After 45 years of service to Chattem, 32 as President and Chairman of the Board, Alexander Guerry, Jr. died in 1990. His dedication to excellence, integrity in all business matters and strong community values were instilled into the very culture of the organization. This dedication and unrelenting pursuit of excellence is embodied in his son, Zan Guerry who stepped forward to assume the responsibilities as President and Chairman of the Board upon his father's death. Like his father, Zan Guerry possesses a passion for winning and talent for tennis, yet his victories on the court and in the board room are tempered with reflection and perspective. Interestingly, he also relies on a simple, yet timeless, philosophy to define and guide the Company's culture - Do what's right, do your best and treat others as you wish to be treated.

In an effort to further focus on the business, in 1998 Zan Guerry retained his title as Chairman of the Board and Chief Executive Officer and appointed A. Alexander Taylor, II to the position of President and Chief Operating Officer of Chattem, Inc. Prior to his appointment, Mr. Taylor was a valued member of Chattem's Board of Directors and an accomplished corporate lawyer.

In September 2005, Mr. Taylor resigned to pursue other opportunities and was replaced by Bob Bosworth. Mr. Bosworth has served on the Company's Board of Directors since 1986 and, prior to 1998, was employed by Chattem for 18 years, most recently as Executive Vice President and Chief Financial Officer.

Since 2001 through today, Chattem's sales and earnings have steadily increased. During this four year period, adjusted earnings per share have risen at a compound annual growth rate of 54% and adjusted net income has grown from $8.4 million in 2001 to $34.3 million in 2004. This period has been overwhelmingly the most dynamic one in our long history. Our stock continues to be a solid performer, with a total market capitalization of over $900 million as of August 2005.