Chattem Announces Noncompliance with NASDAQ Listing Rule

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--

As previously reported on Chattem, Inc.'s CHTT (the “Company”) Form 8-K filed on February 12, 2010 (the “Form 8-K”), the Company is no longer in compliance with NASDAQ Listing Rule 5605(c) (“Rule 5605(c)”) which requires that the audit committee of the Company's Board of Directors (the “Board”) be composed of at least three independent directors. As more fully described in the Form 8-K, as a result of certain appointments to, and resignations from, the Board as contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 20, 2009, among the Company, sanofi-aventis, a French société anonyme, and River Acquisition Corp., a Tennessee corporation and an indirect wholly-owned subsidiary of Parent, the Company has only two independent directors, both of whom are members of the audit committee.

On February 19, 2010, the Company received a notice from the staff of the NASDAQ Stock Market, indicating the Company is not in compliance with Rule 5605(c). However, consistent with Listing Rule 5605(c)(4)(A), NASDAQ will provide the Company a cure period in order to regain compliance as follows:

• until the earlier of the Company's next annual shareholders' meeting or February 9, 2011; or
• if the next annual shareholder's meeting is held before August 9, 2010 then the Company must evidence compliance no later than August 9, 2010.

The Company must submit to NASDAQ documentation, including biographies of any new directors, evidencing compliance with the rules no later than this date. In the event the Company does not regain compliance by this date, NASDAQ rules require the NASDAQ staff to provide written notification to the Company that its securities will be delisted.

If the merger that is contemplated by the Merger Agreement does not occur prior to the expiration of the cure period, the Company will take the necessary steps to appoint an additional independent director to the Board and to the Company's audit committee in order to comply with Rule 5605(c).

Statement on Cautionary Factors

This release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words, “believes,” “expects,” “anticipates,” “plans,” “estimates” or similar expressions. Examples of forward-looking statements in this release include references to our announced transaction with sanofi-aventis. Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on beliefs and assumptions of management, which in turn are based on currently available information. The forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Important factors that could cause actual results to differ materially from those contained in any forward-looking statement include, but are not limited to, the risk factors disclosed in our Annual Report on Form 10-K for the year ended November 30, 2009, as added or revised by our subsequent Quarterly Reports on Form 10-Q, under the caption “Risk Factors” and unexpected delays or impediments to the announced transaction with sanofi-aventis. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of these in light of new information or future events.