CROWN CRAFTS INC — Proxy Solicitation & Information Statement 2010

Jul 23, 2010

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CROWN CRAFTS, INC. (Name of Registrant as Specified in its Charter) WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. I WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND, LTD. WYNNEFIELD CAPITAL MANAGEMENT, LLC WYNNEFIELD CAPITAL, INC. CHANNEL PARTNERSHIP II, L.P. WYNNEFIELD CAPITAL, INC. PROFIT SHARING & MONEY PURCHASE PLAN NELSON OBUS JOSHUA H. LANDES JON C. BIRO MELVIN L. KEATING

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The Wynnefield Group Investor Presentation Regarding Crown Crafts, Inc. (Nasdaq: CRWS)

Overview

I.Who is the Wynnefield Group?

II.Change Needed to Create Stockholder Value A.Background of Election Contest B.Wynnefield Warned About This in 2007 C.Years of Underperformance and Entrenchment D.Board has No Articulated Strategic Plan; Product Line Extension Does Not Qualify

III.Deficiencies of the Current Management-Endorsed Board Majority

A.Misaligned Interests Lead to Pursuit of Status Quo B.Current Board Not Acting in Stockholders’ Best Interests; Reinstated “Poison Pill” Without Stockholder Approval

IV.Wynnefield’s Nominees A.Expertise to Address Company’s Challenges B.Focus on Increasing Value for All Stockholders

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Who Is The Wynnefield Group?

Value investor in small & micro-cap stocks

Largest stockholder of Crown Crafts

Currently own about 17% of outstanding stock

Long-term investor

Invested in Crown Crafts since 1996 and have increased holdings at a variety of price points to protect ownership during this period

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Background of Election Contest

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Wynnefield Warned About This in 2007

CRWS’ Unfulfilled 2007 Promises: Share Price

Pointing to share price of $4.65, Crown Crafts wrote: “In many respects, fiscal year 2007 marked the successful completion of our efforts that began in 2001 to turn the Company around and reestablish a solid foundation for growth and success ” [Letter to stockholders, 7/24/07]

Fact: CRWS stock has never again achieved that level – down more than 16% since then (as of July 20, 2010).

CRWS’ Unfulfilled 2007 Promise: Creating Value

Describing a company “more nimble and poised for growth,” it promised “strategic acquisitions that will build long-term stockholder value” and enhancing stockholder value through “achieving organic growth,” among other objectives. [Letter to stockholders, 7/16/07]

Fact: Over the past three years, CRWS has instead completed three small tuck-in acquisitions while revenue and operating income remain flat.

Fact: CRWS’ net sales decreased by $1.3 million (1.5%) in FY 2010, despite the Company’s assertions in its earnings release that it was a “banner year.”

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Years of Underperformance and Entrenchment

*

x

Source : Bloomberg as of July 21, 2010* TTM = Trailing Twelve Months

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Years of Underperformance and Entrenchment

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Years of Underperformance and Entrenchment

*Pure Play - Infant and Juvenile Industry Company

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Years of Underperformance and Entrenchment

• As of 12/23/08, KID became a “Pure Play” Peer after divestiture of giftware business 9

Years of Underperformance and Entrenchment

*Excludes KID, which did not become a “Pure Play” Peer until divestiture of giftware business on 12/23/08 10

Board Has No Articulated Strategic Plan

Strategic Review Committee Never Publicly Disclosed Findings or Even that it had Deliberations

Only After Wynnefield’s 2010 Proxy Announcement Did Board Proclaim Adoption of “Strategic Plan”

This is first stockholders have heard of this Still, nothing else disclosed about “plan” Only thing known about “plan” – if there even is one – is that it has failed to create stockholder value

This recent announcement is only a product line extension

The Company’s Micro-Acquisitions Merely Mask Declining Core Business to Maintain Status Quo

No Stockholder Value Created by the Board or Management’s Actions in Recent Times

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Misaligned Interests Lead to Pursuit of Status Quo

Lavish Board and Management Pay Incentivize Status Quo Rather Than Creating Stockholder Value

Management:
Board-approved lavish executive compensation and severance packages – significant amounts of cash; little long-term equity compensation despite policy statement to the contrary

Board-approved golden parachute payments and tax gross-ups that could cost more than $5 million – exceeding CRWS’ annual net income

Board-approved incentive plan rewards management with approximately 3.7% of Company if over five years they match the EBITDA multiple at which peers are currently trading, a handsome reward for average performance

Board:
Over past three years, total Board compensation was over $1.3 million while market value declined by $10.6 million (-22%)

In 2008, Board retainers doubled while operating income remained flat In 2009, one director’s total compensation was $104,126 Majority of Board retainer paid in cash Current non-employee directors hold only 2% of outstanding voting stock

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Board Not Acting in Stockholders’ Best Interests

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Wynnefield Nominees’ Expertise

Jon C. BiroMelvin L. Keating

Executive OfficerExecutive Officer
CFO – Consolidated Graphics, Inc.CEO – Alliance Semiconductor Corp.
CFO, Interim CEO – ICO, Inc.
CEO – Sunbelt Management Corporate Director EVP, CFO & Treasurer – Quovadx Inc.
Aspect Medical Systems Inc.
ICO, Inc.Corporate Director
Public Accounting & FinanceBitstream Inc.
Infologix, Inc. Certified Public Accountant (CPA)
Red Lion Hotels, Corp.* Price Waterhouse LLP

Aspect Medical Systems Inc.
Integrated Silicon Solutions Inc.
Plymouth Rubber Co.
Price Legacy Corp.
White Electronic Designs Corp.
Strategic Consultant *CurrentWarburg Pincus Equity Partners BTI Systems, Inc.

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Focus to Increase Value for All Stockholders

Our Nominees are committed to working constructively with Board to create stockholder value and address significant corporate governance deficiencies

Strategic PlanCorporate Governance Form standing Strategic Review CommitteeEliminate staggered Board

Adopt real CEO succession plan Hire qualified independent consultant to help determine future pathTerminate “poison pill” Link executive compensation to Company performance

Communicate to stockholders nature and extent of reviewSplit Chairman/CEO roles
Amend non-employee director compensation; our Nominees will only take 50% of cash compensation or donate balance to American SIDS Institute Cause Company to participate in investor or industry conferences

Modify change-in-control agreements

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