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: November 28, 2000
Date of Earliest Event Reported: November 22, 2000
TANDYCRAFTS, INC.
Delaware 1-7258 75-1475224
-------- ------ ----------
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1400 Everman Parkway
Fort Worth, Texas 76140
(817) 551-9600
Not applicable
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS.
On November 22, 2000, Tandycrafts, Inc. (the "Company") issued a press
release announcing that the Company has entered into a settlement
agreement with the Tandycrafts Full Value Committee. Copies of the
Settlement Agreement and press release are filed herewith as Exhibits
2.1 and 99.1 respectively.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
--------
2.1 Settlement Agreement, dated as of November 21, 2000, by and among
Tandycrafts, Inc., R.E. Cox, III, Sheldon Stein, Michael J.
Walsh, Jack Kahl, Colon Washburn and Joe K. Pace, Steel
Partners II, L.P., Warren G. Lichtenstein, Steven Wolosky,
Mark E. Schwarz, James R. Henderson, Glen Kassan, Harold Smith,
Newcastle Partners, L.P., and The Tandycrafts Full Value
Committee.
99.1 Press Release dated November 22, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TANDYCRAFTS, INC.
Dated: November 28, 2000 By: /s/ Michael J. Walsh
-----------------------------------
Michael J. Walsh
Chairman and Chief Executive Officer
EXHIBIT 2.1
SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT, dated as of November 21, 2000, by and among
Tandycrafts, Inc., a Delaware corporation ("Tandycrafts" or the "Company"), R.E.
Cox, III ("Cox"), Sheldon Stein ("Stein"), Michael J. Walsh ("Walsh"), Jack Kahl
("Kahl"), Colon Washburn ("Washburn") and Joe K. Pace ("Pace") (collectively,
Tandycrafts, Cox, Stein, Walsh, Kahl, Washburn and Pace, are referred to herein
as the "Tandycrafts Parties"), Steel Partners II, L.P., a Delaware limited
partnership ("Steel"), Warren G. Lichtenstein ("Lichtenstein"), Steven Wolosky
("Wolosky"), Mark E. Schwarz ("Schwarz"), James R. Henderson ("Henderson"), Glen
Kassan ("Kassan"), Harold Smith ("Smith"), Newcastle Partners, L.P., a Texas
limited partnership ("Newcastle"), and The Tandycrafts Full Value Committee
(collectively, Steel, Lichtenstein, Wolosky, Schwarz, Henderson, Kassan, Smith,
Newcastle and the Full Value Committee are referred to herein as the "Steel
Parties").
WHEREAS, Steel beneficially owns an aggregate of 1,537,100 shares and
Newcastle beneficially owns an aggregate of 264,200 shares of common stock of
Tandycrafts, $1.00 par value ("Common Stock");
WHEREAS, the Steel Parties have (i) notified Tandycrafts, in letters
dated June 5, 2000 and September 18, 2000, of their intention to nominate and
solicit proxies in support of six candidates to stand for election to the
Tandycrafts Board of Directors ("Board") at Tandycrafts's 2000 Annual
Stockholders Meeting (the "Nomination Notice") and (ii) filed materials with the
Securities and Exchange Commission ("SEC") in order to solicit proxies to vote
at the Tandycrafts' 2000 Annual Stockholders Meeting ("Annual Meeting") in order
to elect a slate of nominees pursuant to the Nomination Notice (the "Steel Proxy
Solicitation");
WHEREAS, the Steel Parties have (i) purported to deliver consents to
the Company with respect to the removal of the existing members of the
Tandycrafts Board of Directors and elect directors in their place without a
meeting of the Tandycrafts stockholders and (ii) filed materials with the SEC in
order to solicit consents to remove and replace directors of the Company without
a meeting of Tandycrafts Stockholders (the "Steel Consent Solicitation");
WHEREAS, Tandycrafts has filed a lawsuit against certain of the Steel
Parties in the United States District Court in the Northern District of Texas
entitled TANDYCRAFTS, INC. V. STEEL PARTNERS II, L.P., WARREN G. LICHTENSTEIN,
NEWCASTLE PARTNERS AND MARK E. SCHWARZ, C.A. CV1838-L, alleging violations of
certain securities laws and other allegations (the "Tandycrafts Litigation"),
and Steel has filed a lawsuit against the Tandycrafts Parties in the New Castle
County Court of Chancery of the State of Delaware, entitled STEEL PARTNERS II,
L.P., V. TANDYCRAFTS, INC., MICHAEL J. WALSH, R.E. COX III, JOE K. PACE, SHELDON
STEIN, COLON WASHBURN AND JACK KAHL, C.A. No. 18326NC, amended November 1,
2000, in response thereto and relating to other issues (the "Steel Litigation");
WHEREAS, the Tandycrafts Parties and the Steel Parties have determined
that the interests of Tandycrafts and its shareholders, and the interests of the
Steel Parties, would best be served by (i) avoiding the substantial expense and
disruption that could be expected to result from the Steel Proxy and Consent
Solicitations, the Steel Litigation and the Tandycrafts Litigation,
(ii) nominating the persons as set forth herein for election as directors of
Tandycrafts, (iii) terminating the Steel Litigation and the Tandycrafts
Litigation and (iv) the receipt of other agreements, covenants, rights and
benefits as provided herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
Section 1. Representations, Warranties and Covenants of the
Tandycrafts Parties. Each of the Tandycrafts Parties hereby represents,
warrants and agrees that (a) each of the Tandycrafts Parties has full legal
right, power and authority to execute, deliver and perform this Agreement, and
consummate the transactions contemplated hereby, (b) the execution and delivery
of this Agreement, and the consummation by Tandycrafts of the transactions
contemplated hereby have been duly authorized by all necessary corporate
actions, and (c) this Agreement constitutes valid, legal and binding obligations
of each of the Tandycrafts Parties, enforceable against each such party in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium (whether general or specific)
or other laws now or hereafter in effect.
Section 2. Representations, Warranties and Covenants of the Steel
Parties. Each of the Steel Parties hereby represents, warrants and agrees that
(a) each of the Steel Parties has full legal right, power and authority to
execute, deliver and perform this Agreement, and consummate the transactions
contemplated hereby, (b) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate actions, and (c) this Agreement constitutes valid,
legal and binding obligations of each of the Steel Parties, enforceable against
each such party in accordance with its terms, except that such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium (whether
general or specific) or other laws now or hereafter in effect.
Section 3. Board Composition; Related Matters.
3.1 On the date of this Settlement Agreement, (a) the Tandycrafts
Parties shall cause the number of directors on the Tandycrafts Board of
Directors to be fixed at six (6) directors, (b) Messrs. Kahl and Cox shall
resign from the Tandycrafts Board of Directors and (c) the Tandycrafts Parties
who remain as members of the Tandycrafts Board of Directors shall elect Messrs.
Lichtenstein, Schwarz and Kassan to the Tandycrafts Board of Directors to
replace the resigning directors. The Tandycrafts Board of Directors shall also
create an Advisory Committee of ex-officio directors to serve for such term as
determined by a vote of four members of the Tandycrafts Board of Directors. The
Advisory Committee shall consist of Messrs. Cox and Kahl, and their activities
shall be limited to client relationship issues. Copies of the minutes of the
Advisory Committee shall be made available to all members of the Board. The
Tandycrafts Parties and the Steel Parties agree that except with respect to the
actions contemplated by Section 3.2 of this Agreement, no action of the Board
may be taken without the affirmative vote of four (4) directors. The
composition of any other Committee of the Board shall require the affirmative
vote of four (4) directors.
3.2 On the date of this Settlement Agreement or as soon as
practicable thereafter, the Tandycrafts Parties agree that they shall cause the
Company to issue to Steel and Newcastle an aggregate of 123,000 shares of
Tandycrafts common stock. Steel and Newcastle shall designate the number of
shares each shall be issued simultaneously with the execution of this Settlement
Agreement, which shares shall be deemed fully paid and non-assessable.
Simultaneously with the execution of this Settlement Agreement, the Tandycrafts
Parties shall have caused the Board to amend the Company's Shareholder Rights
Plan (the "Rights Plan") to permit the issuance of such shares without any Steel
Parties being considered "Acquiring Persons" under the Rights Plan as a result
of such issuance (but that the acquisition of beneficial ownership by the Steel
Parties of any additional shares of the Company's common stock shall result in
the Steel Parties being considered "Acquiring Persons" as provided for under the
provisions of the Plan). Except for such amendment, the Rights Plan has not
been amended since March 1, 2000 and the By-laws of the Company have not been
amended since March 16, 1997. In addition, simultaneously with the execution of
this Settlement Agreement, the Tandycrafts Parties shall have caused the Board
to pass a resolution providing that the issuance of the Company's shares to
Steel and Newcastle as contemplated hereunder shall not have caused the Steel
Parties to become an "interested stockholder" for purposes of Delaware General
Corporation Law ("DGCL") Section 203. In consideration for the issuance of such
shares, the Steel Parties agree that (a) at least two (2) members of the Board
shall be independent of the Steel Parties (the "Independent Directors") and (b)
in the event the Steel Parties acquire beneficial ownership of any additional
share or shares of the Company without the prior approval of the Independent
Directors, they will be bound by and subject to the provisions of DGCL Section
203 as if they had otherwise become an "interested stockholder" for purposes of
DGCL Section 203 by virtue of such acquisition.
3.3 The Tandycrafts Parties shall cause Tandycrafts to (a) set
December 11, 2000 as the record date for the Annual Meeting, (b) set January 17,
2001 as the date of the Annual Meeting and (c) nominate a new slate of six
directors for election by the stockholders to the Board at the Annual Meeting.
Such slate shall consist of three persons selected by the Tandycrafts Parties,
who shall be Messrs. Washburn, Stein and Walsh (the "Tandycrafts Nominees") and
three persons selected by the Steel Parties, who shall be Messrs. Lichtenstein,
Schwarz and Kassan (the "Steel Nominees"). The parties hereto agree that none of
Messrs. Kahl, Cox, Pace, Henderson, Smith or Wolosky shall stand for election as
a director at the Annual Meeting.
3.4 If any Tandycrafts Nominee or Steel Nominee elects not to
stand for election to the Board at the Annual Meeting, then the party hereto
that selected such nominee shall have the right to select a new person at the
Annual Meeting to be that party's nominee. In addition, if a Tandycrafts Nominee
or a Steel Nominee ceases to serve as a member of the Board by reason of death,
resignation, removal, disqualification or for any other reason, prior to
expiration of the Standstill Period (as defined below), then such vacancy on the
Board shall be filled by the party hereto that originally selected such nominee.
A director selected by either the Tandycrafts Parties or the Steel Parties to
fill such a vacancy shall hold office until such director's successor shall have
been duly elected and qualified.
3.5 The Steel Parties and their Affiliates and Associates (as such
terms are defined in Rule 12b-2 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), and the Tandycrafts Parties, shall publicly
support and recommend that Tandycrafts shareholders vote for the election of
each of the Steel Nominees and Tandycrafts Nominees at the Annual Meeting, and
each of the Steel Parties and the Tandycrafts Parties shall vote, and shall
cause their Affiliates and Associates to vote, all shares of Common Stock which
they are entitled to vote at the Annual Meeting (including as proxies) in favor
of the election of each of the Steel Nominees and the Tandycrafts Nominees and
such votes shall not be revoked in any manner. The Company agrees that it shall
publicly support and recommend that Tandycrafts shareholders vote for the
election of each of the Steel Nominees and Tandycrafts Nominees at the Annual
Meeting, and shall cause its designated proxy holders to vote in favor of the
election of each of the Steel Nominees and the Tandycrafts Nominees with respect
to any valid proxy received by the Company and such votes shall not be revoked
for the Annual Meeting for which no contrary voting instructions are
specifically provided by the holders of such shares.
3.6 At the first meeting of the Board following the expiration of
the Standstill Period (as hereinafter defined), unless the Tandycrafts Board of
Directors by an affirmative vote of four (4) directors determines to do so at an
earlier date, the Board shall retain a nationally recognized investment banking
firm to explore all strategic alternatives relating to Tandycrafts.
3.7 The Tandycrafts Parties and the Steel Parties agree that (a)
the Company shall be bound by and honor all agreements, contracts and
commitments with the officers listed on Schedule I hereto (the "Officers") and
shall not contest the validity or enforceability of any such agreement, contract
or commitment, but shall be entitled to enforce the provisions thereof in
accordance with their terms and (b) in the event the Company does not honor such
agreements, contracts or commitments, the Company shall be required to pay the
legal fees and expenses incurred by the Officers to enforce such agreements,
contracts or commitments.
Section 4. Settlement of Litigation.
4.1 As promptly as practicable after the execution of this
Agreement (a) Tandycrafts Parties shall take all steps necessary to dismiss, as
to those members of the Steel Parties who are defendants therein, the
Tandycrafts Litigation, without prejudice, and without costs or expenses and (b)
Steel Parties shall take all steps necessary to dismiss, as to those members of
the Tandycrafts Parties who are defendants therein, the Steel Litigation without
prejudice, and without costs or expenses.
4.2 The Steel Parties and the Tandycrafts Parties agree that
during the Standstill Period neither party will commence against the other party
any litigation or any other action or proceeding relating in any way to
Tandycrafts, except with respect to any breach of this Agreement.
4.3 Effective upon execution of this Agreement, the Steel Parties
irrevocably withdraw their Nomination Notice and agree to terminate the Steel
Proxy Solicitation and Consent Solicitation.
Section 5. Standstill Period.
5.1 Each of the Steel Parties, on the one hand, and each of the
Tandycrafts Parties, on the other hand, agree that, without the prior written
consent of four (4) members of the Board or as otherwise contemplated by
Sections 3.2, 3.3, 3.4 and 3.5 of this Settlement Agreement, it shall not during
the period from the date hereof until six months from the date of this Agreement
(the "Standstill Period"), directly or indirectly:
(a) acquire or agree, offer, seek or propose to acquire, or cause
to be acquired, ownership (including, but not limited to, beneficial
ownership as defined in Rule 13d-3 under the Exchange Act) of any of the
assets or businesses of Tandycrafts or its subsidiaries or any securities
of Tandycrafts or its subsidiaries (including, without limitation, any
debt, equity or convertible securities) or any rights or options to acquire
any such ownership from any Person (as defined below);
(b) make, or in any way participate in, any "solicitation" of
"proxies" (as such terms are used in the proxy rules of the SEC) to vote or
consent, or seek to advise or influence in any manner whatsoever any Person
with respect to the voting of any securities of Tandycrafts or seek to call
or hold any meeting of the shareholders;
(c) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) (other than with the Steel
Parties) or enter into any voting trust agreement with respect to any
voting securities of Tandycrafts;
(d) arrange, or in any way participate in, any financing for the
purchase of any voting securities or securities convertible or exchangeable
into exercisable for any voting securities or assets of Tandycrafts;
(e) otherwise act, whether alone or in concert with others, to
seek to propose to Tandycrafts, or any of its stockholders, any merger,
business combination, restructuring, recapitalization or similar
transaction to or with Tandycrafts or otherwise act, whether alone or in
concert with others, to seek to control, change or influence the
stockholders, Board, management or policies of Tandycrafts, or nominate any
Person as a director or officer of Tandycrafts, or seek to call or hold any
meeting of Tandycrafts stockholders;
(f) solicit, negotiate with, or provide any information to, any
Person with respect to a merger, business combination, exchange offer or
liquidation of Tandycrafts or any other acquisition of Tandycrafts, any
acquisition of securities of or all or any portion of the assets of
Tandycrafts or any other similar transaction;
(g) make any proposal to be considered and/or voted upon at any
meeting the stockholders of Tandycrafts, discuss or communicate with
respect to any matter related to the business and affairs of Tandycrafts
with the stockholders of Tandycrafts;
(h) announce an intention to, or enter into any discussion,
negotiations, arrangements or understandings with any third party with
respect to, any of the foregoing matters;
(i) disclose any intention, plan or arrangement inconsistent with
any of the foregoing provisions; or
(j) advise, assist, encourage or participate with any other Person
in connection with action inconsistent with any of the foregoing
provisions.
"Person" shall mean any natural person, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, government or any agency or political subdivision thereof, or
any other legal entity or organization.
Section 6. Miscellaneous.
6.1 Severability. If any provision of this Settlement Agreement
shall be held invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and shall not in any manner render invalid
or unenforceable any other provisions of this Settlement Agreement.
6.2 Governing Law. This Settlement Agreement and the rights and
duties of the parties hereto shall be governed by and construed in accordance
with the internal laws of the State of Delaware without regard to principles of
conflicts of law.
6.3 Entire Agreement. This Settlement Agreement and any and all
other documents delivered in connection herewith set forth the entire
understanding of the parties in respect to the transactions contemplated herein
and supersede all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. Each party hereto has retained
independent counsel and such counsel has advised each party with respect to the
subject matter of this Settlement Agreement, and except as set forth herein, no
party is relying upon any representations or statements of any other party.
6.4 Equitable Relief. The parties hereto agree that irreparable
damage would occur in the event any provision of this Settlement Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
6.5 Amendments and Waivers to be in Writing. This Settlement
Agreement may not be amended, modified or changed, and none of the terms,
covenants, representations, warranties or conditions hereof may be waived,
except by a written instrument signed by the party against whom enforcement of
any amendment, change or modification is sought, or in the case of a waiver, by
the party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce same.
6.6 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective
(a) when personally delivered or delivered by telecopy (with confirmation of
transmission) on a business day during normal business hours at the address or
number designated below or (b) on the business day following the date of mailing
by overnight courier, fully prepaid, addressed to such address, whichever shall
first occur. The addresses for such communications shall be:
If to Tandycrafts or any of the Tandycrafts Parties:
Tandycrafts, Inc.
1400 Everman Parkway
Fort Worth, Texas 76140
Attention: Russell L. Price
Telecopy: (817) 551-9795
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: Dennis J. Block, Esq.
Telecopy: (212) 504-6666
If to The Steel Parties:
Warren Lichtenstein
Steel Partners II, L.P.
150 East 52nd Street, 21st Floor
New York, New York 10022
Telecopy: (212) 813-2198
with a copy to:
Olshan Grundman Frome Rosenzweig & Wolosky LLP
505 Park Avenue
New York, New York 10022
Attention: Steve Wolosky, Esq.
Telecopy: (212) 980-7177
Any party hereto may from time to time change its address for notices under this
Section 6.6 by giving at least 10 days' written notice of such changed address
to the other parties hereto in accordance with the notice provisions set forth
in this Section 6.6.
6.7 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement, and shall not be deemed to limit or
affect any of the provisions hereof.
6.8 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
6.9 Further Assurances. The parties hereto shall execute and
deliver such further documents and do such further acts as any party hereto
shall reasonably require in order to assure and confirm to the parties hereto
the rights hereby created or to facilitate the full performance of the terms of
this Agreement.
6.10 Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all of which such counterparts shall constitute but
one and the same agreement. A facsimile signature shall be deemed an original.
6.11 Assignment. Neither this Agreement nor any rights hereunder
may be assigned by any party in whole or in part, without the prior written
consent of the other parties hereto.
6.12 Expenses. Except for the issuance of the shares as set forth
in Section 3.2, each party shall pay its own costs incident to any matters
relating to (a) this Agreement, (b) the Tandycrafts Litigation, (c) the Steel
Litigation, (d) any of the Steel Parties' investment in Tandycrafts, (e) any
expenses relating to election of directors to the Board (except with respect to
the election of directors as contemplated by Section 3 of this Agreement) or (f)
any other matter relating to Tandycrafts. Notwithstanding the foregoing, in
the event of a dispute regarding the performance of this Agreement, the non-
prevailing party shall reimburse the prevailing party the amount the prevailing
party's reasonable attorney's fees, cost and expenses, in addition to any other
relief to which the prevailing party may be entitled.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
have caused this Agreement to be duly executed by their respective authorized
officers as of the date hereof.
TANDYCRAFTS, INC.
By: __________________________________________
Name:
Title:
R.E. COX, III
_____________________________________________
SHELDON STEIN
_____________________________________________
MICHAEL J. WALSH
_____________________________________________
JACK KAHL
_____________________________________________
COLON WASHBURN
_____________________________________________
JOE K. PACE
_____________________________________________
THE STEEL PARTIES
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C., General Partner
By: ______________________________________
Name: Warren Lichtenstein
Title: Chairman
THE TANDYCRAFTS FULL VALUE COMMITTEE
_________________________
By: Warren Lichtenstein
WARREN G. LICHTENSTEIN
_____________________________________________
NEWCASTLE PARTNERS, L.P.
_____________________________________________
By: Mark E. Schwartz
MARK E. SCHWARZ
_____________________________________________
STEVEN WOLOSKY
_____________________________________________
JAMES R. HENDERSON
_____________________________________________
GLEN KASSAN
_____________________________________________
HAROLD SMITH
_____________________________________________
EXHIBIT 99.1
CONTACT: Leo Taylor
Tandycrafts, Inc. (817) 551-9600
([email protected])
FOR IMMEDIATE RELEASE or
Jeff Lambert, Brian Edwards ([email protected])
Lambert, Edwards & Associates, Inc. (616) 233-0500
TANDYCRAFTS REACHES SETTLEMENT AGREEMENT WITH SHAREHOLDERS GROUP
----------------------------------------------------------------
FORT WORTH, Texas, Nov. 22 - Tandycrafts, Inc. (NYSE: TAC) announced today that
it has entered into a settlement agreement with the Tandycrafts Full Value
Committee, New York City- based Steel Partners II, L.P. and Newcastle Partners,
L.P.
The Fort Worth, Texas-based wall decor and home furnishings company said the
settlement calls for a six month standstill agreement in which the Tandycrafts
Full Value Committee agreed to terminate its pending proxy contest and consent
solicitation in exchange for Board representation. In addition, all parties have
agreed to dismiss their respective lawsuits.
Under terms of the agreement, Tandycrafts will grant the Tandycrafts Full Value
Committee three seats on its six-seat board. The new board will consist of
incumbent directors Michael Walsh, Sheldon Stein and Colon Washburn and three
new representatives from the Tandycrafts Full Value Committee; Warren
Lichtenstein, Mark Schwarz and Glen Kassan. Current Tandycrafts directors Earl
Cox and Jack Kahl will no longer serve on the board of directors, but will sit
on a newly formed advisory board.
"We are glad to have reached some middle ground with Steel Partners and
Newcastle Partners so we can get back to business at Tandycrafts," said Michael
Walsh, chairman and chief executive officer of Tandycrafts. "We have made
considerable investment and progress in our core frames and home furnishings
business and are beginning to see the benefits of these efforts. We look forward
to continuing our pace and maximizing the value of Tandycrafts for all
shareholders." Warren Lichtenstein of Steel Partners added: "The standstill
agreement should facilitate our efforts to assist management in enhancing
shareholder value. At the end of the six month standstill period, the Company
has committed to retain a nationally recognized investment banking firm to
explore all strategic alternatives."
Tandycrafts announced that it has set its record date for December 11, 2000 and
has scheduled its annual meeting to be held on or around January 17, 2001.
Tandycrafts also announced that it expects to file its annual report on Form 10-
K in approximately early December. The Company said its annual meeting and proxy
filing were delayed while it sought to amend its credit terms with its banks and
find replacement and additional financing. Tandycrafts announced last month that
it has reached agreement with its senior lenders to amend the Company's
revolving credit facility and is continuing discussions with other parties to
secure additional capital to fund long-term growth.
Walsh continued: "While we have an amended credit facility in place, we will
continue to negotiate with other potential financing sources to provide
financing and capital to Tandycrafts."
Tandycrafts, Inc. (www.tandycrafts.com ) is a leading maker and marketer of
consumer products, including frames and wall decor sold under the Pinnacle Art &
Frame brand and home furnishings sold through its Cargo Furniture subsidiary.
The Company's products are sold nationwide through wholesale distribution
channels, including mass merchandisers and specialty retailers, and direct-to-
consumer channels through the Company's retail stores, mail order and the
Internet.
Statements in this news release which are not purely historical facts are
forward looking statements, including statements containing the words "believe",
"estimate", "project", "expect" or similar expressions. These statements are
made pursuant to the safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934, as amended. All forward looking statements are based upon
information available to Tandycrafts on the date of this release. Any forward
looking statement inherently involves risks and uncertainties that could cause
actual results to differ materially from the forward-looking statements. Factors
that would cause or contribute to such differences include, but are not limited
to, continued acceptance of the Company's products in the marketplace,
successful implementation of its strategic plan, the extension or refinancing of
its existing bank facility and the restrictions any such extension or
refinancing could place on the Company, the ability to obtain new financing from
other financing sources, the ability to generate positive cash flow from
operations and asset sales, competitive factors, dependence upon third-party
vendors, and other risks detailed in the Company's periodic report filings with
the Securities and Exchange Commission. By making these forward-looking
statements, the Company undertakes no obligation to update these statements for
revisions or changes after the date of this release. Readers are cautioned not
to place undue reliance on forward looking statements.
