EXECUTION COPY
EXHIBIT 10.23
SEVERANCE PROTECTION AGREEMENT
BETWEEN
SPAN-AMERICA MEDICAL SYSTEMS, INC. AND JAMES R. O'REAGAN
This Severance Protection Agreement (this "Agreement") is made and entered into effective the 25th day of July,
2002, by and between James R. O'Reagan, an individual (the "Executive"), and Span-America Medical Systems,
Inc., a South Carolina corporation (the "Company").
W I T N E S S E T H
WHEREAS the Company's Board of Directors (the "Board") has determined that it is essential and in the best
interests of the Company and its shareholders to retain the services of the Executive in the event of a threat or
occurrence of a Change in Control of the Company;
WHEREAS, in order to induce the Executive to remain in the employ of the Company in the event of a threat or
the occurrence of a Change in Control, the Company desires to provide the Executive with certain benefits in the
event his or her employment is terminated as a result of, or in connection with, a Change in Control; and
WHEREAS the Executive is willing to continue his or her employment with the Company under the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained
herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall have the meanings specified below.
"Accrued Compensation" shall mean an amount which shall include all amounts earned or accrued through the
employment termination date but not paid as of that date, including, without limitation, (i) base salary, (ii)
reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company
during the period ending on the termination date, (iii) vacation pay, (iv) bonuses and incentive compensation, and
(v) all other amounts to which the Executive is entitled under any compensation plan of