EXHIBIT 10.2
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CHATTEM, INC.
1715 WEST 38TH STREET
CHATTANOOGA, TN 37409
GRANT AGREEMENT
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This letter is to inform you that an award has been granted to you by Chattem,
Inc.. Effective ________ you have been granted Non-Qualified Stock Options to
purchase ________ shares at $________ per share. This grant will expire on
________. The following table will outline the vesting schedule associated with
these options.
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OPTION PLAN: 2005 Stock Incentive Plan
GRANT NUMBER: ____________________
VEST START DATE:___________________
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SHARES FULL
VESTING VEST DATE
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Please sign both copies of this Grant Agreement as your acknowledgement of this
stock option grant and the terms and conditions associated with the grant. Also
complete the enclosed Beneficiary Designation Form, have it notarized and return
it along with one copy of the signed Grant Agreement. Retain the bound documents
for your file.
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Optionee Date
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for the Compensation Committee
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Page 1 of 1
TERMS AND CONDITIONS OF STOCK OPTION GRANT
The Compensation Committee (the "Committee") of the Board of Directors of
Chattem, Inc. ("Chattem") has been designated to administer the Chattem, Inc.
Stock Incentive Plan - 2005 (the "Plan") and has selected you ("Optionee") to
receive a stock option grant as detailed in the attached Grant Agreement:
o The Option evidenced by the Grant Agreement shall become exercisable in
accordance with the vesting schedule shown in the Grant Agreement and
outlined in the Plan.
o The option hereby granted may be exercised by Optionee at such time or
times, in whole or in part(s) to the extent then vested, as Optionee may
select provided that such option is exercised not later than seven (7)
years from the date of grant.
o Exercise of the option hereby granted shall be on such forms as may then be
prescribed by the Committee, shall specify the number of shares being
purchased and shall be accompanied by payment in full in cash, or the
equivalent thereof, or, alternatively, the tender of properly endorsed
certificates of common shares of Chattem's capital stock whose Fair Market
Value under the rules established by the Committee on the date of tender is
equal to the balance of the option purchase price or (in the discretion of
the Committee) an irrevocable notice of sale delivered to a broker, in form
and content acceptable to the Committee, instructing the broker to remit
the exercise price to the Company together with any applicable withholding
taxes.
o The options hereby granted are non-transferable except under the limited
circumstances specified in the Plan in the event of death.
o All options not yet exercised shall immediately cease and terminate thirty
(30) days after Optionee ceases to be employed by Chattem, or any of its
subsidiaries or affiliates, for any reason other than death, disability,
retirement, divestiture of a subsidiary (or significant business unit) or a
leave of absence approved by the Committee under the terms of the Plan.
o The option hereby granted is subject to all the provisions and limitations
of the Plan which, in the event of any conflict with the provisions
contained herein or the Grant Agreement, shall control. Limitations
contained in the Plan upon the options hereby granted, in addition to those
specified above, include but are not limited to the following: (1) rules
and regulations established by the Committee; (2) the Company's ability to
suspend the Plan due to the adverse impact of any Federal or State law or
regulation affecting the securities to be sold under the Plan or the
taxable effect upon the Company arising out of the sale of the security
under the option; and (3) adjustments due to recapitalization, merger,
consolidation or reorganization.
o The option hereby granted has been conditioned upon compliance with the
provisions of Rule 16(b)(3) of the Securities and Exchange Commission and,
in the event prior to exercise it is subsequently determined that the
exemption provided by said rule is inapplicable to the Plan, then the
option hereby granted shall be deemed to be null and void to the extent
permitted by law and deemed advisable by the Committee.