<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
CHATTEM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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TENNESSEE 62-0156300
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1715 WEST 38TH STREET
CHATTANOOGA, TENNESSEE 37409
(423) 821-4571
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
SIGNAL INVESTMENT & MANAGEMENT CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 62-1290284
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1105 NORTH MARKET STREET, SUITE 1300
WILMINGTON, DELAWARE 19890
(302) 656-3950
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
COPIES TO:
A. ALEXANDER TAYLOR II HUGH F. SHARBER, ESQ.
PRESIDENT AND CHIEF OPERATING OFFICER MILLER & MARTIN LLP
CHATTEM, INC. 1000 VOLUNTEER BUILDING
1715 WEST 38TH STREET CHATTANOOGA, TENNESSEE 37402
CHATTANOOGA, TN 37409 (423) 756-6600
(423) 821-4571
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
(Continued on next page)
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CALCULATION OF REGISTRATION FEE
<TABLE>
- -----------------------------------------------------------------------------------
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(1)(2) FEE(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(4)..... $250,000,000 $250,000,000 $69,500
- --------------------------------------------------------------------------------
Preferred Stock, no par
value per share(5).... $250,000,000 $250,000,000
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Common Stock, no par
value per share(6).... $250,000,000 $250,000,000
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Warrants(7)............ $250,000,000 $250,000,000
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Guarantees of Debt Secu-
rities(8)............. $250,000,000 $250,000,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $250,000,000. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(2) The proposed maximum offering price per unit (a) has been omitted pursuant
to Instruction II.D. of Form S-3 and (b) will be determined, from time to
time, by the Registrants in connection with the issuance by the
Registrants of the securities registered hereunder.
(3) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
(4) Subject to footnote 1, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from
time to time, by the Registrant. There is also being registered hereunder
an indeterminate principal amount of Debt Securities as shall be issuable
upon exercise of Warrants registered hereby.
(5) Subject to footnote 1, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from
time to time, by the Registrant. There is also being registered hereunder
an indeterminate number of shares of Preferred Stock as shall be issuable
upon exercise of Warrants registered hereby.
(6) Subject to footnote 1, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold from time to
time, by the Registrant, including shares of other classes or series of
the Company's stock that may be issued upon reclassification of unissued,
authorized stock of the Company. There is also being registered hereunder
an indeterminate number of shares of Common Stock including shares of
other classes or series of the Company's stock that may be issued upon
reclassification of unissued, authorized stock of the Company, as shall be
issuable upon conversion of the Preferred Stock or Debt Securities or
exercise of Warrants registered hereby.
(7) Subject to footnote 1, there is being registered hereunder an
indeterminate number of Warrants representing rights to purchase shares of
Preferred Stock or Common Stock, including shares of other classes or
series of the Company's stock that may be issued upon reclassification of
unissued, authorized stock of the Company, as the case may be, registered
pursuant to this Registration Statement.
(8) Pursuant to Rule 457(n) under the Securities Act of 1933, no separate fee
is payable for the Guarantees.
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- -------------------------------------------------------------------------------
<PAGE>
(Continued from previous page)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pur-
suant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or inter-
est reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering pur-
suant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier ef-
fective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) un-
der the Securities Act of 1933, check the following box and list the Securi-
ties Act registration statement number of the earlier effective registration
statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. +
+THE COMPANY MAY NOT SELL THESE SECURITIES UNTIL A REGISTRATION STATEMENT +
+FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS +
+PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING +
+AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT +
+PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER , 1998.
CHATTEM, INC.
BY THIS PROSPECTUS, WE OFFER UP TO $250,000,000 OF -
DEBT SECURITIES, PREFERRED STOCK,
COMMON STOCK AND WARRANTS
We may offer the securities in one or more separate classes or series, in
amounts, at prices and on terms to be determined by market conditions at the
time of sale and to be set forth in a supplement or supplements to this
Prospectus. Any securities may be offered with other securities or separately.
Debt securities or preferred stock may be exchangeable for or convertible into
shares of common stock. Debt securities may be guaranteed by our subsidiary,
Signal Investment & Management Co. The aggregate offering price of the
securities will not exceed $250,000,000.
We will provide the specific terms of these securities in supplements to this
Prospectus. You should read this Prospectus and supplements carefully before
you invest. More information on the Company may be obtained from the sources
described herein (see "Information Available to You").
The securities may be sold on a negotiated or competitive bid basis to or
through underwriters or dealers designated from time to time or to other
purchasers directly or through agents designated from time to time (see "Plan
of Distribution").
Our common stock is listed on the Nasdaq Stock Market (National Market) under
the symbol "CHTT."
This Prospectus may not be used to consummate a sale of securities unless
accompanied by the applicable Prospectus Supplement.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR
ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS DECEMBER , 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Information Available to You................................................ 2
Incorporation of Certain Documents by Reference............................. 2
The Company................................................................. 3
Ratio of Earnings to Fixed Charges.......................................... 4
Use of Proceeds............................................................. 4
Plan of Distribution........................................................ 4
Description of Stock........................................................ 5
Description of Debt Securities.............................................. 5
Description of Warrants..................................................... 8
Certain Provisions in the Charter........................................... 9
Experts..................................................................... 9
Legal Matters............................................................... 10
Indemnification of Directors and Officers................................... 11
</TABLE>
INFORMATION AVAILABLE TO YOU
We are subject to the informational reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and therefore file,
reports, proxy statements and other information with the Securities and
Exchange Commission (the "SEC"). You may read and copy any document we file at
the SEC's public reference facilities at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the SEC's regional offices
located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New York, New
York 10048. You can obtain copies of these materials from the Public Reference
Section of the SEC at Judiciary Plaza, 450 Fifth Street, Washington, D.C.
20549 at prescribed rates. Our SEC filings are also available to the public
from the SEC's web site at http://www.sec.gov.
We have filed with the SEC a Registration Statement on Form S-3 (herein
together with all amendments, supplements and exhibits thereto called the
"Registration Statement") with respect to the securities covered by this
Prospectus. This Prospectus does not contain all of the information set forth
in the Registration Statement, as permitted by the rules and regulations of
the SEC. For further information with respect to Chattem and the securities
offered hereby, we refer you to the Registration Statement. Statements
contained herein concerning the provisions of certain documents filed with, or
incorporated by reference in, the Registration Statement as exhibits are not
necessarily complete and each such statement is qualified in its entirety by
reference to the applicable document filed with the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference
the documents listed below and any further filings made with the SEC under
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act until our offering is
completed.
(1) Chattem's Annual Report on Form 10-K for the year ended November 30,
1997, filed March 2, 1998;
(2) Chattem's Quarterly Reports on Form 10-Q filed April 14, 1998, July 14,
1998 and October 15, 1998;
(3) Chattem's Current Reports on Form 8-K filed February 25, 1998, March 10,
1998, April 8, 1998, May 28, 1998 (as amended by Form 8-K/A filed May 29,
1998) and November 18, 1998; and
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(4) The description of Chattem's common stock as set forth in Chattem's
Amended and Restated Charter filed as an exhibit to Chattem's Annual Report on
Form 10-K for the transition period ended November 30, 1992.
We also incorporate by reference the documents listed below and any further
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act until our offering is completed.
(1) Signal Investment & Management Co. ("Signal") Annual Report on Form 10-K
for the year ended November 30, 1997, filed on March 2, 1998; and
(2) Signal's Quarterly Reports on Form 10-Q filed April 4, 1998, July 14,
1998 and October 15, 1998.
You may request a copy of these filings, at no cost, by writing or
telephoning us at: Chattem, Inc., 1715 West 38th Street, Chattanooga,
Tennessee 37409, Attention: A. Alexander Taylor, II (Telephone: (423) 821-
4571). You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement. We have not authorized anyone
else to provide you with different information. This Prospectus is an offer to
sell or to buy only the securities referred to herein, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this Prospectus is current only as of the date
hereof.
THE COMPANY
Chattem, Inc. ("We," "Chattem" or the "Company") is a diversified
manufacturer and marketer of over-the-counter health and skin care products,
dietary supplements and diet aids. We manufacture and market:
. branded over-the-counter ("OTC") pharmaceuticals, such as GOLD BOND,
FLEX ALL, ICY HOT, ASPERCREME, CAPZASIN, SPORTSCREME, ARTHRITIS HOT,
BENZODENT, HERPECIN-L, PAMPRIN, PREMSYN PMS and NORWICH aspirin;
. functional toiletries, including PHISODERM, BULLFROG, ULTRASWIM, SUN-IN
and MUDD;
. dietary supplements, including GARLIQUE, MELATONEX, ECHINEX, PROPALMEX,
REJUVEX and HARMONEX;
. the BAN line of antiperspirants and deodorants; and
. DEXATRIM appetite suppressants.
Our objective is to offer high quality brand name products in niche market
segments in which our products can be among the market leaders. We strive to
achieve this objective by identifying brands with favorable demographic
appeal, being flexible in modifying products and promotions in response to
changing consumer demands and developing creative and cost-effective marketing
and advertising programs. We manufacture approximately half of our consumer
products.
We anticipate that the Company will continue to expand through a combination
of brand acquisitions and internal growth. Since 1986, we have acquired
approximately 20 brands, including the acquisition of DEXATRIM, ASPERCREME,
CAPZASIN, SPORTSCREME and ARTHRITIS HOT, on December 21, 1998. We also
acquired other brands during this period including BAN, GARLIQUE, MELATONEX,
ECHINEX, PROPALMEX, REJUVEX, GOLD BOND, FLEX-ALL, ICY HOT, PHISODERM,
BENZODENT, NORWICH, BULLFROG and ULTRASWIM. Our acquisition strategy is to
identify brands that are embryonic or have unrealized potential, which can
complement existing brands, and which can be among the leaders in attractive
niche market segments. We also seek internal growth with programs designed to
capitalize on the value of our existing brands and product line extensions,
such as ICY HOT Arthritis Therapy Gel and GOLD BOND Medicated Foot Powder
introduced in 1997 and GOLD BOND Medicated Lotion in 1998.
The Company's principal executive offices are located at 1715 West 38th
Street, Chattanooga, Tennessee 37409, and its telephone number is (423) 821-
4571. Signal is a wholly-owned subsidiary of Chattem. Its principal executive
offices are located at 1105 North Market, Suite 1300, Wilmington, Delaware
19890, and its telephone number is (302) 656-3950.
3
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
AUGUST 31, YEARS ENDED NOVEMBER 30,
----------- ---------------------------
1998 1997 1997 1996 1995 1994
----- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..... 2.2:1 1.8:1 1.7:1 1.4:1 1.3:1 1.3:1
</TABLE>
For purposes of calculating this ratio, "earnings" consist of the Company's
consolidated income from continuing operations before income taxes,
extraordinary items and fixed charges. "Fixed charges" consist of interest
expense, amortization of deferred financing costs and the portion of rental
expense representative of the interest factor.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the debt securities,
preferred stock, common stock and warrants registered hereunder (the
"Securities") for general corporate purposes, including, among other things,
the acquisition of new brands and the repayment of existing indebtedness.
PLAN OF DISTRIBUTION
We may sell the Securities (i) through agents; (ii) through underwriters;
(iii) through dealers; (iv) directly to purchasers (through a specific bidding
or auction process or otherwise); or (v) through a combination of any such
methods of sale. We (directly or through agents) may sell, and the
underwriters may resell, the Securities in one or more transactions at a fixed
price or prices, which may be changed, or at market prices prevailing at the
time of sale, at prices relating to such prevailing market prices or at
negotiated prices.
Agents designated by the Company from time to time may solicit offers to
purchase the Securities. Agents involved in the offer or sale of the
Securities will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, an agent will act on a best efforts
basis for the period of its appointment. An agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of the Securities
so offered and sold.
If an underwriter or underwriters are utilized in the sale of Securities,
the Company will execute an underwriting agreement with such underwriter or
underwriters at the time an agreement for such sale is reached. The names of
the specific managing underwriter or underwriters, as well as any other
underwriters, and the terms of the transactions, including compensation of the
underwriters and dealers, which may be in the form of discounts, concessions
or commissions, if any, will be set forth in the Prospectus Supplement, which
will be used by the underwriters to make resales of the Securities.
If a dealer is utilized in the sale of the Securities, the Company or an
underwriter will sell such Securities to the dealer, as principal. The dealer
may then resell such Securities to the public at varying prices to be
determined by such dealer at the time of resale. The name of the dealer and
the terms of the transactions will be set forth in the Prospectus Supplement
relating thereto.
4
<PAGE>
Offers to purchase the Securities may be solicited directly by the Company
and sales thereof may be made by the Company directly to institutional
investors or others. The terms of any such sales, including the terms of any
bidding or auction process, if utilized, will be described in the Prospectus
Supplement relating thereto.
We will indemnify agents, underwriters and dealers against certain
liabilities, including liabilities under the Securities Act. The terms and
conditions of such indemnification or contribution will be described in the
applicable Prospectus Supplement. Agents, underwriters and dealers may engage
in transactions with or perform services for us in the ordinary course of
business.
DESCRIPTION OF STOCK
The summary of the terms of the stock of the Company set forth below does
not purport to be complete and is subject to and qualified in its entirety by
reference to the charter and bylaws of the Company and applicable law. See
"Information Available to You."
GENERAL
The Company has authorized 20,000,000 shares of common stock, without par
value (the "Common Stock"), and 1,000,000 shares of preferred stock, without
par value (the "Preferred Stock"). As of December 18, 1998, 9,585,772 shares
of Common Stock were issued and outstanding and no shares of Preferred Stock
were issued and outstanding.
PREFERRED STOCK
The Board of Directors of the Company has the authority, without further
action by the Company's shareholders, to determine the principal rights,
preferences and privileges of the unissued Preferred Stock.
COMMON STOCK
Subject to the preferential rights of any series of Preferred Stock that may
be outstanding, all shares of Common Stock participate equally in any
dividends declared by the Board of Directors and in the net assets of the
Company on liquidation. Holders of shares of Common Stock are entitled to one
vote for each share held of record and have no conversion, exchange,
preemptive or cumulative voting rights. All outstanding shares of Common Stock
are fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is the SunTrust Bank,
Atlanta, Georgia.
DESCRIPTION OF DEBT SECURITIES
The following sets forth certain general terms and provisions of each
indenture under which the debt securities are to be issued (as amended or
supplemented from time to time, each an "Indenture"). The particular terms of
the debt securities being registered hereunder (the "Debt Securities") will be
set forth in a Prospectus Supplement relating to such Debt Securities. The
Debt Securities are to be issued under one or more Indentures, to be entered
into between the Company and a trustee chosen by the Company and qualified to
act under the Trust Indenture Act of 1939, as amended (the "TIA") (together
with any other trustee(s) chosen by the Company and appointed in a
supplemental indenture with respect to a particular series, the "Trustee").
The form of Indenture will be filed by the Company from time to time by means
of an exhibit to Form 8-K and will be available for inspection at the
corporate trust office of the Trustee, or as described above under
"Information Available to You." The Indentures are subject to, and governed
by, the TIA. The Company will execute an Indenture if and when the Company
issues any Debt Securities. The statements made hereunder relating to the
Indentures and the Debt Securities to be issued thereunder are summaries of
certain provisions thereof and do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all provisions of
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<PAGE>
the Indentures (including those terms made a part of the Indenture by
reference to the TIA) and such Debt Securities. Capitalized terms used but not
defined herein shall have the respective meanings set forth in the Indentures.
References below to an "Indenture" are deemed to constitute a reference to the
applicable Indenture under which a particular series of Debt Securities is
issued.
GENERAL
The Debt Securities will be unsecured obligations of the Company. The Debt
Securities may be issued in one or more series. Specific terms of each series
of Debt Securities will be contained in authorizing resolutions or a
supplemental indenture relating to that series. There will be Prospectus
Supplements relating to particular series of Debt Securities. Each Prospectus
Supplement will describe, as to the Debt Securities to which it relates: (i)
the title of the Debt Securities; (ii) any limit upon the aggregate principal
amount of a series of Debt Securities which may be issued; (iii) the date or
dates on which principal of the Debt Securities will be payable and the amount
of principal which will be payable; (iv) the rate or rates (which may be fixed
or variable) at which the Debt Securities will bear interest, if any, as well
as the dates from which interest will accrue, the dates on which interest will
be payable and the record date for the interest payable on any payment date;
(v) the currency or currencies in which principal, premium, if any, and
interest, if any, will be paid; (vi) the place or places where principal,
premium, if any, and interest, if any, on the Debt Securities will be payable
and where Debt Securities which are in registered form can be presented for
registration of transfer or exchange and the identification of any depositary
or depositaries for any global Debt Securities; (vii) any provisions regarding
the right of the Company to redeem or purchase Debt Securities or of holders
to require the Company to redeem Debt Securities; (viii) the right, if any, of
holders of the Debt Securities to convert them into stock or other securities
of the Company, including any provisions intended to prevent dilution of the
conversion rights or otherwise; (ix) any provisions by which the Company will
be required or permitted to make payments to a sinking fund which will be used
to redeem Debt Securities or a purchase fund which will be used to purchase
Debt Securities; (x) the percentage of the principal amount at which Debt
Securities will be issued and, if other than the full principal amount
thereof, the percentage of the principal amount of the Debt Securities which
is payable if maturity of the Debt Securities is accelerated because of a
default; (xi) the terms, if any, upon which Debt Securities may be
subordinated to other indebtedness of the Company; (xii) any additions to,
modifications of or deletions from the terms of the Debt Securities with
respect to Events of Default or covenants or other provisions set forth in the
Indenture; and (xiii) any other material terms of the Debt Securities, which
may be different from the terms set forth in this Prospectus.
EVENTS OF DEFAULT AND REMEDIES
An Event of Default with respect to any series of Debt Securities will be
defined in the Indenture as being default in payment of the principal of or
premium, if any, on any of the Debt Securities of such series; default for 30
days in payment of any installment of interest on any Debt Security of such
series; default by the Company for 60 days after notice in the observance or
performance of any other covenants in the Indenture relating to such series;
and certain events involving bankruptcy, insolvency or reorganization of the
Company. The Indenture will provide that the Trustee may withhold notice to
the holders of any series of Debt Securities of any default (except a default
in payment of principal, premium, if any, or interest, if any, with respect to
such series of Debt Securities) if the Trustee considers it in the interest of
the holders of such series of Debt Securities to do so.
The Indenture will provide that if any Event of Default has occurred and is
continuing with respect to any series of Debt Securities, the Trustee or the
holders of not less than a certain specified percentage in principal amount of
such series of Debt Securities then outstanding may declare the principal of
all the Debt Securities of such series to be due and payable immediately.
However, the holders of a majority in principal amount of the Debt Securities
of such series then outstanding by written notice to the Trustee and the
Company may waive any Default or Event of Default (other than any continuing
Default or Event of Default in payment of principal or interest) with respect
to such series of Debt Securities. Holders of a majority in principal amount
of the then outstanding Debt Securities of any series may rescind an
acceleration with respect to such series and its
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<PAGE>
consequences (except an acceleration due to nonpayment of principal or
interest on such series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default with respect to such
series have been cured or waived.
The holders of a majority in principal amount of the Debt Securities of any
series then outstanding will have the right to direct the time, method and
place of conducting any proceedings for any remedy available to the Trustee
with respect to such series, subject to certain limitations specified in the
Indenture.
DEFEASANCE OF INDENTURE
The Indenture will permit the Company to terminate all of its obligations
under the Indenture as they relate to any particular series of Debt
Securities, other than the obligation to pay interest, if any, on and the
principal of the Debt Securities of such series and certain other obligations,
at any time by (i) depositing in trust with the Trustee, under an irrevocable
trust agreement, money or U.S. government obligations in an amount sufficient
to pay principal of and interest, if any, on the Debt Securities of such
series to their maturity, and (ii) complying with certain other conditions,
including delivery to the Trustee of an opinion of counsel or a ruling
received from the Internal Revenue Service to the effect that holders will not
recognize income, gain or loss for federal income tax purposes as a result of
the Company's exercise of such right and will be subject to federal income tax
on the same amount and in the same manner and at the same times as would have
been the case otherwise.
In addition, the Indenture will permit the Company to terminate all of its
obligations under the Indenture as they relate to any particular series of
Debt Securities (including the obligations to pay interest, if any, on and the
principal of the Debt Securities of such series and certain other obligations)
at any time by (i) depositing in trust with the Trustee, under an irrevocable
trust agreement, money or U.S. government obligations in an amount sufficient
to pay principal of and interest, if any, on the Debt Securities of such
series to their maturity, and (ii) complying with certain other conditions,
including delivery to the Trustee of an opinion of counsel or a ruling
received from the Internal Revenue Service to the effect that holders will not
recognize income, gain or loss for federal income tax purposes as a result of
the Company's exercise of such right and will be subject to federal income tax
on the same amount and in the same manner and at the same times as would have
been the case otherwise, which opinion of counsel is based upon a change in
the applicable federal tax law since the date of the Indenture.
TRANSFER AND EXCHANGE
A holder will be able to transfer or exchange Debt Securities only in
accordance with the provisions of the Indenture. The registrar may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents, and to pay any taxes and fees required by law or permitted by the
Indenture.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Debt Securities may be
amended or supplemented with the consent (which may include consents obtained
in connection with a tender offer or exchange offer for Debt Securities) of
the holders of at least a majority in principal amount of the Debt Securities
of such series then outstanding, and any existing Default under, or compliance
with any provision of the Indenture relating to a particular series of Debt
Securities may be waived (other than any continuing Default or Event of
Default in the payment of interest on or the principal of such Debt
Securities) with the consent (which may include consents obtained in
connection with a tender offer or exchange offer for Debt Securities) of the
holders of a majority in principal amount of the Debt Securities of such
series then outstanding. Without the consent of any holder, the Company and
the Trustee may amend or supplement the Indenture or the Debt Securities to
cure any ambiguity, defect or inconsistency; to provide for uncertificated
Debt Securities in addition to or in place of certificated Debt Securities; to
make any change that does not adversely affect the legal rights of any holder;
or to create a series and establish its terms.
7
<PAGE>
Without the consent of each holder affected, the Company and the Trustee may
not (i) reduce the amount of Debt Securities of such series whose holders must
consent to an amendment, supplement or waiver; (ii) reduce the rate of or
change the time for payment of interest; (iii) reduce the principal of or
change the fixed maturity of any Debt Security or alter the provisions with
respect to redemptions or mandatory offers to repurchase Debt Securities
pursuant to certain covenants set forth in the Indenture; (iv) make any Debt
Security payable in money other than that stated in the Debt Security; (v)
modify the ranking or priority of the Debt Securities; or (vi) waive a
continuing default in the payment of principal of or interest on the Debt
Securities.
The right of any holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such holder) may be subject
to the requirement that such holder shall have been the holder of record of
any Debt Securities with respect to which such consent is required or sought
as of a date identified by the Trustee in a notice furnished to holders in
accordance with the terms of the Indenture.
CONCERNING THE TRUSTEE
The Indenture will provide that in case an Event of Default occurs and is
not cured, the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent person in similar circumstances in the conduct
of its own affairs. The Trustee may refuse to perform any duty or exercise any
right or power under the Indenture, unless it receives indemnity satisfactory
to it against any loss, liability or expense.
DESCRIPTION OF WARRANTS
The Company may issue warrants to purchase Debt Securities (the "Debt
Warrants"), Preferred Stock (the "Preferred Stock Warrants"), Common Stock
(the "Common Stock Warrants") or other securities issued by the Company or
another issuer (the "Other Warrants," collectively with the Debt Warrants, the
Preferred Stock Warrants and the Common Stock Warrants, the "Warrants").
Warrants may be issued independently or together with any Securities and may
be attached to or separate from such Securities. The Warrants are to be issued
under warrant agreements (each a "Warrant Agreement") to be entered into
between the Company and a bank or trust company, as warrant agent (the
"Warrant Agent"), all as shall be set forth in the Prospectus Supplement
relating to the Warrants being offered pursuant thereto.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants, including
the following: (i) the title of such Debt Warrants; (ii) the aggregate number
of such Debt Warrants; (iii) the price or prices at which such Debt Warrants
will be issued; (iv) the designation, aggregate principal amount and terms of
the Debt Securities purchasable upon exercise of such Debt Warrants, and the
procedures and conditions relating to the exercise of such Debt Warrants; (v)
the date, if any, on and after which such Debt Warrants and the related Debt
Securities will be separately transferable; (vi) the principal amount of Debt
Securities purchasable upon exercise of each Debt Warrant, and the price at
which such principal amount of Debt Securities may be purchased upon such
exercise; (vii) the date on which the right to exercise such Debt Warrants
shall commence, and the date on which such right shall expire; (viii) the
maximum or minimum number of such Debt Warrants which may be exercised at any
time; (ix) a discussion of material federal income tax considerations, if any;
and (x) any other terms of such Debt Warrants and terms, procedures and
limitations relating to the exercise of such Debt Warrants.
Debt Warrant certificates will be exchangeable for new Debt Warrant
certificates of different denominations, and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the Prospectus Supplement. Prior to the exercise of their Debt Warrants,
holders of Debt Warrants will not have any of the rights of holders of the
securities purchasable upon such exercise and will not be entitled
8
<PAGE>
to payments of principal of (or premium, if any) or interest, if any, on the
securities purchasable upon such exercise.
PREFERRED STOCK WARRANTS, COMMON STOCK WARRANTS AND OTHER WARRANTS
The applicable Prospectus Supplement will describe the following terms of
Preferred Stock Warrants, Common Stock Warrants, and Other Warrants in respect
of which this Prospectus is being delivered: (i) the title of such Warrants;
(ii) the securities for which such Warrants are exercisable; (iii) the price
or prices at which such Warrants will be issued; (iv) if applicable, the
number of such Warrants issued with each share of Preferred Stock, Common
Stock or other securities of the Company or another issuer; (v) any provisions
for adjustment of the number or amount of shares of Preferred Stock, Common
Stock or other securities of the Company or another issuer receivable upon
exercise of such Warrants or the exercise price of such Warrants; (vi) if
applicable, the date on and after which such Warrants and the related
Preferred Stock, Common Stock or other securities of the Company or another
issuer will be separately transferable; (vii) if applicable, a discussion of
material federal income tax considerations; (viii) any other terms of such
Warrants, including terms, procedures and limitations relating to the exchange
and exercise of such Warrants; (ix) the date on which the right to exercise
such Warrants shall commence, and the date on which such right shall expire;
and (x) the maximum or minimum number of such Warrants which may be exercised
at any time.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder of Warrants to purchase for cash such
principal amount of Debt Securities, shares of Preferred Stock or Common
Stock, or amounts of other securities at such exercise price as shall in each
case be set forth in, or be determinable as set forth in, the Prospectus
Supplement relating to the Warrants offered thereby. Warrants may be exercised
at any time up to the close of business on the expiration date set forth in
the Prospectus Supplement relating to the Warrants offered thereby. After the
close of business on the expiration date, unexercised Warrants will become
void.
Warrants may be exercised as set forth in the Prospectus Supplement relating
to the Warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, forward the Debt
Securities, shares of Preferred Stock or Common Stock or other securities
purchasable upon such exercise. If less than all of the Warrants represented
by such warrant certificate are exercised, a new warrant certificate will be
issued for the remaining Warrants.
CERTAIN PROVISIONS IN THE CHARTER
The Company's Charter contains the following provisions which may have the
effect of delaying or preventing a change of control of the Company: (i) the
Charter provides that the Company's directors are divided into three classes,
that only one class of directors is elected at each annual meeting and that
each director is elected for a term of three years; (ii) the Charter provides
that directors may be removed only for cause prior to the expiration of their
terms; and (iii) the Charter requires that, in addition to any other vote
ordinarily required by law, the affirmative vote of holders of not less than
75% of the outstanding shares of Common Stock shall be necessary to approve
certain sales of Company assets, acquisitions, mergers, changes of control and
other Business Combinations (as defined in the Company's Charter) unless the
proposed Business Combination shall have been approved by a majority of the
Continuing Directors (as defined in the Company's Charter) or certain measures
designed to ensure the fair value is received by all shareholders are complied
with. The provisions enumerated above may have the effect of deterring
unsolicited acquisition proposals or delaying changes in control or management
of the Company.
9
<PAGE>
EXPERTS
The consolidated financial statements of Chattem, Inc. and the financial
statements of Signal Investment & Management Co., incorporated by reference in
this registration statement to the extent and for the periods indicated in
their reports have been audited by Arthur Andersen LLP, independent public
accountants, and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
The financial statements of BAN as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997 incorporated by
reference in this registration statement have been so included in reliance on
the report of PricewaterhouseCoopers LLP, independent public accountants,
given on the authority of said firm as experts in auditing and accounting.
LEGAL MATTERS
The validity of the Securities will be passed upon for us by Miller & Martin
LLP. If certain legal matters in connection with offerings made by this
Prospectus are passed on by counsel for the underwriters of an offering of
those Securities, that counsel will be named in the Prospectus Supplement
relating to that offering.
10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses, other than underwriting discounts and commissions in
connection with the offering of the Securities being registered, are set forth
below. All of such expenses are estimates, except the Securities Act
Registration fee.
<TABLE>
<S> <C>
Securities Act Registration Fee.............................. $ 69,500.00
Printing Fees................................................ $ 10,000.00
Legal Fees and Expenses...................................... $ 25,000.00
Accounting Fees and Expenses................................. $ 10,000.00
Miscellaneous Expenses....................................... $ 5,500.00
-----------
Total...................................................... $120,000.00
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 14(1) of Chattem's Amended and Restated Charter provides that no
director of Chattem shall be liable to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director, except for
liability: (1) for any breach of the director's duty of loyalty to the
corporation or its shareholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, or
(iii) for distributions in violation of Section 48-18-304 of the Tennessee
Code Annotated.
Section 14(2) of Chattem's Amended and Restated Charter further provides
that each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, and whether formal or
informal (a "proceeding"), by reason of the fact that he or she is or was a
director, officer or employee of the corporation or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (hereinafter
"indemnitee") whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Company to the fullest extent authorized
by the Tennessee Business Corporation Act, as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent that
such amendment permits the Company to provide broader indemnification rights
than such law permitted the Company to provide prior to such amendment),
against all expense, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in connection therewith and
such indemnification shall continue as to an indemnitee who has ceased to be a
director, officer, or employee and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; provided, however, that,
except with respect to proceedings to endorse a right to indemnification under
Section 14(3) of the Company's Amended and Restated Charter, the Company shall
indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Company. This right
to indemnification includes the right to be paid by the Company the expenses
incurred in defending any such proceeding in advance of its final disposition
("advancement expenses"); provided, however, that, if the Tennessee Business
Corporation Act so requires, an advancement of expenses incurred by an
indemnitee in his or her capacity as a director, officer or employee shall be
made only upon (I) delivery of written affirmation of the indemnitee's good
faith belief that any applicable standard of conduct required by the Tennessee
Business Corporation Act has been met, and (ii) delivery of an undertaking, by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified
for such expenses under this paragraph or otherwise (an "undertaking").
11
<PAGE>
Under Section 14(3) of Chattem's Amended and Restated Charter, if a claim is
not paid in full by the Company within sixty days after a written claim has
been received by the Company, except in the case of a claim for an advancement
of expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim. If the indemnitee is successful in
whole or in part in any such suit brought by the Company to recover an
advancement of expenses pursuant to the terms of the undertaking, the
indemnitee shall be entitled to also be paid the expense of prosecuting or
defending such a suit. In (i) any suit brought by the indemnitee to enforce a
right to indemnification hereunder (but not in a suit brought by the
indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) any suit by the corporation to recover an advancement
of expenses pursuant to the terms of the undertaking the corporation shall be
entitled to such expenses upon a final adjudication that, the indemnitee has
not met the applicable standard of conduct set forth in the Tennessee Business
Corporation Act, as amended.
Neither the failure of the Company (including its board of directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee
is proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Tennessee Business Corporation Act, nor
an actual determination by the corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the indemnitee has not met
such applicable standard of conduct, shall create a presumption that the
indemnitee has failed to meet the applicable standard of conduct or be a
defense to such suit. In any suit brought by the indemnitee to enforce a right
hereunder, or by the Company to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the indemnitee is not
entitled to indemnification or advancement expenses shall be on the Company.
Section 14(2) further provides that the rights to indemnification and to the
advancement of expenses conferred therein shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, the
corporation's Amended and Restated Charter or Amended and Restated By-laws,
agreement, vote of shareholders or disinterested directors or otherwise.
Article II, Section 5 of Chattem's By-Laws provides that any person made or
threatened to be made a party to a suit or proceeding by reason of the fact
that he or his intestate was, is, or shall be a director or officer or Audit
Committee member of the Company or at the request of the Company a director or
officer or Audit Committee member of another corporation controlled by the
Company, shall be indemnified by the Company to the maximum extent and upon
the conditions provided by the laws of the State of Tennessee, including
Tennessee Code Annotated Sections 48-1-407 through 48-1-411.
12
<PAGE>
ITEM 16. EXHIBITS
1.1*Form of Underwriting Agreement
1.2*Form of Distribution Agreement
3.1Restated Charter of Chattem, Inc. (1)
3.2Amended and Restated Bylaws of Chattem, Inc. (2)
4.1(a)*Form of Senior Debt Securities Indenture
4.1(b)*Form of Senior Subordinated Debt Securities Indenture
4.1(c)*Form of Subordinated Debt Securities Indenture
4.2*Form of Note
4.3*Form of Warrant
4.4*Form of Warrant Agreement
5.1Opinion of Miller & Martin LLP
12.1Statement of Computation of Ratios
23.1Consent of Arthur Andersen LLP
23.2Consent of PricewaterhouseCoopers LLP
23.3Consent of Miller & Martin LLP (included in Exhibit 5.1)
24.1Power of Attorney (included on signature page of this Registration
Statement)
25.1*Statement of Eligibility of Trustee on Form T-I
- --------
* To be filed by Current Report on Form 8-K to be incorporated herein by
reference or by post-effective amendment.
(1) Incorporated by reference from Form 10-K for the year ended November 30,
1992.
(2) Incorporated by reference from Form 10-K for the year ended November 30,
1993.
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(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;
(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 this registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in the periodic reports filed with or
furnished to the Commission by the Registrants pursuant to Section 13
or Section 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
herein, 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.
The undersigned Registrants hereby further undertake that, for the purposes
of determining any liability under the Securities Act of 1933, each filing of
such Registrant's annual report pursuant to Section 13(a) or Section 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
13
<PAGE>
reference in this 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.
The undersigned Registrants hereby further undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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.
The undersigned Registrants hereby further undertake to file an application
for the purpose of determining the eligibility of the Trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section 305(b)(2)
of the Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions described under Item 15 of this
registration statement, or otherwise (other than insurance), the Registrants
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants 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 Registrants 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 whether
such indemnification by it is against public policy as expressed in such Act
and will be governed by the final adjudication of such issue.
14
<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-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CHATTANOOGA, STATE OF TENNESSEE, ON DECEMBER 21,
1998.
Chattem, Inc.
/s/ A. Alexander Taylor, II
By: _________________________________
A. ALEXANDER TAYLOR, II
PRESIDENT
POWER OF ATTORNEY AND SIGNATURES
WE, THE UNDERSIGNED OFFICERS AND DIRECTORS OF CHATTEM, INC., HEREBY
SEVERALLY CONSTITUTE AND APPOINT ZAN GUERRY AND A. ALEXANDER TAYLOR, II, AND
EACH OF THEM SINGLY, OUR TRUE AND LAWFUL ATTORNEYS WITH FULL POWER TO THEM,
AND EACH OF THEM SINGLY, TO SIGN FOR US AND IN OUR NAMES IN THE CAPACITIES
INDICATED BELOW, THE REGISTRATION STATEMENT ON FORM S-3 FILED HEREWITH AND ANY
AND ALL PRE-EFFECTIVE AND POST-EFFECTIVE AMENDMENTS TO SAID REGISTRATION
STATEMENT, AND GENERALLY TO DO ALL THINGS IN OUR NAMES AND ON OUR BEHALF IN
OUR CAPACITIES AS OFFICERS AND DIRECTORS TO ENABLE CHATTEM, INC. TO COMPLY
WITH THE PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND ALL
REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION, HEREBY RATIFYING AND
CONFIRMING OUR SIGNATURES AS THEY MAY BE SIGNED BY OUR SAID ATTORNEYS, OR
EITHER OF THEM, TO SAID REGISTRATION STATEMENT AND ANY AND ALL AMENDMENTS
THERETO.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Zan Guerry Chairman of the Board of December 21, 1998
______________________________________ Directors and Chief
ZAN GUERRY Executive Officer
(Principal Executive
Officer)
/s/ A. Alexander Taylor II President and Chief December 21, 1998
______________________________________ Operating Officer,
A. ALEXANDER TAYLOR II Director
/s/ Stephen M. Powell Controller (Principal December 21, 1998
______________________________________ Accounting Officer)
STEPHEN M. POWELL
/s/ Louis H. Barnett Director December 21, 1998
______________________________________
LOUIS H. BARNETT
/s/ Richard E. Cheney Director December 21, 1998
______________________________________
RICHARD E. CHENEY
/s/ Scott L. Probasco, Jr. Director December 21, 1998
______________________________________
SCOTT L. PROBASCO, JR.
/s/ Samuel E. Allen Director December 21, 1998
______________________________________
SAMUEL E. ALLEN
/s/ Robert E. Bosworth Director December 21, 1998
______________________________________
ROBERT E. BOSWORTH
</TABLE>
15
<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-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF WILMINGTON, STATE OF DELAWARE, ON DECEMBER 21,
1998.
Signal Investment & Management Co.
/s/ A. Alexander Taylor, II
By: _________________________________
A. ALEXANDER TAYLOR, II
PRESIDENT
POWER OF ATTORNEY AND SIGNATURES
WE, THE UNDERSIGNED OFFICERS AND DIRECTORS OF SIGNAL INVESTMENT & MANAGEMENT
CO., HEREBY SEVERALLY CONSTITUTE AND APPOINT A. ALEXANDER TAYLOR, II AND
STEPHEN M. POWELL, AND EACH OF THEM SINGLY, OUR TRUE AND LAWFUL ATTORNEYS WITH
FULL POWER TO THEM, AND EACH OF THEM SINGLY, TO SIGN FOR US AND IN OUR NAMES
IN THE CAPACITIES INDICATED BELOW, THE REGISTRATION STATEMENT ON FORM S-3
FILED HEREWITH AND ANY AND ALL PRE-EFFECTIVE AND POST-EFFECTIVE AMENDMENTS TO
SAID REGISTRATION STATEMENT, AND GENERALLY TO DO ALL THINGS IN OUR NAMES AND
ON OUR BEHALF IN OUR CAPACITIES AS OFFICERS AND DIRECTORS TO ENABLE SIGNAL
INVESTMENT & MANAGEMENT CO. TO COMPLY WITH THE PROVISIONS OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND ALL REQUIREMENTS OF THE SECURITIES AND EXCHANGE
COMMISSION, HEREBY RATIFYING AND CONFIRMING OUR SIGNATURES AS THEY MAY BE
SIGNED BY OUR SAID ATTORNEYS, OR EITHER OF THEM, TO SAID REGISTRATION
STATEMENT AND ANY AND ALL AMENDMENTS THERETO.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ A. Alexander Taylor II President (principal December 21, 1998
______________________________________ Executive Officer),
A. ALEXANDER TAYLOR II Director
/s/ Stephen M. Powell Vice President and December 21, 1998
______________________________________ Treasurer (Principal
STEPHEN M. POWELL Accounting Officer),
Director
/s/ Hugh F. Sharber Director December 21, 1998
______________________________________
HUGH F. SHARBER
/s/ Margaret Pulgini Director December 21, 1998
______________________________________
MARGARET PULGINI
</TABLE>
16
<PAGE>
OPINION OF MILLER & MARTIN LLP
December 21, 1998
Chattem, Inc.
1715 West 38th Street
Chattanooga, Tennessee 37409
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
Reference is hereby made to the Registration Statement on Form S-3 (as
amended, the "Registration Statement"), which Chattem, Inc., a Tennessee
corporation (the "Company"), and Signal Investment and Management Co., a
Delaware corporation ("Signal"), have filed on the date hereof with the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Act"), with respect to the offering and issuance from time to
time by the Company of the following: (i) one or more series of its debt
securities (the "Debt Securities"), (ii) shares of its preferred stock, without
par value per share (the "Preferred Stock"), (iii) shares of its common stock,
without par value per share (the "Common Stock"), and/or (iv) warrants (the
"Warrants") to purchase Debt Securities, Preferred Stock or Common Stock, valued
in the aggregate at a maximum of $250,000,000 together with guarantees thereof
by Signal (the "Guarantees"). The Debt Securities, the Preferred Stock, the
Common Stock, the Warrants and the Guarantees are herein collectively referred
to as the "Securities." All capitalized terms which are not defined herein shall
have the meanings assigned to them in the Registration Statement.
We have acted as counsel for the Company and Signal in connection with
the preparation and filing of the Registration Statement and are familiar with
the proceedings taken by the Company and Signal in connection with the
authorization, registration, sale and issuance of the Securities. We have
examined such documents, records and materials as we have deemed necessary in
connection with this opinion letter.
On the basis of, and in reliance on, the foregoing examination and upon
information furnished to us by the Company's and Signal's officers, directors
and agents, and subject to the assumptions, exceptions, qualifications and
limitations contained herein and to future compliance with the pertinent
provisions of the Act and, with respect to the Indentures (as defined below) and
the Debt Securities, future compliance with the Trust Indenture Act of 1939, as
amended (the "TIA"), and future compliance with such securities or "blue sky"
laws of any jurisdiction as may be applicable, we are of the opinion that:
1. When (a) the Debt Securities in substantially the form described
in the Registration Statement and the indenture described therein (as amended or
supplemented in accordance with the respective terms thereof, each an
"Indenture") shall have been authorized, executed and authenticated in
accordance with the terms of the applicable Indenture, (b) the Indentures shall
have been duly authorized, executed and delivered by the Company and Signal, as
appropriate, and qualified under the TIA and (c) the Debt Securities shall have
been issued and sold as described in the Registration Statement, and if in an
underwritten offering, in accordance with the terms and conditions of the
applicable underwriting agreement, the Debt Securities will be duly authorized
and valid and binding obligations of the Company.
2. When the Preferred Stock shall have been authorized, issued and
sold as described in the Registration Statement and, if in an underwritten
offering, in accordance with the terms and conditions of the applicable
underwriting agreement, the Preferred Stock will be validly issued, fully paid
and nonassessable.
<PAGE>
3. When the Common Stock shall have been authorized, issued and sold
as described in the Registration Statement and, if in an underwritten offering,
in accordance with the terms and conditions of the applicable underwriting
agreement, the Common Stock will be validly issued, fully paid and
nonassessable.
4. When the Warrants shall have been authorized, issued and sold as
described in the Registration Statement and, if in an underwritten offering, in
accordance with the terms and conditions of the applicable underwriting
agreement, the Warrants will be duly authorized and valid and binding
obligations of the Company.
The opinions set forth above are subject to the following assumptions,
qualifications, limitations and exceptions being true and correct at or prior to
the time of the delivery of any such Security:
(a) The Board of Directors of the Company and Signal shall have duly
established the terms of such Security and duly authorized the issuance and sale
of such Security in conformity with the Company's Restated Charter or Signal's
Certificate of Incorporation, as applicable, each as amended through such time,
and such authorization shall not have been modified or rescinded;
(b) The Registration Statement shall have been declared effective and
such effectiveness shall not have been terminated or rescinded;
(c) The applicable Trustee and shall have been qualified under the
TIA and a Form T-1 shall have been properly filed as an exhibit to the
Registration Statement;
(d) In the case of an Indenture, Debt Security or agreement pursuant
to which any Warrants are to be issued, there shall be no terms or provisions
contained therein which would have the effect, under applicable law, of
vitiating the validity and binding nature of such instrument;
(e) There will not have occurred any change in law affecting the
validity or enforceability of such Security; and
(f) The validity and binding effect of any of the obligations of the
Company and Signal with reference to any such Security are subject to the effect
of any bankruptcy, insolvency, reorganization, moratorium, arrangement, or
similar laws affecting the enforcement of creditors' rights generally
(including, without limitation, the effect of statutory or other laws regarding
fraudulent transfers or preferential transfers) and general principles of
equity, regardless of whether enforceability is considered in a proceeding in
equity or at law.
This opinion is limited to the current laws of the State of Tennessee
as they apply to the Company and the laws of the State of Delaware as they apply
to Signal and the current federal laws of the United States and to the present
judicial interpretations thereof and to the facts as they presently exist. We
undertake no obligation to advise you of changes that may result from
developments occurring after the date hereof or from facts or circumstances
brought to our attention after the date hereof.
This opinion may be filed as an exhibit to the Registration Statement.
Consent is also given to the reference to this firm under the caption "Legal
Matters" in the prospectus contained in the Registration Statement. In giving
this consent, we do not admit we are included in the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations of
the SEC promulgated thereunder.
Very truly yours,
/s/ Miller & Martin LLP
Miller & Martin LLP
<PAGE>
EX-12.1
8
STATEMENT OF COMPUTATION OF RATIOS
EXHIBIT 12.1
CHATTEM, INC.
RATIO OF EARNINGS TO FIXED CHARGES-CONTINUING OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Nine Months Ended
August 31, For the Year Ended November 30,
------------------------- ----------------------------------------------------------
1998 1997 1997 1996 1995 1994
---------- ----------- ------------ ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Earnings
- --------
Income from Continued Operations 24,080 9,369 11,248 5,620 3,610 3,292
Fixed Charges 19,490 12,061 16,234 13,661 11,327 9,578
---------- ----------- ------------ ------------- ------------- --------------
43,570 21,430 27,482 19,281 14,937 12,870
========== =========== ============ ============= ============= ==============
Fixed Charges
- -------------
Total Interest Expense 19,232 11,838 15,934 13,394 11,076 9,360
Interest component of
operating leases 258 223 300 267 251 218
---------- ----------- ------------ ------------- ------------- --------------
19,490 12,061 16,234 13,661 11,327 9,578
========== =========== ============ ============= ============= ==============
Earnings to Fixed Charges Ratio 2.2 1.8 1.7 1.4 1.3 1.3
- ------------------------------- ========== =========== ============ ============= ============= ==============
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 19, 1998
(except with respect to the matter discussed in Note 15 to the consolidated
financial statements as to which the date is February 23, 1998) included in the
Form 10-K for Chattem, Inc. for the year ended November 30, 1997 and our report
dated January 19, 1998 (except with respect to the matter discussed in Note 6 to
the financial statements as to which the date is February 23, 1998) included in
the Form 10-K for Signal Investment & Management Co. for the year ended November
30, 1997 and to all references to our Firm included in the registration
statement.
/s/ Arthur Andersen LLP
December 18, 1998
Chattanooga, Tennessee
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Chattem, Inc. of our report dated March 3, 1998
relating to the financial statements of the Ban deodorant and antiperspirant
product lines of Bristol-Myers Products, a division of Bristol-Myers Squibb
Company, which appears on page 4 of Form 8-K of Chattem, Inc. dated March 24,
1998. We also consent to the reference to us under the heading "Experts" in such
Prospectus.
PricewaterhouseCoopers LLP
New York, New York
December 21, 1998
