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)
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.
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
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).
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.
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
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.