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EXHIBIT 10.10
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NON-COMPETITION AND SEVERANCE AGREEMENT
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This Agreement is made and entered into as of the 1st of June,
2004, by and
between CHATTEM, INC., a Tennessee corporation (the "Company")
and Theodore K.
Whitfield Jr. (the "Executive").
WITNESSETH
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WHEREAS, the Company is desirous of assuring itself of
continuity of
management through the hiring and retention of certain key
executives, and to
foster their unbiased and analytical assessment of any offer to
acquire control
of the Company; and
WHEREAS, the Company desires to impose upon the Executive
obligations of
confidentiality and to restrict his ability to obtain employment
with certain
competitors of the Company; and
WHEREAS, the Executive is willing to accept obligations of
confidentiality
and non-competition in exchange for specified severance
benefits;
NOW, THEREFORE, the Company and the Executive do hereby agree as
follows:
1. Term. The term of this Agreement shall commence as of the day
and year
first above written and continue indefinitely thereafter for a
period ending
three (3) years after the termination of the Executive's
employment with the
Company.
2. Confidentiality Obligations. During the term of this
Agreement the
Executive agrees to maintain all confidential information and
trade secrets
obtained during the course of his employment with the Company as
confidential
and to disclose the same to no one, other than in the
furtherance of the
Company's business in the normal course or to a fellow employee
with a
reasonable need to know, unless the Executive can demonstrate by
documentary
evidence that such information was (1) known to him prior to his
employment with
the Company; (2) subsequently became part of the public domain
through no fault
of his own; or (3) was subsequently disclosed to him by a third
party not in
violation of any obligation of confidentiality and non-use with
the Company.
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3. Non-Compete. In the event of a Change in Control (as
hereinafter
defined) while Executive is employed by the Company and during
the term of this
Agreement, Executive will not accept compensation or anything of
value from, nor
offer or provide any services, including consulting services, to
any person,
company, partnership, joint venture or other entity which has or
does a
significant business involving, in whole or in part, health and
beauty aid
products sold over the counter. This provision applies only to
entities selling
the above specified products in competition with the Company in
the United
States.
4. Severance Benefits. If the Company Discharges or
Constructively
Discharges the Executive during the term of this Agreement
within twenty-four
(24) months after the occurrence of a Change in Control, he
shall receive a
Severance Benefit. In addition, after a Change in Control, the
Executive shall
be entitled to resign his position with the Company and elect to
receive the
Severance Benefit (the "Election") at any time during the period
commencing
one-hundred and eighty (180) days after the Change in Control
and ending
two-hundred and forty (240) days after the Change in Control
notwithstanding
that the fact that no Discharge or Constructive Discharge has
occurred. These
terms are hereby defined as follows:
A. "Change in Control":
(i) Change of one-third (1/3) or more of any directors of
the Company within any twelve (12) month period; or
(ii) Change of one-half (1/2) or more of the directors of
the Company within any twenty-four (24) month period; or
(iii) Acquisition by any person of the ownership or right to
vote of thirty-five (35%) percent or more of the Company's
outstanding voting shares. "Person" shall mean any person,
corporation, partnership, or any entity and any affiliate or
associate thereof. "Affiliate" and "associate" shall have
the
meanings assigned to them in Rule 12(b)(2) of the General
Rules
and Regulations under the Securities Exchange Act of 1934.
B. "Discharges": terminates the Executive for any reason other
than
indictment or conviction for a felony or other crime
involving
substantial moral turpitude, disability, death, alcoholism,
drug
addiction or the gross, active misfeasance of the Executive
with
regard to his duties with the Company.
2
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C. "Constructively Discharges": changes location or reduces
the
Executive's status, duties, responsibilities or direct or
indirect compensation, (including future increases
commensurate
with those given other managers of the Company), or so alters
the
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