Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by the addition of the following:
On May 20, 2011, the Wynnefield Reporting Persons sent a letter to the Nominating and Corporate Governance Committee of the Issuer’s Board of Directors (the “Board”) suggesting that Ms. Patricia Stensrud (the “Nominee”) be considered as an Issuer nominee for election to the Board at the Issuer’s 2011 Annual Meeting of Stockholders (the “Annual Meeting”). Unfortunately, the Issuer did not provide a timely response to the Wynnefield Reporting Persons’ suggestion that the Nominee be considered for nomination by the Issuer for election to its Board prior to the deadline for stockholders to timely submit nominations pursuant to the Issuer’s nomination notice procedures set forth in its Bylaws. In order to preserve the right of the Wynnefield Reporting Persons to nominate the Nominee as a member of the Board, on May 27, 2011 the Wynnefield Reporting Persons delivered a letter to the Issuer notifying it that the Wynnefield Reporting Persons intend to nominate and seek to elect the Nominee as a member of the Issuer’s Board at the Annual Meeting.
The Wynnefield Reporting Persons believe Ms. Stensrud’s skill set and extensive industry specific operational experience, accomplishments in brand and product development, together with her marketing, licensing and management expertise in the fields of retail design, fashion, technology, and consumer products, provides her with insight unique to and currently lacking from the Issuer’s Board. Furthermore, the election of Ms. Stensrud, as the Board’s only woman, will address the Issuer’s stated commitment to a diversified membership among its Board of Directors.
Should the Issuer nominate Ms. Stensrud as an Issuer nominee for election to the Board, the Wynnefield Reporting Persons would endorse and support her nomination. In the event the Issuer fails to nominate Ms. Stensrud as one of its director nominees for election at the Annual Meeting, the Wynnefield Reporting Persons intend to file a proxy statement with the Securities and Exchange Commission and solicit proxies to elect Ms. Stensrud.
Set forth below is certain biographical information with respect to the Nominee:
Patricia Stensrud, 63, since May of 2011 Ms. Stensrud has served as the president of A&H Manufacturing, a leading packaging company with operations in the United States, China and the United Kingdom. In November 2010, Ms. Stensrud co-founded The SilkRoute Partnership, an advisory firm providing strategic business development expertise for luxury and lifestyle brands within the fashion, beauty and consumer product sectors. Since founding Hudson River Partners LLC in 2003, Ms. Stensrud has served as its principal for private real estate investment as well as providing advisory due diligence, strategic planning, and business model development for upscale fashion and accessories companies. From January 2005 until November 2005 as the company was preparing to be sold, Ms. Stensrud was the president of the Women’s Sportswear Division for Tommy Hilfiger USA, with responsibility for divisional profitability, marketing, product and strategy development for diversified markets, as well as pioneering new social media and pricing strategies for the company. From 1991 to 2002, Ms. Stensrud served as the CEO and vice chairman of Victoria & Co., a multi-branded, multi-channel fashion jewelry manufacturer and marketer which was acquired by Jones Apparel Group. During Ms. Stensrud’s tenure, the company transformed into a global market leader through market re-definition, creation of multiple brands and diversified business segments, pioneering lifestyle branding in the fashion jewelry industry, establishing a multi-channel business model for reaching diverse target customer segments, excelling in product design, expanding licensing strategies, and implementing technology advances and strategic acquisitions. Ms. Stensrud previously served as marketing director and various other marketing management positions for Avon Products from 1982 to 1989 and was responsible for the successful launch of numerous products and categories. Ms. Stensrud currently serves as an operating advisor for Verite Capital Partners, a private equity investment fund; a senior advisor for Avalon Group Ltd., a New York-based investment bank; and an advisory board member of WalkStyles, Inc., a California-based wellness lifestyle company. She is also a member of Women Corporate Directors, a global membership organization and community of women corporate directors; and the board president for the Girl Scouts Council of Greater New York. Ms. Stensrud attended the Eastman School of Music in Rochester, New York and is a graduate of Golden Gate University in San Francisco where she earned B.A. (cum laude) and M.B.A. degrees.
| CUSIP No. 228309100 | 13D/A | Page 12 of 14 Pages |
In the event the Nominee shall be unable to serve for any reason, the Wynnefield Reporting Persons reserve the right to select a replacement Nominee. Additionally, in the event the Issuer purports to increase the number of directors serving on the Board or otherwise increases the number of directors to be elected at the Annual Meeting, the Wynnefield Reporting Persons reserve the right to nominate additional persons as directors to fill any vacancies created by the increase or to fill any additional positions on the Board which the Issuer’s stockholders shall vote on at the Annual Meeting.
Other than as set forth in this Item 4, the Wynnefield Reporting Persons do not have any current plans, proposals or negotiations that relate to or would result in any of the matters referred to in paragraphs (a) through (j) of Item 4 of the Schedule 13D. The Wynnefield Reporting Persons intend to review their investment in the Issuer on a continuing basis, and to the extent permitted by law, may seek to engage in discussions with other stockholders and/or with management and the Board of Directors of the Issuer concerning the business, operations or future plans of the Issuer. Depending on various factors including, without limitation, the Issuer’s financial position, the price levels of the Common Shares, conditions in the securities markets and general economic and industry conditions, the Wynnefield Reporting Persons may, in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, purchasing additional Common Shares, selling Common Shares, engaging in short selling of or any hedging or similar transaction with respect to the Common Shares, taking any other action with respect to the Issuer or any of its securities in any manner permitted by law or changing its intention with respect to any and all matters referred to in paragraphs (a) through (j) of Item 4.
