UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
November 7, 2008 (November 6, 2008)
Crown Crafts, Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware
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1-7604
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58-0678148
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(State or Other
Jurisdiction of
Incorporation)
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(Commission File Number)
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(IRS Employer
Identification
No.)
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916 South Burnside Avenue, Gonzales, LA
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70737
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number,
including area code:
(225) 647-9100
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (
see
General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
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Item 1.01.
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Entry into a Material Definitive Agreement
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The information set forth in Item 5.02 is incorporated herein by this reference.
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangement of Certain Officers
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On November 6, 2008, Crown Crafts, Inc. (the Company) entered into amendments to the
employment agreements with each of E. Randall Chestnut, President and Chief Executive Officer of
the Company, Amy Vidrine Samson, Vice President and Chief Accounting Officer of the Company, and
Nanci Freeman, President and Chief Executive Officer of Crown Crafts Infant Products, Inc., a
wholly-owned subsidiary of the Company, as well an amendment to the severance protection agreement
between the Company and Mr. Chestnut. The purpose of such amendments was to bring the agreements
into compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended, and the Treasury regulations and Internal Revenue Service guidance thereunder. The
amendments generally affect the timing, but not the amount, of compensation and other benefits that
may be received by the executive officers thereunder and implement related technical changes. In
addition, the employment agreement amendments also revise the description of the Companys business
for purposes of the agreements noncompetition provisions to reflect the Companys current
operations with respect to infant and toddler products.
The foregoing amendments are filed as exhibits hereto, and the description contained herein of
such amendments is qualified in its entirety by reference to the terms of such documents.
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Item 9.01.
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Financial Statements and Exhibits
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(d)
Exhibits
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10.1
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First Amendment to Employment Agreement dated November 6, 2008 by and
between the Company and E. Randall Chestnut
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10.2
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First Amendment to Amended and Restated Severance Protection
Agreement dated November 6, 2008 by and between the Company and E.
Randall Chestnut
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10.3
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First Amendment to Amended and Restated Employment Agreement dated
November 6, 2008 by and between the Company and Amy Vidrine Samson
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10.4
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First Amendment to Amended and Restated Employment Agreement dated
November 6, 2008 by and between the Company and Nanci Freeman
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company
has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CROWN CRAFTS, INC.
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By:
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/s/ E. Randall Chestnut
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E. Randall Chestnut,
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Dated: November 7, 2008
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President and Chief Executive Officer
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EXHIBIT INDEX
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Exhibit No.
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Exhibit
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10.1
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First Amendment to Employment Agreement dated November 6, 2008
by and between the Company and E. Randall Chestnut
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10.2
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First Amendment to Amended and Restated Severance Protection
Agreement dated November 6, 2008 by and between the Company
and E. Randall Chestnut
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10.3
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First Amendment to Amended and Restated Employment Agreement
dated November 6, 2008 by and between the Company and Amy
Vidrine Samson
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10.4
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First Amendment to Amended and Restated Employment Agreement
dated November 6, 2008 by and between the Company and Nanci
Freeman
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Exhibit 10.1
FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
(the Amendment) is made and entered into as of
the 6th day of November, 2008, by and between
CROWN CRAFTS, INC.
, a Delaware corporation
(Employer), and
E. RANDALL CHESTNUT
, an individual resident of the State of Louisiana
(Employee).
W
I
T
N
E
S
S
E
T
H
:
WHEREAS
, Employer and Employee have entered into that certain Employment Agreement dated as of
July 23, 2001 (the Agreement);
WHEREAS
, Employer and Employee wish to amend the Agreement as provided herein to comply with
Section 409A of the Internal Revenue Code of 1986, as amended; and
WHEREAS
, capitalized terms used but not otherwise defined herein shall have the same meanings
given to such terms in the Agreement;
NOW, THEREFORE
, in consideration of the foregoing and the mutual covenants and agreements
herein, the parties hereto do hereby agree as follows:
1.
Amendments to Agreement
. The Agreement is hereby amended as follows:
(a) The second sentence of Section 7.2.3 of the Agreement is amended and restated in its
entirety as follows:
For purpose of reference, such activities currently include the business of
manufacturing, marketing and distribution of infant and toddler bedding, blankets
and accessories and infant bibs, bath items and gift sets and the Employers
operations and activities related thereto.
(b) Section 10.5 of the Agreement is amended and restated in its entirety as follows:
10.5 If this Agreement is terminated (i) at Employers election without Cause
or (ii) at the election of Employee for Good Reason within sixty (60) days after the
occurrence of the event that constitutes Good Reason, then, in each such case,
Employee shall be entitled to those benefits to which Employee would be entitled if
a Change in Control would have occurred as set forth in Section 13 hereof, payable
as provided therein.
(c) The definition of Competing Business in Section 12.1 of the Agreement is amended and
restated in its entirety as follows:
Competing Business
means a business that, wholly or partly, directly
or indirectly, engages in manufacturing, marketing or distribution of infant or
toddler bedding, blankets or accessories or infant bibs, bath items or gift sets.
(d) Section 13.1 of the Agreement is amended and restated in its entirety as follows:
13.1
Change in Control
shall have the same meaning as set forth in Section
2.5 of that certain Amended and Restated Severance Protection Agreement dated April
20, 2004 between Employer and Employee (as the same may be amended from time to
time, the Severance Protection Agreement).
(e) Section 13.2 of the Agreement is amended and restated in its entirety as follows:
13.2 If there occurs a Change in Control of Employer, Employee shall be
entitled to the compensation and benefits set forth in Section 3 of the Severance
Protection Agreement, payable as provided therein.
(f) Section 14.2 of the Agreement is amended and restated in its entirety as follows:
14.2 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without giving effect to the
conflict of laws principles thereof.
(g) The Agreement is amended by deleting Section 14.7 thereof in its entirety.
(h) The Agreement is amended by adding the following as new Section 15 thereof:
15.
Compliance with Section 409A
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15.1 This Agreement shall be interpreted to avoid any penalty sanctions under
Section 409A of the Internal Revenue Code of 1986, as amended (Section 409A). If
any payment or benefit cannot be provided or made at the time specified herein
without incurring sanctions under Section 409A, then such benefit or payment shall
be provided in full at the earliest time thereafter when such sanctions will not be
imposed. For purposes of Section 409A, (i) all payments to be made upon a
termination of employment under this Agreement may only be made upon a separation
from service within the meaning of such term under Section 409A, (ii) each payment
made under this Agreement shall be treated as a separate payment and (iii) the right
to a series of installment payments under this Agreement is to be treated as a right
to a series of separate payments. In no event shall Employee, directly or
indirectly, designate the calendar year of payment.
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15.2 All reimbursements and in-kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of Section 409A,
including, where applicable, the requirements that (i) any reimbursement is for
expenses incurred during Employees lifetime (or during a shorter period of time
specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other calendar year, (iii) the reimbursement of an eligible expense will be made on
or before the last day of the calendar year following the year in which the expense
is incurred and (iv) the right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit.
15.3 Notwithstanding any provision in this Agreement to the contrary, if, at
the time of Employees separation from service with Employer, Employer has
securities which are publicly traded on an established securities market, Employee
is a specified employee (as defined in Section 409A) and it is necessary to
postpone the commencement of any severance payments otherwise payable pursuant to
this Agreement as a result of such separation from service to prevent any
accelerated or additional tax under Section 409A, then Employer will postpone the
commencement of the payment of any such payments or benefits hereunder (without any
reduction in such payments or benefits ultimately paid or provided to Employee) that
are not otherwise exempt from Section 409A until the first payroll date that occurs
after the date that is six (6) months following Employees separation from service
with Employer (as determined under Section 409A). If any payments are postponed
pursuant to this Section 15.3, then such postponed amounts will be paid in a lump
sum to Employee on the first payroll date that occurs after the date that is six (6)
months following Employees separation from service with Employer. If Employee dies
during the postponement period prior to the payment of any postponed amount, such
amount shall be paid to the personal representative of Employees estate within
sixty (60) days after the date of Employees death.
(i) Schedule 12 to the Agreement is amended by (i) replacing Paramus, New Jersey as
referenced therein with Wayne, New Jersey and (ii) deleting Troy, Michigan.
2.
Miscellaneous
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(a)
Choice of Law
. This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without giving effect to the conflict of laws
principles thereof.
(b)
Counterparts
. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument.
(c)
Severability
. If any term or provision of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the
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remainder of the terms and provisions of this Amendment shall in no way be affected, impaired
or invalidated.
(d)
Existing Terms
. The existing terms and conditions of the Agreement shall remain
in full force and effect except as such terms and conditions are specifically amended by, or
conflict with, the terms of this Amendment.
[Signature page follows.]
4
IN WITNESS WHEREOF
, the parties hereto have executed this Amendment, or caused this Amendment
to be executed by the undersigned thereunto duly authorized, as of the date first written above.
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CROWN CRAFTS, INC.
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By: /s/ Olivia Elliott
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Name:
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Olivia Elliott
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Title:
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VP & CFO
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/s/ E. Randall Chestnut
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E. RANDALL CHESTNUT
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5
Exhibit 10.2
FIRST AMENDMENT
TO
AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT
(the Amendment)
is made and entered into as of the 6th day of November, 2008, by and between
CROWN CRAFTS, INC.
, a
Delaware corporation (the Company), and
E. RANDALL CHESTNUT
, an individual resident of the State
of Louisiana (the Executive).
W
I
T
N
E
S
S
E
T
H
:
WHEREAS
, the Company and the Executive have entered into that certain Amended and Restated
Severance Protection Agreement dated as of April 20, 2004 (the Agreement);
WHEREAS
, Company and Executive wish to amend the Agreement as provided herein to comply with
Section 409A of the Internal Revenue Code of 1986, as amended; and
WHEREAS
, capitalized terms used but not otherwise defined herein shall have the same meanings
given to such terms in the Agreement;
NOW, THEREFORE
, in consideration of the foregoing and the mutual covenants and agreements
herein, the parties hereto do hereby agree as follows:
1.
Amendments to Agreement
. The Agreement is hereby amended as follows:
(a) Subsection 3.1.1 of the Agreement is amended by replacing 90-day period as referenced
therein with 60-day period.
(b) Subsection 3.1.2 is amended and restated in its entirety as follows:
3.1.2 If the Executives employment with the Company shall be terminated (i)
by the Company other than for Cause or Disability, (ii) by the Executive for Good
Reason within sixty (60) days after the occurrence of the event that constitutes
Good Reason or (iii) by the Executive for any reason during the Window Period, the
Executive shall be entitled to the following:
(c) Subsection 3.1.2(vi) is amended by adding the following immediately before the semicolon
at the end thereof:
and
provided further
that such expenses must be incurred by the Executive
no later than the end of the second calendar year following the calendar year in
which his termination of employment occurs
(d) Subsection 3.1.2(vii) is amended by adding the following immediately before the period at
the end thereof:
,
provided
that such expenses must be incurred by the Executive no later
than the end of the second calendar year following the calendar year in which his
termination of employment occurs
(e) Subsection 3.1.3 is amended and restated in its entirety as follows:
3.1.3. The amounts provided for in subsections 3.1.1 and 3.1.2(i), (ii) and
(iv) shall be paid in a lump sum in cash within five (5) days of the Executives
Termination Date.
(f) The Agreement is amended by adding the following as new Section 16 thereof:
16.
Compliance with Section 409A
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16.1 This Agreement shall be interpreted to avoid any penalty sanctions under
Section 409A of the Code (Section 409A). If any payment or benefit cannot be
provided or made at the time specified herein without incurring sanctions under
Section 409A, then such benefit or payment shall be provided in full at the earliest
time thereafter when such sanctions will not be imposed. For purposes of Section
409A, (i) all payments to be made upon a termination of employment under this
Agreement may only be made upon a separation from service within the meaning of
such term under Section 409A, (ii) each payment made under this Agreement shall be
treated as a separate payment and (iii) the right to a series of installment
payments under this Agreement is to be treated as a right to a series of separate
payments. In no event shall the Executive, directly or indirectly, designate the
calendar year of payment.
16.2 All reimbursements and in-kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of Section 409A,
including, where applicable, the requirements that (i) any reimbursement is for
expenses incurred during the Executives lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other calendar year, (iii) the reimbursement of an eligible expense will be made on
or before the last day of the calendar year following the year in which the expense
is incurred and (iv) the right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit.
16.3 Notwithstanding any provision in this Agreement to the contrary, if, at
the time of the Executives separation from service with the Company, the Company
has securities which are publicly traded on an established securities market, the
Executive is a specified employee (as defined in Section 409A) and it is necessary
to postpone the commencement of any severance payments otherwise payable pursuant to
this Agreement as a result of such separation from service to prevent any
accelerated or additional tax under Section 409A, then the
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Company will postpone the commencement of the payment of any such payments or
benefits hereunder (without any reduction in such payments or benefits ultimately
paid or provided to the Executive) that are not otherwise exempt from Section 409A
until the first payroll date that occurs after the date that is six (6) months
following the Executives separation from service with the Company (as determined
under Section 409A). If any payments are postponed pursuant to this Section 16.3,
then such postponed amounts will be paid in a lump sum to the Executive on the first
payroll date that occurs after the date that is six (6) months following the
Executives separation from service with the Company. If the Executive dies during
the postponement period prior to the payment of any postponed amount, such amount
shall be paid to the personal representative of the Executives estate within sixty
(60) days after the date of the Executives death.
2.
Miscellaneous
.
(a)
Choice of Law
. This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without giving effect to the conflict of laws
principles thereof.
(b)
Counterparts
. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument.
(c)
Severability
. If any term or provision of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of
the terms and provisions of this Amendment shall in no way be affected, impaired or invalidated.
(d)
Existing Terms
. The existing terms and conditions of the Agreement shall remain
in full force and effect except as such terms and conditions are specifically amended by, or
conflict with, the terms of this Amendment.
[Signature page follows.]
3
IN WITNESS WHEREOF
, the parties hereto have executed this Amendment, or caused this Amendment
to be executed by the undersigned thereunto duly authorized, as of the date first written above.
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CROWN CRAFTS, INC.
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By: /s/ Olivia Elliott
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Name:
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Olivia Elliott
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Title:
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Vice President & Chief Financial Officer
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/s/ E. Randall Chestnut
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E. RANDALL CHESTNUT
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4
Exhibit 10.3
FIRST AMENDMENT
TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the Amendment) is made
and entered into as of the 6th day of November, 2008, by and between
CROWN CRAFTS, INC.
, a Delaware
corporation (Employer), and
AMY VIDRINE SAMSON
, an individual resident of the State of Louisiana
(Employee).
W
I
T
N
E
S
S
E
T
H
:
WHEREAS
, Employer and Employee have entered into that certain Amended and Restated Employment
Agreement dated as of April 20, 2004 (the Agreement);
WHEREAS
, Employer and Employee wish to amend the Agreement as provided herein to comply with
Section 409A of the Internal Revenue Code of 1986, as amended; and
WHEREAS
, capitalized terms used but not otherwise defined herein shall have the same meanings
given to such terms in the Agreement;
NOW, THEREFORE
, in consideration of the foregoing and the mutual covenants and agreements
herein, the parties hereto do hereby agree as follows:
1.
Amendments to Agreement
. The Agreement is hereby amended as follows:
(a) Section 1 of the Agreement is amended by replacing Chief Financial Officer with Vice
President and Chief Accounting Officer.
(b) The second sentence of Section 7.2.3 of the Agreement is amended and restated in its
entirety as follows:
For purpose of reference, such activities currently include the business of
manufacturing, marketing and distribution of infant and toddler bedding, blankets
and accessories and infant bibs, bath items and gift sets and the Employers
operations and activities related thereto.
(c) Section 10.5 of the Agreement is amended and restated in its entirety as follows:
10.5 If this Agreement is terminated (i) at Employers election without Cause,
(ii) at the election of Employee for Good Reason within sixty (60) days after the
occurrence of the event that constitutes Good Reason or (iii) at the election of
Employee within sixty (60) days after the acquisition of the Company by purchase,
merger, consolidation or otherwise where this Agreement is not expressly assumed by
the acquirer of the Company pursuant to such transaction, then, in each such case,
Employee shall receive what she would have received under Section 13.2 hereof
following a Change in Control, payable as provided therein.
(d) The definition of Competing Business in Section 12.1 of the Agreement is amended and
restated in its entirety as follows:
Competing Business
means a business that, wholly or partly, directly
or indirectly, engages in manufacturing, marketing or distribution of infant or
toddler bedding, blankets or accessories or infant bibs, bath items or gift sets.
(e) The first sentence of Section 13.2 of the Agreement is amended by (i) replacing 180-day
period as referenced therein with 150-day period and (ii) replacing ninety (90) days each time
it is referenced therein with sixty (60) days.
(f) The last sentence of Section 13.2 of the Agreement is amended by replacing thirty (30)
days as referenced therein with ten (10) days.
(g) The Agreement is amended by adding the following as new Section 15 thereof:
15.
Compliance with Section 409A
.
15.1 This Agreement shall be interpreted to avoid any penalty sanctions under
Section 409A of the Internal Revenue Code of 1986, as amended (Section 409A). If
any payment or benefit cannot be provided or made at the time specified herein
without incurring sanctions under Section 409A, then such benefit or payment shall
be provided in full at the earliest time thereafter when such sanctions will not be
imposed. For purposes of Section 409A, (i) all payments to be made upon a
termination of employment under this Agreement may only be made upon a separation
from service within the meaning of such term under Section 409A, (ii) each payment
made under this Agreement shall be treated as a separate payment and (iii) the right
to a series of installment payments under this Agreement is to be treated as a right
to a series of separate payments. In no event shall Employee, directly or
indirectly, designate the calendar year of payment.
15.2 All reimbursements and in-kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of Section 409A,
including, where applicable, the requirements that (i) any reimbursement is for
expenses incurred during Employees lifetime (or during a shorter period of time
specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other calendar year, (iii) the reimbursement of an eligible expense will be made on
or before the last day of the calendar year following the year in which the expense
is incurred and (iv) the right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit.
15.3 Notwithstanding any provision in this Agreement to the contrary, if, at
the time of Employees separation from service with Employer, Employer has
securities which are publicly traded on an established securities market,
2
Employee is a specified employee (as defined in Section 409A) and it is
necessary to postpone the commencement of any severance payments otherwise payable
pursuant to this Agreement as a result of such separation from service to prevent
any accelerated or additional tax under Section 409A, then Employer will postpone
the commencement of the payment of any such payments or benefits hereunder (without
any reduction in such payments or benefits ultimately paid or provided to Employee)
that are not otherwise exempt from Section 409A until the first payroll date that
occurs after the date that is six (6) months following Employees separation from
service with Employer (as determined under Section 409A). If any payments are
postponed pursuant to this Section 15.3, then such postponed amounts will be paid in
a lump sum to Employee on the first payroll date that occurs after the date that is
six (6) months following Employees separation from service with Employer. If
Employee dies during the postponement period prior to the payment of any postponed
amount, such amount shall be paid to the personal representative of Employees
estate within sixty (60) days after the date of Employees death.
(h) Exhibit A to the Agreement is amended by (i) replacing $176,400.12 with $174,000 and
(ii) deleting the provision therein captioned Auto allowance.
(i) Schedule 12 to the Agreement is amended by (i) replacing Paramus, New Jersey as
referenced therein with Wayne, New Jersey and (ii) deleting Troy, Michigan.
2.
Miscellaneous
.
(a)
Choice of Law
. This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without giving effect to the conflict of laws
principles thereof.
(b)
Counterparts
. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument.
(c)
Severability
. If any term or provision of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of
the terms and provisions of this Amendment shall in no way be affected, impaired or invalidated.
(d)
Existing Terms
. The existing terms and conditions of the Agreement shall remain
in full force and effect except as such terms and conditions are specifically amended by, or
conflict with, the terms of this Amendment.
[Signature page follows.]
3
IN WITNESS WHEREOF
, the parties hereto have executed this Amendment, or caused this Amendment
to be executed by the undersigned thereunto duly authorized, as of the date first written above.
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CROWN CRAFTS, INC.
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By: /s/ E. Randall Chestnut
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Name:
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E. Randall Chestnut
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Title:
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President & Chief Executive Officer
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/s/ Amy Vidrine Samson
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AMY VIDRINE SAMSON
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4
Exhibit 10.4
FIRST AMENDMENT
TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the Amendment) is made
and entered into as of the 6th day of November, 2008, by and between
CROWN CRAFTS, INC.
, a Delaware
corporation (Employer), and
NANCI FREEMAN
, an individual resident of the State of California
(Employee).
W
I
T
N
E
S
S
E
T
H
:
WHEREAS
, Employer and Employee have entered into that certain Amended and Restated Employment
Agreement dated as of April 20, 2004 (the Agreement);
WHEREAS
, Employer and Employee wish to amend the Agreement as provided herein to comply with
Section 409A of the Internal Revenue Code of 1986, as amended; and
WHEREAS
, capitalized terms used but not otherwise defined herein shall have the same meanings
given to such terms in the Agreement;
NOW, THEREFORE
, in consideration of the foregoing and the mutual covenants and agreements
herein, the parties hereto do hereby agree as follows:
1.
Amendments to Agreement
. The Agreement is hereby amended as follows:
(a) The second sentence of Section 7.2.3 of the Agreement is amended and restated in its
entirety as follows:
For purpose of reference, such activities currently include the business of
manufacturing, marketing and distribution of infant and toddler bedding, blankets
and accessories and infant bibs, bath items and gift sets and the Employers
operations and activities related thereto.
(b) Section 10.5 of the Agreement is amended and restated in its entirety as follows:
10.5 If this Agreement is terminated (i) at Employers election without Cause,
(ii) at the election of Employee for Good Reason within sixty (60) days after the
occurrence of the event that constitutes Good Reason or (iii) at the election of
Employee within sixty (60) days after the acquisition of the Company by purchase,
merger, consolidation or otherwise where this Agreement is not expressly assumed by
the acquirer of the Company pursuant to such transaction, then, in each such case,
Employee shall receive what she would have received under Section 13.2 hereof
following a Change in Control, payable as provided therein.
(c) The definition of Competing Business in Section 12.1 of the Agreement is amended and
restated in its entirety as follows:
Competing Business
means a business that, wholly or partly, directly
or indirectly, engages in manufacturing, marketing or distribution of infant or
toddler bedding, blankets or accessories or infant bibs, bath items or gift sets.
(d) The first sentence of Section 13.2 of the Agreement is amended by (i) replacing 180-day
period as referenced therein with 150-day period and (ii) replacing ninety (90) days each time
it is referenced therein with sixty (60) days.
(e) The last sentence of Section 13.2 of the Agreement is amended by replacing thirty (30)
days as referenced therein with ten (10) days.
(f) The Agreement is amended by adding the following as new Section 15 thereof:
15.
Compliance with Section 409A
.
15.1 This Agreement shall be interpreted to avoid any penalty sanctions under
Section 409A of the Internal Revenue Code of 1986, as amended (Section 409A). If
any payment or benefit cannot be provided or made at the time specified herein
without incurring sanctions under Section 409A, then such benefit or payment shall
be provided in full at the earliest time thereafter when such sanctions will not be
imposed. For purposes of Section 409A, (i) all payments to be made upon a
termination of employment under this Agreement may only be made upon a separation
from service within the meaning of such term under Section 409A, (ii) each payment
made under this Agreement shall be treated as a separate payment and (iii) the right
to a series of installment payments under this Agreement is to be treated as a right
to a series of separate payments. In no event shall Employee, directly or
indirectly, designate the calendar year of payment.
15.2 All reimbursements and in-kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of Section 409A,
including, where applicable, the requirements that (i) any reimbursement is for
expenses incurred during Employees lifetime (or during a shorter period of time
specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other calendar year, (iii) the reimbursement of an eligible expense will be made on
or before the last day of the calendar year following the year in which the expense
is incurred and (iv) the right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit.
15.3 Notwithstanding any provision in this Agreement to the contrary, if, at
the time of Employees separation from service with Employer, Employer has
securities which are publicly traded on an established securities market, Employee
is a specified employee (as defined in Section 409A) and it is necessary to
postpone the commencement of any severance payments otherwise
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payable pursuant to this Agreement as a result of such separation from service
to prevent any accelerated or additional tax under Section 409A, then Employer will
postpone the commencement of the payment of any such payments or benefits hereunder
(without any reduction in such payments or benefits ultimately paid or provided to
Employee) that are not otherwise exempt from Section 409A until the first payroll
date that occurs after the date that is six (6) months following Employees
separation from service with Employer (as determined under Section 409A). If any
payments are postponed pursuant to this Section 15.3, then such postponed amounts
will be paid in a lump sum to Employee on the first payroll date that occurs after
the date that is six (6) months following Employees separation from service with
Employer. If Employee dies during the postponement period prior to the payment of
any postponed amount, such amount shall be paid to the personal representative of
Employees estate within sixty (60) days after the date of Employees death.
(g) Schedule 12 to the Agreement is amended by (i) replacing Paramus, New Jersey as
referenced therein with Wayne, New Jersey and (ii) deleting Troy, Michigan.
2.
Miscellaneous
.
(a)
Choice of Law
. This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without giving effect to the conflict of laws
principles thereof.
(b)
Counterparts
. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument.
(c)
Severability
. If any term or provision of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of
the terms and provisions of this Amendment shall in no way be affected, impaired or invalidated.
(d)
Existing Terms
. The existing terms and conditions of the Agreement shall remain
in full force and effect except as such terms and conditions are specifically amended by, or
conflict with, the terms of this Amendment.
[Signature page follows.]
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IN WITNESS WHEREOF
, the parties hereto have executed this Amendment, or caused this Amendment
to be executed by the undersigned thereunto duly authorized, as of the date first written above.
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CROWN CRAFTS, INC.
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By: /s/ E. Randall Chestnut
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Name:
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E. Randall Chestnut
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Title:
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President & Chief Executive Officer
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/s/ Nanci Freeman
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NANCI FREEMAN
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