the June 1, 1996 date of this table. Includes
75,621 shares of Common Stock held in the Crown Crafts, Inc. Employee Stock
Ownership Plan and 92,695 held by the Bernstein Family Foundation, a
charitable foundation for which Messrs. Michael and Philip Bernstein act as
trustees.
(4) Includes 253,738 shares of Common Stock owned individually by Mr. Philip
Bernstein. Includes 185,000 shares owned by Mr. Bernstein's spouse, as to
which he disclaims beneficial ownership. Includes 2,059 shares of Common
Stock in the Crown Crafts, Inc. Employee Stock Ownership Plan and 92,695
held by the Bernstein Family Foundation, a charitable foundation for which
Messrs. Michael and Philip Bernstein act as trustees.
(5) Includes 5,015 shares of Common Stock owned individually by Mr. Chestnut.
Includes 176 shares of Common Stock in the Crown Crafts, Inc. Employee
Stock Ownership Plan.
(6) Includes 500 shares of Common Stock owned individually by Mr. Chittum.
Includes 363 shares of Common Stock in the Crown Crafts, Inc. Employee
Stock Ownership Plan.
(7) Includes 50,000 shares of Common Stock owned individually by Mr.
Criscillis. Includes options for 6,667 shares which are or will become
exercisable by Mr. Criscillis within the 60 day period following the June
1, 1996 date of this table. Includes 13,226 shares of Common Stock in the
Crown Crafts, Inc. Employee Stock Ownership Plan.
(8) Includes 5,065 shares of Common Stock owned individually by Ms. Knoll.
Includes options for 2,000 shares which are or will become exercisable by
Ms. Knoll within the 60 day period following the June 1, 1996 date of this
table. Includes 17,137 shares of Common Stock in the Crown Crafts, Inc.
Employee Stock Ownership Plan.
(9) Includes 58,632 shares of Common Stock owned by Mr. Schmatz individually,
5,600 held by Mr. Schmatz as trustee for his minor children and options for
10,000 shares which are or will become exercisable by Mr. Schmatz within
the 60 day period following the June 1, 1996 date of this table. Also
includes 44,272 shares held in the Crown Crafts, Inc. Employee Stock
Ownership Plan.
(10) Includes 5,500 shares of Common Stock owned by Mr. Swiren individually and
3,520 shares held by his spouse for which he disclaims beneficial
ownership.
(11) Includes 36,260 shares of Common Stock owned by Mr. Toub individually and
4,400 shares held by Mr. Toub as custodian for his minor children for which
he disclaims beneficial ownership.
(12) See footnotes 3, 4, 5, 6, 7, 8, 9, 10 and 11 above.
(13) Wachovia Bank of Georgia, N.A. is the owner of record as trustee and has
indicated that it has sole right to dispose of these shares, which are held
in accounts for approximately 1,900 participants in the Crown Crafts, Inc.
Employee Stock Ownership Plan. Plan participants have the right to vote all
shares held in their individual accounts. Shares as to which no voting
instructions are received from participants are voted by the Trustee in
accordance with instructions received from the Administrative Committee of
the Plan. The committee consists of Messrs. Philip Bernstein, Michael H.
Bernstein and Paul A. Criscillis, Jr., all of whom are executive officers
of the Company and Mr. Robert E. Schnelle, the Company's Treasurer.
Mr. Philip Bernstein is the father of Mr. Michael H. Bernstein.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors currently consists of ten directors divided into
three classes, as nearly equal in size as possible, with such classes of
directors serving staggered three-year terms of office. Accordingly, at each
annual meeting of shareholders, a class consisting of approximately one-third of
the Company's directors will be elected to hold office for a term expiring at
the third succeeding annual meeting of shareholders, with each
3
director holding office until his or her successor is duly elected and
qualified, or until his or her earlier resignation or removal.
The Board of Directors propose that the three Class I nominees identified
below be elected for a three year term and until the election and qualification
of their successors, as provided in the Bylaws of the Company. The other seven
directors (whose names are also listed below) will continue in office. Each
nominee is presently a director of the Company.
The proxyholders intend to vote "FOR" the election of the individuals named
below unless authority is specifically withheld in the proxy.
While it is not anticipated, in the event any nominee is not a candidate or
is unable to serve as a director at the time of the election, the proxies will
be voted for the nominee designated by the present Board of Directors to fill
such vacancy.
The name and age of each of the nominees, his or her principal occupation
(including positions and offices with the Company) and the period during which
he or she has served as a director are set forth below.
NOMINEES FOR DIRECTOR
NOMINEES FOR CLASS I
FOR A THREE-YEAR TERM EXPIRING ON THE DATE OF THE 1999 ANNUAL MEETING
NAME AGE POSITION WITH COMPANY SINCE
- ---------------------------------------- --- ---------------------------------------- -----
Philip Bernstein........................ 89 Chairman of the Board of Directors 1968
Rudolph J. Schmatz...................... 58 Vice President, Sales and Marketing 1976
Director 1976
Jane E. Shivers......................... 53 Director 1994
CONTINUING DIRECTORS
CLASS II
TERM EXPIRING ON THE DATE OF THE 1997 ANNUAL MEETING
E. Randall Chestnut..................... 48 Vice President, Corporate Development 1995
Director 1995
Roger D. Chittum........................ 57 Vice President, Law and Administration,
Secretary 1993
Director 1992
Patricia G. Knoll....................... 44 Vice President, Manufacturing 1994
Director 1994
Alfred M. Swiren........................ 79 Director 1977
CLASS III
TERM EXPIRING ON THE DATE OF THE 1998 ANNUAL MEETING
Michael H. Bernstein.................... 53 President and Chief Executive Officer 1976
Director 1976
Paul A. Criscillis, Jr.................. 47 Vice President, Chief Financial Officer 1985
Director 1985
Richard N. Toub......................... 53 Director 1986
4
NOMINEES
Philip Bernstein has been employed by the Company since 1961. Mr. Bernstein
currently serves as Chairman of the Board and has held that position since 1968.
Rudolph J. Schmatz has served as a director of the Company since 1976. Mr.
Schmatz joined the Company in 1976 as Vice President, Administration. He held
that position until 1985 when he was elected to his current position of Vice
President, Sales and Marketing.
Jane E. Shivers was elected to the Board of Directors in November 1994.
Since 1985, Ms. Shivers has served as Executive Vice President of Ketchum Public
Relations and Director of its Atlanta office.
A vote of a plurality of the shares of Common Stock represented at the
meeting will be required to elect the nominees for Directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE
THREE NOMINEES FOR DIRECTOR NAMED ABOVE.
CONTINUING DIRECTORS
Michael H. Bernstein joined the Company in 1972 in an executive capacity.
He has served on the Board of Directors and as President and Chief Executive
Officer since 1976.
E. Randall Chestnut joined the Company in January 1995 as Vice President,
Corporate Development. He was elected to the Board of Directors in February
1995. Prior to joining the Company, Mr. Chestnut was from December 1988 to
January 1995 President of Beacon Manufacturing Company, a producer of adult and
infant blankets. From 1990 to December 1994, Mr. Chestnut also served as Vice
Chairman of Wiscassett Mills Company, a yarn manufacturer.
Roger D. Chittum has served as a director of the Company since 1992. From
1973 to 1983, Mr. Chittum was an officer of Tosco Corporation where his
responsibilities included at various times mineral land development, technology
licensing, government relations, environmental affairs and other executive
functions. Mr. Chittum was a principal in the law firm of Rosenberg, Chittum,
Mendlin & Hecht and predecessor law firms in Los Angeles, California, from 1984
to 1993. He joined the Company as Vice President, Law and Administration and
Secretary in October 1993.
Paul A. Criscillis, Jr. has served as a director and as Vice President,
Chief Financial Officer since 1985, and was Secretary of the Company from 1991
to October 1993. Prior to joining the Company, Mr. Criscillis was a partner with
the public accounting firm of Deloitte & Touche.
Patricia G. Knoll has been associated with the Company since 1972. Prior to
her election as Vice President, Manufacturing, in July, 1994, Ms. Knoll held
numerous positions in the Company, including her most recent position as Georgia
Manufacturing Manager. Ms. Knoll was elected to the Board of Directors in
November 1994.
Alfred M. Swiren has served as a director of the Company since 1977. He is
a practicing attorney and a member of the Florida and Massachusetts bars. Mr.
Swiren formerly served as Senior Vice President of Jefferson Stores, Inc.,
Miami, Florida.
Richard N. Toub is a United States attorney practicing in London, England,
as an international lawyer and business advisor. He was elected to the Board of
Directors in 1986.
The Company's Board of Directors met five times during the fiscal year
ended March 31, 1996. No director attended fewer than 80% of the total number of
meetings of the Board, and each director attended each meeting of the committees
of which he or she was a member. Management communicates with the members of the
Board throughout the year. In addition, the Board of Directors took action by
unanimous written consent fourteen times during the same time period.
Messrs. Alfred M. Swiren and Richard N. Toub and Ms. Shivers serve on both
the Audit Committee and Compensation Committee. The Audit Committee met once
during fiscal 1996. The Compensation Commit-
5
tee met three times during fiscal 1996 and also took action by unanimous written
consent thirteen times during that same time period. The Board of Directors has
no standing nominating committee.
The executive officers of the Company are as follows:
NAME AGE POSITION
- ---------------------------- --- --------------------------------------------
Michael H. Bernstein........ 53 President and Chief Executive Officer
Philip Bernstein............ 89 Chairman of the Board of Directors
E. Randall Chestnut......... 48 Vice President, Corporate Development
Roger D. Chittum............ 57 Vice President, Law and Administration
Paul A. Criscillis, Jr...... 47 Vice President, Chief Financial Officer
Patricia G. Knoll........... 44 Vice President, Manufacturing
Rudolph J. Schmatz.......... 58 Vice President, Sales and Marketing
The officers of the Company serve at the pleasure of the Board of
Directors.
Michael H. Bernstein joined the Company in 1972 in an executive capacity.
He has served on the Board of Directors and as President and Chief Executive
Officer since 1976.
Philip Bernstein has been employed by the Company since 1961. Mr. Bernstein
currently serves as Chairman of the Board and has held that position since 1968.
E. Randall Chestnut joined the Company in January 1995 as Vice President,
Corporate Development. He was elected to the Board of Directors in February
1995. Prior to joining the Company, Mr. Chestnut was from December 1988 to
January 1995 President of Beacon Manufacturing Company, a producer of adult and
infant blankets. From 1990 to December 1994, Mr. Chestnut also served as Vice
Chairman of Wiscassett Mills Company, a yarn manufacturer.
Roger D. Chittum has served as a director of the Company since 1992. From
1973 to 1983, Mr. Chittum was an officer of Tosco Corporation where his
responsibilities included at various times mineral land development, technology
licensing, government relations, environmental affairs and other executive
functions. Mr. Chittum was a principal in the law firm of Rosenberg, Chittum,
Mendlin & Hecht and predecessor law firms in, Los Angeles, California, from 1984
to 1993. He joined the Company as Vice President, Law and Administration and
Secretary in October 1993.
Paul A. Criscillis, Jr. has served as a director and as Vice President,
Chief Financial Officer since 1985, and was Secretary of the Company from 1991
to October 1993. Prior to joining the Company, Mr. Criscillis was a partner with
the public accounting firm of Deloitte & Touche.
Patricia G. Knoll has been associated with the Company since 1972. Prior to
her election as Vice President, Manufacturing, in July, 1994, Ms. Knoll held
numerous positions in the Company, including her most recent position as Georgia
Manufacturing Manager. Ms. Knoll was elected to the Board of Directors in
November 1994.
Rudolph J. Schmatz has served as a director of the Company since 1976. Mr.
Schmatz joined the Company in 1976 as Vice President, Administration. He held
that position until 1985 when he was elected to his current position of Vice
President, Sales and Marketing.
6
EXECUTIVE COMPENSATION
The following tables and narrative text discuss the Compensation paid
during the fiscal year ended March 31, 1996 and the two (2) prior fiscal years
to the Company's Chief Executive Officer and the Company's five other most
highly compensated executive officers (with annual salary and bonus in excess of
$100,000).
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
------------------- AWARDS/ ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) (#) ($)
- ------------------------------------------- ------ -------- -------- ------------ ------------
M.H. Bernstein............................. 1996 $235,000 $ -0- 50,000 $ 2,366(2)
President and Chief Executive Officer 1995 $235,000 $725,000 50,000 $ 3,531(2)
1994 $239,519 $497,411 70,000 $ 5,269(2)
E.R. Chestnut.............................. 1996 $148,000 $112,000 25,000 $ 2,834(3)
Vice President, Corporate Development(4) 1995 $ 24,477 $ 42,000 25,000 $ -0-
R.D. Chittum............................... 1996 $148,000 $ -0- 25,000 $ 2,863(3)
Vice President, Law and Administration(5) 1995 $148,000 $218,600 37,000 $ 3,105(2)
1994 $ 74,000 $ 70,612 35,000 $29,162(6)
P.A. Criscillis, Jr........................ 1996 $148,000 $ -0- 25,000 $ 2,983(3)
Vice President and Chief Financial 1995 $ 85,385 $125,385 12,500 $ 3,276(2)
Officer(7) 1994 $ 77,500 $ 74,301 35,000 $ 2,131(2)
P.G. Knoll................................. 1996 $148,000 $ -0- 25,000 $ 3,163(3)
Vice President, Manufacturing(8) 1995 $106,008 $167,008 25,000 $ 3,531(2)
1994 $ 95,975 $ -0- 15,000 $ 2,414(2)
R.J. Schmatz............................... 1996 $148,000 $ -0- 25,000 $ 3,118(3)
Vice President, Sales and Marketing 1995 $148,000 $232,000 25,000 $ 3,467(2)
1994 $150,846 $141,223 35,000 $ 2,870(2)
- ---------------
(1) Except for the payment of a guaranteed minimum bonus to Mr. E.R. Chestnut,
there were no bonus payments made during fiscal 1996 because the Company's
earnings were below the minimum level required for payment of bonuses under
the Company's Executive Incentive Bonus Plan.
(2) Represents Company contributions to the Crown Crafts, Inc. Employee Stock
Ownership Plan.
(3) Represents Company contributions to the Crown Crafts, Inc. Employee Stock
Ownership Plan and the Crown Crafts, Inc. 401(k) Retirement Savings Plan.
(4) Mr. Chestnut was employed by the Company effective January 20, 1995.
(5) Mr. Chittum was employed by the Company effective October 1, 1993.
(6) Includes legal fees of $28,162 and director's fees of $1,000 paid to Mr.
Chittum for services rendered prior to his employment with the Company.
(7) Mr. Criscillis took an unpaid sabbatical leave of absence from November 1,
1993 to September 6, 1994.
(8) Ms. Knoll became Vice President of Manufacturing effective July 11, 1994,
prior to that time she was Georgia Manufacturing Manager. Ms Knoll took an
unpaid sabbatical leave of absence from February 7, 1994 to July 11, 1994.
7
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to stock
options granted to the Company's executive officers during the fiscal year ended
March 31, 1996, including the potential realizable value of such options at
assumed annual rates of stock appreciation 5% and 10% for the term of the
options.
REALIZABLE
INDIVIDUAL GRANTS(1) VALUE AT ASSUMED
--------------------------------------------------- ANNUAL RATES
NUMBER OF % OF OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING TO OPTION TERM(2)
OPTIONS EMPLOYEE EXERCISE OR EXPIRATION ---------------------
NAME GRANTED(#) IN FY BASE PRICE DATE 5% 10%
- ----------------------------------- ---------- -------- ----------- ---------- -------- --------
M.H. Bernstein..................... 50,000 9.7% $ 12.88 8-21-00 $177,856 $393,016
E.R. Chestnut...................... 25,000 4.9% $ 12.88 8-21-00 $ 88,928 $196,508
R.D. Chittum....................... 25,000 4.9% $ 12.88 8-21-00 $ 88,928 $196,508
P.A. Criscillis, Jr................ 25,000 4.9% $ 12.88 8-21-00 $ 88,928 $196,508
P.G. Knoll......................... 25,000 4.9% $ 12.88 8-21-00 $ 88,928 $196,508
R.J. Schmatz....................... 25,000 4.9% $ 12.88 8-21-00 $ 88,928 $196,508
- ---------------
(1) All options granted to the named executive officers were granted pursuant to
the Company's 1995 Non-Qualified Stock Option Plan. Each such option
becomes exercisable in three equal portions commencing with the first
anniversary of the grant date. Each such option includes a "limited stock
appreciation right" ("LSAR") with respect to an equal number of shares. The
option and the LSAR become immediately exercisable upon a change in control
of the Company. Each such option expires on the fifth anniversary of its
grant date.
(2) The assumed rates of growth are set by the Securities Exchange Commission
for illustration purposes only and are not intended to forecast the future
stock prices.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
The following table sets forth certain information with respect to stock
options exercised by the Company's executive officers during the fiscal year
ended March 31, 1996, and options held by such officers, whether exercisable or
unexercisable, at March 31, 1996.
VALUE OF UNEXERCISED-
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)(2)
SHARES ---------------------- ---------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- ------------------------------- ------------ -------------- ---------------------- ---------------------
M.H. Bernstein................. 0 $ 0 133,332/106,668 $ 0/0
E.R. Chestnut.................. 0 $ 0 8,333/ 41,667 $ 0/0
R.D. Chittum................... 0 $ 0 35,665/ 61,335 $ 0/0
P.A. Criscillis, Jr............ 0 $ 0 59,165/ 45,002 $ 0/0
P.G. Knoll..................... 0 $ 0 25,666/ 46,668 $ 0/0
R. J. Schmatz.................. 0 $ 0 66,665/ 53,335 $ 0/0
- ---------------
(1) Value Realized is equal to the difference between the market price on the
date of exercise and the exercise price which is equal to the closing price
on the date of grant.
(2) Value is equal to the difference between the March 31, 1996, closing price
of the Company's common stock ($9.50) and the exercise price, which is
equal to the closing price on the date of grant. The exercise price of all
options held by the Company's executive officers at March 31, 1996 was
greater than the closing price on that date.
8
PERFORMANCE GRAPH
Set forth below is a graph which compares the value of $100 invested at the
close of trading on the last trading day preceding the first day of the fifth
preceding fiscal year, in each of three investment alternatives: (a) the
Company's Common Stock, (b) the S&P 500, and (c) a Peer Group consisting of five
publicly-traded corporations (including the Company) that are engaged
principally in the manufacture and sale of home furnishing textile products. The
graph assumes all dividends were re-invested. The corporations included in the
Peer Group are Crown Crafts, Inc., Fieldcrest Cannon, Inc., Springs Industries,
Inc., Thomaston Mills, Inc. and Frenchtex, Inc. Frenchtex, Inc., excluded from
the peer group for fiscal 1995 because no performance information was available,
has been included once again in the peer group.
[GRAPH]
Measurement Period CROWN CRAFTS S&P 500 IN-
(Fiscal Year Covered) INC DEX PEER GROUP
3/31/91 100 100 100
3/31/92 113.58 111.04 145.76
3/31/93 120.81 127.95 181.35
3/31/94 138.31 129.84 169.77
3/31/95 126.30 150.05 165.05
3/31/96 71.27 198.22 176.75
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
This report of the Compensation Committee of the Board of Directors of the
Company sets forth the Committee's compensation policies applicable to the Chief
Executive Officer and the other five most highly compensated executive officers
as well as other executive officers of the Company, including the specific
relationship of corporate performance to executive compensation, with respect to
compensation reported in this proxy statement for fiscal 1996.
The Compensation Committee is currently composed of the three nonemployee
directors of the Company, Ms. Jane E. Shivers, Mr. Alfred M. Swiren and Mr.
Richard N. Toub. No member of the Compensation Committee has ever been an
employee of the Company or any of its subsidiaries. They are not eligible to
participate in any of the compensation plans that the Committee administers
except they are eligible to receive automatic, non-discretionary annual awards
of stock options under the Company's 1995
9
Stock Option Plan. The Compensation Committee has overall responsibility to
review, monitor and recommend compensation plans to the Board of Directors for
approval. In reviewing and approving executive compensation for key executives
other than Mr. Michael H. Bernstein, the Committee reviews recommendations from
Mr. Bernstein. Mr. Bernstein's compensation is determined by the Committee.
POLICY AND OBJECTIVES
The fundamental philosophy of the compensation program of the Company is to
motivate executive officers to achieve short-term and long-term goals through
incentive-based compensation and to provide competitive levels of compensation
that will enable the Company to attract and retain qualified executives.
The Company's executive compensation program consists primarily of three
components. Of the three, only base salary is fixed. The other two components
are incentive-based. The Executive Incentive Bonus Plan ("EIBP") provides
short-term incentives based upon the Company's annual operating results while
the Company's Stock Option Plan provides long-term incentives. Since the
structure of the Company's executive officers compensation is weighted more
heavily toward incentive-based compensation, total compensation will usually be
above average with higher operating results and below average when operating
results are poorer.
A key objective of the Compensation Committee is to assure that the
Company's executives' total compensation is competitive. To this end, the
Company receives and reviews executive compensation surveys and provides this
information to the Committee. These surveys confirm that, while the total
compensation of the Company's executives in fiscal 1996 was below average,
historically, total compensation has been about average when compared with
equivalent jobs with industrial employers of comparable size.
SHORT-TERM COMPENSATION
Base Salary
The Committee sets the base salary for each executive officer, including
the President and Chief Executive Officer, at amounts below the average base
salary for equivalent jobs with other industrial employers. Although base salary
is reviewed annually by the Committee, adjustments are infrequent. The Committee
believes this policy is consistent with the overall Company philosophy as set
forth above.
Short-term Incentives
The Company's EIBP provides the Company's executive officers with an
opportunity for significant short-term incentive compensation based upon the
Company's operating results for the fiscal year. The maximum amounts potentially
realizable by the eligible executive officers are well above median bonuses
applicable to equivalent jobs with other industrial employers. This is intended
to offset the fact that executive officers' base salaries are below average,
thereby providing significant incentive with respect to short-term operating
results.
Under the EIBP, the Committee meets annually to set goals and establish
formulae, based upon numerous factors including the Company's projected
operating results. The formulae are generally progressive, meaning that lower
levels of profitability by the Company result in a lower proportion of incentive
compensation to pretax income than do higher levels of profitability. The
Committee has reserved the right to alter the formulae at any time to reflect
changing conditions.
The total short-term compensation which includes base salary and bonuses
under the EIBP provides the executive officers of the Company the opportunity to
be compensated at levels similar to, or as operating results are more positive,
in excess of equivalent jobs with other industrial employers at moderate levels
of corporate financial performance. As a result of the decline of the Company's
earnings in fiscal 1996, no bonuses were paid under the EIBP, except that, one
executive officer received a payment of a minimum bonus which was guaranteed at
the time of his employment.
10
LONG-TERM COMPENSATION
The Company's compensation program includes long-term compensation in the
form of periodic grants of stock options. The granting of stock options is
designed to link the interests of the executives with those of the shareholders
as well as to retain key executives. Stock option grants provide an incentive
that focuses the executives' attention on managing the Company from the
perspective of an owner with an equity stake in the business. Stock options are
tied to the future performance of the Company's stock and will provide value
only if the price of the Company's stock increases after the stock option
becomes exercisable and before the stock option expires.
Long-term compensation is offered only to those key employees who can make
an impact on the Company's long-term performance.
COMPENSATION PAID TO THE CHIEF EXECUTIVE OFFICER
The Compensation Committee meets annually to evaluate the performance of
the Chief Executive Officer. The compensation paid in fiscal 1996 to Mr. Michael
H. Bernstein, the Company's Chief Executive Officer, was based on the factors
generally applicable to compensation paid to executives of the Company as
described in this Report.
In reviewing Mr. Bernstein's short-term compensation, the Committee reviews
and considers Mr. Bernstein's recent performance, his achievements in prior
years, his achievement of specific short-term goals and the Company's
performance in that fiscal year. Mr. Bernstein's base salary and bonus formula
for fiscal 1996 were approved based on this review process. Mr. Bernstein's
bonus formula, which was based on the Company's operating results for fiscal
1996, resulted in no payment of bonus for fiscal 1996.
Additionally, Mr. Bernstein's long-term compensation was determined by
considering such factors as the overall long-term goals of the Company,
performance trends, potential stock appreciation and actual performance taking
into consideration factors and conditions which affected that performance, both
positively and negatively.
TAX COMPLIANCE POLICY
Certain provisions of the federal tax laws enacted in 1993 limit the
deductibility of certain compensation for the Chief Executive Officer and the
additional four executive officers who are highest paid and employed at year end
to $1 million per year each. This provision has had no effect on the Company
since its enactment since no officer of the Company received as much as $1
million in applicable remuneration in any year. Nonetheless, the presence of
non-qualified stock options make it theoretically possible that the threshold
may be exceeded at some time in the future. In such a case, the Company intends
to take the necessary steps to conform its compensation to qualify for
deductibility. Further, the Committee intends to give strong consideration to
the deductibility of compensation in making its compensation decisions for
executive officers in the future, balancing the goal of maintaining a
compensation program which will enable the Company to attract and retain
qualified executives while maximizing the creation of long-term shareholder
value.
Respectfully submitted:
Jane E. Shivers
Alfred M. Swiren
Richard N. Toub
CASH COMPENSATION OF DIRECTORS
For the fiscal year ending March 31, 1996, no employee director of the
Company was paid additional compensation as a member of the Board of Directors.
Each nonemployee director of the Company is paid $1,000 for each Board meeting
attended and $1,000 for each attended Committee meeting which is held on a
11
date other than the date of a Board meeting. Each nonemployee director is
reimbursed for all expenses incurred in connection with service on the Board of
Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Ms. Shivers and Messrs. Swiren and
Toub. Mr. Toub is an attorney who has provided services to the Company in the
past. Mr. Toub provided such services during fiscal 1996 for which he was paid
$720. The Company expects he will continue to provide such services during
fiscal 1997.
COMPLIANCE WITH SECTION 16(A) OF THE ACT
Based upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during fiscal 1995 and Forms 5 and amendments thereto with respect
to fiscal 1996, to the best of the Company's knowledge, no other reports were
required during the fiscal year ended March 31, 1996 and all filing requirements
applicable to directors, officers or ten percent (10%) shareholders of the
Company required by Section 16(a) of the Securities Exchange Act of 1934 were
filed on a timely basis except that Mr. E. Randall Chestnut did not timely
report the purchase of 15 shares of the Company's common stock on a Form 4 for
the month of March, 1996.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company has not yet selected its independent public accountants for its
fiscal year ending March 30, 1997. This selection will be made later in the year
by the Company's Board of Directors, based upon the recommendations of the Audit
Committee. The current members of the Audit Committee are identified under
"Proposal 1 -- Election of Directors".
Deloitte & Touche, LLP has served as the Company's auditors since 1983.
Representatives of Deloitte & Touche are expected to be present at the Annual
Meeting and will have an opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Appropriate proposals of shareholders intended to be presented at the
Company's next annual meeting of shareholders (which the Company currently
intends to hold in August of 1997) must be received by the Company by March 24,
1997 for inclusion in its proxy statement and form of proxy relating to that
meeting. If the date of the next annual meeting is changed by more than 30
calendar days from such anticipated time frame, the Company shall, in a timely
manner, inform its shareholders of the change and the date by which proposals of
shareholders must be received.
MISCELLANEOUS
Management does not know of any other matters to come before the meeting.
If any other matters properly come before the meeting, however, it is the
intention of the persons designated as Proxies to vote in accordance with their
best judgment on such matters.
ANNUAL REPORT
The Company's 1996 Annual Report to Shareholders is enclosed with this
Proxy Statement. The Annual Report is not a part of the proxy soliciting
material. Additional copies of such Annual Report along with copies of the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1996,
as filed with the Securities and Exchange Commission (exclusive of documents
incorporated by reference), are available without charge to shareholders upon
written request to Investor Relations, Crown Crafts, Inc., 1600 RiverEdge
Parkway, Suite 200, Atlanta, Georgia 30328.
12
[LOGO] CROWN CRAFTS
CROWN CRAFTS, INC.
1600 River Edge Parkway
Suite 200
Atlanta, GA 30328
CROWN CRAFTS, INC. PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CROWN
CRAFTS, INC. FOR THE ANNUAL MEETING OF STOCKHOLDERS
AUGUST 8, 1996
The undersigned stockholder hereby constitutes and appoints each of Michael
H. Bernstein and Roger D. Chittum, with full power of substitution, to act as
proxy for and to vote all shares of Common Stock which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of Crown Crafts, Inc.
(the "Annual Meeting") to be held on August 8, 1996 at 10:00 a.m., at the
Company's Atlanta, Georgia Corporate Office, 1600 RiverEdge Parkway, Suite 200,
Atlanta, Georgia, or at any adjournment(s) or postponements thereof, on all
matters coming before the Annual Meeting.
THE PROXIES SHALL VOTE AS SPECIFIED BELOW, OR IF A CHOICE IS NOT SPECIFIED
FOR THE FOLLOWING PROPOSAL, THE PROXIES SHALL VOTE "FOR" THE ELECTION OF THE
BOARD OF DIRECTORS' NOMINEES FOR DIRECTORS.
The undersigned instructs said proxies to vote:
1. To elect the three Class I director nominees listed below to the Board of
Directors of Crown Crafts, Inc., each for a three-year term.
Philip Bernstein Rudolph J. Schmatz Jane E. Shivers
/ / FOR all nominees
/ / WITHHOLD AUTHORITY / / FOR all nominees, except vote withheld from the following
to vote for all nominees nominees:
------------------------------------------------
2. The undersigned further gives the proxies authority to vote according to his
or her best judgment with respect to any other matters which properly come
before the meeting.
The undersigned acknowledges the receipt of Notice of the Annual Meeting and
Proxy Statement, each dated June 28, 1996 and the Annual Report to Shareholders,
and hereby revokes any proxy or proxies heretofore given by the undersigned
relating to the Annual Meeting.
Signature:
----------------------
Date:
---------------------------
(Signature should conform to name and title stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should add their titles upon
signing.)
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED POSTAGE PAID ENVELOPE.