AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1999.
REGISTRATION FILE NO. 333-_________
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SPAN-AMERICA MEDICAL SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-0525804
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
70 COMMERCE CENTER
GREENVILLE, SOUTH CAROLINA 29615
(864) 288-8877
(Address, Including Zip Code, of Principal Executive Offices)
SPAN-AMERICA MEDICAL SYSTEMS, INC. 1997 STOCK OPTION PLAN
(Full Title of the Plan)
JAMES D. FERGUSON, PRESIDENT AND CHIEF EXECUTIVE OFFICER
SPAN-AMERICA MEDICAL SYSTEMS, INC.
70 COMMERCE CENTER
GREENVILLE, SOUTH CAROLINA 29615
(864) 288-8877
(Name, address, and telephone number, including
area code, of agent for service)
Copies to:
ERIC K. GRABEN, ESQ.
WYCHE, BURGESS, FREEMAN & PARHAM, P.A.
POST OFFICE BOX 728
GREENVILLE, SOUTH CAROLINA 29602-0728
(864) 242-8200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to Offering Price Aggregate Amount of
to be Registered be Registered Per Share(1) Offering Price (1) Registration Fee(1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 200,000 shares $5.25 $1,050,000 $291.90
===================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c) and (h), the average of the high and low prices
reported on the Nasdaq National Market System on January 12, 1999 (as
published in the Wall Street Journal) is used for purposes of calculating
the registration fee.
THE EXHIBIT INDEX IS ON PAGE 9 OF THIS REGISTRATION STATEMENT.
<PAGE>
PART I:
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not included in this registration statement (the "Registration Statement")
but provided or to be provided to Span-America Medical Systems, Inc.'s
("Span-America") 1997 Stock Option Plan (the "Plan") participants pursuant to
Rule 428(b) of the Securities Act of 1993, as amended (the "Securities Act").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not included in this Registration Statement but provided or to be provided
to Plan participants pursuant to Rule 428(b) of the Securities Act.
PART II:
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents or portions thereof are hereby incorporated by
reference:
Span-America's Annual Report on Form 10-K for the fiscal year ended
October 3, 1998 (Commission File No. 000-11392).
All other reports filed by Span-America pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended, since the end of
Span-America's fiscal year ended October 3, 1998 (Commission File No.
000-11392).
The description of Span-America's common stock contained in the
registrant's Form 8-A filed with the Securities and Exchange Commission on
or about October 20, 1986 (Commission File No. 000- 11392).
All documents subsequently filed by Span-America pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part thereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
2
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The law firm of Wyche, Burgess, Freeman & Parham, P.A., located in
Greenville, South Carolina, is counsel to the registrant in connection with this
Registration Statement and has passed on certain aspects of the legality of the
common stock covered hereby. As of January 7, 1999, attorneys of Wyche, Burgess,
Freeman & Parham, P.A., beneficially owned in the aggregate 19,000 of the
outstanding shares of common stock of the registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Company's By-Laws provides as follows:
Section 5.1 Indemnification of Directors. The corporation shall indemnify
any individual made party to a proceeding because he is or was a director of the
corporation against liability incurred in the proceeding to the fullest extent
permitted by law.
Section 5.2 Advance Expenses for Directors. The corporation shall pay for
or reimburse the reasonable expenses incurred by a director who is a party to a
proceeding in advance of final disposition of the proceeding to the fullest
extent permitted by law.
Section 5.3 Other Employees and Agents. In addition to any indemnification
required by law, the corporation may, to the extent authorized from time to time
by the board of directors, grant rights of indemnification, and rights to be
paid by the corporation the expenses incurred in defending any proceeding in
advance of its final disposition, to any employee or agent of the corporation to
the fullest extent of the provisions of this By-Law with respect to the
indemnification and advancement of expenses of directors and officers of the
corporation.
Section 5.4 Nature of Right to Indemnification. The right to
indemnification conferred in this ByLaw shall be a contract right and shall
include the right to be paid by the corporation the expenses incurred in
defending any such proceeding in advance of its final disposition, such advances
to be paid by the corporation within 30 days after the receipt by the
corporation of a statement or statements from the claimant requesting such
advances from time to time; provided, however, that the payment of such
expenses, incurred by a person to whom indemnification is or may be available
under this By-Law, in advance of the final disposition of a proceeding shall be
made only pursuant to Section 33-8-530 of the South Carolina Business
Corporation Act of 1988, as amended (the "Act"), or such successor provision as
may be in effect from time to time.
Section 5.5 Request for Indemnification; Determination of Entitlement
Thereto; When Paid. To obtain indemnification under this By-Law, a claimant
shall submit to the corporation written request, including therein or therewith
such documentation and information as is reasonably available to the claimant
and is reasonably necessary to determine whether and to what extent the claimant
is entitled to indemnification. Upon written request by a claimant for
indemnification pursuant to the first sentence of this Section 5.5, a
determination with respect to the claimant's entitlement thereto shall be made
in accordance with Section 33-8-550 of the Act, or such successor provision as
may be in effect from time to time. If it is so determined that the claimant is
entitled to indemnification, payment to the claimant shall be made within 10
days after such determination.
3
<PAGE>
Section 5.6 Right of Action; No Presumption. If a claim under Sections
5.1, 5.2 or 5.3 of this By-Law is not paid in full by the corporation within
thirty days after a written claim pursuant to Section 5.5 of this By-Law has
been received by the corporation, the claimant may at any time thereafter bring
suit against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim to the extent permitted by law. It shall
be a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition where the requirements of Section 33-8-530 of the Act, or any
successor provision thereto that may be in effect from time to time, have been
complied with) that the claimant has not met the standard of conduct which makes
it permissible under the Act for the corporation to indemnify the claimant for
the amount claimed, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its board of
directors, special counsel or shareholders) to have made a determination prior
to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she had met the applicable standard of
conduct set forth in the Act, nor an actual determination by the corporation
(including its board of directors, special counsel or shareholders) that the
claimant has not met such applicable standard of conduct, shall create a
presumption that the claimant has not met the applicable standard of conduct.
Section 5.7 Binding Effect on the Corporation. If a determination shall
have been made pursuant to Section 5.5 of this By-Law that the claimant is
entitled to indemnification, the corporation shall be bound by such
determination in any judicial proceeding commenced pursuant to Section 5.6 of
this By-Law.
Section 5.8 No Challenge to Validity. The corporation shall be precluded
from asserting any judicial proceeding commenced pursuant to Section 5.6 of this
By-Law that the procedures and presumptions of this By-Law are not valid,
binding and enforceable and shall stipulate in such proceeding that the
corporation is bound by all the provisions of this By-Law.
Section 5.9 Nonexclusivity. The right to indemnification and payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this By-Law shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision of the
articles of incorporation, By-Laws, agreement, vote of shareholders or directors
or otherwise. No repeal or modification of this By-Law shall in any way diminish
or adversely affect the right of any director, officer, employee or agent of the
corporation hereunder in respect of any occurance or matter arising prior to any
such repeal or modification.
Section 5.10 Severability If any provision or provisions of this By-Law
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(1) the validity, legality and enforceability of the remaining provisions of
this By-Law (including, without limitation, each portion of any Section of this
ByLaw containing any such provision held to be invalid, illegal or
unenforceable, that is not itself held to be invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (2) to the fullest
extent possible, the provisions of this By-Law (including, without limitation,
each such portion of any Section of this By-Law containing any such provision
held to be invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
Section 5.11 Notices. Any notice, request or other communication required
or permitted to be given to the corporation under this By-Law shall be in
writing and either delivered in person or sent by telecopy, telex, telegram,
overnight mail or courier service, or certified or registered mail, postage
prepaid,
4
<PAGE>
return receipt requested, to the Secretary of the corporation and shall be
effective only upon receipt by the Secretary.
Sections 33-8-500 et seq. of the South Carolina Business Corporation Act
of 1988, as amended, providing for indemnification of directors are contained in
Exhibit 99.2 of this Registration Statement and are incorporated herein by
reference.
The Articles of Amendment to the Articles of Incorporation of the
registrant filed with the South Carolina Secretary of State's office on February
6, 1989 provide as follows:
A director of the corporation shall not be personally liable to the
corporation or any of its shareholders for monetary damages for breach of
fiduciary duty as a director, provided that this provision shall not be
deemed to eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or which
involved gross negligence, intentional misconduct, or a knowing violation
of law; (iii) imposed under Section 33-8-330 of the South Carolina
Business Corporation Act of 1988 (improper distribution to shareholder);
or (iv) for any transaction from which the director derived an improper
personal benefit.
The Plan provides for indemnification of the members of the Board of
Directors or the Committee, defined in the Plan as a committee of Span-America's
board of directors which administers the Plan, as follows:
In addition to such other rights of indemnification as they may have
as members of the Board, the members of the Board or Committee shall, to
the fullest extent permitted by law, be indemnified by the Company against
the reasonable expenses, including attorney's fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any
of them may be a party by reason of any action taken or failure to act
under or in connection with the Plan or any Option granted thereunder, and
against all amounts paid by them in settlement thereof (provided the
settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Board member or
Committee member is liable for gross negligence or misconduct in the
performance of his duties; provided that within 60 days after institution
of any such action, suit or proceeding the Board member or Committee
member shall in writing offer the Company the opportunity, at its own
expense, to handle and defend the same.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
- -------
5
<PAGE>
4.1 Specimen of certificate of common stock: Incorporated by reference to
Exhibit 1 to the Registration Statement on Form S-8 of the Registrant,
File No. 33-32896.
4.2 Restated Articles of Incorporation: Incorporated by reference to Exhibit
3(a) to the Registration Statement on Form S-18 of the Registrant, File No
0-11392.
4.3 Amendment to Articles of Incorporation: Incorporated by reference to
Exhibit 3.1.1 to the Form 10-K of the Registrant filed with the Commission
for the fiscal year ended September 28, 1991, File No. 0-11392.
4.4 Amendment to Articles of Incorporation: Incorporated by reference to
Exhibit 4.4 to the Form 10-Q of the Registrant filed with the Commission
for the fiscal quarter ended March 28, 1992, File No.
0-11392.
4.5 Amended and Restated Bylaws of the Company: Incorporated by reference to
Exhibit 3 to the Form 10-Q of the Registrant filed with the Commission for
the period ended March 29, 1997, File No. 0-11392.
4.6 Shareholder Rights Agreement dated September 20, 1993 between the Company
and Wachovia Bank of North Carolina N.A., as rights agent: Incorporated by
reference to Exhibit 2 to the current report on Form 8-K filed by the
Company with the Commission on September 20, 1993.
5.1 Opinion of Wyche, Burgess, Freeman & Parham, P.A. regarding legality of
shares of Span-America Medical Systems, Inc.
23.1 Consent of Wyche, Burgess, Freeman & Parham, P.A.-- contained in Exhibit
5.1.
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney -- contained on the signature page of this filing.
99.1 Span-America Medical Systems, Inc. 1997 Stock Option Plan: Incorporated by
reference to Exhibit 10.14 to the Form 10-K of the Registrant filed with
the Commission for the fiscal year ended September 27, 1997, File No.
0-11392.
99.2 Sections 33-8-500 of the South Carolina Business Corporations Act of 1988,
as amended (which govern indemnification of directors).
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
6
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
7
<PAGE>
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Greenville, State of South Carolina, as of January 7,
1999.
SPAN-AMERICA MEDICAL SYSTEMS, INC.
By: /s/ James D. Ferguson
--------------------------------------
James D. Ferguson
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James D. Ferguson and Richard C. Coggins,
and each of them, as true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including pre-effective and post-effective amendments) to this registration
statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission and the
Nasdaq National Market, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all which said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, may lawfully do, or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ James D. Ferguson President, Chief Executive Officer January 7, 1999
- --------------------------- and Director
James D. Ferguson
/s/ Richard C. Coggins Chief Financial Officer and Director January 7, 1999
- ---------------------------
Richard C. Coggins
/s/ Gwendolyn L. Randolph Controller January 7, 1999
- ---------------------------
Gwendolyn L. Randolph
/s/ Roy W. Black Director January 7, 1999
- ----------------------------
Roy W. Black
/s/ Thomas F. Grady, Jr. Director January 7, 1999
- ----------------------------
Thomas F. Grady, Jr.
/s/ Thomas D. Henrion Director January 7, 1999
- ----------------------------
Thomas D. Henrion
/s/ Douglas E. Kennemore, M.D. Director January 7, 1999
- ------------------------------
Douglas E. Kennemore, M.D.
/s/ Brien Laing Director January 7, 1999
- ------------------------------
Brien Laing
/s/ J. Ernest Lathem, M.D. Director January 7, 1999
- ------------------------------
J. Ernest Lathem, M.D.
/s/ James M. Shoemaker, Jr. Director January 12, 1999
- ------------------------------
James M. Shoemaker, Jr.
</TABLE>
9
<PAGE>
INDEX TO EXHIBITS CONTAINED HEREIN
EXHIBIT PAGE
- ------- ----
4.1 Specimen of certificate of common stock: Incorporated by reference
to Exhibit 1 to the Registration Statement on Form S-8 of the
Registrant, File No. 33-32896.
4.2 Restated Articles of Incorporation: Incorporated by reference to
Exhibit 3(a) to the Registration Statement on Form S-18 of the
Registrant, File No 0-11392.
4.3 Amendment to Articles of Incorporation: Incorporated by reference to
Exhibit 3.1.1 to the Form 10-K of the Registrant filed with the
Commission for the fiscal year ended September 28, 1991, File No.
0-11392.
4.4 Amendment to Articles of Incorporation: Incorporated by reference to
Exhibit 4.4 to the Form 10-Q of the Registrant filed with the
Commission for the fiscal quarter ended March 28, 1992, File No.
0-11392.
4.5 Amended and Restated Bylaws of the Company: Incorporated by
reference to Exhibit 3 to the Form 10-Q of the Registrant filed with
the Commission for the period ended March 29, 1997, File No.
0-11392.
4.6 Shareholder Rights Agreement dated September 20, 1993 between the
Company and Wachovia Bank of North Carolina N.A., as rights agent:
Incorporated by reference to Exhibit 2 to the current report on Form
8-K filed by the Company with the Commission on September 20, 1993.
5.1 p.11 Opinion of Wyche, Burgess, Freeman & Parham, P.A. regarding
legality of shares of Span-America Medical Systems, Inc.
23.1 Consent of Wyche, Burgess, Freeman & Parham, P.A.-- contained in
Exhibit 5.1.
23.2 p.13 Consent of Ernst & Young LLP.
24.1 Power of Attorney -- contained on the signature page of this filing.
99.1 Span-America Medical Systems, Inc. 1997 Stock Option Plan:
Incorporated by reference to Exhibit 10.14 to the Form 10-K of the
Registrant filed with the Commission for the fiscal year ended
September 27, 1997, File No. 0-11392.
99.2 p.14 Sections 33-8-500 of the South Carolina Business Corporations
Act of 1988, as amended (which govern indemnification of directors).
10
EXHIBIT 5.1
[Wyche, Burgess, Freeman & Parham Letterhead]
January 8, 1999
Span-America Medical Systems, Inc.
70 Commerce Center
Greenville, SC 29615
Re: Opinion re Legality of shares issued pursuant to the Registration
Statement on Form S-8 of Span-America Medical Systems, Inc. 1997
Stock Option Plan
Ladies and Gentlemen:
The opinion set forth below is rendered with respect to the 200,000
shares, no par value, of common stock of Span-America Medical Systems, Inc., a
South Carolina corporation (the "Company"), that will be registered with the
Securities and Exchange Commission by the above-referenced Registration
Statement on Form S-8 pursuant to the Securities Act of 1933, as amended, in
connection with the Company's 1997 Stock Option Plan (the "Plan"). We have
examined the Company's Articles of Incorporation, and all amendments thereto,
and the Company's By-Laws, as amended, and reviewed the records of the Company's
corporate proceedings. We have made such investigation of law as we have deemed
necessary in order to enable us to render this opinion. With respect to matters
of fact, we have relied upon information provided to us by the Company and no
further investigation. With respect to all examined documents, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity to authentic originals of all documents
submitted to us as copies and the accuracy and completeness of the information
contained therein.
Based on and subject to the foregoing and subject to the comments,
limitations and qualifications set forth below, we are of the opinion that upon
satisfaction of the exercisability and other conditions set forth in the Plan
and in the applicable stock option agreement or letter and payment of the
applicable exercise price, shares of the Company's common stock covered by the
above-referenced Registration Statement that are issued after the date hereof
under and in compliance with the terms of the Plan will be legally issued, fully
paid to the Company and non-assessable.
The foregoing opinion is limited to matters governed by the laws of the
State of South Carolina in force on the date of this letter. We express no
opinion with regard to any matter that may be (or that purports to be) governed
by the laws of any other state or jurisdiction or
11
<PAGE>
any political subdivision of the State of South Carolina. In addition, we
express no opinion with respect to any matter arising under or governed by the
South Carolina Uniform Securities Act, as amended, any law respecting disclosure
or any law respecting any environmental matter.
This opinion is rendered as of the date of this letter and applies only to
the matters specifically covered by this opinion, and we disclaim any continuing
responsibility for matters occurring after the date of this letter.
Except as noted below, this opinion is rendered solely for your benefit in
connection with the above-referenced Registration Statement on Form S-8
respecting shares of the Company's common stock to be issued under the Plan and
may not be relied upon, quoted or used by any other person or entity, other than
participants in the Plan, or for any other purpose without our prior written
consent.
We consent to the use of this opinion as an exhibit to the
above-referenced Registration Statement on Form S-8 respecting shares of the
Company's common stock to be issued under the Plan. We also consent to the use
of our name under the heading "Item 5: Interests of Named Experts and Counsel."
Very truly yours,
/s/ WYCHE, BURGESS, FREEMAN & PARHAM, P.A.
WYCHE, BURGESS, FREEMAN & PARHAM, P.A.
12
EXHIBIT 23.2
[Ernst & Young LLP Letterhead]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Span-America Medical Systems, Inc..
We consent to the incorporation by reference in the Registration Statement (Form
S-8) and the related Prospectus pertaining to the Span-America Medical Systems,
Inc. 1997 Stock Option Plan of our report dated November 11, 1998, with respect
to the financial statements of Span-America Medical Systems, Inc. incorporated
by reference in its Annual Report (Form 10-K) for the year ended October 3, 1998
and the related financial statement schedule included therein, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
January 8, 1999
13
EXHIBIT 99.2
CODE OF LAWS OF SOUTH CAROLINA 1976 ANNOTATED
TITLE 33. CORPORATIONS, PARTNERSHIPS AND ASSOCIATIONS
CHAPTER 8. DIRECTORS AND OFFICERS
ARTICLE 5. INDEMNIFICATION
SS. 33-8-500. ARTICLE DEFINITIONS.
In this subchapter:
(1) "Corporation" includes any domestic or foreign predecessor entity of
a corporation in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation,
is or was serving at the corporation's request as a director,
officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise. A director is considered to be
serving an employee benefit plan at the corporation's request if his
duties to the corporation also impose duties on, or otherwise
involve services by, him to the plan or to participants in or
beneficiaries of the plan. "Director" includes, unless the context
requires otherwise, the estate or personal representative of a
director.
(3) "Expenses" include counsel fees.
(4) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an
employee benefit plan), or reasonable expenses incurred with respect
to a proceeding.
(5) "Official capacity" means: (i) when used with respect to a director,
the office of director in a corporation; and (ii) when used with
respect to an individual other than a director, as contemplated in
Section 33-8-560, the office in a corporation held by the officer,
or the employment or agency relationship undertaken by the employee
or agent on behalf of the corporation. "Official capacity" does not
include service for any other foreign or domestic corporation or any
partnership, joint venture, trust, employee benefit plan, or other
enterprise.
(6) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
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SS. 33-8-510. AUTHORITY TO INDEMNIFY.
(a) Except as provided in subsection (d), a corporation may indemnify an
individual made a party to a proceeding because he is or was a
director against liability incurred in the proceeding if:
(1) he conducted himself in good faith; and
(2) he reasonably believed:
(i) in the case of conduct in his official capacity with the
corporation, that his conduct was in its best interest;
and
(ii) in all other cases, that his conduct was at least not
opposed to its best interest; and
(3) in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a
purpose he reasonably believed to be in the interests of the
participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is
not, of itself, determinative that the director did not meet the
standard of conduct described in this section.
(d) A corporation may not indemnify a director under this section:
(1) in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(2) in connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in his
official capacity, in which he was adjudged liable on the basis
that personal benefit was improperly received by him.
(e) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding.
SS. 33-8-520. MANDATORY INDEMNIFICATION.
Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which he was a party because he is or was a
director of the corporation against reasonable expenses incurred by him in
connection with the proceeding.
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SS. 33-8-530. ADVANCE FOR EXPENSES.
(a) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of
final disposition of the proceeding if:
(1) the director furnishes the corporation a written affirmation of
his good faith belief that he has met the standard of conduct
described in Section 33-8-510;
(2) the director furnishes the corporation a written undertaking,
executed personally or on his behalf, to repay the advance if it
is ultimately determined that he did not meet the standard of
conduct; and
(3) a determination is made that the facts then known to those
making the determination would not preclude indemnification
under this subchapter.
(b) The undertaking required by subsection (a)(2) must be an unlimited
general obligation of the director but need not be secured and may
be accepted without reference to financial ability to make
repayment.
(c) Determinations and authorizations of payments under this section
must be made in the manner specified in Section 33-8-550.
SS. 33-8-540. COURT-ORDERED INDEMNIFICATION.
Unless a corporation's articles of incorporation provide otherwise, a
director of the corporation who is a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another court of
competent jurisdiction. On receipt of an application, the court after giving any
notice the court considers necessary may order indemnification if it determines:
(1) the director is entitled to mandatory indemnification under Section
33-8-520, in which case the court also shall order the corporation
to pay the director's reasonable expenses incurred to obtain
court-ordered indemnification; or
(2) the director is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not he met the
standard of conduct set forth in Section 33-8-510 or was adjudged
liable as described in Section 33-8-510(d), but if he was adjudged
so liable his indemnification is limited to reasonable expenses
incurred.
SS. 33-8-550. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION.
(a) A corporation may not indemnify a director under Section 33-8-510
unless authorized in the specific case after a determination has
been made that indemnification of the director is permissible in the
circumstances because he has met the standard of conduct set forth
in Section 33-8-510.
(b) The determination must be made:
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(1) by the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the
proceeding;
(2) if a quorum cannot be obtained under subdivision (1), by
majority vote of a committee duly designated by the board of
directors (in which designation directors who are parties may
participate), consisting solely of two or more directors not at
the time parties to the proceeding;
(3) by special legal counsel:
(i) selected by the board of directors or its committee in
the manner prescribed in item (1) or (2); or
(ii) if a quorum of the board of directors cannot be obtained
under subdivision (1) and a committee cannot be
designated under subdivision (2), selected by majority
vote of the full board of directors (in which selection
directors who are parties may participate); or
(4) by the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the
proceeding may not be voted on the determination.
(c) Authorization of indemnification and evaluation as to reasonableness
of expenses must be made in the same manner as the determination
that indemnification is permissible, except that, if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses must
be made by those entitled under subsection (b)(3) to select counsel.
SS. 33-8-560. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS.
Unless a corporation's articles of incorporation provide otherwise:
(1) an officer of the corporation who is not a director is entitled to
mandatory indemnification under Section 33-8-520, and is entitled to
apply for court-ordered indemnification under Section 33-8-540, in
each case to the same extent as a director;
(2) the corporation may indemnify and advance expenses under this
subchapter to an officer, employee, or agent of the corporation who
is not a director to the same extent as to a director; and
(3) a corporation also may indemnify and advance expenses to an officer,
employee, or agent who is not a director to the extent, consistent
with public policy, that may be provided by its articles of
incorporation, bylaws, general or specific action of its board of
directors, or contract.
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SS. 33-8-570. INSURANCE.
A corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise, against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer, employee, or agent,
whether or not the corporation would have power to indemnify him against the
same liability under Section 33-8-510 or 33-8-520.
SS. 33-8-580. APPLICATION OF ARTICLE.
(a) A provision treating a corporation's indemnification of or advance
for expenses to directors that is contained in its articles of
incorporation, bylaws, a resolution of its shareholders or board of
directors, or in a contract or otherwise is valid only if and to the
extent the provision is consistent with this article. If articles of
incorporation limit indemnification or advance for expenses,
indemnification and advance for expenses are valid only to the
extent consistent with the articles.
(b) This article does not limit a corporation's power to pay or
reimburse expenses incurred by a director in connection with his
appearance as a witness in a proceeding at a time when he has not
been made a named defendant or respondent to the proceeding.
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