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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 27, 2000
CHATTEM, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TENNESSEE 0-5905 62-0156300
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(STATE OF (COMMISSION FILE NO.) (IRS EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
1715 WEST 38TH STREET, CHATTANOOGA, TENNESSEE 37409
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(423) 821-4571
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 5. OTHER EVENTS.
(a) Adoption of Rights Plan.
The Board of Directors of Chattem, Inc. (the "Company")
declared a dividend distribution of one Right for each outstanding share of
Company Common Stock to shareholders of record at the close of business on
February 11, 2000 (the "Record Date"). Each Right entitles the registered holder
to purchase from the Company a unit consisting of one one-hundredth of a share
(a "Unit") of Series A Junior Participating Preferred Stock, without par value
(the "Series A Preferred Stock"), at a Purchase Price of $90 per Unit, subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement"), dated as of January 27, 2000, between the
Company and SunTrust Bank, Atlanta, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earliest to occur of (i) the tenth
business day following the date (the "Stock Acquisition Date") of the first
public announcement by the Company that any person or group has become the
beneficial owner of 15% or more of the Common Stock then outstanding (other than
the Company, any subsidiary of the Company, and any employee benefit plan of the
Company or any subsidiary), (ii) the tenth business day following the
commencement of a tender or exchange offer if, upon its consummation, the
offeror would become the beneficial owner of 15% or more of the Common Stock
then outstanding, or (iii) a merger or other business combination transaction
involving the Company. Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock certificates issued
after the Record Date will contain a notation incorporating the Rights Agreement
by reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the occurrence of
a Triggering Event (as defined below) that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock will
be issued.
The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M. (Chattanooga, Tennessee time) on January 27, 2010,
unless earlier redeemed, exchanged, extended or terminated by the Company as
described below. At no time will the rights have any voting power.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
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In the event that a Person becomes an Acquiring Person, except
pursuant to an offer for all outstanding shares of Common Stock which the
independent directors determine to be fair and not inadequate to and to
otherwise be in the best interests of the Company and its shareholders, after
receiving advice from one or more investment banking firms (a "Qualifying
Offer"), each holder of a Right will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. Notwithstanding any of the foregoing, following the occurrence of
the event set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable
following the occurrence of the event set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $90 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$180 worth of Common Stock (or other consideration, as noted above) for $90.
Assuming that the Common Stock had a per share value of $18 at such time, the
holder of each valid Right would be entitled to purchase ten (10) shares of
Common Stock for $90.
In the event that (i) the Company is acquired in a merger
(other than a "clean-up" merger which follows a Qualifying Offer) or other
business combination transaction (x) in which the Company is not the surviving
entity, (y) in which the Company is the surviving entity and the Common Stock is
changed or exchanged or the Common Stock remains outstanding but constitutes
less than 50% of the shares outstanding immediately following the merger, or
(ii) 50% or more of the Company's assets or earning power is transferred, each
holder of a Right (except Rights which have previously been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the exercise price of
the Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such person or group of fifty percent (50%) or more
of the outstanding Common Stock, the Board may exchange the Rights (other than
Rights owned by such person or group which have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, or one one-hundredth of
a share of Preferred Stock (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
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Rights will terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company or in the event of the
redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights, or to shorten or lengthen any time
period under the Rights Agreement. The foregoing notwithstanding, no amendment
may be made at such time as the Rights are not redeemable.
The Rights Agreement specifying the terms of the Rights is
being filed with the Securities and Exchange Commission as Exhibit 4 hereto and
is incorporated herein by reference. The foregoing description of the Rights is
qualified in its entirety by reference to such exhibit.
(b) Amendments to By-Laws.
On January 27, 2000, the Board of Directors of the Company
further amended the Amended and Restated By-Laws of the Company to provide,
among other things, that notice by a shareholder of new business or
nominations for directors to be brought before an annual meeting of
shareholders must be given to the Company at least 90 days prior to the
anniversary date of the prior year's annual meeting. The By-Law amendments
are not applicable to the Company's 2000 Annual Meeting of Shareholders. A
copy of the Amended and Restated By-Laws of the Company as amended is filed
herewith as Exhibit 3 (the "Amended By-Laws").
Under the Amended By-Laws, a shareholder who wishes to
propose new business for consideration or to nominate persons for election to
the Board of Directors at the Company's 2001 Annual Meeting of Shareholders
must deliver or mail to the Company and the Company must receive on or before
the advance notice deadline set forth in the Amended By-Laws the information
specified in the Amended By-Laws regarding such proposal or nomination.
Additionally, under the Securities and Exchange
Commission's Rule 14a-4, at the 2001 Annual Meeting of the Shareholders, the
Company may exercise discretionary voting authority under proxies it solicits
to vote on a proposal made by a shareholder that the shareholder does not
seek to include in the Company's proxy statement pursuant to Rule 14a-8
unless the Company is notified about the proposal on or before the advance
notice deadline set forth in the Amended By-Laws, and the shareholder
satisfies the other requirements of Rule 14a-4(c).
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The Amended and Restated By-Laws were also amended to
establish the process of requesting special meetings of the shareholders and the
timing of special meetings.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit
No. Exhibit
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3 Amended and Restated By-Laws of Chattem, Inc., as
amended on January 27, 2000 (together with form of
amendment to Amended and Restated By-Laws).
4 Rights Agreement, dated as of January 27, 2000,
between Chattem, Inc. and SunTrust Bank, Atlanta, as
Rights Agent, is incorporated herein by reference to
the exhibit to the Company's Registration Statement
on Form 8-A, dated February 1, 2000.
99 Press Release issued by the Company on January 27, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
February 1, 2000
CHATTEM, INC.
By:_____________________________________
A. Alexander Taylor II,
President and Chief Operating Officer
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INDEX TO EXHIBITS
Exhibit No. Exhibit
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3 Amended and Restated By-Laws of Chattem,
Inc., as amended on January 27, 2000
(together with form of amendment to
Amended and Restated By-Laws).
4 Rights Agreement, dated as of January 27,
2000, between Chattem, Inc. and SunTrust
Bank, Atlanta, as Rights Agent, is
incorporated herein by reference to the
exhibit to the Company's Registration
Statement on Form 8-A, dated February 1,
2000.
99 Press Release issued by the Company on January 27, 2000.
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Exhibit 3
AMENDED AND RESTATED BY-LAWS
OF
CHATTEM, INC.
ARTICLE I - SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of shareholders shall be
held on such date, at such time and place as may be designated by the board of
directors.
Section 2. Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or entitled to vote at any meeting of
shareholders, or shareholders entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purpose, the
record date shall be 15 days prior to the date on which the action requiring
such determination of shareholders is to be taken. The board of directors may
fix in advance another record date, not more than 70 days nor less than 10 days
prior to the date on which the action is to be taken.
Section 3. Proxies. All proxies shall be filed with the secretary of
the corporation before or at the time of the meeting.
Section 4. Advance Notice for New Business. No business may be
transacted at an annual meeting of shareholders, starting with the 2001 annual
meeting of shareholders and all annual meetings thereafter, other than business
that is either (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors (or any duly
authorized committee thereof), (b) otherwise properly brought before the annual
meeting by or at the direction of the Board of Directors (or any duly authorized
committee thereof) or (c) otherwise properly brought before the annual meeting
by any shareholder of the Corporation (i) who is a shareholder of record on the
date of the giving of the notice provided for in this Section 4 and on the
record date for the determination of shareholders entitled to vote at such
annual meeting and (ii) who complies with the notice procedures set forth in
this Section 4.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a shareholder, such shareholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.
To be timely, a shareholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the Corporation
not less than ninety (90) days prior to the anniversary date of the immediately
preceding annual meeting of shareholders; provided, however, that in the event
that the annual meeting is called for a date that is not within thirty (30) days
before or after such anniversary date, notice by the shareholder in order to be
timely must be so received not later than the close of business
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on the tenth (10th) day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure of the date of the
annual meeting was made, whichever first occurs.
To be in proper written form, a shareholder's notice to the Secretary
must set forth as to each matter such shareholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such shareholder, (iii) the
class or series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by such shareholder, (iv) a description of
all arrangements or understandings between such shareholder and any other person
or persons (including their names) in connection with the proposal of such
business by such shareholder and any material interest of such shareholder in
such business and (v) a representation that such shareholder intends to appear
in person or by proxy at the annual meeting to bring such business before the
meeting. In addition, notwithstanding anything in this Section 4 to the
contrary, a shareholder intending to nominate one or more persons for election
as a Director at an annual or special meeting must comply with Section 5,
Article I of these By-laws for such nomination or nominations to be properly
brought before such meeting.
No business shall be conducted at the annual meeting of shareholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 4, provided, however, that, once business
has been properly brought before the annual meeting in accordance with such
procedures, nothing in this Section 4 shall be deemed to preclude discussion by
any shareholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.
Section 5. Advance Notice for Nominations of Directors. Only persons
who are nominated in accordance with the following procedures shall be eligible
for election as Directors of the Corporation, except as may be otherwise
provided in the Restated Charter with respect to the right of holders of
preferred stock of the Corporation to nominate and elect a specified number of
directors in certain circumstances. Nominations of persons for election to the
Board of Directors may be made at any annual meeting of shareholders, starting
at the 2001 annual meeting of shareholders and all annual meetings thereafter,
or at any special meeting of shareholders called for the purpose of electing
directors called after January 27, 2000, (a) by or at the direction of the Board
of Directors (or any duly authorized committee thereof) or (b) by any
shareholder of the Corporation (i) who is a shareholder of record on the date of
the giving of the notice provided for in this Section 5 and on the record date
for the determination of shareholders entitled to vote at such meeting and (ii)
who complies with the notice procedures set forth in this Section 5.
In addition to any other applicable requirements, for a nomination to
be made by a shareholder, such shareholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.
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To be timely, a shareholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the Corporation
(a) in the case of an annual meeting, not less ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of shareholders;
provided, however, that in the event that the annual meeting is called or a date
that is not within thirty (30) days before or after such anniversary date,
notice by the shareholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs;
and (b) in the case of a special meeting of shareholders called for the purpose
of electing directors, not later than the close of business on the tenth (10th)
day following the day on which notice of the date of the special meeting was
mailed or public disclosure of the date of the special meeting was made,
whichever first occurs.
To be in proper written form, a shareholder's notice to the Secretary
must set forth (a) as to each person whom the shareholder proposes to nominate
for election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by the person and (iv) any
other information relating to the person that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder; and (b) as to the shareholder giving the
notice (i) the name and record address of such shareholder, (ii) the class or
series and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such shareholder, (iii) a description of all
arrangements or understandings between such shareholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nominations) are to be made by such shareholder, (iv) a representation
that such shareholder intends to appear in person or by proxy at the meeting to
nominate the persons named in its notice and (v) any other information relating
to such shareholder that would be required to be disclosed in a proxy statement
or other filings required to be made in connection with solicitations of proxies
for election of directors pursuant to Section 14 of the Exchange Act and the
rules and regulations promulgated thereunder. Such notice must be accompanied by
a written consent of each proposed nominee to being named as a nominee and to
serve as a director if elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 5. If the Chairman of the meeting determines that a nomination was not
made in accordance with the foregoing procedures, the Chairman shall declare to
the meeting that the nomination was defective and such defective nomination
shall be disregarded.
Section 6. Special Meetings.
(a) Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by the Tennessee Business Corporation Act
(herein called "the Act") or by the Restated Charter
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may be called by the Chairman of the Board, the President or the Board of
Directors or shall be called by the Chairman or Secretary at the request in
writing sent by registered mail of the holders entitled to cast at least
10% percent of the votes which all shareholders are entitled to cast at the
particular meeting. Such request shall state the purpose or purposes of the
proposed meeting.
(b) Any shareholders of record requesting the Corporation to
call a special meeting of shareholders pursuant to this Section 6 (collectively,
the "Initiating Shareholder") shall deliver or mail by registered mail written
notice of such request to the Secretary of the Corporation at its principal
executive offices (the "Notice"). The Notice must contain a statement of the
purpose or purposes of the proposed meeting. The purposes of a special meeting
shall be stated in the request therefor, and the business transacted shall be
confined to such purposes.
(c) If the Initiating Shareholder owns shares of the
Corporation entitled to cast at least 10% of the votes that all shareholders are
entitled to cast at the particular meeting (the "Requisite Shares"), the
Corporation shall be required to call the special meeting of shareholders
requested by the Initiating Shareholder.
(d) If the Initiating Shareholder does not own the Requisite
Shares, the provisions of this subsection (d) shall apply. Within 10 days after
the Secretary's receipt of the Notice from the Initiating Shareholder containing
all the information required by subsection (b) of this Section 6, the Board of
Directors shall fix a record date for determining the shareholders of record
entitled to join in the request for the calling of the special meeting of
shareholders. The Corporation shall give prompt written notice of the fixing of
the record date to the Initiating Shareholder. If such record date is not fixed
within such 10 day period, the record date shall be the close of business on the
date next preceding the day on which the Initiating Shareholder requests that a
record date be set. If shareholders of record on the record date purporting to
own of record the Requisite Shares deliver or mail written requests to the
Secretary of the Corporation at its principal executive offices that the
Corporation call the special meeting, the Corporation shall promptly appoint an
inspector to perform a ministerial review of, and render a report to the
Corporation and the Initiating Shareholder concerning, the validity of such
requests and any revocations thereof. The inspector will be instructed to
perform such review and render such report promptly. The Corporation shall not
be required to call the special meeting until the inspector has rendered such
report and certified in writing to the Corporation and the Initiating
Shareholder that valid, unrevoked requests for the calling of the special
meeting were received from shareholders of record on the record date owning of
record on such date the Requisite Shares. Nothing contained in this subsection
(d) shall be construed to mean or imply that the Board of Directors or any
shareholder shall not be entitled to contest the validity of any written request
or revocation thereof, whether before or after certification by the inspector,
through court proceedings or otherwise. Any dispute as to whether or not the
Corporation is required to call the special meeting of shareholders will be
resolved through appropriate court proceedings, in which the Corporation will
request the court to resolve the dispute as expeditiously as possible.
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(e) Notwithstanding any other provision of these By-laws, no
written request to call a special meeting of shareholders shall be effective
unless, within seventy (70) days after the record date fixed pursuant to
subsection (d) of this Section 6, the Corporation has received such written
requests from shareholders of record on such record date owning on such date the
Requisite Shares.
(f) The record date for determining the shareholders of record
entitled to vote at a special meeting called pursuant to this Section 6 shall be
fixed by the Board of Directors within twenty (20) days after it is determined
that the Corporation is required to call such meeting. Written notice of such
record date shall be sent promptly to the Initiating Shareholder and the meeting
shall be held on such date as shall be determined by the Board of Directors
which shall be not less than sixty (60) nor more than ninety (90) days after the
date on which (i) a satisfactory request for a special meeting is made by an
Initiating Shareholder pursuant to subsection (c) of this Section 6 or (ii) a
determination is made pursuant to subsection (d) of this Section 6 that
sufficient written consents requesting a special meeting have been received by
the inspector. If such record date is not fixed within such 20 day period, the
record date shall be the close of business on the date next preceding the day on
which it is determined that the Corporation is required to call such special
meeting.
(g) The business to be conducted at a special meeting called
pursuant to this Section 6 shall be limited to the business set forth in the
Notice and such other business or proposals as the Board of Directors shall
determine and shall be set forth in the notice of meeting. The Board of
Directors or the Chairman of the Board of Directors may determine rules and
procedures for the conduct of the meeting.
ARTICLE II - DIRECTORS
Section 1. Number and Compensation. There shall be from 7 to 12
directors of the corporation. Compensation of directors shall be determined by
the board.
Section 2. Regular Meetings. Regular meetings of the board, without
notice, shall be held immediately after the annual meeting of shareholders and
on the fourth Wednesday of January, April, and July, at the corporation
headquarters in Chattanooga, or at such other date and place as may be
determined by the board.
Section 3. Special Meetings. Special meetings of the board may be
called by the chairman of the board, the president or any three directors.
Section 4. Notice. Notice of any special meeting shall be given at
least one (1) day prior thereto by oral, telegraphic, electronic or written
notice given or delivered personally to each director or at least three (3) days
prior thereto if such notice is given by regular, registered or certified mail.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail addressed to the director at his home or business address.
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Section 5. Indemnification. 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
corporation or at the request of the corporation a director of officer or Audit
Committee member of another corporation controlled by the corporation, shall be
indemnified by this corporation 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.
Section 6. Action Without Meeting. The board may take any action which
it is required or permitted to take by law without a meeting upon written
consent setting forth the action so taken and signed by all of the directors
entitled to vote thereon.
Section 7. Committees. The majority of the entire board, by resolution,
may designate committees and delegate to them such authority of the board as it
deems desirable within the limits prescribed by Tennessee law.
Section 8. Advisory Directors. The board may appoint advisory directors
who shall act only in the capacity of providing general policy advice to the
board. In any action where a recorded vote of the directors is taken, the vote
of elected directors shall determine the outcome.
ARTICLE III - OFFICERS
Section 1. Election. The board shall elect all officers for terms of
one year. Assistant officers, if any, shall not be considered officers for the
purposes of this section, and shall be appointed and subject to removal by the
president.
Section 2. Vacancies. A vacancy in any office subject to board election
may be filled by the board.
Section 3. Chairman of the Board. The chairman of the board shall be
the chief executive officer. He shall preside at any meetings of the board and
of the shareholders.
Section 4. President. The President shall have management and control
of the affairs of the corporation in accordance with policies promulgated by the
board.
Section 5. The Vice Presidents. In the event of the absence, death, or
inability to act of the president, the executive vice president shall perform
the duties and be vested with the powers of the president. The vice presidents
shall perform such duties as from time to time may be assigned to them by the
president or by the board of directors.
Section 6. The Secretary. The secretary shall: (a) see that all notices
are duly given in accordance with the provisions of these by-laws and as
required by law; (b) take minutes of meetings of the directors
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and shareholders; (c) perform such other duties as may be assigned to him by the
president or by the board.
Section 7. Assistant Secretaries. The assistant secretaries shall
perform such duties as may be assigned to them by the secretary.
Section 8. Salaries. Salaries of officers shall be determined by the
board and may be changed by the board at any time.
ARTICLE IV - SHARES
Section 1. Signatures. All certificates for shares shall be signed by
the president or executive vice president or such vice president as may be
designated by the board and the secretary or an assistant secretary.
Section 2. Transfer. Transfer of shares shall be made only on the share
transfer books of the corporation.
Section 3. Voting Upon Shares of Other Corporations Held by the
Corporation. The president shall have authority to vote in person or by proxy on
behalf of the corporation at any meeting of shareholders of any corporation in
which the corporation may hold shares. The board may confer like powers upon any
other officer.
ARTICLE V - FISCAL YEAR
The fiscal year of the corporation shall begin on December 1 and end on
November 30.
ARTICLE VI - SEAL
The corporate seal shall be circular, and the inscription thereof shall
include the corporate name and state of incorporation.
ARTICLE VII - AMENDMENT
The by-laws may be amended by the vote of a majority of the board.
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FORM OF AMENDMENT TO THE AMENDED AND RESTATED BYLAWS
APPROVED BY THE BOARD OF DIRECTORS OF CHATTEM, INC.
JANUARY 27, 2000
The Amended and Restated Bylaws were amended to add the
following Sections to Article I:
Section 4. Advance Notice for New Business. No business may be
transacted at an annual meeting of shareholders, starting with the 2001 annual
meeting of shareholders and all annual meetings thereafter, other than business
that is either (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors (or any duly
authorized committee thereof), (b) otherwise properly brought before the annual
meeting by or at the direction of the Board of Directors (or any duly authorized
committee thereof) or (c) otherwise properly brought before the annual meeting
by any shareholder of the Corporation (i) who is a shareholder of record on the
date of the giving of the notice provided for in this Section 4 and on the
record date for the determination of shareholders entitled to vote at such
annual meeting and (ii) who complies with the notice procedures set forth in
this Section 4.
In addition to any other applicable requirements, for business
to be properly brought before an annual meeting by a shareholder, such
shareholder must have given timely notice thereof in proper written form to the
Secretary of the Corporation.
To be timely, a shareholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than ninety (90) days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided, however, that in
the event that the annual meeting is called for a date that is not within thirty
(30) days before or after such anniversary date, notice by the shareholder in
order to be timely must be so received not later than the close of business on
the tenth (10th) day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure of the date of the annual
meeting was made, whichever first occurs.
To be in proper written form, a shareholder's notice to the
Secretary must set forth as to each matter such shareholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of such shareholder,
(iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by such shareholder, (iv)
a description of all arrangements or understandings between such shareholder and
any other person or persons (including their names) in connection with the
proposal of such business by such shareholder and any material interest of such
shareholder in such business and (v) a representation that such shareholder
intends to appear in person or by proxy at the annual meeting to bring such
business before the meeting. In addition, notwithstanding anything in this
Section 4 to the contrary, a shareholder intending
<PAGE>
to nominate one or more persons for election as a Director at an annual or
special meeting must comply with Section 5, Article I of these By-laws for such
nomination or nominations to be properly brought before such meeting.
No business shall be conducted at the annual meeting of
shareholders except business brought before the annual meeting in accordance
with the procedures set forth in this Section 4, provided, however, that, once
business has been properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 4 shall be deemed to preclude
discussion by any shareholder of any such business. If the Chairman of an annual
meeting determines that business was not properly brought before the annual
meeting in accordance with the foregoing procedures, the Chairman shall declare
to the meeting that the business was not properly brought before the meeting and
such business shall not be transacted.
Section 5. Advance Notice for Nominations of Directors. Only
persons who are nominated in accordance with the following procedures shall be
eligible for election as Directors of the Corporation, except as may be
otherwise provided in the Restated Charter with respect to the right of holders
of preferred stock of the Corporation to nominate and elect a specified number
of directors in certain circumstances. Nominations of persons for election to
the Board of Directors may be made at any annual meeting of shareholders,
starting at the 2001 annual meeting of shareholders and all annual meetings
thereafter, or at any special meeting of shareholders called for the purpose of
electing directors called after January 27, 2000, (a) by or at the direction of
the Board of Directors (or any duly authorized committee thereof) or (b) by any
shareholder of the Corporation (i) who is a shareholder of record on the date of
the giving of the notice provided for in this Section 5 and on the record date
for the determination of shareholders entitled to vote at such meeting and (ii)
who complies with the notice procedures set forth in this Section 5.
In addition to any other applicable requirements, for a
nomination to be made by a shareholder, such shareholder must have given timely
notice thereof in proper written form to the Secretary of the Corporation.
To be timely, a shareholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation (a) in the case of an annual meeting, not less ninety (90) days
prior to the anniversary date of the immediately preceding annual meeting of
shareholders; provided, however, that in the event that the annual meeting is
called or a date that is not within thirty (30) days before or after such
anniversary date, notice by the shareholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the annual meeting was mailed or
such public disclosure of the date of the annual meeting was made, whichever
first occurs; and (b) in the case of a special meeting of shareholders called
for the purpose of electing directors, not later than the close of business on
the tenth (10th) day following the day on which notice of the date of the
special meeting was mailed or public disclosure of the date of the special
meeting was made, whichever first occurs.
<PAGE>
To be in proper written form, a shareholder's notice to the
Secretary must set forth (a) as to each person whom the shareholder proposes to
nominate for election as a director (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or employment of
the person, (iii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by the person and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
shareholder giving the notice (i) the name and record address of such
shareholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such shareholder,
(iii) a description of all arrangements or understandings between such
shareholder and each proposed nominee and any other person or persons (including
their names) pursuant to which the nominations) are to be made by such
shareholder, (iv) a representation that such shareholder intends to appear in
person or by proxy at the meeting to nominate the persons named in its notice
and (v) any other information relating to such shareholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 5. If the Chairman of the meeting determines that a nomination was not
made in accordance with the foregoing procedures, the Chairman shall declare to
the meeting that the nomination was defective and such defective nomination
shall be disregarded.
Section 6. Special Meetings.
(a) Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by the Tennessee Business Corporation Act
(herein called "the Act") or by the Restated Charter may be called by the
Chairman of the Board, the President or the Board of Directors or shall be
called by the Chairman or Secretary at the request in writing sent by registered
mail of the holders entitled to cast at least 10% percent of the votes which all
shareholders are entitled to cast at the particular meeting. Such request shall
state the purpose or purposes of the proposed meeting.
(b) Any shareholders of record requesting the Corporation to
call a special meeting of shareholders pursuant to this Section 6 (collectively,
the "Initiating Shareholder") shall deliver or mail by registered mail written
notice of such request to the Secretary of the Corporation at its principal
executive offices (the "Notice"). The Notice must contain a statement of the
purpose or purposes of the proposed meeting. The purposes of a special meeting
shall be stated in the request therefor, and the business transacted shall be
confined to such purposes.
<PAGE>
(c) If the Initiating Shareholder owns shares of the
Corporation entitled to cast at least 10% of the votes that all shareholders are
entitled to cast at the particular meeting (the "Requisite Shares"), the
Corporation shall be required to call the special meeting of shareholders
requested by the Initiating Shareholder.
(d) If the Initiating Shareholder does not own the Requisite
Shares, the provisions of this subsection (d) shall apply. Within 10 days after
the Secretary's receipt of the Notice from the Initiating Shareholder containing
all the information required by subsection (b) of this Section 6, the Board of
Directors shall fix a record date for determining the shareholders of record
entitled to join in the request for the calling of the special meeting of
shareholders. The Corporation shall give prompt written notice of the fixing of
the record date to the Initiating Shareholder. If such record date is not fixed
within such 10 day period, the record date shall be the close of business on the
date next preceding the day on which the Initiating Shareholder requests that a
record date be set. If shareholders of record on the record date purporting to
own of record the Requisite Shares deliver or mail written requests to the
Secretary of the Corporation at its principal executive offices that the
Corporation call the special meeting, the Corporation shall promptly appoint an
inspector to perform a ministerial review of, and render a report to the
Corporation and the Initiating Shareholder concerning, the validity of such
requests and any revocations thereof. The inspector will be instructed to
perform such review and render such report promptly. The Corporation shall not
be required to call the special meeting until the inspector has rendered such
report and certified in writing to the Corporation and the Initiating
Shareholder that valid, unrevoked requests for the calling of the special
meeting were received from shareholders of record on the record date owning of
record on such date the Requisite Shares. Nothing contained in this subsection
(d) shall be construed to mean or imply that the Board of Directors or any
shareholder shall not be entitled to contest the validity of any written request
or revocation thereof, whether before or after certification by the inspector,
through court proceedings or otherwise. Any dispute as to whether or not the
Corporation is required to call the special meeting of shareholders will be
resolved through appropriate court proceedings, in which the Corporation will
request the court to resolve the dispute as expeditiously as possible.
(e) Notwithstanding any other provision of these By-laws, no
written request to call a special meeting of shareholders shall be effective
unless, within seventy (70) days after the record date fixed pursuant to
subsection (d) of this Section 6, the Corporation has received such written
requests from shareholders of record on such record date owning on such date the
Requisite Shares.
(f) The record date for determining the shareholders of record
entitled to vote at a special meeting called pursuant to this Section 6 shall be
fixed by the Board of Directors within twenty (20) days after it is determined
that the Corporation is required to call such meeting. Written notice of such
record date shall be sent promptly to the Initiating Shareholder and the meeting
shall be held on such date as shall be determined by the Board of Directors
which shall be not less than sixty (60) nor more than ninety (90) days after the
date on which (i) a satisfactory request for a special meeting is made by an
Initiating Shareholder pursuant to subsection (c) of this Section 6 or (ii) a
determination is made pursuant to subsection (d) of this Section 6 that
sufficient written consents requesting a special meeting have been
<PAGE>
received by the inspector. If such record date is not fixed within such 20 day
period, the record date shall be the close of business on the date next
preceding the day on which it is determined that the Corporation is required to
call such special meeting.
(g) The business to be conducted at a special meeting called
pursuant to this Section 6 shall be limited to the business set forth in the
Notice and such other business or proposals as the Board of Directors shall
determine and shall be set forth in the notice of meeting. The Board of
Directors or the Chairman of the Board of Directors may determine rules and
procedures for the conduct of the meeting.
<PAGE>
Exhibit 99
FOR IMMEDIATE RELEASE
JANUARY 27, 2000
CHATTEM, INC.
ADOPTS SHAREHOLDER RIGHTS PLAN
CHATTANOOGA, TENN. - JANUARY 27, 2000 - CHATTEM, INC. (NASDAQ: CHTT), a
leading marketer and manufacturer of branded consumer products, announced today
that its Board of Directors adopted a Shareholder Rights Plan pursuant to which
Rights will be distributed as a dividend at the rate of one Right for each share
of common stock, without par value of the Company held by shareholders of record
as of the close of business on February 11, 2000.
The Rights Plan is designed to deter coercive or unfair takeover
tactics, including the accumulation of shares in the open market or through
private transactions, and to prevent an acquirer from gaining control of the
Company without offering a fair price to all shareholders. The distribution of
the Rights is not intended to prevent a takeover of the Company and should not
deter any prospective bidder willing to negotiate with the Board of Directors
and pay a full and fair price for the Company's shares.
Each right initially will entitle shareholders to buy one one-hundredth
of a share of a new Series A Junior Participating Preferred Stock at an exercise
price of $90.00 per Right, subject to adjustment. Because the Rights will not
initially be exercisable and will trade with the common stock, separate Right
certificates will not be provided to shareholders at this time. The Rights
generally will be exercisable only if a person or group acquires beneficial
ownership of 15% or more of the Company's common stock.
<PAGE>
The Company also announced that the Board has amended the Company's
By-laws to provide, among other things, for 90-day advance notice of shareholder
nominations for directors and shareholder-initiated business at annual meetings.
A copy of the Shareholder Rights Plan and amended By-laws will be filed
shortly with the Securities and Exchange Commission.
For more information on Chattem, Inc., visit the Company's website at
www.chattem.com.
The statements contained in this release that are not historical facts
are forward-looking statements, including those relating to the potential
benefits of the Rights Plan and our intentions and expectations regarding the
Rights Plan. Important factors that could cause results to differ materially
from management's expectations include the risk that the adoption of the Rights
Plan could affect the stock price. Additional information on factors that could
potentially affect our financial and other results may be found in our documents
filed with the Securities and Exchange Commission.
Company Contacts: Alec Taylor
President and Chief Operating Officer
423/821-2037, ext 281
Chris Keller
Director of Finance
423/821-2037, ext 278
Steve Powell
Controller
423/821-2037, ext 340
