UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 ☒
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))
☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Under §240.14a-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):
☒ No fee required.
☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 providedFee computed on table in exhibit required by Item 25(b) per Exchange Act Rule 0-11(a)(2)Rules 14a(6)(i)(1) 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.0-11.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
July 1, 2019
June 29, 2022
Dear Stockholders:
It is my pleasure to invite you to this year’s annual meetingAnnual Meeting of stockholders,Stockholders, which will be held on Tuesday, August 13, 2019,16, 2022, at 10:009:30 a.m., local time, at our executive offices located at 916 South Burnside Avenue, Third Floor, Gonzales, Louisiana.
Details regarding the annual meetingAnnual Meeting and the business to be conducted are described in the Notice of Internet Availability of Proxy Materials you received in the mail and in thisthe accompanying proxy statement. We have also made available a copy of our 20192022 Annual Report to Stockholders with this proxy statement. We encourage you to read these materials, which include our audited financial statements and provide information about our business.
We have elected to provide access to our proxy materials over the Internet underin accordance with the U.S. Securities and Exchange Commission’s “notice and access” rules. Accordingly, most stockholders will not receive paper copies of our proxy materials. The Notice of Internet Availability of Proxy Materials provides information on how stockholders may obtain paper copies of our proxy materials if they so choose.
Whether or not you plan to attend the annual meeting,Annual Meeting, please vote as soon as possible to ensure that your shares will be represented and voted at the annual meeting.Annual Meeting. You may vote over the Internet, by telephone or, if you receive a paper proxy card in the mail, by mailing the completed proxy card. If you attend the annual meeting,Annual Meeting, then you may vote your shares in person even though you have previously voted your proxy.
Thank you for your ongoing support of, and continued interest in, Crown Crafts.
Sincerely,
 
Chairman |
NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS |
The annual meeting2022 Annual Meeting of stockholdersStockholders of Crown Crafts, Inc. (the “Company”) will be held at the Company’sour executive offices, located at 916 South Burnside Avenue, Third Floor, Gonzales, Louisiana, on August 13, 2019,16, 2022, at 10:009:30 a.m., Central Daylight Time, for the following purposes:
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The boardBoard of directorsDirectors has fixed June 14, 201917, 2022 as the record date to determine the stockholders entitled to notice of, and to vote at, the annual meeting.Annual Meeting. Only those stockholders of record of Crown Crafts Series A common stock as of the close of business on that date will be entitled to vote at the annual meetingAnnual Meeting or at any adjournment or postponement thereof.
Your vote is very important. Whether or not you plan to attend the annual meeting,Annual Meeting, we encourage you to read thisthe accompanying proxy statement and submit your proxy as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions on the Notice of Internet Availability of Proxy Materials you received in the mail, the section of thisthe accompanying proxy statement titled “Questions“Proxy Solicitation and Answers About these Proxy Materials”Voting Information” or, if you requested to receive printed proxy materials, the included proxy card. To obtain directions to attend the annual meetingAnnual Meeting and vote in person, please contact our corporate secretaryCorporate Secretary at (225) 647-9100.
By Order of the Board of Directors,  Craig J. Demarest Vice President, Chief Financial Officer and Corporate Secretary |
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS
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Important Notice Regarding Internet
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This proxy statement and our 2019 Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the fiscal year ended March 31, 2019, are available free of charge at https://materials.proxyvote.com/228309.
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Recommendation of | 36 |
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CROWN CRAFTS, INC.
916 South Burnside Avenue
Gonzales, Louisiana70737
PROXY STATEMENT
FOR
2022 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 13, 201916, 2022
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS
Why am I receiving these proxy materials?
The boardBoard of directorsDirectors (the “Board”) of Crown Crafts, Inc. (“Crown Crafts”, the “Company”, or the “Company”“we”) has made these proxy materials available to you on the Internet or, upon your request, has delivered printed versions of these proxy materials to you by mail, in connection with the solicitation of proxies by and on behalf of the boardBoard for use at the annual meetingCompany’s 2022 Annual Meeting of the Company’s stockholdersStockholders to be held at the Company’s executive offices, located at 916 South Burnside Avenue, Third Floor, Gonzales, Louisiana, on August 13, 2019,16, 2022, at 10:009:30 a.m., Central Daylight Time, and any adjournment or postponement thereof.thereof (the “Annual Meeting”). Stockholders of the Company are invited to attend the annual meetingAnnual Meeting and are requested to vote on the proposals described in this proxy statement.statement for the Annual Meeting (this “Proxy Statement”).
These proxy materials were first made available to stockholders on or about July 1, 2019.June 29, 2022.
What is included in these materials?
These materials include:
this proxy statement for the annual meeting;This Proxy Statement; and
theThe Company’s 20192022 Annual Report to Stockholders (the “2022 Annual Report”), which includes the Company’s audited consolidated financial statements.Annual Report on Form 10-K for the fiscal year ended April 3, 2022 (the “fiscal year 2022”).
If you request printed versions of these proxy materials by mail, then they will also include the proxy card for the annual meeting.Annual Meeting.
What am I voting on?
You will be voting on each of the following:
the election of one Class I director for a three-year term of office;
the ratification of the appointment of KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for the fiscal year ending March 29, 2020
the approval, on an advisory basis, of the compensation of the Company’s named executive officers;
the approval, on an advisory basis, of the frequency of holding future advisory votes on executive compensation; and
any other business that may properly come before the annual meeting or any adjournment or postponement thereof.
As of the date of this proxy statement, the board of directors knows of no other matters that will be brought before the annual meeting.
Why did I receive a one-page notice in the mail or email notification regarding the Internet availability of proxy materials instead of a full set of proxy materials?
Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), the Company has provided access to its proxy materials over the Internet. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to stockholders. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice, free of charge, or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy of the proxy materials may be found in the Notice. In addition, stockholders may request to receive proxy materials electronically by email on an ongoing basis.
How can I get electronic access to the proxy materials?
The Notice provides you with instructions regarding how to:
viewView proxy materials for the annual meetingAnnual Meeting on the Internet and execute a proxy; and
instructInstruct the Company to send future proxy materials to you electronically by email.
Choosing to receive future proxy materials by email will save the Company the cost of printing and mailing documents to you and will reduce the impact of its annual meetingsthe Annual Meetings on the environment. If you choose to receive future proxy materials by email, then you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.
What is being voted on at the Annual Meeting?
Stockholders are being asked to vote on the following proposals, which are more fully described in this Proxy Statement:
To elect one Class I director to the Board to serve until the Company’s annual meeting of stockholders to be held in 2025 and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal from office (“Proposal 1”);
To ratify the appointment of KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for the fiscal year ending April 2, 2023 (“Proposal 2”); and
To approve, on an advisory basis, the compensation of the Company’s named executive officers (“Proposal 3”).
In addition to the above matters, we will transact any other business that may properly come before the Annual Meeting. As of the date of this Proxy Statement, the Board knows of no other matters that will be brought before the Annual Meeting. However, if other matters are properly presented at the Annual Meeting, then the persons named as proxies will vote in their discretion with respect to those matters.
Who can vote at the annual meeting?Annual Meeting?
You may vote if you owned sharesare a stockholder of record of the Company’s Series A common stock, par value $0.01 per share (the “Common Stock”), as of the close of business on June 14, 2019,17, 2022, the record date for the annual meeting.Annual Meeting (the “Record Date”). As of the Record Date, there were 10,069,084 shares of Common Stock outstanding and entitled to vote at the Annual Meeting, held by 154 holders of record. A list of the Company’s stockholders will be available for review at the Company’s executive offices during regular business hours for a period of ten days before the Annual Meeting.
If you are a beneficial owner of the Common Stock as of the close of business on the Record Date, then you will receive voting instructions from the brokerage firm, bank or other nominee that holds your shares as the holder of record. You must follow the voting instructions of the holder of record in order for your shares to be voted.
As of the Record Date, the Company’s directors and executive officers as a group beneficially owned, and were entitled to vote, 1,158,534 shares of Common Stock, or approximately 11.5% of the outstanding shares of Common Stock on that date.
How many votes am I entitled to cast?
All holdersEach holder of Crown Crafts Series A common stock arerecord of the Common Stock is entitled to cast one vote perfor each share of Common Stock held as ofby such holder on the record date.
You mayRecord Date.Cumulative voting is not cumulate your votes for any matter being voted on at the annual meeting,permitted, and youstockholders are not entitled to appraisal or dissenters’ rights.rights with respect to any matter to be voted on at the Annual Meeting.
Your shares can be voted at the Annual Meeting only if you are present or represented by a valid proxy.
How does the Board recommend I vote?
The Board has unanimously determined to recommend that stockholders vote:
“FOR” the Class I director nominee;
“FOR” the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for the fiscal year ending April 2, 2023; and
“FOR” the approval, on an advisory basis, of the compensation of the Company’s named executive officers.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
Most of our stockholders hold their shares in an account at a brokerage firm, bank or other nominee holder, rather than holding share certificatesshares in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
Stockholder of Record.Record. If, on the record date,Record Date, your shares were registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc. (“Broadridge”), then you are a “stockholder of record” who may vote at the annual meeting,Annual Meeting, and we are providing these proxy materials directly to you.
Beneficial Owner.Owner. If, on the record date,Record Date, your shares were held in an account at a brokerage firm, or at a bank or other nominee holder, then you are considered the beneficial owner of shares held “in streetin “street name,” and these proxy materials are being forwarded to you by your brokerbrokerage firm, bank or other nominee holder who is considered the stockholder of record for purposes of voting at the annual meeting.Annual Meeting. As the beneficial owner, you have the right to direct your broker onbrokerage firm, bank or other nominee holder how to vote your shares and to attend the annual meeting.Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the annual meetingAnnual Meeting unless you receive a valid proxy from your brokerage firm, bank or other nominee holder. To obtain a valid proxy, you must make a special request of your brokerage firm, bank or other nominee holder. Obtaining a valid proxy may take several days.
How do I vote my shares?
StockholdersIf you are a stockholder of record, then you may vote using one of the following four methods:
overOver the Internet, which you are encouraged to do if you have access to the Internet;
by
By telephone;
byBy completing, signing and returning the included proxy card, for those who requested to receive printed proxy materials in the mail; or
byBy attending the annual meetingAnnual Meeting and voting in person.
The Notice provides instructions on how to access your proxy, which contains instructions on how to vote via the Internet or by telephone. For stockholders who request to receive a paper proxy card in the mail, instructions for voting via the Internet, by telephone or by mail are set forth on the proxy card.
If you hold your shares in street name the organization holding, then your accountbrokerage firm, bank or other nominee who holds your shares is considered the stockholder of record for purposes of voting at the annual meeting.Annual Meeting. The stockholder of record will provide you with instructions on how to vote your shares. Internet and telephone voting will be offered to stockholders owning shares through most brokerage firms and banks. Additionally,As discussed above, if you would like to vote in person at the annual meeting,Annual Meeting, then you must contact the brokerage firm, bank or other nominee who holds your shares to obtain a valid proxy from them and bring it with you to the annual meeting.Annual Meeting. You will not be able to vote at the annual meetingAnnual Meeting unless you have a valid proxy from your brokerage firm, bank or other nominee.nominee holder.
Can I change my mind after I vote?
If you are a stockholder of record and vote by proxy, then you may revoke that proxy at any time before it is voted at the Annual Meeting. You may do this by using one of the following methods:
Voting again by telephone or over the Internet until 11:59 p.m., Eastern Daylight Time, on August 15, 2022;
Giving written notice to the Company’s Corporate Secretary at Crown Crafts, Inc., P.O. Box 1028, Gonzales, Louisiana 70707, Attn.: Corporate Secretary;
Delivering a later-dated proxy; or
Voting in person at the Annual Meeting.
If you hold your shares in street name, then you may change your vote by submitting new voting instructions to your brokerage firm, bank or other nominee holder. You must contact your brokerage firm, bank or other nominee holder to find out how to do so. However, since you are not the stockholder of record, you may not change your vote by voting those shares in person at the Annual Meeting unless you receive a valid proxy from your brokerage firm, bank or other nominee holder authorizing you to vote at the Annual Meeting.
How many votes must be present to hold the Annual Meeting?
In order for the Company to conduct the Annual Meeting, the holders of a majority of the shares of Common Stock issued and outstanding and entitled to vote must be present, in person or by proxy, at the Annual Meeting. This is referred to as a quorum. Your shares will be counted as present at the Annual Meeting if you do one of the following:
Vote via the Internet or by telephone;
Return a properly executed proxy by mail; or
Attend the Annual Meeting and vote in person.
Shares represented by valid proxies received but marked as abstentions, and shares represented by valid proxies received but reflecting broker non‑votes, will be counted as present at the Annual Meeting for purposes of establishing a quorum.
If a quorum is not present at the Annual Meeting, then it is expected that the Annual Meeting will be adjourned or postponed to solicit additional proxies.
What are broker non‑votes?
Under certain circumstances, including the election of directors, matters involving executive compensation and other matters considered non-routine, brokerage firms and banks are prohibited from exercising discretionary authority for beneficial owners who have not provided voting instructions to the brokerage firm or broker. This is generally referred to as a “broker non-vote.” In these cases, as long as a routine matter is also being voted on, and in cases where the stockholder does not vote on such routine matter, those shares will be counted for the purpose of determining if a quorum is present, but will not be included as votes cast with respect to those matters. Whether a brokerage or bank has authority to vote its shares on uninstructed matters is determined by stock exchange rules. We expect that brokerage firms and brokers will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions only with respect to Proposal 2 but not with respect to any of the other proposals to be voted on at the Annual Meeting.
What vote is required, and how will the votes be counted, to elect directors and to adopt each of the other proposals?
The following chart describes the proposals to be considered at the Annual Meeting, the vote required to elect directors and to adopt each of the other proposals, and the manner in which votes will be counted:
Proposal | Voting | Vote Required to Adopt Proposal | Effect of Abstentions | Effect of Broker Non-Votes |
Election of Class I Director (Proposal 1) | For or Withhold | A nominee will be elected by a plurality of votes cast at the Annual Meeting, meaning that the Class I nominee receiving the most votes will be elected as the Class I director | No effect | No effect |
Ratification of KPMG (Proposal 2) | For, Against or Abstain | The affirmative vote of a majority of the votes cast at the Annual Meeting | No effect | Brokers have discretion to vote |
Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers (Proposal 3) | For, Against or Abstain | The affirmative vote of a majority of the votes cast at the Annual Meeting | No effect | No effect |
How many votes are needed for other matters that may be brought before the Annual Meeting?
In the event that any other matter is properly brought before the Annual Meeting, the affirmative vote of a majority of the votes cast in respect of such matter will be required for its approval. The Board knows of no other matters that will be brought before the Annual Meeting. If other matters are properly introduced, then the persons named in the proxy as the proxy holders will vote on such matters in their discretion.
Will my shares be voted if I do not provide my proxy?
If you are a stockholder of record, then your shares will not be voted if you do not vote them or provide a proxy.
If you hold your shares in street name and if your brokerage firm or bank signs and returns a proxy on your behalf that does not contain voting instructions, then your shares will count as present at the Annual Meeting for quorum purposes, but your shares will not count as a vote cast in respect of any proposal.
What if my shares are registered in more than one person’sperson’s name?
If you own shares that are registered in the name of more than one person, then each person must sign the proxy. If an attorney, executor, administrator, trustee, guardian or any other person signs the proxy in a representative capacity, then the full title of the person signing the proxy should be given and a certificate should be furnished showing evidence of appointment.
What does it mean if I receive more than one Notice?Notice?
If you receive more than one Notice, then you have multiple accounts with brokers or Broadridge, the Company’s transfer agent. Please vote all of these shares. It is recommended that you contact your broker or the Company’s transfer agent,Broadridge, as applicable, to consolidate as many accounts as possible under the same name and address. Broadridge the Company’s transfer agent, may be contacted by telephone at (877) 830-4936.
Can I change my mind after I vote?
You may change your vote at any time beforeHow are proxies solicited and what is the polls close at the annual meeting. You may do this by using one of the following methods:
voting again by telephone or over the Internet until 11:59 p.m., Eastern Daylight Time, on August 12, 2019;
giving written notice to the Company’s corporate secretary at Crown Crafts, Inc., P.O. Box 1028, Gonzales, Louisiana 70707, Attn.: Corporate Secretary;
delivering a later-dated proxy; or
voting in person at the annual meeting.
How many votes must be present to hold the annual meeting?cost?
In order for the Company to conduct the annual meeting, the holders of a majority of the shares of the Company’s Series A common stock outstanding and entitled to vote as of the record date must be present, in person or by proxy, at the annual meeting. This is referred to as a quorum. Your shares will be counted as present at the annual meeting if you do one of the following:
vote via the Internet or by telephone;
return a properly executed proxy by mail (even if you do not provide voting instructions); or
attend the annual meeting and vote in person.
How many votes are needed to elect the Class I director?
The Class I director will be elected by a plurality of the votes cast at the annual meeting, meaning that the Class I nominee receiving the most votes will be elected as the Class I director.
How many votes are needed to ratify the appointment of KPMG as the Company’s independent registered public accounting firm for the fiscal year ending March 29, 2020?
The approval of this proposal requires the affirmative vote in favor of it of a majority of the votes cast at the annual meeting in respect of such proposal.
How many votes are needed to approve the compensation of the Company’s named executive officers?
The approval of this proposal requires the affirmative vote in favor of it of a majority of the votes cast at the annual meeting in respect of such proposal.
How many votes are needed to approve the frequency of holding future advisory votes on executive compensation?
The frequency of the advisory vote on compensation of our named executive officers that receives the greatest number of votes – every year, every other year or every three years – cast by stockholders will be considered the stockholders’ preferred frequency with regard to how often an advisory vote regarding the compensation of the Company’s named executive officers should be submitted to the Company’s stockholders.
How many votes are needed for other matters that may be brought before the annual meeting?
In the event that any other matter is properly brought before the annual meeting, the affirmative vote in favor of such matter of a majority of the votes cast in respect of such matter will be required for its approval. The board of directors knows of no other matters that will be brought before the annual meeting. If other matters are properly introduced, the persons named in the proxy as the proxy holders will vote on such matters in their discretion.
Will my shares be voted if I do not provide my proxy?
If you hold your shares directly in your own name, they will not be voted if you do not vote them or provide a proxy. However, your shares may be voted under certain circumstances where you do not provide a proxy if they are held in the name of a brokerage firm. Brokerage firms have the authority under stock exchange rules to vote customers’ unvoted shares on “routine” matters, which include the ratification of the appointment of the Company’s independent registered public accounting firm. Accordingly, if a brokerage firm votes your shares on these matters in accordance with these rules, your shares will count as present at the annual meeting for purposes of establishing a quorum and will count as “for” votes or “against” votes, as the case may be. If a brokerage firm signs and returns a proxy on your behalf that does not contain voting instructions, your shares will count as present at the annual meeting for quorum purposes, but your shares will not count as a vote cast in respect of any proposal. These are referred to as “broker non-votes.”
Where do I find the voting results for the annual meeting?
The Company will announce preliminary voting results at the annual meeting. The final voting results will be tallied by the inspector of election at the annual meeting and subsequently published in the Company’s Current Report on Form 8-K, which the Company is required to file with the SEC within four business days following the annual meeting.
Who can help answer my questions?
You can contact our corporate secretary, Olivia Elliott, by telephone at (225) 647-9100 or by writing to Crown Crafts, Inc., P.O. Box 1028, Gonzales, Louisiana 70707, Attn.: Corporate Secretary, with any questions about the proposals described in this proxy statement or how to execute your vote.
THE ANNUAL MEETING
General
This proxy statement is being furnished to you, as a stockholder of Crown Crafts, Inc., as part of the solicitation of proxies by the Company’s board of directors for use at the annual meeting to be held on August 13, 2019 and any adjournment or postponement thereof.
Date, Time, Place and Purpose of the Annual Meeting
The annual meeting will be held at the Company’s executive offices, located at 916 South Burnside Avenue, Third Floor, Gonzales, Louisiana, on August 13, 2019, at 10:00 a.m., Central Daylight Time.
The annual meeting is being held for the following purposes, which are more fully described in this proxy statement:
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Recommendations of the Board of Directors
The board of directors has unanimously determined to recommend that stockholders vote (i) “FOR” the Class I director nominee; (ii) “FOR” the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for the fiscal year ending March 29, 2020; (iii) “FOR” the approval of the compensation of the Company’s named executive officers; and (iv) “FOR” the option of once every three years as the preferred frequency for an advisory vote on executive compensation.
Record Date and Voting Power
Only holders of record of Crown Crafts Series A common stock at the close of business on the record date, June 14, 2019, are entitled to notice of and to vote at the annual meeting. As of the record date, there were 10,119,355 shares of Crown Crafts Series A common stock outstanding and entitled to vote at the annual meeting, held by 156 holders of record. A list of the Company’s stockholders will be available for review at the Company’s executive offices during regular business hours for a period of ten days before the annual meeting.
Each holder of Crown Crafts Series A common stock is entitled to one vote for each share of Crown Crafts Series A common stock he or she owned as of the record date. Cumulative voting is not permitted, and stockholders are not entitled to appraisal or dissenters’ rights with respect to any matter to be voted on at the annual meeting.
Quorum and Vote Required
A quorum of stockholders is necessary to transact business at the annual meeting. The presence, in person or by proxy, of shares of Crown Crafts Series A common stock representing a majority of the shares of Crown Crafts Series A common stock outstanding and entitled to vote on the record date is necessary to constitute a quorum at the annual meeting. Abstentions and broker “non-votes” will count as present for establishing a quorum at the annual meeting.
Directors are elected by a plurality of the votes cast, meaning that the Class I nominee receiving the most properly cast votes will be elected as the Class I director. Each of the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm and the approval of the compensation of the Company’s named executive officers requires the affirmative vote in favor of such proposal of a majority of the votes cast at the annual meeting in respect of such proposal. The frequency of the advisory vote on compensation of our named executive officers that receives the greatest number of votes – every year, every other year or every three years – cast by stockholders will be considered the stockholders’ preferred frequency with regard to how often an advisory vote regarding the compensation of the Company’s named executive officers should be submitted to the Company’s stockholders. If a quorum is not present at the annual meeting, then it is expected that the annual meeting will be adjourned or postponed to solicit additional proxies.
As of the record date, the Company’s directors and executive officers as a group beneficially owned and were entitled to vote approximately 1,278,059 shares of Crown Crafts Series A common stock, or approximately 12.63% of the outstanding shares of Crown Crafts Series A common stock on that date.
Voting Your Shares
You may vote by proxy or in person at the annual meeting.
Voting in Person. If you plan to attend the annual meeting and wish to vote in person, you will be given a ballot at the annual meeting. Please note, however, that if your shares are held in “street name,” which means your shares are held of record by a brokerage firm, bank or other nominee holder, and you wish to vote at the annual meeting, you must bring to the annual meeting a proxy from the record holder of the shares authorizing you to vote at the annual meeting.
Voting by Proxy. Even if you plan to attend the annual meeting, you should vote your proxy over the Internet, by telephone or, if you receive a paper proxy card in the mail, by mailing the completed proxy card. You can always change your vote at the annual meeting. Unless you change your vote at the annual meeting, your latest dated vote before the annual meeting will be the vote counted. Voting instructions are included on your proxy. If you properly grant your proxy and submit it to the Company in time to vote, one of the individuals named as your proxy will vote your shares as you have directed. If no instructions are indicated on a properly executed proxy or voting instruction, the shares will be voted according to the recommendations of the board of directors as follows: (i) “FOR” the Class I director nominee; (ii) “FOR” the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for the fiscal year ending March 29, 2020; (iii) “FOR” the approval of the compensation of the Company’s named executive officers; and (iv) “FOR” the option of once every three years as the preferred frequency for an advisory vote on executive compensation. If other matters come before the annual meeting, the shares represented by proxies will be voted, or not voted, by the individuals named in the proxies in their discretion.
If you are the stockholder of record of your shares, you may deliver your voting instructions by telephone or over the Internet or, if you requested to receive a printed proxy card in the mail, by completing the proxy card and signing, dating and returning it in the included pre-addressed, postage-paid envelope. To be valid, a returned proxy card must be properly signed and dated.
If you are not the record holder of your shares, you must provide the record holder of your shares with instructions on how to vote your shares. If your shares are held by a brokerage firm, bank or other nominee holder, that brokerage firm, bank or nominee may allow you to deliver your voting instructions by telephone or over the Internet. Stockholders whose shares are held by a brokerage firm, bank or other nominee should refer to the voting instruction card forwarded to them by that brokerage firm, bank or nominee holding their shares.
Revoking a Proxy
You may revoke your proxy at any time before it is voted at the annual meeting by (i) delivering to the secretary of Crown Crafts a signed notice of revocation bearing a date later than the date of the proxy and stating that the proxy is revoked, (ii) granting a new proxy relating to the same shares and bearing a later date (which, if you intend to do by telephone or over the Internet, you may do only until 11:59 p.m., Eastern Daylight Time, on August 12, 2019) or (iii) attending the annual meeting and voting in person. Written notices of revocation and other communications with respect to the revocation of proxies should be addressed to Crown Crafts, Inc., P.O. Box 1028, Gonzales, Louisiana 70707, Attn.: Corporate Secretary.
If your shares are held in the name of a brokerage firm, bank or other nominee, you may change your vote by submitting new voting instructions to your brokerage firm, bank or other nominee. You must contact your broker, bank or other nominee to find out how to do so. However, since you are not the stockholder of record in that case, you may not change your vote by voting those shares in person at the annual meeting unless you receive a valid proxy from your brokerage firm, bank or other nominee holder authorizing you to vote at the annual meeting.
Abstentions and Broker Non-Votes
Shares of Crown Crafts Series A common stock for which the Company has received proxies but with respect to which holders of those shares have chosen to abstain from voting will be counted as present at the annual meeting for purposes of determining the presence or absence of a quorum for the transaction of business at the annual meeting but will not count as a vote cast in respect of the election of directors or any other proposal with respect to which the stockholder has chosen to abstain. As a result, those shares will not be included in the vote totals for such proposal and, therefore, will have no effect on such proposal.
Brokers are prohibited in certain circumstances from exercising discretionary authority for beneficial owners who have not returned proxies to the brokers (so-called “broker non-votes”). In these circumstances, those shares will be counted for the purpose of determining if a quorum is present, but such shares will not be included in the vote totals and, therefore, will have no effect on any proposal. Under the rules that govern brokers, brokers do not have discretionary authority to vote on the election of directors or on executive compensation matters; however, brokers have discretionary authority to vote on the ratification of the Company’s independent registered public accounting firm and may choose to do so.
All votes will be tabulated by the inspector of elections for the annual meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.
Solicitation of Proxies
Crown Crafts will bear all costs incurred on behalf of the Company’s board of directorsBoard in connection with its solicitation of proxies from the holders of Crown Crafts Series A common stockCommon Stock for the annual meeting,Annual Meeting, including any costs associated with printing and mailing proxy materials for those stockholders who request to receive printed versions of them.
In addition, directors, officers and employees of Crown Craftsthe Company and its subsidiaries may solicit proxies by mail, personal interview, telephone, email or facsimile transmission without additional compensation. The Company may also solicit proxies through press releases and postings on its website at www.crowncrafts.com. Arrangements will be made with brokerage houses, voting trustees, banks, associations and other custodians, nominees and fiduciaries, who are record holders of the Company’s Series A common stockCommon Stock not beneficially owned by them, for forwarding these proxy materials to, and obtaining proxies from, the beneficial owners of such stock entitled to vote at the annual meeting. Crown CraftsAnnual Meeting. The Company will reimburse these persons for their reasonable expenses incurred in doing so.
Other BusinessHow will votes be counted?
All votes will be tabulated by the inspector of elections for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.
Where do I find the voting results for the Annual Meeting?
The Company does not expect thatwill announce preliminary voting results at the Annual Meeting. The final voting results will be tallied by the inspector of elections at the Annual Meeting and subsequently published in the Company’s Current Report on Form 8-K, which the Company is required to file with the SEC within four business days following the Annual Meeting.
Who can help answer my questions?
You can contact our Corporate Secretary, Craig J. Demarest, by telephone at (225) 647-9100 or by writing to Crown Crafts, Inc., P.O. Box 1028, Gonzales, Louisiana 70707, Attn.: Corporate Secretary, with any matter other thanquestions about the proposals presenteddescribed in this proxy statement will be brought before the annual meeting. However, if other matters are properly presented at the annual meetingProxy Statement or any adjournment or postponement of the annual meeting, the persons named as proxies will vote in their discretion with respecthow to those matters.execute your vote.
CORPORATE GOVERNANCE
Our board of directorsThe Board is committed to maintaining sound and effective corporate governance principles and believes that strong corporate governance is critical to achieving our performance goals and to maintaining the trust and confidence of stockholders, employees, suppliers, customers and regulatory agencies. The boardBoard regularly reviews the Company’s corporate governance practices in light of proposed and adopted laws and regulations, the practices of other leading companies, the recommendations of various corporate governance authorities and the expectations of our stockholders.
The board of directorsBoard is responsible for establishing broad corporate policies of the Company, monitoring the Company’s overall performance and ensuring that the Company’s activities are conducted in a responsible and ethical manner. However, in accordance with well-established corporate legal principles, the board of directorsBoard is not involved in the Company’s day-to-day operating matters. Members of the boardBoard are kept informed about the Company’s business by participating in boardBoard and committee meetings, by reviewing analyses and reports provided to them by the Company and through discussions with the chairmanChairman of the board, the lead directorBoard and officers of the Company.
Each non-employee member of the boardBoard is “independent,” as defined for purposes of the rules of the SEC, the listing standards of The Nasdaq Stock Market (“Nasdaq”“Nasdaq”) and Section 162(m) of the Internal Revenue Code of 1986, as amended (the “IRC”“Code”). For a director to be considered independent, the boardBoard must determine that the director does not have a relationship with the Company that would interfere with the exercise of his or her independent judgment in carrying out his or her responsibilities of a director. In making this determination, the boardBoard considers all relevant facts and circumstances, including any transactions or relationships between the director and the Company or its subsidiaries.
Code of Business Conduct and Ethics;Ethics; Code of Conduct for Directors
The Company has adopted a Code of Business Conduct and Ethics that is applicable to all directors and employees, including the Company’s chief executive officerChief Executive Officer and chief financial officer.Chief Financial Officer. The Code of Business Conduct and Ethics covers topics such topics as conflicts of interest, insider trading, competition and fair dealing, discrimination and harassment, health and safety, confidentiality, payments to governmental personnel and compliance procedures. The Code of Business Conduct and Ethics is posted on the Company’s website at www.crowncrafts.com. In addition, the Company has also adopted a Code of Conduct for Directors, which is also posted on the Company’s website at www.crowncrafts.com.
During fiscal year 2019,2022, the Company’s board of directorsBoard had the following standing committees: audit committee; compensation committee; nominatingAudit Committee, Compensation Committee, Nominating and corporate governance committee;Governance Committee, and capital committee. Committee membership and theCapital Committee. The responsibilities assigned by the board of directorsBoard to each of these committees are briefly described below.
Audit Committee. The board of directors met six times during fiscal year 2019. Each director attended all of the meetings of the board and committees of which he or she was a member during fiscal year 2019. All board members attended the Company’s annual meeting held in 2018, and all members of the board have been requested to attend the 2019 annual meeting. Although the Company has no formal policy with respect to board members’ attendance at the Company’s annual meeting of stockholders, it is customary for all board members to attend the annual meeting.
Audit Committee
The audit committee is currently comprised of three members,directors, none of whom is a current or former employee of the Company or any of its subsidiaries and all of whom are, in the opinion of the board,Board, free from any relationship that would interfere with the exercise of their independent judgment in the discharge of the audit committee’sAudit Committee’s duties. See “Report of the Audit Committee.” The current members of the audit committeeAudit Committee are Donald Ratajczak (Chair), Sidney Kirschner and Patricia Stensrud. The audit committeeAudit Committee has adopted a formal, written charter, which has been approved by the full boardBoard and which specifies the scope of the audit committee’sAudit Committee’s responsibilities and how it should carry them out. The complete text of the audit committeeAudit Committee charter is available on the Company’s website at www.crowncrafts.com.www.crowncrafts.com.
The audit committeeAudit Committee represents the boardBoard in discharging its responsibility relating to the accounting, reporting and financial practices of the Company and its subsidiaries. Its primary functions include monitoring the integrity of the Company’s financial statements and system of internal controls and the Company’s compliance with regulatory and legal requirements; monitoring the independence, qualifications and performance of the Company’s independent auditor; and providing a line of communication among the independent auditor, management and the board. The audit committee met four times during fiscal year 2019. Executive sessions were held with the Company’s independent auditor at each of these meetings.Board.
Compensation Committee. The Compensation Committee
The compensation committee is currently comprised of three directors, Zenon S. Nie (Chair), Sidney Kirschner and Patricia Stensrud, none of whom is a current or former employee of the Company or any of its subsidiaries and all of whom are, in the opinion of the board,Board, free from any relationship that would interfere with the exercise of their independent judgment in the discharge of the compensation committee’sCompensation Committee’s duties. The compensation committeeCompensation Committee has adopted a formal, written charter, which has been approved by the full boardBoard and which specifies the scope of the compensation committee’sCompensation Committee’s responsibilities and how it should carry them out. The complete text of the compensation committeeCompensation Committee charter is available on the Company’s website at www.crowncrafts.com. www.crowncrafts.com.
The duties of the compensation committeeCompensation Committee are generally to establish the compensation for the Company’s executive officers and to act on such other matters relating to compensation as it deems appropriate, including an annual evaluation of the Company’s chief executive officerChief Executive Officer and the design and oversight of all compensation and benefit programs in which the Company’s employees and officers are eligible to participate. The compensation committee met two times during fiscal year 2019.
NominatingNominating and CorporateGovernance Committee. The Nominating and Governance Committee
The nominating and corporate governance committee is currently comprised of three directors, Zenon S. Nie (Chair), Sidney Kirschner and Donald Ratajczak, none of whom is a current or former employee of the Company or any of its subsidiaries and all of whom are, in the opinion of the board,Board, free from any relationship that would interfere with the exercise of their independent judgment in the discharge of the nominatingNominating and corporate governance committee’sGovernance Committee’s duties. The nominatingNominating and corporate governance committeeGovernance Committee has adopted a formal, written charter, which has been approved by the full boardBoard and which specifies the scope of the nominatingNominating and corporate governance committee’sGovernance Committee’s responsibilities and how it should carry them out. The complete text of the nominatingNominating and corporate governance committeeGovernance Committee charter is available on the Company’s website at www.crowncrafts.com. The nominating and corporate governance committee met three times during fiscal year 2019.
The nominatingNominating and corporate governance committeeGovernance Committee has the general responsibility for overseeing the Company’s corporate governance practices and for identifying, reviewing and recommending to the boardBoard individuals to be nominated for election to the board.Board. The nominatingNominating and corporate governance committeeGovernance Committee will also consider any director candidate proposed in good faith by a stockholder of the Company. To do so, a stockholder should send the director candidate’s name, credentials, contact information and his or her consent to be considered as a candidate to the corporate secretary of the Company.Company’s Corporate Secretary. The proposing stockholder should also include his or her contact information and a statement of his or her share ownership (how(i.e., how many shares of Crown Crafts Series A common stockCommon Stock the proposing stockholder owns and how long such shares have been held), as well as any other information required by the Company’s bylaws.
Capital Committee. The Capital Committee
The capital committee is currently comprised of fourthree directors, Patricia Stensrud (Chair), E. Randall Chestnut, Zenon S. Nie and Donald Ratajczak. With the exception of Mr.E. Randall Chestnut nonewas a member of the directorsCapital Committee until his resignation from the Board effective May 1, 2022. None of the current members of the Capital Committee is a current or former employee of the Company or any of its subsidiaries, and such directors, in the opinion of the board,Board, are free from any relationship that would interfere with the exercise of their independent judgment in the discharge of the capital committee’sCapital Committee’s duties. The capital committeeCapital Committee has adopted a formal, written charter, which has been approved by the full boardBoard and which specifies the scope of the capital committee’sCapital Committee’s responsibilities and how it should carry them out. The complete text of the capital committeeCapital Committee charter is available on the Company’s website at www.crowncrafts.com.
The capital committeeCapital Committee is responsible for overseeing and making recommendations with respect to certain capital market transactions, including stock repurchases and dividend payments.
The capital committeefollowing table provides a summary of the membership of the Board and its committees since the beginning of fiscal year 2022, together with information regarding the number of meetings held during fiscal year 2022.
Director Name | Independent | Audit Committee | Compensation Committee | Nominating Committee | Capital Committee |
Randall Chestnut(1) | No | ✔ | |||
Sidney Kirschner | Yes | ✔ | ✔ | ✔ | |
Zenon S. Nie | Yes | ✔* | ✔* | ✔ | |
Donald Ratajczak | Yes | ✔* | ✔ | ✔ | |
Patricia Stensrud | Yes | ✔ | ✔ | ✔* | |
Number of Meetings | 4(2) | 11(3) | 7(3) | 4 |
* Chair
(1) Mr. Chestnut resigned from the Board effective May 1, 2022.
(2) Executive sessionswere held with the Company’s independent auditor at each of these meetings.
(3) The number of meetings of the Compensation Committee and the Nominating and Governance Committee each include five joint meetings of the two committees.
The Board met foursix times during fiscal year 2019.2022. Each director attended all of the meetings of the Board and committees of which he or she was a member during fiscal year 2022. All Board members attended the Company’s annual meeting of stockholders held in 2021, and all members of the Board have been requested to attend the Annual Meeting. Although the Company has no formal policy with respect to Board members’ attendance at the Company’s annual meeting of stockholders, it is customary for all Board members to attend.
On April 14, 2022, the Company and Mr. Chestnut agreed that he would retire from the Company effective May 1, 2022 and, in connection therewith, he resigned his position as a director of the Company, and all other positions he held with the Company, effective as of such date. Also on April 14, 2022, the Board appointed: (i) Olivia W. Elliott, the Company’s President and Chief Executive Officer, as a director of the Company, effective May 1, 2022, to fill the vacancy created by Mr. Chestnut’s resignation; and (ii) Mr. Nie, then the Lead Director of the Board, to serve as Chairman of the Board, effective May 1, 2022, replacing Mr. Chestnut in such role. Mr. Nie ceased serving as the Lead Director upon commencing his service as Chairman of the Board.
Identifying and Evaluating Nominees
With respect to the nomination process, the nominatingNominating and corporate governance committeeGovernance Committee reviews the composition and size of the boardBoard to ensure that it has the proper expertise and independence; determines the criteria for the selection of boardBoard members and boardBoard committee members; establishes criteria for qualifications as independent directors, consistent with applicable laws and listing standards; maintains a file of suitable candidates for consideration as nominees to the board;Board; reviews boardBoard candidates recommended by stockholders in compliance with all director nomination procedures for stockholders; and recommends to the boardBoard the slate of nominees of directors to be elected by the stockholders and any directors to be elected by the boardBoard to fill vacancies.
The nominatingNominating and corporate governance committeeGovernance Committee will evaluate candidates for election to the boardBoard based on their financial literacy, business acumen and experience, independence and willingness, ability and availability for service. This may include consideration of factors such as the following:
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Whether the potential nominee has leadership, strategic or policy-setting experience in a complex organization, including not only a corporate organization but also any governmental, educational or other non-profit organization;
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Whether the potential nominee has experience and expertise that is relevant to the Company’s business, including any specialized business experience, technical expertise or industry expertise, and whether the potential nominee has knowledge regarding issues affecting the Company;
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Whether the potential nominee is highly accomplished in his or her respective field;
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Whether the potential nominee has high ethical character and a reputation for honesty, integrity and sound business judgment;
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Whether the potential nominee is free of any conflict of interest or the appearance of any conflict of interest and whether he or she is willing and able to represent the interests of all stockholders;
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Any factor affecting the ability or willingness of the potential nominee to devote sufficient time to the Board’s activities and to enhance his or her understanding of the Company’s business; and
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How the potential nominee would contribute to diversity, with a view toward the needs of the Board as a whole. |
Additionally, with respect to an incumbent director whom the nominatingNominating and corporate governance committeeGovernance Committee is considering as a potential nominee for re-election, the committeeNominating and Governance Committee will review and consider the incumbent director’s service during his or her term, including the number of meetings attended, level of participation and overall contribution to the Company. The manner in which the committeeNominating and Governance Committee evaluates a potential nominee will not differ based on whether the potential nominee is recommended by a stockholder.
The nominatingNominating and corporate governance committeeGovernance Committee has not adopted a formal policy with regard to the consideration of diversity in identifying director nominees, although the committee and the boardBoard are committed to a diversified membership. When identifying and recommending director nominees, the members of the committee generally view diversity expansively to include, without limitation, concepts such as race, gender, national origin, differences of viewpoint and perspective, professional experience, education, skill and other qualities or attributes that together contribute to the functioning of the board.Board.
The following table provides information about the diversity of the Board in a standardized matrix as required by Nasdaq Rule 5606:
Board Diversity Matrix | ||||
Total Number of Directors – 5 |
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Part I: Gender Identity | Female | Male | Non-Binary | Did Not |
Directors | 2 | 2 |
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Part II: Demographic Background | ||||
African American or Black |
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Alaskan Native or American Indian |
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Asian |
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Hispanic or Latinx |
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Native Hawaiian or Pacific Islander |
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White | 2 | 2 |
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Two or More Races or Ethnicities |
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LGBTQ+ |
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Did Not Disclose Demographic Background | 1 | |||
The board of directors believes that having a single leader servingBoard is currently led by Mr. Nie, as chairmanChairman of the board and chief executive officer, together withBoard, who is an experienced and engaged lead director, isindependent director. Upon the most appropriate leadership structure forresignation of Mr. Chestnut as the board at this time.
Combining the roles of chairmanChairman of the boardBoard, the Board determined to separate the positions of Chief Executive Officer and chief executive officer makes clear that the person serving in these roles has primary responsibility for managing the Company’s business, subject to the oversight and reviewChairman of the board. Under this structure, E. Randall Chestnut, the current chairmanBoard in recognition of the boarddifferences between the two roles. The Chief Executive Officer is responsible for our strategic direction, day-to-day leadership and chief executive officer, chairs board meetings, whereperformance while the board discusses strategic and business issues. The board believes that this approach is preferable because the chief executive officer is the individual with primary responsibility for implementing the Company’s strategy, directing the work of other officers and leading implementationChairman of the Company’s strategic plans as approved byBoard, in consultation with the board. This structure creates a single leader who is directly accountable toChief Executive Officer, sets the boardagenda for and through the board, to stockholders, and enables the chief executive officer to act as the key link between the board and other members of management. In addition, Mr. Chestnut personally brings to the combined role of chairmanpresides over meetings of the board and chief executive officer a long history with Crown Crafts.
Because the board also believes that strong, independent board leadership is a critical aspect of effective corporate governance, the board has established the position of lead director. The lead director, who must be independent, is elected by the independent directors. The lead director presides over executive sessions of the independent directors, consults with the chairman of the board,Board, oversees the flow of information to the boardBoard and acts as a liaison between the non-employee directors and management. As
In addition, we believe that the primary interface betweenseparation of the chief executive officerpositions of Chief Executive Officer and Chairman of the Board at this time will facilitate the transition of the Company’s new Chief Executive Officer who was appointed effective March 1, 2022, and provide for more effective monitoring and objective evaluation of the Chief Executive Officer’s performance. The separation of these leadership roles also allows the Chairman of the Board to strengthen the Board’s independent oversight of our performance and governance standards. With the separation of the positions of Chief Executive Officer and Chairman of the Board, the Board has eliminated the role of Lead Director, which was previously held by Mr. Nie during fiscal year 2022.
Another important component of the Board’s leadership structure is the role of its committees. The Board has delegated certain oversight functions to its four standing committees — the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, and the board, the lead director provides a valuable counterweightCapital Committee. These committees regularly report back to the combined chairmanBoard with specific findings and recommendations in their areas of oversight and also consult and work with the board and chief executive officer role. The lead director also serves as a focal point for the independent directors, thereby enhancing and clarifying the board’s independence from management. Zenon S. Nie currently serves as the lead director.Chief Executive Officer. Further information about these four committees is provided above in “ – Board Committees.”
We believe that the Board’s leadership structure, policies, and practices, when combined with our other governance policies and procedures, function well in:
Strengthening Board leadership;
Fostering cohesive decision making at the Board level;
Solidifying director collegiality;
Improving problem solving; and
Enhancing strategy formulation and implementation.
As noted above, the Company’s business and affairs are managed under the direction of its board of directors.Board. This includes the board’sBoard’s overseeing the type and amount of risk undertaken by the Company. In discharging its oversight responsibilities, the boardBoard relies on a combination of the business experience of its members and the expertise and business experience of the Company’s officers and employees, as well as, from time to time, advice of various consultants and experts. An appropriate balancing of risks and potential rewards with the long-term goals of the Company is, and historically has been, implicit in the decisions and policies of the board.Board. Because risk oversight is so thoroughly made a part of all boardBoard deliberations and discussions, no special provision has been made for that oversight in the board’sBoard’s leadership structure, except in connection with (i) the role of the audit committee,Audit Committee, which has responsibility for overseeing the Company’s risk management programs and policies.policies; and (ii) the role of the Compensation Committee, which has responsibility for assessing the risks associated with the Company’s compensation programs.
The audit committeeAudit Committee focuses on financial reporting risk, oversees the entire audit function and evaluates the effectiveness of internal and external audit efforts. It receives reports from management regularly regarding the Company’s assessment of risks and the adequacy and effectiveness of internal control systems. The audit committeeAudit Committee reports regularly to the full boardBoard and is required by its charter to discuss at least annually with management and the Company’s independent auditor the adequacy of the Company’s risk management programs and policies, including any recommendations the committee may have for improvements in those areas.
Certain Relationships and Related Transactions
Related Party Transactions Policy and Procedure
The Company’s written related party transactions policy provides that we will only enter into or ratify a transaction with a related party when our board of directors, acting through the audit committee, determines that the transaction is in the best interests of the Company and its stockholders.
For purposes of the policy, a “related party” means:
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A “related party transaction,” for purposes of the policy, includes any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which the Company or any of its subsidiaries is or will be a participant, the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year and any related party has or will have a direct or indirect interest.
We review all known relationships and transactions in which the Company and our directors, executive officers and significant stockholders or their immediate family members are participants to determine whether such persons have a direct or indirect interest. Our corporate secretary is primarily responsible for developing and implementing processes to obtain information regarding our directors, executive officers and significant stockholders with respect to related party transactions. In addition, the Company’s directors, nominees for director and executive officers are required to notify us of any potential related party transactions and provide us with information regarding such transactions. If our corporate secretary determines that a transaction is a related party transaction, then the audit committee must review the transaction at its next regularly scheduled meeting and either approve or disapprove the transaction. If the corporate secretary determines that it is impractical or undesirable to wait until the next regularly scheduled committee meeting for the audit committee to review the transaction, then the chair of the audit committee may approve the transaction and report such approval (and the rationale for such approval) to the audit committee at its next regularly scheduled meeting.
In determining whether to approve or ratify a transaction with a related party, the audit committee will take into account all of the relevant facts and circumstances available to it, including, among any other factors it deems appropriate:
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Any member of the audit committee who is a related party with respect to a transaction under review may not participate in the deliberations or vote on the approval of the transaction.
If a related party transaction will be ongoing, the audit committee may establish guidelines for the Company to follow in its ongoing dealings with the related party. Thereafter, the audit committee, on at least an annual basis, will review and assess ongoing relationships with the related party to monitor compliance with the audit committee’s guidelines and to determine whether the related party transaction remains appropriate.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended March 31, 2019,2022, Messrs. Nie and Kirschner and Ms. Stensrud served as members of the compensation committee.Compensation Committee. None of them is or has been an officer or employee of the Company.
Communication with the Board and its Committees
Any stockholder may communicate with the boardBoard by directing correspondence to the board,Board, any of its committees or one or more of its individual members, in care of the corporate secretary,Company’s Corporate Secretary, at Crown Crafts, Inc., P.O. Box 1028, Gonzales, Louisiana 70707.
PROPOSAL 1 – ELECTION OF DIRECTORS
The Company has a classified boardBoard currently consisting of one Class I director (E. Randall Chestnut)(Olivia W. Elliott), two Class II directors (Sidney Kirschner and Zenon S. Nie) and two Class III directors (Donald Ratajczak and Patricia Stensrud). At each annual meeting of stockholders, directors are duly elected for a full termto the Board to serve until the third ensuing annual meeting of three years to succeed those directors whose termsstockholders and until their successors are expiring. elected and qualified or until their earlier death, resignation or removal from office.
The Class I director currently serves until the 2019 annual meeting,Annual Meeting, and the Class II and Class III directors currently serve until the Company’s annual meetings of stockholders to be held in 20212024 and 2020,2023, respectively.
Pursuant to the Company’s bylaws, the board of directorsBoard has fixed its membership at five directors.
At the 2019 annual meeting,Annual Meeting, one Class I director will be elected to hold officethe Board to serve until the 2022Company’s annual meeting of stockholders.stockholders to be held in 2025 and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal from office. The board of directorsBoard has nominated E. Randall ChestnutOlivia W. Elliott for re-electionelection to the board of directorsBoard as athe Class I nominee. Mr. ChestnutMs. Elliott has consented to serve and be named in this proxy statementProxy Statement and will serve as a director, if elected, for hisher term and until hisher successor shall be elected and shall qualify, except as otherwise provided in the Company’s bylaws.
If you properly grant your proxy and submit it to the Company in time to vote, the proxy holder will vote your shares “for” the election of Mr. ChestnutMs. Elliott unless you have specifically indicated by proper proxy that your shares should be withheld from voting for him.her. Proxies cannot be voted at the annual meetingAnnual Meeting for a greater number of persons than the number of nominees named.
Recommendation of the Board of Directors
The board of directors unanimously recommends a vote “FOR” the Class I nominee discussed below. Proxies will be voted “FOR” the election of this nominee unless otherwise specified.
Class I Nominee
The following person is the nominee for a Class I directorship with a term ending in 2022:2025:
Name | Age | Director Service |
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E. Randall ChestnutOlivia W. Elliott was appointed to the Board, effective May 1, 2022. She is a Certified Public Accountant and assumed the role of the Company’s President and Chief Executive Officer in March 2022, after serving as the Company’s President and Chief Operating Officer since January 2021, and the Company’s Vice President and Chief Financial Officer since September 2008. She continued to serve as the Company’s Chief Financial Officer until February 2021. She joined the Company in January 1995November 2001 as Vice President, Corporate Development. Since then, he has been an executiveSecretary and Treasurer. She began her career in public accounting in 1991 with Deloitte & Touche LLP, where she worked for more than three years, after which she worked for seven years in finance and treasury functions with two public companies.
Recommendation of the Company, and in July 2001, he was elected President, Chief Executive Officer and ChairmanBoard of the Board.Directors
| The Board unanimously recommends a vote “FOR” the Class I nominee discussed above. Proxies will be voted “FOR” the election of this nominee unless otherwise specified. |
The following persons are the Class II and Class III directors of the Company, with terms expiring as set forth below:
Director | Age | Director Service | Expiration of Current Term | Age | Director Service | Director | Expiration of Current Term |
Sidney Kirschner | 84 | 2001 – present | 2021 | 87 | 2001 – present | II | 2024 |
Zenon S. Nie | 68 | 2001 – present | 2021 | 71 | 2001 – present | II | 2024 |
Donald Ratajczak (2) | 76 | 2001 – present | 2020 | ||||
Dr. Donald Ratajczak | 79 | 2001 – present | III | 2023 | |||
Patricia Stensrud | 71 | 2011 - present | 2020 | 74 | 2011 – present | III | 2023 |
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Sidney Kirschner is currentlyhas served as Executive Vice President of Piedmont Healthcare and Chief Philanthropy Officer of the Piedmont Healthcare Foundation.Foundation since 2010. Mr. Kirschner previously served as Head of School at the Alfred & Adele Davis Academy from 2007 to 2010 and as Chairman of the Board, President and Chief Executive Officer of Northside Hospital, Atlanta, Georgia, from 1992 to 2004. From 1987 to 1992, he served as Chairman of the Board, Chief Executive Officer and President of National Service Industries, Inc., formerly a Fortune 500 company listed on the New York Stock Exchange. Mr. Kirschner has served on the board of directors of numerous community organizations. He is a member of the board of directors of Superior Uniform Group, Inc. and Cleveland Group, Inc.
Zenon S. Nieis was appointed Chairman of the Board of the Company, effective May 1, 2022. Mr. Nie served as Lead Director from August 2009 until he commenced serving as Chairman of the Board. He has served since 2001 asChairman of the Board, President and Chief Executive Officer of the CEO Advisory Board LLC, a management consulting firm he founded in 2000, and since 2001 has also been an operating partner in Tri-Artisan Partners, which merged with Morgan Joseph to form Morgan Joseph TriArtisan LLC in January 2011. From 1993 to 2000, he was Chairman of the Board, President, Chief Executive Officer and Chief Operating Officer of Simmons Company, a billion-dollar international manufacturer and distributor of mattresses. From 1991 to 1993, he was President of the Consumer Home Fashion division of the Bibb Company, which included the Juvenile Products textile division. Prior to that, he was President of Serta Incorporated and held other senior executive positions at both Serta and Sealy Incorporated over the previous 13 years. Mr. Nie has earned the CERT Certificate in Cybersecurity Oversight for directors from the Software Engineering Institute at Carnegie Mellon University and is a National Association of Corporate Directors (“NACD”) Board Leadership Fellow.
Dr. DonaldRatajczak recently retired as thea consulting economist, having served in such role from 1983 until 2018 for various financial institutions/investment banks, most recently Raymond James. He served from 2000 to Raymond James and was2003 as the former Chairman and Chief Executive Officer of Brainworks Ventures, Inc., an enterprise development company he founded in 2000. He is also Regent’s Professor Emeritus at the Robinson College of Business at Georgia State University. From 1997 to 2000, he was Regent’s Professor of Economics at Georgia State University, and from 1973 to 1997, he was a Professor or Associate Professor in that department. He is also the founder, and from 1973 to 2000 was the Director of the Economic Forecasting Center at Georgia State University. He was a director of Assurance AmericaAssuranceAmerica from 2003 until 2015, Citizens Bancshares from 2003 until 2014, and Ruby Tuesday from 1981 until 2012.
Patricia Stensrud is the founder of Hudson River Partners LLC, established in 2003, where she serves as principal and managing partner, overseeing private real estate investment and M&A advisory for start-up and acquisition initiatives. She also serveshas served since 2016 as a Managing Director forwith Avalon Securities LLC, a New York-based boutique investment bank where she provides financial and strategic business advisory services to lower- and middle-market companies with clients encompassing a mix of private and public companies as well as private equity funds in domestic and international markets. She is also the Founder and Managing Partner of Hudson River Partners, LLC, an advisory and real estate investment firm. Her C-suite operating expertise, market strategy advisory, assessing and managing transaction opportunities, and sourcing capital.background covers a range of industry sectors. From May 2011 through November of 2015, Ms. Stensrud served as President of A&H Worldwide, a leading packaging company with global operations in the United States, China and the United Kingdom. Between December 2005 and December of 2010, through Hudson River Partners, her focus was on M&A activity within the fashion and accessories industry. From January 2005 until November 2005, she worked with Tommy Hilfiger USA where she served as President of the Women’s Sportswear Division prior to relocation of the company’s headquarters to Amsterdam. Prior to that she was Chief Executive Officer of Victoria + Co, a division of Jones Apparel Group in addition to having held leadership positions with Avon Products and IBM. Ms. Stensrud served as a member of the board of directors of Christopher & Banks Corporation from 2011 through June of 2016, and is Board Chair Emeritus for the Girl Scouts Council of Greater New York. In April 2016, Ms. Stensrud achieved qualification asShe is a credentialedrecognized NACD Board Leadership Fellow with NACD.Fellow.
The directors believe that their combined business and professional experience and expertise makesmake them a valuable resource to management and qualifiesqualify them for service on the board.Board. Many of the Company’s current directors, including Messrs. Kirschner, Nie and Ratajczak, have served on the boardBoard since the reorganization of Crown Crafts in 2001. Mr. ChestnutMs. Elliott has been with the Company including serving as a director, for over 20 years.years and was appointed to the Board in May of 2022. During their tenures, these directors and nomineesnominee have gained considerable institutional knowledge about the Company, its operations and its industry, which has made them effective directors. Continuity of service and this development of institutional knowledge help make the Company’s boardBoard more efficient and effective at developing long-range plans than it would be if there were frequent turnover in boardBoard membership.
As noted above, Mr. Chestnut isMs. Elliott has been with the Company’s longest-tenured director. HisCompany since November 2001, serving in both financial and operational leadership positions. Her perspective with respect to the Company’s progress and past challenges as both a director and an officer of the Company is essential when the boardBoard is evaluating issues and risks facing the Company. HisHer knowledge and understanding of the industry and its key players, including suppliers and customers, make Mr. Chestnut an invaluableMs. Elliott a valuable resource for the board.Board.
Mr. Kirschner brings to the Company a valuable understanding of its opportunities and the challenges it faces. During a successful and varied career, he has held top executive officer positions with a former Fortune 500 company and has served on the boards of other successful companies, including companies in the textile and manufacturing industries.
Mr. Nie is a key voice on the boardBoard with respect to strategy and growth. During his varied career, he has gained valuable perspective on management matters, having served in top executive positions with other manufacturing companies.
Dr. Ratajczak is a leading economist who is regularly called on to provide advice and guidance with respect to financial and economic matters. His considerable expertise and experience in these areas combine with his understanding of the Company’s operations to make him a significant contributor to the board.Board.
Ms. Stensrud brings to the Company extensive experience in the consumer goods and apparel industries. Her experience provides the Company with added insight into the views of retailers and suppliers alike and enables Ms. Stensrud to offer a unique and valuable perspective to the board.Board.
COMPENSATION OF DIRECTORS
Each non-employee director is paid an annual cash retainer of $40,000 with no(paid monthly) for the period through July 2022. Commencing in August 2022, each non-employee director will be paid an annual cash retainer of $50,000 (paid monthly). No additional boardBoard meeting fees are paid.
The Company’s lead directorLead Director position was paid a supplemental annual cash retainer of $30,000 (paid monthly) until the position was eliminated as of May 1, 2022. Effective May 1, 2022, the non-executive Chairman of the Board is paid an additional $20,000 for his service in that position.a supplemental annual cash retainer of $50,000 (paid monthly). Additional annual retainers are paid to committee chairs as follows: (i) audit committee chair,Audit Committee Chair, $12,000; (ii) compensation committee chair,Compensation Committee Chair, $10,000; and (iii) nominatingNominating and corporate governanceGovernance Committee Chair and capital committee chairs,Capital Committee Chair, $4,500 each. Each non-employee director receives a cash fee of $1,000 for each committee meeting attended, and eachattended.
Each non-employee director also received a restricted stock grant in August 20182021 of 7,0008,033 shares of Crown Crafts Series A common stock. Common Stock. The number of shares was determined by dividing $60,000 by the closing price of the Common Stock as reported on Nasdaq on the date of the grant. In August of 2022 (and annually thereafter), each non-employee director will receive an annual restricted stock grant on the date of the annual meeting of stockholders with the number of shares determined by dividing $75,000 by the average closing price of the Common Stock as reported on Nasdaq for the twenty trading days prior to the date of the annual meeting of stockholders. The restricted shares granted to non-employee directors have a one year vesting period.
Directors who are employees of Crown Craftsthe Company or its subsidiaries do not receive any compensation for their service as directors. However, in accordance with the terms of Mr. Chestnut’s employment agreement, he received an annual grant of shares of restricted stock in August 2021 on the same terms as the annual grant of shares made to non-employee members of the Board. These shares vested upon his retirement and resignation from the Board on May 1, 2022.
The following table sets forth information regarding compensation earned by or paid to the Company’s non-employee directors for fiscal year 2019.2022.
Name | Fees Earned or Paid in Cash (1) |
Stock Awards (2) | All Other Compensation |
Total | ||||||||
Sidney Kirschner | $49,000 | $38,024 | $ - | $ 87,024 | ||||||||
Zenon S. Nie | $83,500 | $38,024 | $ - | $121,524 | ||||||||
Donald Ratajczak | $63,000 | $38,024 | $ - | $101,024 | ||||||||
Patricia Stensrud | $54,500 | $38,024 | $ - | $ 92,524 |
Name | Fees Earned or Paid | Stock | All Other Compensation | Total |
E. Randall Chestnut | - | $60,000 | - | $60,000 |
Sidney Kirschner | $58,125 | $60,000 | - | $118,125 |
Zenon S. Nie | $99,833 | $60,000 | - | $159,833 |
Donald Ratajczak | $67,000 | $60,000 | - | $127,000 |
Patricia Stensrud | $63,500 | $60,000 | - | $123,500 |
(1) | Includes fees earned in fiscal year |
(2) | Stock awards consist of awards of unvested stock granted on August |
EXECUTIVE COMPENSATION
Executive officers of the Company are elected or appointed by the board of directorsBoard and hold office until their successors are elected or until their earlier death, resignation or removal, subject to the terms of applicable employment agreements. See “Employment,“ – Compensation Discussion and Analysis – Employment, Severance and Compensation Arrangements.” The executive officers of the Company during fiscal year 2022 are as follows:
Name | Age | Position With Company |
E. Randall Chestnut (1) |
| Chairman of the Board |
Olivia W. Elliott (2) |
| Director, President and Chief Executive Officer |
Craig J. Demarest (3) | 56 | Vice President and Chief Financial Officer |
Donna E. Sheridan |
| President and Chief Executive Officer, NoJo Baby & Kids, Inc. (“NoJo”) |
(1) |
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(2) | Ms. Elliott, a Certified Public Accountant, assumed the role of the Company’s President and Chief Executive Officer on March 1, 2022 after serving as the Company’s President and Chief Operating Officer since January 2021, and the Company’s Vice President and Chief Financial Officer since September 2008. She continued to serve as the Company’s Chief Financial Officer until February 2021. She joined |
(3) | Mr. Demarest joined the Company in February 2021 as its Chief Financial Officer. He previously served as the Chief Financial Officer of Carbo Ceramics Inc., a global technology company that provides products and services to the oil and gas, industrial and environmental markets, from September 2020 to February 2021. Prior to that, he served almost 15 years in various positions at Tidewater Inc., an NYSE listed company providing offshore marine support and transportation services to the global offshore energy industry. At Tidewater, he advanced to Vice President, Controller and Principal Accounting Officer, a position that he held from June 2008 to December 2018. He also spent almost 17 years with KPMG, serving as an Audit Partner of the firm from 1999 to 2004. |
(4) | Ms. Sheridan joined NoJo in January 2019. She was previously Senior Vice President at Lambs & Ivy for eight years. Prior to that, she served as General Manager for Disney Consumer Products over Soft Lines for North America and had previously held numerous other roles with the Walt Disney Company over a fourteen-year period, including brand management, merchandising and director roles. |
Compensation Discussion and Analysis
The compensation committee of the board of directorsCompensation Committee has overall responsibility for establishing, implementing and monitoring the Company’s compensation structure, policies and programs. The compensation committeeCompensation Committee oversees the design and implementation of strategic compensation programs for the Company’s executive officers and is responsible for assessing and approving the total compensation paid to the Company’s chief executive officerChief Executive Officer and histhe Chief Executive Officer’s compensation recommendations for other executive officers and for determining whether the compensation paid under the Company’s programs is fair, reasonable and competitive. The compensation committee’s chairCompensation Committee Chair regularly reports to the board of directorsBoard on compensation committeeCompensation Committee actions and recommendations. The Company’s compensation committeeCompensation Committee has authority to retain (at the Company’s expense) outside counsel, compensation consultants and other advisors to assist as needed.
The individuals who served as the Company’s chief executiveChief Executive and chief financial officersChief Financial Officers during fiscal year 2019,2022, as well as the other individualindividuals included in the “- Summary Compensation TableTable” below, are referred to individually, as an “executive,a “named executive officer,” and collectively, as the “named executive officers.” With respect to the named executive officers, this Compensation Discussion and Analysis identifies the Company’s current compensation philosophy and objectives and describes the various methodologies, policies and practices for establishing and administering the compensation programs of the named executive officers.
Compensation Philosophy and Objectives
The compensation committeeCompensation Committee believes that the most effective executive compensation programs are those that align the interests of the Company’s executive officers with those of its stockholders. The compensation committeeCompensation Committee further believes that a properly structured compensation program will attract and retain talented individuals and motivate them to drive stockholder value and achieve specific short- and long-term strategic objectives and that a significant percentage of executive pay should be based on the principle of pay-for-performance. However, the compensation committeeCompensation Committee also recognizes that the Company must maintain its ability to attract highly talented executives. For this reason, an important objective of the compensation committeeCompensation Committee is to ensure that the Company’s compensation program is competitive with its peer-group companies (the “compensation peer group”).
The Company’s executive compensation program is designed to provide:
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Levels of base compensation that are competitive with comparable companies;
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Annual incentive compensation that varies in a manner consistent with the achievement of individual performance objectives and financial results of the Company;
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Long-term incentive compensation that focuses executive efforts on building stockholder value through meeting longer-term financial and strategic goals; and
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Executive benefits that are meaningful and competitive with comparable companies.
In designing and administering the Company’s executive compensation program, the compensation committeeCompensation Committee attempts to strike an appropriate balance among these various elements. The compensation committeeCompensation Committee considers the pay practices of the compensation peer group to determine the appropriate pay mix and compensation levels. With respect to performance-based pay, the compensation committeeCompensation Committee believes that executive compensation should be closely tied to the financial and operational performance of the Company, as well as to the individual performance and responsibility level of the named executive officers. The compensation committeeCompensation Committee also believes that the Company’s executive compensation program should include a significant equity-based component because it best aligns the executives’ interests with those of the Company’s stockholders. For purposes of retention, the compensation committeeCompensation Committee believes that the equity-based component should have meaningful conditions to encourage valued employees to remain in the employ of the Company. Finally, the compensation committeeCompensation Committee also considers other forms of executive pay as a means to attract, retain and motivate highly qualified executives.
Methodology for Establishing Compensation
The compensation committeeCompensation Committee is comprised of three independent directors, all of whom satisfy the Nasdaq listing requirements and relevant SEC regulations. There are no interlocking relationships between any member of the compensation committeeCompensation Committee and any of our executive officers. None of the compensation committeeCompensation Committee members is an officer, employee or former officer or employee of the Company.
The compensation committeeCompensation Committee is responsible for all compensation decisions for the chief executive officerChief Executive Officer and other named executive officers. The chief executive officerChief Executive Officer annually reviews the performance of the other named executive officers, including consideration of market pay practices of the compensation peer group in conjunction with both Company and individual performance. The conclusions and recommendations of the chief executive officerChief Executive Officer are presented to the compensation committeeCompensation Committee for approval. The compensation committeeCompensation Committee has absolute discretion as to whether it approves the recommendations of the chief executive officerChief Executive Officer or makes adjustments, as it deems appropriate.
Total direct compensation includes cash, in the form of base salary and annual incentives, and long-term equity incentives. The compensation committeeCompensation Committee evaluates the mix between these three elements based on the pay practices of comparable companies.
The Compensation Committee reviews aggregate compensation data for each officer position from comparable companies included in the compensation peer group are selectedbased primarily on the basis of their comparability to the Company based oncompany size, as measured through annual revenue, market capitalization and other financial measures. Although the compensation committeeCompensation Committee also considers and reviews information from proxy statements and other relevant survey data, it particularly focuses on the compensation practices of the compensation peer groupsuch comparable companies in considering compensation levels for the chief executive officerCompany’s Chief Executive Officer and the other named executive officers. The compensation committeeCompensation Committee considers the opinions and recommendations of the chief executive officerChief Executive Officer and various outside advisers and strives to be fully informed in its determination of the appropriate compensation mix and award levels for the named executive officers. All compensation decisions take into consideration the compensation committee’sCompensation Committee’s guiding principles of fairness to employees, retention of talented executives and fostering improved Company performance, which it believes will ultimately benefit the Company’s stockholders. With respect to the named executive officers, the following describestable and text describe in greater detail the objectives and policies behind the various elements of the compensation mix.
Component | Type | Objectives | ||
Base Salary | Fixed | • Attract and retain executives • Compensate executive for level of responsibility and experience | ||
Annual Incentive Bonus | Variable | • Reward meaningful contributions to the Company’s profitability • Reward achievement of the Company’s annual financial and operational goals • Promote accountability and strategic decision-making | ||
Long-Term Incentive Awards | Variable | • Align management and stockholder goals by linking management compensation to stock price over extended period • Encourage long-term, strategic decision-making • Reward achievement of long-term company performance goals • Promote accountability • Retain key executives | ||
Broad-Based Benefits Programs | Fixed | • Foster the health and well‑being of executives • Attract and retain executives • Reward employee loyalty and long-term service |
Base Salary. It is the Company’s philosophy that employees be paid a base salary that is competitive with the salaries paid by comparable organizations based on each employee’s experience, performance and geographic location. Generally, the Company has chosen to position cash compensation at close to market median levels in order to remain competitive in attracting and retaining executive talent. The allocation of total cash between base salary and incentive bonus awards is based on a variety of factors. The compensation committeeCompensation Committee considers a combination of the executive’s performance, the performance of the Company and the individual business or corporate function for which the executive is responsible, the nature and importance of the position and role within the Company, the scope of the executive’s responsibility and the current compensation package in place for the executive, including the executive’s current annual salary and potential bonus awards under the Company’s short-term incentive plan.
The compensation committeeCompensation Committee generally evaluates executive salaries annually. An analysis of the Company’s executive compensation indicated that base salaries for the named executive officers were generally positioned at the market median. During fiscal year 2019,2022, based in part on information provided previously by an independent compensation consultant, as well as the compensation committee’sCompensation Committee’s own assessment of the information and factors described above, the compensation committeeCompensation Committee determined to increase the base salaries of Ms. Elliott and certain other officersMs. Sheridan incrementally to maintain market median levels.
Annual Incentive Bonus
. The Company intends to continue its strategy of compensating the named executive officers through programs that emphasize performance-based incentive compensation. The Company’s short-term incentive compensation program is designed to recognize and reward executive officers and other employees who contribute meaningfully to the Company’s profitability and increase in stockholder value.
In general, the funding of the annual incentive bonus pool is dependent upon earnings before interest, taxes, depreciation and amortization (after deducting incentive compensation) of the Company and its subsidiaries. If the plan is fully funded, each named executive officer has the ability to receive the target bonus payout. The percentage of the target bonus actually paid to each named executive officer depends on the goal attainment levels. The threshold level of performance for funding the bonus pool is 90% of target, at which point the annual bonus pool is 5% funded.
For fiscal year 2019,2022, the Company and two of its wholly-owned subsidiaries, NoJo Baby and Kids, Inc. and Sassy Baby, Inc., achieved greater than the minimum, but less than the maximum level of the performance target. Accordingly, the bonus pool was partially funded. Bonus amounts will be paid in the secondfirst quarter of the fiscal year 2020,ending April 2, 2023 (“fiscal year 2023”), but were expensed in fiscal 2019,year 2022, the fiscal year in which the bonuses were earned and to which the payments relate.
In July 2012, the Company also implemented a performance bonus plan, in which only Mr. Chestnut and Ms. Elliott currently participate, that provides for awards of shares of common stock in the event that the aggregate average market value of the common stock during the relevant fiscal year, plus the amount of regular cash dividends paid in respect of the common stock during such period, increases. In such event, Mr. Chestnut is eligible to receive an award equal in value to 5% of the amount of such increase (subject to a cap of $250,000 for fiscal 2015 and subsequent years), and Ms. Elliott is eligible to receive an award equal in value to 1% of the amount of such increase (subject to a cap of $125,000 for fiscal 2015 and subsequent years). Any shares of common stock issued in connection with this plan will be issued under the Company’s stockholder-approved 2014 Omnibus Equity Compensation Plan (the “2014 plan”), or any other equity-based plan or program of the Company approved by the stockholders of the Company and then in effect, will vest one-half on each of the one- and two-year anniversaries of the last day of the relevant performance period and will be subject to any additional terms and conditions that the compensation committee may determine. For fiscal year 2019, there were no stock awards pursuant to this bonus plan.
Long-Term Incentive Awards
. Long-term incentive awards are the third component of the Company’s total compensation package. The compensation committeeCompensation Committee believes that equity-based compensation ensures that the Company’s officers have a continuing stake in the long-term success of the Company. Accordingly, the Company’s officers and certain other employees may participate in the 2014 plan,2021 Incentive Plan (the “2021 Plan”) which provides for grants of equity incentive awards, including stock options, stock units, stock awards, stock appreciation rights and other stock-based awards. Awards may be granted under the 2014 plan2021 Plan from time to time until August 11, 2024,20, 2031, unless the 2014 plan2021 Plan is terminated or replaced prior to that date. The compensation committeeCompensation Committee approves all awards under the 2014 plan2021 Plan and acts as the administrator of the 2014 plan.2021 Plan.
Award levels under the 2014 plan2021 Plan are determined based on the compensation practices of the compensation peer group. In general, long-term incentive awards are targeted at the median of the compensation peer group with appropriate adjustments for individual and Company performance, although past awards have generally been below market levels. Stock options granted under the 2014 plan,2021 Plan, as well as under the Company’s prior equity compensation plans, vest and become exercisable in equal installments over a two-year period fromterms determined by the grant date,Compensation committee, have a 10-yearten-year term and have an exercise price equal to the fair market value of the Company’s common stockCommon Stock on the date of grant, and priorgrant; restricted stock awards have been subject to cliff vesting on the first, second, fourth or fifth anniversary of the date of grant. In the case of restricted stock, the shares are held by the Company’s transfer agent in escrow until restrictions lapse and the participant pays taxes on the value of the shares. Participants are entitled to vote their shares and are entitled to any dividends payable on their restricted stock and to vote their shares.once the vesting restrictions lapse. Restricted stock cannot be sold or transferred until the shares vest. Should a named executive officer leave the Company prior to the completion of the applicable vesting schedule, the unvested portion of the grant is forfeited.
Historically, the determination of whether equity compensation awards will be granted is made promptly following the preparation of the prior year’s audited financial statements because the awards are made (or not) based upon the compensation committee’sCompensation Committee’s assessment of the Company’s overall performance for such period, as well as the committee’sCompensation Committee’s assessment of the individual’s overall performance over the same time. This determination is generally made considering the totality of the circumstances and not necessarily on the basis of one or more specified performance metrics.
Broad-Based Benefits Programs
. The named executive officers are entitled to participate in the benefits programs that are available to all full-time employees. These benefits include health, dental, vision, disability and life insurance, paid vacation and Company contributions to a 401(k) profit-sharing retirement plan. The Company’s 401(k) plan provides for matching contributions by the Company in an amount equal to 100% of the first 2% of employee compensation deferred, plus 50% of the next 3% of employee compensation deferred. All employees age 18 and older are eligible to participate in the plan after two months of service.
Evaluation of Chief Executive Officer Compensation and Executive Performance
Compensation of Chief Executive Officer
. The compensation committeeCompensation Committee meets with the other independent directors each year in an executive session to evaluate the performance of the Company’s chief executive officer.Chief Executive Officer. The compensation committeeCompensation Committee does not confer with the chief executive officerChief Executive Officer or any other members of management when setting the chief executive officer’sChief Executive Officer’s base salary. The compensation committeeCompensation Committee does not rely solely on predetermined formulas or a limited set of criteria when it evaluates the performance of the chief executive officerChief Executive Officer and the other named executive officers.
Compensation of Other Named Executive Officers
Officers. The chief executive officerChief Executive Officer met with the compensation committeeCompensation Committee to review hisher compensation recommendations for the other named executive officers. Heofficers for 2022. She described the findings of hisher performance evaluation of all such persons and provided the basis of hisher recommendations with the compensation committee,Compensation Committee, including the scope of each person’s duties, oversight responsibilities and individual objectives and goals against results achieved. In its analysis of the other named executive officers, the compensation committeeCompensation Committee applied the same rationale to this group as it applied when considering the chief executive officer’sChief Executive Officer’s base salary. The compensation committeeCompensation Committee also considered the pay practices of the compensation peer group and information previously provided previouslyto the Company by an independent compensation consultant.
Administrative Policies and Practices
. To evaluate and administer the compensation programs of the chief executive officerChief Executive Officer and other named executive officers, the compensation committeeCompensation Committee meets periodically each year in conjunction with regularly scheduled boardBoard meetings. The compensation committeeCompensation Committee also holds special meetings and meets telephonically to discuss extraordinary items.
Employment, Severance and Compensation Arrangements
Crown CraftsThe Company has entered into employment agreements with each of the named executive officersMr. Chestnut, Ms. Elliott, Mr. Demarest and has also entered into a severance protection agreement with Mr. Chestnut.Ms. Sheridan. A summary of the terms of these agreements is set forth below.
E. Randall Chestnut.Chestnut. The Company and Mr. Chestnut entered into an employment agreement withAmendment to Amended and Restated Employment and Severance Protection Agreement, dated as of April 14, 2022, which amends the Amended and Restated Employment and Severance Protection Agreement, dated as of December 16, 2020, between the Company and Mr. Chestnut, effective as of July 23, 2001,to reflect Mr. Chestnut’s retirement. Pursuant to the amendment: (i) Mr. Chestnut continued to receive the salary and benefits pursuant to whichhis agreement through May 1, 2022; (ii) in lieu of the compensation and benefits Mr. Chestnut has agreedwould otherwise have been entitled to servereceive under his agreement through its termination on April 2, 2023, the Company paid Mr. Chestnut $155,692.15 on May 1, 2022; (iii) the 8,033 shares of restricted stock granted to Mr. Chestnut on August 11, 2021 under the 2021 Plan, which would have vested on the earlier of August 11, 2022 and the date immediately preceding the date of the Annual Meeting, accelerated and vested on May 1, 2022; and (iv) the term of his agreement ended on May 1, 2022.
Pursuant to his agreement, the Company employed Mr. Chestnut as President until January 4, 2021 and as Chief Executive Officer until March 1, 2022, when the Board appointed Ms. Elliott as Chief Executive Officer, and thereafter he continued to be employed by the Company until his retirement on May 1, 2022. Mr. Chestnut also continued to serve as the Chairman of the Board until his retirement and resignation from the Board on May 1, 2022.
Pursuant to his agreement, Mr. Chestnut: (i) received an annual salary equal to $463,500 through March 28, 2021, an annual salary of $231,750 from March 29, 2021 through April 3, 2022, and compensation at the rate of $154,484.66 per annum from April 4, 2022 through May 1, 2022; (ii) received a cash bonus with respect to the fiscal year ended March 28, 2021 (“fiscal year 2021”) consistent with past bonuses paid by the Company to him, but not with respect to any subsequent fiscal year; (iii) received a grant of 8,033 shares of Common Stock in August 2021 on the same terms as the annual grant of shares made to non-employee members of the Company. The initial termBoard; (iv) was entitled to participate in any medical, dental, hospitalization, disability, accident, life insurance and 401(k) plans or arrangements of Mr. Chestnut’s employment agreement expired March 31, 2004; however, the agreement currently renews automaticallyCompany for which he was eligible; and (v) received $24,470 of moving expenses paid on a monthly basis unless either party gives the other party one year’s advance notice of non-renewal.his behalf.
In addition, pursuant to his agreement: (i) the Company purchased from Mr. Chestnut, on December 16, 2020, 250,000 shares of Common Stock owned by him for an aggregate purchase price of $1,885,875.00, or $7.5435 per share (which represents the trailing 10-trading day volume weighted average closing price of the Common Stock ending, and including, December 16, 2020); (ii) the Company transferred to Mr. Chestnut title to the 2016 Ford F-150 used by him in connection with his employment; and (iii) paid to Mr. Chestnut all accrued but unpaid vacation and other paid time off earned under the Company’s vacation and paid time off policies through March 28, 2021.
Mr. Chestnut’s employment agreement provides for an annual salary, subject to annual review and upward adjustment, and cash bonuses based on the Company’s achievement of performance criteria established by the compensation committee, as well as other benefits under programs adopted by the Company from time to time. Mr. Chestnut’s employment agreement also contains one-yearcontains: (i) post-employment non-competition provisions, one-year post-employmentand customer non-solicitation provisions which end on May 1, 2023; and (ii) two-year post-employment employee non-solicitation provisions.
The Company entered into an amended and restated severance protection Mr. Chestnut’s agreement with Mr. Chestnut effective as of April 20, 2004. This agreement provides for a two-year term renewable annually (so as to always be effective for two years after each renewal date), unless either party notifies the other of non-renewal in a timely manner, and providesalso provided Mr. Chestnut with certain benefits upon the termination of his employment. These benefits are discussedemployment in the section of this proxy statement entitled “Potential Payments Upon Termination or Change in Control.”certain circumstances.
Pursuant to the amendment, upon his termination, Mr. Chestnut received the compensation and benefits described above in lieu of any other compensation or benefits under his agreement.
Olivia W. Elliott. Elliott.The Company entered into an employment agreement with Ms. Elliott effective as of November 6, 2008, pursuant to which Ms. Elliott has agreed to serveserved as the Company’s Vice President and Chief Financial Officer. On December 16, 2020, the Board appointed Ms. Elliott to serve as the Company’s President and Chief Operating Officer, ofeffective January 4, 2021. On February 8, 2022, the Company.Board appointed Ms. Elliott to serve as Chief Executive Officer and President, effective March 1, 2022. The initial term of Ms. Elliott’s employment agreement expired on November 6, 2009; however, the agreement renews automatically on a daily basis unless either party gives the other party one year’s advance notice of non-renewal.
Ms. Elliott’s employment agreement provides for an annual salary, subject to annual review and upward adjustment, and cash bonuses based on the Company’s achievement of performance criteria established by its board of directors,Board, as well as other benefits under programs adopted by the Company from time to time. Ms. Elliott’s employment agreement also contains one-year post-employment non-competition provisions, one-year post-employment customer non-solicitation provisions and two-year post-employment employee non-solicitation provisions. The agreement also provides Ms. Elliott with certain benefits upon the termination of her employment. These benefits are discussed under “ — Potential Payments Upon Termination or Change in Control.” On June 7, 2022, Ms. Elliott’s employment agreement was amended to reflect that she is serving as President and Chief Executive Officer and to remove provisions that entitled her to terminate her employment and receive severance in the sectionevent of this proxy statementa change in control if at the time of the change in control, or during the 150-day period thereafter, Mr. Chestnut is no longer employed by the Company.
In connection with Ms. Elliott’s appointment as President and Chief Operating Officer: (i) effective January 4, 2021, Ms. Elliott’s salary increased to $325,000 per annum, and she is eligible to receive a target annual cash bonus equal to 60% of her salary; and (ii) on January 4, 2021, the Company granted Ms. Elliott, pursuant to the Company’s 2014 Omnibus Equity Compensation Plan (the “2014 Plan”), an option to purchase 50,000 shares of Common Stock with an exercise price per share equal to the fair market value of the Common Stock on such date, which option vested and became exercisable as to one-half of the underlying shares on January 4, 2022 and will vest and become exercisable as to one-half of the underlying shares on January 4, 2023.
In connection with Ms. Elliott’s appointment as Chief Executive Officer: (i) effective March 1, 2022, Ms. Elliott’s salary increased to $400,000 per annum; (ii) on March 1, 2022, the Company granted Ms. Elliott, pursuant to the 2021 Plan, a performance award consisting of 125,000 shares of Common Stock, of which: (a) 50,000 shares shall be earned if the closing price per share of the Common Stock equals or exceeds $8.00 on ten trading days within any period of twenty consecutive trading days prior to March 1, 2027; and (b) 75,000 shares shall be earned if the closing price of the Common Stock equals or exceeds $9.00 on ten trading days within any period of twenty consecutive trading days prior to March 1, 2027.
Craig J. Demarest. The Company entered into an employment agreement with Mr. Demarest effective as of February 22, 2021, pursuant to which Mr. Demarest has agreed to serve as the Company’s Vice President and Chief Financial Officer. The initial term of Mr. Demarest’s agreement expired on February 28, 2022; however, beginning on March 1, 2021, and continuing on the first day of each calendar month thereafter, such term has been and will be extended automatically for one additional calendar month so that the term of Mr. Demarest’s agreement will always be for one full year, unless either party provides notice to the other at any time that the term shall not be further extended and shall terminate at the end of the one-year period following such notice.
Under Mr. Demarest’s agreement, he: (i) will receive a minimum base salary of $237,500, subject to annual review and upward adjustment; (ii) commencing with the fiscal year 2022, is eligible to receive a target bonus of up to 40% of his base salary amount and as much as 60% of his base salary amount if certain earnings goals are met; and (iii) is entitled “Potentialto receive other benefits under programs adopted by the Company from time to time. Upon the execution of the agreement, Mr. Demarest also received a grant of 10,000 shares of Common Stock pursuant to the 2014 Plan, which shares are subject to vesting on February 22, 2023. Mr. Demarest’s employment agreement also contains one-year post-employment non-competition provisions, one-year post-employment customer non-solicitation provisions and one-year post-employment employee non-solicitation provisions. The agreement also provides Mr. Demarest with certain benefits upon the termination of his employment. These benefits are discussed under “ — Potential Payments Upon Termination or Change in Control.”
Donna E. Sheridan.Sheridan. NoJo entered into an employment agreement with Ms. Sheridan effective as of January 18, 2019, pursuant to which Ms. Sheridan has agreed to serve as President and Chief Executive Officer of NoJo. The initial term of Ms. Sheridan’s employment agreement expiresexpired on December 31, 2019; however, beginning on February 1, 2019, and continuing on the first day of each calendar month thereafter, the term of the agreement will be extended automatically for one additional calendar month so that such term will always be for one full year, unless either party provides notice to the other at any time that the term shall not be further extended and shall terminate at the end of the one-year period following such notice.
Ms. Sheridan’s employment agreement provides for an annual salary, subject to annual review and upward adjustment, and cash bonuses based on the Company’s achievement of performance criteria established by the compensation committee,Compensation Committee, as well as other benefits under programs adopted by the Company from time to time. It also contains one-year post-employment non-competition, customer non-solicitation and employee non-solicitation provisions. The agreement also provides Ms. Sheridan with certain benefits upon the termination of her employment. These benefits are discussed in the section of this proxy statement entitled “Potentialunder “ — Potential Payments Upon Termination or Change in Control.”
The boardBoard has implemented stock ownership guidelines for directors, the chief executive officerCompany’s Chief Executive Officer and the chief financial officer.Chief Financial Officer. Under those guidelines,guidelines: (i) directors are expected to hold a minimum of 35,000 shares of the Company’s Series A common stock,Common Stock having a value equal to not less than three times their retainer; (ii) the chief executive officerChief Executive Officer is expected to hold shares of the Company’s Series A common stockCommon Stock having a value equal to not less than two times histhe Chief Executive Officer’s annual salary,salary; and (iii) the chief financial officerChief Financial Officer is expected to hold shares of the Company’s Series A common stockCommon Stock having a value equal to not less than the amount of herthe Chief Financial Officer’s annual salary. Neither the boardBoard nor the compensation committeeCompensation Committee has implemented stock ownership guidelines for other officers. The compensation committee,Compensation Committee, however, continues to periodically review best practices and re-evaluate whether additional stock ownership guidelines are consistent with the compensation philosophy of the Company and with the interests of its stockholders.
Compensation Committee ReportInsider Trading Policy
The compensation committeeBoard has adopted an insider trading policy which is applicable to Board members and the officers and other employees of the Company and its subsidiaries. Under the policy, no Board member or any officer or other employee (or any other person designated by the policy or by the Company’s Compliance Officer as subject to the policy) who is aware of material nonpublic information relating to the Company may, directly or indirectly through family members or other persons or entities:
(i) | Engage in transactions in the Company’s securities, except as otherwise specified in the policy; |
(ii) | Recommend the purchase or sale of any of the Company’s securities; |
(iii) | Disclose material nonpublic information about us to other persons, including friends, business associates and investors, unless any such disclosure is made in accordance with our policies regarding the protection, or authorized external disclosure, of such information; or |
(iv) | Assist anyone engaged in any of the above activities. |
In addition, no Board member or any officer or other employee (or any other person designated by the policy or by the Company’s Compliance Officer as subject to the policy) who, in the course of working for us, learns of material nonpublic information about a company with which we do business, including one of our customers or suppliers, may trade in that company’s securities until the information becomes public or is no longer material.
To further ensure adherence with the policy, procedures applicable to Board members and our officers have been established for blackout periods with respect to quarterly trading restrictions as well as event-specific trading restriction periods. The policy provides guidance as to what constitutes material information and when information becomes public. The policy addresses transactions by family members and controlled entities, as well as other transactions which are prohibited, such as short-term trading, short sales, publicly trading in options, margin purchases and pledging. The policy discusses the consequences of an insider trading violation and additional procedures applicable to Board members and our officers. The policy requires all persons subject to the policy to provide written certification of their understanding of, and intent to comply with, the policy.
The policy also strongly discourages Board members and the officers and other employees of the Company and its subsidiaries from engaging in hedging or monetization transactions (including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds). Any person wishing to enter into such an arrangement must first submit the proposed transaction for approval by the Company’s Compliance Officer. Any request for pre-clearance of a hedging or similar arrangement must set forth the justification for the proposed transaction. The Company’s Compliance Officer has never approved, nor has received, a request for pre-clearance of a hedging or similar arrangement.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statementProxy Statement with the Company’s management and, based on such review and discussions, has recommended to the board of directorsBoard that the Compensation Discussion and Analysis be included in this proxy statement.Proxy Statement.
Submitted by the Compensation Committee:
Zenon S. Nie (Chair) Sidney Kirschner Patricia Stensrud |
Summary Compensation and Other Tables
Summary Compensation Table
. The following table sets forth all compensation paid or accrued during fiscal years 2019year 2022 and 2018the fiscal year 2021 to the named executive officers.
Name and Principal Position |
Fiscal Year |
Salary |
Stock Awards |
Option Awards |
Non-Equity Incentive Plan Compensation |
All Other Compensation |
Total | |||||||||||||||||||
E. Randall Chestnut | 2019 | $ | 463,500 | $ | - | $ | - | $ | 313,287 | (1) | $ | 22,282 | (2) | $ | 799,069 | |||||||||||
| Chairman of the Board, President and Chief Executive Officer | 2018 | 463,500 | - | - | - | 23,947 | (3) | 487,447 | ||||||||||||||||||
Olivia W. Elliott | 2019 | $ | 270,750 | $ | - | $ | - | $ | 127,853 | (1) | $ | 21,856 | (4) | $ | 420,459 | |||||||||||
| Vice President and Chief Financial Officer | 2018 | 261,500 | - | - | - | 22,868 | (5) | 284,368 | ||||||||||||||||||
Donna E. Sheridan (6) President and Chief Executive Officer, NoJo | 2019 | $ | 58,846 | $ | 146,565 | (7) | $ | - | $ | - | $ | 2,455 | (8) | $ | 207,866 | |||||||||||
Name and Principal Position | Fiscal Year | Salary | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | ||||||||||||||||||
E. Randall Chestnut(1) | 2022 | $ | 232,860 | $ | 60,000 | $ | - | $ | - | $ | 7,069 | (2) | $ | 299,929 | |||||||||||
| Chairman of the Board and Chief Executive Officer, former President | 2021 | $ | 465,728 | $ | - | $ | - | $ | 417,150 | (3) | $ | 75,396 | (4) | $ | 958,274 | ||||||||||
Olivia W. Elliott | 2022 | $ | 337,115 | $ | 628,950 | (5) | $ | 46,551 | (6) | $ | 310,500 | (7) | $ | 27,784 | (8) | $ | 1,350,900 | ||||||||
| President and Chief Operating Officer, former Vice President and Chief Financial Officer | 2021 | $ | 309,904 | $ | 49,200 | (9) | $ | 64,842 | (10) | $ | 212,625 | (3) | $ | 24,467 | (11) | $ | 661,038 | ||||||||
Craig J. Demarest (16) | 2022 | $ | 237,500 | $ | - | $ | 16,052 | (6) | $ | 142,500 | (7) | $ | 16,673 | (12) | $ | 412,725 | |||||||||
| Vice President and Chief Financial Officer | 2021 | $ | 22,837 | $ | 76,000 | (9) | 1,038 | (13) | $ | 99,875 | |||||||||||||||
Donna E. Sheridan | 2022 | $ | 316,154 | $ | 334,425 | (5) | $ | 30,499 | (6) | $ | 192,750 | (7) | $ | 27,070 | (14) | $ | 900,898 | ||||||||
| President and Chief Executive Officer, NoJo | 2021 | $ | 306,442 | $ | 49,200 | (9) | $ | 32,421 | (10) | $ | 186,000 | (3) | $ | 27,374 | (15) | $ | 601,437 | ||||||||
(1) |
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(2) | Represents |
(3) | Represents incentive bonus amounts earned in fiscal year 2021 but paid in fiscal year 2022. |
(4) | Represents amounts paid by the Company on behalf of Mr. Chestnut as follows: (i) |
| Represents the aggregate grant date fair value of restricted stock and performance shares granted in fiscal year 2022 computed in accordance with FASB ASC Topic 718. |
(6) | Reflects the aggregate grant date fair value of stock options granted in fiscal year 2022 computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of this amount are included in Note 8 to the Company’s audited consolidated financial statements for the fiscal year ended April 3, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on June 8, 2022. |
(7) | Represents incentive bonus amounts earned in fiscal year 2022 but paid in fiscal year 2023. |
(8) | Represents amounts paid by the Company on behalf of Ms. Elliott as follows: (i) |
| Represents the aggregate grant date fair value of restricted stock granted in fiscal year 2021 computed in accordance with FASB ASC Topic 718. |
(10) | Reflects the aggregate grant date fair value of stock options granted in fiscal year 2021 computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of this amount are included in Note 8 to the Company’s audited consolidated financial statements for the fiscal year ended April 3, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on June 8, 2022. |
(11) | Represents amounts paid by the Company on behalf of Ms. Elliott as follows: (i) |
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| Represents $1,038 paid by the |
| Represents |
(15) | Represents amounts paid by the Company on behalf of Ms. Sheridan as follows: (i) $17,671 in automobile expenses; and (ii) $9,703 in matching contributions to Ms. Sheridan’s account under the Company’s 401(k) retirement savings plan. |
(16) | Mr. Demarest joined the Company in February 2021. |
Outstanding Equity Awards at Fiscal Year-End
.The following table sets forth information regarding the outstanding equity awards held by the named executive officers at March 31, 2019,April 3, 2022, the last day of the Company’s 2019 fiscal year.year 2022.
Option Awards | Stock Awards | |||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) |
Option Exercise Price |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested (3) | ||||||||||||||||||
E. Randall Chestnut | - | - | - | - | 15,115 | (1) | $ | 77,993 | ||||||||||||||||
Olivia W. Elliott | - | - | - | - | 3,005 | (1) | $ | 15,506 | ||||||||||||||||
Donna E. Sheridan | - | - | - | - | 25,000 | (2) | $ | 129,000 | ||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (9) | ||||||||||||||||||
E. Randall Chestnut | - | - | - | - | 8,033 | (1) | $ | 52,215 | ||||||||||||||||
Olivia W. Elliott | 25,000 | (2) | 25,000 | (2) | $ | 7.11 | 1/4/2031 | 10,000 | (3) | $ | 65,000 | |||||||||||||
| 29,000 | (4) | $ | 7.98 | 6/9/2031 | 15,000 | (5) | $ | 97,500 | ||||||||||||||||
| 125,000 | (6) | $ | 812,500 | |||||||||||||||||||||
Craig J. Demarest | - | 10,000 | (4) | $ | 7.98 | 6/9/2031 | 10,000 | (7) | $ | 65,000 | ||||||||||||||
Donna E. Sheridan | 15,000 | (8) | - | $ | 4.76 | 6/13/2029 | 10,000 | (3) | $ | 65,000 | ||||||||||||||
| 12,500 | (2) | 12,500 | (2) | $ | 7.11 | 1/4/2031 | 10,000 | (5) | $ | 65,000 | ||||||||||||||
| 19,000 | (4) | $ | 7.98 | 6/9/2031 | 62,500 | (6) | $ | 406,250 | ||||||||||||||||
(1) |
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| Amount shown is the number of shares of unvested stock granted on August 11, 2021. These shares vested on May 1, 2022, in connection with Mr. Chestnut’s retirement. |
(2) | Amounts shown are the number of shares underlying the options granted to the named executive officer on January |
(3) | Amount shown is the number of shares of unvested stock granted on June 10, 2020. These shares vested on June 10, 2022. |
(4) | Amounts shown are the number of shares underlying the options granted to the named executive officer on June 9, 2021. The options vest and become exercisable in equal installments over a two‑year period. |
(5) | Amount shown is the number of shares of unvested stock granted on June 9, 2021. These shares vested on June 9, 2022. |
(6) | Amount shown is the number of shares underlying a performance based award granted on March 1, 2022. These shares are earned based upon achievement of stock price hurdles and shares earned will vest in three equal installments beginning on the date earned and on each of the first and second anniversaries of the date earned. |
(7) | Amount shown is the number of shares of unvested stock granted on February 22, 2021. These shares vest on February 22, 2023. |
(8) | Amounts shown are the number of shares underlying the options granted to the named executive officer on June 13, 2019. |
| Market values shown are based on the closing price of |
Option Exercises and Stock Vested.During fiscal year 2022, our named executive officers did not exercise any stock option awards and no stock awards held by them vested.
Potential Payments Upon Termination or Change in Control
Each of the employmentapplicable agreements between the Company (which, for purposes of this discussion, includes NoJo in the case of Ms. Sheridan’s employment)employment agreement) and the named executive officers (other than Mr. Chestnut) requires the Company to make severance payments and provide severance benefits to the executive under certain circumstances if his or her employment with the Company is terminated other than for “Cause”“cause” or for “good reason” (each as defined in the applicable agreement and discussed under “ – Definitions of Cause and Good Reason”) or upon the executive’s death or disability. For purposesMr. Chestnut retired and resigned his positions with the Company effective May 1, 2022 and, as a result, is no longer entitled to any payments upon termination or change in control. As of his retirement on May 1, 2022, pursuant to the terms of the amendment to his amended and restated employment agreements withand severance protection agreement, his employment terminated and he received a payment of $155,692.15, and the 8,033 shares of restricted stock granted to Mr. Chestnut on August 11, 2021, under the 2021 Plan, accelerated and Ms. Elliott, a termination of employment is generally for “Cause” ifvested.
The Compensation Committee has determined that the executive has been convictedseverance and change in control benefits discussed below are an important part of a felonycompetitive overall compensation arrangement for the named executive officers; consistent with the objective of attracting, motivating and retaining highly talented executives and important as a recruitment and retention device. The Compensation Committee also has concluded that change in control benefits, where applicable, help to secure the continued employment and dedication of the applicable named executive officer, mitigate concern that such officer might have regarding such officer’s continued employment prior to or iffollowing a change in control and encourage independence and objectivity when considering possible transactions that may be in the termination is evidenced by a resolution adopted in good faith by two-thirdsbest interests of the Company’s boardstockholders but may possibly result in the termination of such officer’s employment. Finally, the Compensation Committee has concluded that post-termination non-competition and non-solicitation covenants to which the executive: (i) intentionally and continually failed substantially to perform his or her reasonably assigned dutiesnamed executive officers have agreed in their employment agreements in consideration for a period of at least 30 days after a written notice of demand for substantial performance has been deliveredthe Company providing the benefits discussed below are highly beneficial to the executive; or (ii) intentionally engaged in illegal conduct or gross misconduct which results in material economic harm to the Company. Under Ms. Sheridan’s employment agreement, “Cause” exists if Ms. Sheridan: (i) is convicted of, pleads guilty or nolo contendere to, or confesses to any felony or any act of fraud, misappropriation, misrepresentation or embezzlement; (ii) has engaged in any dishonest act to the material damage or prejudice to the Company or its subsidiaries or in any conduct materially damaging to their property, business or reputation; (iii) has engaged in habitual substance abuse; (iv) breaches the terms of her employment agreement and fails, after notice, to timely cure such breach; (v) violates any rule, regulation or policy of the Company and fails, after notice, to timely cure such violation; or (vi) willfully and continually fails to substantially perform her duties and, fails, after notice, to timely cure such failure.
UnderThe Compensation Committee has determined that the payment or provision of the benefits discussed below is consistent with competitive practices for positions at the level of the named executive officers. The potential amount of such benefits that an executive may receive in the event of a change in control, if any, did not influence the Compensation Committee’s decisions regarding other compensation elements due to the fact that a change in control may never occur during the named executive officer’s term of employment.
E. Randall Chestnut. Mr. Chestnut retired and resigned his position with the Company effective May 1, 2022 and, as a result, is no longer entitled to any payments upon termination or change in control. As of the end of fiscal year 2022, under Mr. Chestnut’s amended and restated employment agreement and severance protection agreement, if duringMr. Chestnut’s employment was terminated by the two years following a “ChangeCompany without cause or by Mr. Chestnut for good reason, then, in Control,” he terminatesaddition to salary and benefits accrued through the date of termination, the Company would have been required to: (i) continue to pay Mr. Chestnut his annual salary through April 2, 2023, which salary would have been paid in regular installments unless Mr. Chestnut terminated his employment for “Good Reason”good reason, in which case, such salary would have been paid in one lump sum payment; (ii) issue to Mr. Chestnut any stock awards to which he would have been entitled under the agreement had his employment not been terminated; and (iii) pay or reimburse Mr. Chestnut for any reason during the 60-day period commencing 90 days after the occurrencegroup health insurance premiums paid or incurred through April 2, 2023. In all other instances of the Change in Control or iftermination of Mr. Chestnut’s employment, including by the Company terminates his employment other than for Cause,cause, by Mr. Chestnut without good reason or by reason of Mr. Chestnut’s death or disability, then he will be entitledthe Company would have been required to receive the following payments, benefits and rights: (i) payment of three times his annual base salary (based upon the highest rate in effect on certain dates as set forth in the employment agreement); (ii) payment of three times the bonus amount previously paidpay to him (based upon the highest amount previously paid during certain periods as set forth in the employment agreement); (iii) for a period of three years, or such longer period as may be provided by the terms of the appropriate program, practice or policy, continuation on behalf of Mr. Chestnut his dependentsall salary and beneficiaries of life insurance, disability, medical, dental and hospitalization benefits; (iv) payment of the excess retirement benefit he would have received had he remained employed for three additional years; (v) all of Mr. Chestnut’s outstanding incentive awards shall become fully vested and, if applicable, fully exercisable; (vi) Mr. Chestnut may require the Company to purchase within five days following his termination any shares of stock or shares purchased upon exercise of any options at a price equal to the fair market value of such shares onbenefits accrued through the date of purchase by the Company; (vii) payment of outplacement services up to $30,000; and (viii) payment of reasonable moving expenses. Mr. Chestnut’s severance protection agreement also provides that if any payment or benefit to which Mr. Chestnut is entitled pursuant to the agreement gives rise to excise tax liability for Mr. Chestnut under Section 4999 of the IRC, a tax gross-up will be provided to him by the Company so that he will receive the same after-tax payment as would have been the case if such payment or benefit were not subject to such excise tax.termination.
Olivia W. Elliott. Under Ms. Elliott’s employment agreement, if her employment is terminated by the Company without Causecause or by her for Good Reason,good reason, then she is entitled to payment of the sum of: (i) her salary, perquisites and all other compensation other than bonuses for the greater of the remaining term of her employment agreement and one year; plus (ii) a bonus, which is required to be an amount equal to the highest annual bonus paid or payable to her in respect of any of the immediately preceding three full fiscal years. This amount is payable as well to Ms. Elliott if her respective employment agreement is not expressly assumed by any acquiror of the Company, whether by purchase, merger, consolidation or otherwise. Additionally, Ms. Elliott
Craig J. Demarest. Under Mr. Demarest’s employment agreement, if Mr. Demarest’s employment is entitledterminated by the Company without cause or by him for good reason, then then the Company will: (i) continue to provide noticepay Mr. Demarest equal installments, in accordance with the Company’s normal payroll practices and cycles, totaling the sum of his annual base salary as then in effect, plus the highest annual bonus paid or payable to him in respect of any of the three full fiscal years ended immediately prior to the date of his termination; and (ii) pay to Mr. Demarest all salary accrued through the date of the termination, plus credit for any vacation earned but not taken, and any bonus earned for the prior fiscal year but not yet paid, as of the date of termination. In all other instances of termination of herMr. Demarest’s employment, and receive the foregoing severance payments and benefits under the following circumstances: (i) if there occurs a Change in Control, and if at the time of such Change in Control, E. Randall Chestnut is not employedincluding by the Company for cause, by Mr. Demarest without good reason or anyby reason of its affiliates;Mr. Demarest’s retirement, death or (ii) if there occurs a Change in Control and if Mr. Chestnut is so employed at the time of such Change in Control and at any time during the 150-day period immediately following the occurrence of such Change in Control, Mr. Chestnut shall no longer be employed byincapacity, the Company will pay to Mr. Demarest all salary accrued through the date of the termination, plus credit for any vacation earned but not taken or anypaid through the date of its affiliates for whatever reason.termination.
For purposes of the employment agreements with Mr. Chestnut and Ms. Elliott, “Good Reason” generally means a good faith determination by the executive that, without the executive’s consent, any one or more of the following events or conditions has occurred:
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“Change in Control” under the Company’s employment agreement with Ms. Elliott generally means (i) any transaction, whether by merger, consolidation, asset sale, tender offer, reverse stock split or otherwise, which results in the acquisition of beneficial ownership by any person or entity or any group of persons or entities acting in concert of 25% or more of the outstanding shares of common stock of the Company; (ii) the sale of all or substantially all of the assets of the Company; or (iii) the liquidation of the Company.
“Change in Control” under the Company’s severance protection agreement with Mr. Chestnut generally means any of the following:
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Donna Sheridan. Under Ms. Sheridan’s employment agreement, if Ms. Sheridan’s employment is terminated by NoJo without Causecause or by her for Good Reason,good reason, then she is entitled to payment ofof: (i) any accrued but unpaid salary through the end of the calendar month in which such termination occurs plus credit for any vacation earned but not taken, plus any bonus earned at the end of the prior fiscal year that has not been paid by the date of termination; and (ii) equal installment payments in accordance with normal payroll practices, which are in the aggregate equal to the sum of (A)(a) her salary (at the rate in in effect as of the date of termination) and (B)(b) the highest annual bonus paid or payable to her in respect of any of the three full fiscal years ended immediately prior to the date of termination.
Definitions of Cause and Good Reason. For purposes of Ms. Elliott’s agreement, a termination of employment is for “cause” if the executive has been convicted of a felony or if the termination is evidenced by a resolution adopted in good faith by two-thirds of the Board that the executive: (i) intentionally and continually failed substantially to perform her reasonably assigned duties for a period of at least thirty days after a written notice of demand for substantial performance has been delivered to the executive; or (ii) intentionally engaged in illegal conduct or gross misconduct which results in material economic harm to the Company.
For purposes of each of Mr. Demarest’s agreement and Ms. Sheridan’s agreement, “cause” exists if the executive: (i) is convicted of, pleads guilty or nolo contendere to, or confesses to any felony or any act of fraud, misappropriation, misrepresentation or embezzlement; (ii) has engaged in any dishonest act to the material damage or prejudice to the Company or its subsidiaries or in any conduct materially damaging to their property, business or reputation; (iii) has engaged in habitual substance abuse; (iv) breaches the terms of his or her employment agreement “Good Reason”and fails, after notice, to timely cure such breach; (v) violates any rule, regulation or policy of the Company and fails, after notice, to timely cure such violation; or (vi) willfully and continually fails to substantially perform his or her duties and, fails, after notice, to timely cure such failure.
For purposes of Ms. Elliott’s agreement, “good reason” means a good faith determination by her that, without her consent, any one or more of the following events or conditions has occurred:
The assignment to her of any duties inconsistent with her position, authority, duties or responsibilities;
A material reduction by the Company of her base salary or an adverse change in the eligibility requirements or performance criteria under any bonus, incentive or compensation plan, program or arrangement;
Any failure to pay her any compensation or benefits to which she is entitled within five days of the date due;
The Company requiring her to be based anywhere other than within 50 miles of her job location, except for reasonably required travel;
The insolvency or the filing of a petition for bankruptcy by the Company;
Any purported termination of her employment for cause by the Company which does not comply with the specified provisions governing a termination for cause;
Any breach by the Company of any material provision of her employment agreement;
The failure by the Company to continue in effect any pension, bonus, incentive, stock ownership, purchase, option, life insurance, health, accident disability, or any other employee benefit plan, program or arrangement, in which she participates, or the taking of any action by the Company that would adversely affect her participation or materially reduce her benefits under any of such plans; or
the taking of any action by the Company that would materially adversely affect the physical conditions in or under which she performs her employment duties.
For purposes of each of Mr. Demarest’s agreement and Ms. Sheridan’s agreement, “good reason” exists if, without Ms. Sheridan’sthe executive’s consent: (i) he or she is required to relocate or otherwise establish his or her principal daily work location more than 50 miles from his or her current principal work location;location (other than a change in such location to a location closer to his or her home residence); (ii) there is a material diminution in his or her authority, duties or responsibilities; or (iii) NoJothe employer (either the Company or NoJo) materially breaches the employment agreement.
The compensation committee has determined that the foregoing severance and change in control benefits are an important part of a competitive overall compensation arrangement for the named executive officers, are consistent with the objective of attracting, motivating and retaining highly talented executives and are important as a recruitment and retention device. The compensation committee also has concluded that change in control benefits help to secure the continued employment and dedication of the named executive officers, mitigate concern that they might have regarding their continued employment prior to or following a change in control and encourage independence and objectivity when considering possible transactions that may be in the best interests of the Company’s stockholders but may possibly result in the termination of their employment. Finally, the compensation committee has concluded that post-termination non-competition and non-solicitation covenants to which the named executive officers have agreed in their employment agreements in consideration for the Company providing these severance and change in control benefits are highly beneficial to the Company.
The compensation committee has determined that the payment or provisionAudit Committee of the foregoing severance and change in control benefits is consistent with competitive practices for positions at the level of the named executive officers. The potential amount of such benefits that an executive may receive in the event of a change in control did not influence the compensation committee’s decisions regarding other compensation elements due to the fact that a change in control may never occur during the named executive officer’s term of employment.
REPORT OF THE AUDIT COMMITTEE
The audit committee of the Company’s board of directorsBoard is comprised of three directors, all of whom are independent, as defined by the listing standards of Nasdaq. The boardBoard has determined that Donald Ratajczak is an audit committeeAudit Committee financial expert within the meaning of regulations adopted by the SEC because of his accounting and related financial management expertise and experience. The audit committeeAudit Committee has adopted a formal, written charter, which has been approved by the full boardBoard and which specifies the scope of the audit committee’sAudit Committee’s responsibilities and how it should carry them out. The complete text of the audit committeeAudit Committee charter is available on the Company’s website at www.crowncrafts.com.
The audit committeeAudit Committee oversees the Company’s financial reporting process and internal control structure on behalf of the board of directors.Board. Management is responsible for the preparation, presentation and integrity of the financial statements and the effectiveness of the Company’s internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for expressing an opinion as to the conformity of the Company’s consolidated financial statements with generally accepted accounting principles and as to the effectiveness of the Company’s internal control over financial reporting.principles.
The audit committeeAudit Committee has reviewed and discussed with the Company’s management the audited financial statements of the Company for the fiscal year ended March 31, 2019.April 3, 2022. The audit committeeAudit Committee has discussed with KPMG, the Company’s independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 1301, as adopted by the Public Company Accounting Oversight Board. In addition, KPMG has provided the audit committeeAudit Committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the audit committeeAudit Committee concerning independence, and the audit committeeAudit Committee has discussed with KPMG the firm’s independence from management and the Company.
Based on the aforementioned review and discussions with management and KPMG, the audit committeeAudit Committee recommended to the boardBoard that the Company’s audited consolidated financial statements be included in the Company’s 2022 Annual Report on Form 10-K for the fiscal year ended March 31, 2019.April 3, 2022.
This report has been submitted by the audit committee.Audit Committee.
Donald Ratajczak (Chair) Sidney Kirschner Patricia Stensrud |
The Report of the Audit Committee is not deemed filed with the SEC and shall not be deemed incorporated by reference into any prior or future filings made by the Company under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Company specifically incorporates such information by reference.
PROPOSAL 2 – RATIFICATION OF APPOINTMENT
PROPOSAL 2 – RATIFICATION OF APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG currently serves as the Company’s independent registered public accounting firm and conducted the audit of the Company’s consolidated financial statements for fiscal years 2022 and 2021. Although appointment of the independent registered public accounting firm of the Company is not required to be submitted to a vote of the stockholders of the Company for ratification under the laws of Delaware, the Audit Committee has recommended that the Board submit this matter to the stockholders as a matter of good corporate practice. If the stockholders fail to ratify the appointment, then the Audit Committee of the Board will reconsider whether to retain KPMG and may retain that firm or another independent registered public accounting firm without resubmitting the matter to the stockholders of the Company for their approval. Even if the appointment is ratified, the Audit Committee of the Board may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
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Representatives of KPMG are expected to be present at the Annual Meeting. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
Principal Accountant’s Fees and Services
The following is a summary of the fees billed to the Company by KPMG for professional services rendered during the fiscal years 2022 and 2021:
Fee Category | Fiscal 2022 Fees | Fiscal 2021 Fees | ||||||
Audit Fees(1) | $ | 269,990 | $ | 225,000 | ||||
Audit-Related Fees(2) | $ | - | $ | - | ||||
Tax Fees(3) | $ | 93,470 | $ | 147,950 | ||||
All Other Fees(4) | $ | - | $ | - | ||||
Total Fees | $ | 363,460 | $ | 372,950 | ||||
(1) |
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| Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. There were no audit-related fees billed to the Company by KPMG in fiscal |
(3) |
|
| Other fees consist of fees for products and services other than the services reported above. There were no fees billed to the Company by KPMG in fiscal |
Pre-Approval Policies and Procedures
All services provided by KPMG are subject to pre-approval by the Audit Committee. Pre-approval may be provided for specific categories of services, limited to a specified budget amount, and may generally be given for up to one year. Before granting approval for additional services, or on a case-by-case basis as determined by the Audit Committee, the Audit Committee will require: (i) a detailed description of the proposed service; (ii) a statement from management as to why they believe KPMG is best qualified to perform the service; and (iii) an estimate of the fees to be incurred. Before granting its approval, the Audit Committee gives due consideration to whether approval of the relevant service will have a detrimental impact on the independence of KPMG.
All fees of KPMG in the preceding table were approved in accordance with the Audit Committee’s pre-approval policies and procedures.
Recommendation of the Board of Directors
All services provided by
| The Board unanimously recommends a vote “FOR”the ratification of the appointment of KPMG
|
PROPOSAL 3 – APPROVAL, ON AN ADVISORY
|
Pursuant to Section 14A of the Securities Exchange Act, of 1934, as amended (the “Exchange Act”), which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, (the “Dodd-Frank Act”), and the related rules of the SEC, stockholders of the Company are being asked to provide advisory approval of the compensation of the Company’s named executive officers, as it has been described in the “Executive Compensation” section of this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers and the philosophy, policies and practices described in this Proxy Statement. While this vote is advisory and not binding on the Company, it will provide the Company with information regarding investor sentiment about its executive compensation philosophy, policies and practices, which the Compensation Committee will be able to consider when determining executive compensation for the remainder of fiscal year 2023 and beyond.
At the Company’s annual meeting of stockholders held in 2019, the stockholders voted, on an advisory basis, on the frequency of holding future advisory votes on the compensation of the Company’s named executive officers. After considering the results of that vote, the Board determined to include a say-on-pay proposal in the Company’s proxy materials every year until the next required advisory vote on the frequency of stockholder advisory votes on named executive officer compensation.
As described in detail under the heading “Executive Compensation – Compensation Discussion and Analysis,” the Company’s executive compensation programs are designed to attract, motivate and retain the named executive officers, each of whom is critical to the Company’s success. Under these programs, the named executive officers are rewarded for the achievement of specific annual, long-term, strategic and corporate goals and the realization of increased stockholder value. Stockholders are encouraged to read the “Executive Compensation” section for additional details about the Company’s executive compensation programs, including information about the compensation of the named executive officers for fiscal year 2022.
This say-on-pay proposal gives stockholders the opportunity to endorse or not endorse the overall executive compensation program as described in this Proxy Statement by voting for or against the following resolution:
“RESOLVED, that the Company’s stockholders approve the compensation of the named executive officers as described in this Proxy Statement under “Executive Compensation”, including the Compensation Discussion and Analysis, the compensation tables and related material.”
The vote by the stockholders will be a non-binding, advisory vote, meaning that the voting results will not be binding on the Company, the Board or the Compensation Committee or overrule or affect any previous action or decision by the Board or the Compensation Committee or any compensation previously paid or awarded. However, the Board and the Compensation Committee will take the voting results into account when determining executive compensation matters in the future.
Recommendation of the Board of Directors
| The Board unanimously recommends a vote “FOR” the approval, on an advisory basis, of the compensation of the Company’s named executive officers as described in this Proxy Statement. Proxies will be voted “FOR” the approval of the compensation of the Company’s named executive officers
|
The following table sets forth certain information, based upon publicly filed documents, regarding the number and percentage of shares of Common Stock that are deemed to be “beneficially owned” under the rules of the SEC, as of the Record Date, by: (i) each director of the Company; (ii) each nominee for election as a director; (iii) the named executive officers of the Company named in the “Summary Compensation Table” included elsewhere herein; (iv) all executive officers and directors as a group; and (v) all persons known to the Company who may be deemed beneficial owners of more than 5% of the outstanding shares of Common Stock.
Name of Beneficial Owner(1) | Number of Shares Beneficially Owned | Percentage of Outstanding Shares(2) |
North Star Investment Management Corporation(3) 20 N. Wacker Drive Suite #1416 Chicago, Illinois 60606 | 627,885 | 6.2% |
Skylands Capital, LLC(4) 1200 North Mayfair Road Suite 250 Milwaukee, WI 53226 | 558,484 | 5.6% |
E. Randall Chestnut(5) | 385,342 | 3.8% |
Olivia W. Elliott(7) | 188,262 | 1.7% |
Donald Ratajczak | 167,175 | 1.7% |
Zenon S. Nie(6) | 162,387 | 1.6% |
Sidney Kirschner | 106,024 | 1.1% |
Patricia Stensrud | 72,774 | * |
Donna E. Sheridan(8) | 61,570 | * |
Craig J. Demarest (9) | 15,000 | * |
All Executive Officers and Directors as a group (eight persons) | 1,158,534 | 11.5% |
* Less than 1%.
| Under the rules of the SEC, the determination of “beneficial ownership” is based upon |
(2) | Percentage calculated based on 10,069,084 shares of Common Stock outstanding as of the |
(3) | Based on information contained in the |
Name of Beneficial Owner(1) | Number of Shares Beneficially Owned | Percentage of Outstanding Shares(2) | ||
North Star Investment Management Corporation(3) 20 N. Wacker Drive Suite #1416 Chicago, Illinois 60606 | 813,436 | 8.04% | ||
E. Randall Chestnut(4) | 731,033 | 7.22% | ||
Donald Ratajczak | 137,151 | 1.36% | ||
Zenon S. Nie(5) | 132,363 | 1.31% | ||
Olivia W. Elliott(6) | 123,762 | 1.22% | ||
Sidney Kirschner | 86,000 | * | ||
Patricia Stensrud | 42,750 | * | ||
Donna E. Sheridan | 25,000 | * | ||
All executive officers and directors as a group (seven persons) | 1,278,059 | 12.63% |
(4) | Based on information contained in the Form 13F filed by Skylands Capital, LLC with the SEC on May 5, 2022, indicating sole investment discretion relative to 558,484 shares of Common Stock and sole voting authority relative to 393,484 shares of Common Stock as of March 31, 2022. |
