================================================================================
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): NOVEMBER 29, 2005
CHATTEM, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
TENNESSEE 0-5905 62-0156300
- ------------------------ ------------------------ ------------------
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
1715 WEST 38TH STREET, CHATTANOOGA, TENNESSEE 37409
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(423) 821-4571
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
================================================================================
ITEM 1.01. ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
- ---------- ----------------------------------------
(a) On December 1, 2005, Chattem, Inc. (the "Company") announced it has entered
into a third amendment (the "Amendment") to its Senior Secured Revolving Credit
Facility (the "Amended Revolving Credit Facility") with a syndicate of
commercial banks led by Bank of America, N.A., as agent, that, among other
things, increases the Company's borrowing capacity under the facility from $50
million to $100 million, lowers the interest rate on borrowings under the
facility and allows the Company greater flexibility to repurchase its common
stock and refinance its existing debt. The Amended Revolving Credit Facility
matures November 15, 2010. The foregoing description of the Amendment does not
purport to be complete and is qualified in its entirety by reference to the
Amendment, a copy of which is attached to this Form 8-K as Exhibit 10.1, which
is incorporated herein by reference. A copy of the press release dated December
1, 2005 is attached hereto as Exhibit 99.1.
(b) Separately, effective on November 30, 2005 (the "Effective Date"), the
Company entered into amendments to the grant agreements for certain outstanding
stock options previously granted to optionees under the Chattem, Inc. Stock
Incentive Plan - 2005 (the "2005 Plan"). One amendment applies only to certain
employees and executive officers named therein (for purposes of this Form 8-K
only, the "Officers"). The other amendment applies to all optionees other than
the Officers. Each of the amendments provides that, notwithstanding the vesting
schedule shown in the grant agreement, any unvested portion of the previously
granted stock options whose exercise price exceeded the closing sale price of
the shares of common stock underlying such options on the last business day
prior to the Effective Date will vest fully upon the Effective Date (the
"Acceleration"). The amendment with respect to the Officers also provides that
the optionee shall be prohibited from transferring the shares of common stock of
the Company which such optionee may acquire upon exercise of any portion of
stock options that became vested as a result of the Acceleration prior to the
earlier of the date such options would have become vested as set forth in the
vesting schedule or as otherwise specified in the 2005 Plan. All other terms and
conditions of the grant agreements, including the exercise prices and numbers of
shares subject to such options, remain unchanged. Copies of the forms of
amendments are attached hereto as Exhibits 10.2 and 10.3 and are incorporated
herein by reference.
ITEM 2.04. TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL
- ---------- ----------------------------------------------------------------
OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT
------------------------------------------------------------------
On December 1, 2005, the Company also announced that it has called all of its
$75 million of Floating Rate Senior Notes due March 1, 2010 (the "Notes") for
full redemption on December 30, 2005. The Notes were called pursuant to the
optional redemption provisions of Section 3.07 of the Indenture dated as of
February 26, 2004 at a price of 102% of par plus accrued interest to December
30, 2005. The notice of redemption was given by the trustee under the Indenture
to the holders of the Notes on November 30, 2005. The Company will utilize
borrowings under the Amended Revolving Credit Facility and its cash on hand to
fund the redemption of the Notes. A copy of the press release dated December 1,
2005 is attached hereto as Exhibit 99.1.
Statements in this Form 8-K which are not historical facts are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements involve risks, uncertainties and
assumptions that could cause actual outcomes and results to differ materially
from those expressed or projected.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
- ---------- ---------------------------------
(c) The following exhibits are being furnished herewith:
EXHIBIT NO. EXHIBIT DESCRIPTION
----------- -------------------
10.1 Third Amendment to Credit Agreement dated November
29, 2005 by and among Chattem, Inc., its domestic
subsidiaries, identified lenders and Bank of
America, N.A., as Agent
10.2 Form of Amendment to Grant Agreement under the
2005 Plan pertaining only to the Officers
10.3 Form of Amendment to Grant Agreement under the
2005 Plan pertaining to all optionees other than
Officers
99.1 Press Release dated December 1, 2005
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.
December 2, 2005 CHATTEM, INC.
By: /s/ Theodore K. Whitfield, Jr.
---------------------------------
Theodore K. Whitfield, Jr.
Vice President and General Counsel
EXHIBIT INDEX
-------------
Exhibit No. Exhibit Description
- ----------- -------------------
10.1 Third Amendment to Credit Agreement dated November 29, 2005 by
and among Chattem, Inc., its domestic subsidiaries, identified
lenders and Bank of America, N.A., as Agent
10.2 Form of Amendment to Grant Agreement under the 2005 Plan
pertaining only to the Officers
10.3 Form of Amendment to Grant Agreement under the 2005 Plan
pertaining to all optionees other than Officers
99.1 Press Release dated December 1, 2005