SPAN-AMERICA RESPONDS TO JUNE 13, 2003 LETTER
FROM JERRY ZUCKER
GREENVILLE, S.C. – (June 23, 2003) -- Span-America Medical Systems, Inc. (NASDAQ: SPAN) announced today that it has sent the following letter to Jerry Zucker
in response to his June 13, 2003 letter to its Board of Directors:
June 23, 2003
Via Air Courier
Mr. Jerry Zucker
4838 Jenkins Avenue
P.O. Box 5205
North Charleston, SC 29405
Dear Mr. Zucker:
The Board of Directors has received your letter dated June 13, 2003 requesting that the Board submit to the shareholders the question of whether the Amended and Restated
Rights Plan should be terminated. The adoption and amendment of the rights plan was appropriately within the scope of the Board's responsibilities acting on behalf of the shareholders and the Company. As
previously communicated to you, the Special Committee (which is comprised solely of independent directors) and the full Board have determined that, under the current circumstances, the redemption of the rights under
the rights plan is not in the best interests of the Company and its shareholders.
The rights plan was originally adopted by the Board in 1993 to preserve and protect long-term shareholder value and was
amended in March 2003 to extend the initial ten-year term. The purpose of the rights plan is to strengthen the Board's ability, in the exercise of its fiduciary duties, to protect and maximize the long-term
value of the shareholders' investment in the Company. The rights plan encourages a potential acquiror to negotiate directly with the Board, which has been elected by the shareholders, is comprised of a
majority of independent directors and is able to fully consider the Company's financial condition, business plan and future prospects in exercising its business judgment as to the best way to maximize long-term
value for the shareholders. The rights plan also protects against creeping acquisitions of control whereby an acquiror attempts to accumulate significant stock without paying a control premium and protects
against efforts to deprive shareholders of the full value of their stock.
The Board and Special Committee are committed to maximizing the long-term value of the Company for its shareholders. The rights
plan enhances the ability of the Board to do so. Terminating the rights plan would remove this significant protection. In fulfilling its duties, the Board will evaluate any legitimate acquisition offer
presented to the Board to determine whether it would maximize the Company's value for all of its shareholders. The rights plan provides the means for the Board to fulfill this duty and is not intended to and
will not prevent any acquisition that the Board believes is in the best interests of the Company and its shareholders.
Accordingly, we have determined that a shareholder vote on the termination of the
rights plan, which would require the Company to incur substantial expense in order to hold a Special Meeting of Shareholders and solicit proxies, is not in the best interests of the Company or its shareholders.
Sincerely,
/s/ Thomas D. Henrion
Thomas D. Henrion
Chairman of the Board
About Span-America Medical Systems, Inc.
Span-America manufactures and markets a comprehensive selection of pressure management products for the medical market,
including Geo-Matt®, PressureGuard®, Geo-Mattress®, Span+Aids®, Isch-Dish®, and Selan® products. The Company also supplies custom foam and packaging products to the consumer and
industrial markets. Span-America's stock is traded on The Nasdaq Stock Market's National Market under the symbol SPAN.
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