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                                                                    EXHIBIT 10.4

                                  CHATTEM, INC.
                     NON-STATUTORY STOCK OPTION PLAN - 2000

1.       PURPOSE

         The Chattem, Inc. Non-Statutory Stock Option Plan - 2000 (the "2000
Plan") is designed to enable officers and key management employees of Chattem,
Inc. (the "Company") and its Subsidiaries to continue to acquire shares of the
Company's common stock and thus to share in the future success of the Company's
business. Accordingly, the 2000 Plan is intended as a further means not only of
attracting and retaining outstanding management personnel, but also of promoting
a closer identity of interest between key management employees and the Company
and its shareholders.

2.       DEFINITIONS

         Unless the context clearly indicates otherwise, the following terms,
when used in the 2000 Plan, shall have the meanings set forth in this Section 2.

          (a)  "BENEFICIARY" means the person or persons designated in writing
               by the Optionee or, in the absence of such a designation or if
               the designated person or persons predecease the Optionee, the
               Optionee's Beneficiary shall be the person or persons who acquire
               the right to exercise the Option by bequest or inheritance. In
               order to be effective, an Optionee's designation of a Beneficiary
               must be on file with the Committee before the Optionee's death.
               Any such designation may be revoked in writing and a new written
               designation substituted therefor at any time before the
               Optionee's death.

          (b)  "BOARD OF DIRECTORS" or "BOARD" means the board of directors of
               the Company.

          (c)  "CHANGE IN CONTROL" means:

               (i)  Change of 1/3 or more of the directors of the Company within
                    any 12-month period; or

               (ii) Change of 1/2 or more of the directors of the Company within
                    any 24-month period; or

               (iii) Acquisition by any person of the ownership of or right to
                     vote 35% or more of the Company's outstanding voting stock.
                     For purposes of this

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                    paragraph (iii): (A) "person" shall mean any person,
                    corporation, partnership or other entity and any affiliate
                    or associate thereof and (B) "affiliate" and "associate"
                    shall have the meanings given to them in Rule 12b-2
                    promulgated under the Exchange Act.

          (d)  "CODE" means the Internal Revenue Code of 1986, as amended from
               time to time.

          (e)  "COMMITTEE" means the Compensation Committee of the Board of
               Directors or, in the event the Board of Directors terminates the
               existence of the Compensation Committee, then Committee shall
               refer to the Board as a whole.

          (f)  COMPANY means Chattem, Inc., a corporation incorporated under the
               laws of the State of Tennessee, and its successors.

          (g)  "DISABILITY" means a disability that entitles the Optionee to
               benefits under the Company's Long-Term Disability Plan, as
               amended from time to time.

          (h)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
               amended.

          (i)  "FAIR MARKET VALUE" means the closing sale price on the last
               business day prior to the date on which Fair Market Value needs
               to be determined as reported in THE WALL STREET JOURNAL, or the
               average of the high and low bids on such day if no sale exists.

          (j)  "OPTION" means an option to purchase a share or shares of the
               Company's common stock.

          (k)  "OPTION AGREEMENT" means the written agreement to be entered into
               by the Company and the Optionee, as provided in Section 7 hereof.

          (1)  "OPTIONEE" means a person to whom an Option has been granted
               under the 2000 Plan.

          (m)  "RETIREMENT" means retirement from employment with the Company
               and its Subsidiaries, as determined by the Committee in its sole
               discretion.


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          (n)  "SHARES" means shares or the Company's common stock.

          (o)  "SUBSIDIARY" means a subsidiary corporation as defined in Section
               425(f) of the Code (or a successor provision of similar import).

          (p)  "TERM" means the period during which a particular Option may be
               exercised in accordance with Section 10 hereof.


3.       EFFECTIVE DATE OF THE 2000 PLAN

         The 2000 Plan shall become effective when adopted by the Board of
Directors; provided, however, that if the 2000 Plan is not approved by the
holders of a majority of the outstanding Shares present, or represented, and
entitled to vote at the meeting before the first anniversary of its adoption by
the Board, the 2000 Plan and all Options granted under the 2000 Plan prior to
such anniversary shall be null and void and shall be of no effect.

4.       NUMBER AND SOURCE OF SHARES SUBJECT TO THE 2000 PLAN

          (a)  The Company may grant Options under the 2000 Plan for not more
               than Seven Hundred Fifty Thousand(750,000) Shares (subject,
               however, to adjustment as provided in Section 14 hereof) which
               shall be provided by the issuance of Shares authorized but
               unissued.

          (b)  In the event that an Option shall for any reason lapse or be
               terminated without being exercised in whole or in part, the
               Shares subject to the Option shall be restored to the total
               number of Shares with respect to which Options may be granted
               under the 2000 Plan, but only to the extent that the Option has
               not been exercised previously.


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5.       ADMINISTRATION OF THE 2000 PLAN

          (a)  The 2000 Plan shall be administered by the Committee.

          (b)  The Committee shall adopt such rules and regulations (including
               amendments thereto) as it may deem proper; provided, however,
               that it may take action only upon the agreement of a majority of
               its members then in office. Any action that the Committee may
               take through a written instrument signed by a majority of its
               members then in office shall be as effective as though taken at a
               meeting duly called and held.

          (c)  The powers of the Committee shall include plenary authority to
               interpret the 2000 Plan, and, subject to the provisions hereof,
               the Committee shall determine the persons to whom Options shall
               be granted, the number of Shares subject to each Option, the Term
               of each Option, the date on which each Option shall be granted,
               and the provisions of each Option Agreement.

6.       2000 PLAN PARTICIPANTS ELIGIBLE TO RECEIVE OPTIONS

         Options may be granted under the 2000 Plan to key management employees
of the Company or any Subsidiary, including officers who, in the judgment of the
Committee, have a substantial impact on the Company's attainment of corporate
goals. All determinations by the Committee as to the identity of the persons to
whom Options shall be granted hereunder shall be conclusive.

7.       OPTION AGREEMENTS

          (a)  No Option shall be exercised by an Optionee unless the Optionee
               shall have executed and delivered an Option Agreement.

          (b)  Appropriate officers of the Company are hereby authorized to
               execute and deliver Option Agreements in the name of the Company
               as directed from time to time by the Committee.

8.       NON-STATUTORY OPTIONS

         It is intended that the Options granted hereunder shall not be
"incentive stock options" within the meaning of the Code.


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9.       OPTION PRICE

         The Option price to be paid by the Optionee to the Company for each
Share purchased upon the exercise of the Option shall be determined by the
Committee and shall be not less than the Fair Market Value of the Share on the
date the option is granted but may exceed Fair Market Value in the sole
discretion of the Committee.

10.      TERM OF OPTION; EXERCISE OF OPTION

          (a)  Each Option granted under the 2000 Plan shall be exercisable as
               provided in this Section 10. In no event may an Option be
               exercised before the approval of the 2000 Plan by the
               shareholders of the Company at the meeting within the period
               specified by Section 3 hereof. The Term of each Option shall end
               (unless the Option shall have terminated earlier under any other
               provisions of the 2000 Plan) on a date ten (10) years from the
               date of grant of the Option.

          (b)  Each Option shall become exercisable and vested with respect to
               twenty-five percent (25%) of the Shares purchasable thereunder on
               the first anniversary of the date of the grant of the Option. The
               option to purchase an additional twenty-five percent (25%) of
               such Shares shall become exercisable and vested, on a cumulative
               basis, on each of the three succeeding anniversaries of the date
               of the grant of the Option, so that four years from the date of
               such grant the option to purchase all such Shares shall have
               become exercisable and vested. Notwithstanding the foregoing
               vesting schedule (i) each Option shall become exercisable in full
               immediately upon a Change in Control and (ii) upon the death,
               disability or retirement of an Optionee or termination of an
               Optionee's employment pursuant to Section 12(e), any Option held
               by such Optionee shall be exercisable in full in accordance with
               the provisions of Section 12. When exercising an Option, the
               Optionee may purchase less than the full number of Shares then
               available under the Option.

          (c)  Options shall be exercised by delivering or mailing to the
               Committee:


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               (1)  a notice, in the form and in the manner prescribed by the
                    Committee, specifying the number of Shares to be purchased,
                    and

               (2)  payment in full of the Option price for the Shares in cash
                    and/or by the tender of Shares (by delivering the
                    appropriate stock certificates) to the Committee; provided,
                    however, that (i) the Committee shall determine acceptable
                    methods for tendering shares to exercise an Option under the
                    2000 Plan, and may impose such limitations and prohibitions
                    on the use of Shares to exercise an Option as it deems
                    appropriate and (ii) the Committee may permit Optionees to
                    pay for any Shares subject to an option by delivering to the
                    Committee a properly executed exercise notice together with
                    a copy of irrevocable instructions to a broker to deliver
                    promptly to the Company the amount of sale or loan proceeds
                    to pay the purchase price.

                    The Company may enter into agreements for coordinated
                    procedures with one or more brokerage firms in connection
                    with exercises of Options. The value of any Shares tendered
                    in accordance with this Paragraph (c) shall be determined on
                    the basis of their Fair Market Value on the date of
                    exercise.

          (d)  Subject to the provisions of Section 11(a) hereof, upon receipt
               of the notice of exercise and upon payment of the Option price,
               the Company shall promptly deliver to the Optionee a certificate
               or certificates for the Shares purchased, without charge to the
               Optionee for issue or transfer tax.


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11.      CONDITIONS ON EXERCISE

          (a)  The exercise of each Option granted under the 2000 Plan shall be
               subject to the condition that if at any time the Company shall
               determine in its discretion that the satisfaction of withholding
               tax or other withholding liabilities, or that the listing,
               registration or qualification of any Shares otherwise deliverable
               upon such exercise upon any securities exchange or under any
               State or Federal law, or the consent or approval of any
               regulatory body, is necessary or desirable as a condition of, or
               in connection with, such exercise or the delivery or purchase of
               Shares, then in any such event such exercise or payment shall not
               be effective or be made unless such withholding, listing,
               registration, qualification, consent or approval shall have been
               effected or obtained free of any conditions not acceptable to the
               Company. Any such postponement shall not extend the time within
               which the Option may be exercised; and neither the Company nor
               its directors or officers shall have any obligation or liability
               to the Optionee or to a Beneficiary with respect to any Shares as
               to which the option shall lapse because of such postponement.

          (b)  Except with the prior written approval of the Committee, all
               Options granted under the 2000 Plan shall be nontransferable
               other than by will or by the laws of descent and distribution in
               accordance with Section 12(a) hereof, and an Option may be
               exercised during the lifetime of the Optionee only by the
               Optionee.

          (c)  Subject to the provisions of Section 11(b), upon the purchase of
               Shares under an option, the stock certificate or certificates
               may, at the request of the Optionee (or the Optionee's
               Beneficiary, where the Option is exercised by the Beneficiary),
               be issued in the name of the Optionee (or Beneficiary) and the
               name of another person as joint tenants with the right of
               survivorship.


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12.       EXERCISE OF OPTION AFTER DEATH, DISABILITY, RETIREMENT, OR OTHER
          TERMINATION OF EMPLOYMENT

          (a)  DEATH. If an Optionee's employment with the Company or a
               Subsidiary shall cease due to the Optionee's death, any Option
               held by the Optionee on the date of the Optionee's death may be
               exercised only within three (3) years after the Optionee's death
               and only by the Optionee's Beneficiary. If an Optionee shall die
               within three (3) years after cessation of employment while the
               Option is exercisable pursuant to Paragraph (b) below, or if the
               Optionee shall die within three (3) years after cessation of
               employment while the Option is exercisable pursuant to Paragraph
               (c) below, any Option held by the Optionee on the date of his
               death may be exercised after the Optionee's death only within the
               remainder of the period prescribed by Paragraph (b) or Paragraph
               (c), as the case may be, and only by the Optionee's Beneficiary.
               Notwithstanding the foregoing, in no event shall the Option be
               exercisable after the expiration date thereof specified in the
               Option Agreement.

          (b)  DISABILITY. If an Optionee's employment with the Company or a
               Subsidiary ceases due to Disability, the Optionee may exercise
               the Option at any time within three (3) years after the Optionee
               shall so cease to be an employee; provided, however, that in no
               event shall the Option be exercisable after the expiration date
               thereof specified in the Option Agreement.

          (c)  RETIREMENT. If an Optionee's employment with the Company or a
               Subsidiary ceases due to Retirement, the Optionee may exercise
               the Option at any time within three (3) years after the Optionee
               shall so cease to be an employee; provided, however, that in no
               event shall the Option be exercisable after the expiration date
               thereof specified in the Option Agreement.

          (d)  LEAVE OF ABSENCE. The Committee shall have the sole authority to
               determine whether, in any particular case, a leave of absence
               shall result in a termination of employment for purposes of this
               Section 12.

          (e)  DIVESTITURE. If an Optionee's employment with the Company or a
               Subsidiary ceases due to divestiture of a Subsidiary or other
               distinct business unit of the Company, the Optionee may exercise
               the Option at any


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               time within ninety (90) days after the divestiture, provided that
               the Optionee is an employee on the actual date of the
               divestiture; and further provided, that in no event shall the
               Option be exercisable after the expiration date thereof specified
               in the Option Agreement.

          (f)  TERMINATION FOR OTHER REASONS. Upon termination of an Optionee's
               employment with the Company or a Subsidiary for any reason other
               than those specified in Paragraphs (a) through (e) above, the
               Optionee may exercise the Option (to the extent vested) at any
               time within thirty (30) days after such termination; provided,
               however, that in no event shall the Option be exercisable after
               the expiration date thereof specified in the Option Agreement.

13.      SHAREHOLDER RIGHTS

         No person shall have any rights of a shareholder by virtue of an Option
except with respect to Shares actually issued to him or her, and the issuance of
Shares shall confer no retroactive right to dividends.

14.      ADJUSTMENTS FOR CHANGES IN CAPITALIZATION

         In the event that there is any change in the Shares through merger,
consolidation, reorganization, recapitalization or otherwise, or if there shall
be any dividend on the Company's Shares, payable in such Shares, or if there
shall be a stock split or combination of Shares, the aggregate number of Shares
available for Options, the number of Shares subject to outstanding Options, and
the Option price per share of each outstanding Option shall be proportionately
adjusted by the Committee as it deems equitable in its absolute discretion, to
prevent dilution or enlargement of the rights of the Optionee; provided, that
any fractional Shares resulting from such adjustments shall be eliminated. The
Committee's determination with respect to any such adjustments shall be
conclusive.


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15.      EFFECT OF MERGER OR OTHER REORGANIZATION

         If the Company shall be the surviving corporation in a merger or other
reorganization, Options shall extend to stock and securities of the Company to
the same extent that a holder of that number of Shares immediately before the
merger or consolidation corresponding to the number of Shares covered by the
Option would be entitled to have or obtain stock and securities of the Company
under the terms of the merger or consolidation.

16.      TERMINATION, SUSPENSION OR MODIFICATION OF 2000 PLAN

         The Committee may at any time terminate, suspend, amend or modify the
2000 Plan, except that the Committee shall not, without the authorization of the
holders of a majority of the Company's Shares voting at a shareholders' meeting
duly called and held, change (other than through adjustment for changes in
capitalization as provided in Section 14 hereof): (a) the aggregate number of
Shares with respect to which Options may be granted; (b) the class of persons
eligible for Options; (c) the Option price; or (d) the maximum duration of the
2000 Plan. No termination, suspension or modification of the 2000 Plan shall
adversely affect any right acquired by an Optionee, or by any Beneficiary, under
the terms of an Option granted before the date of such termination, suspension
or modification, unless such Optionee or Beneficiary shall consent; but it shall
be presumed conclusively that any adjustment for changes in capitalization in
accordance with Section 14 hereof does not adversely affect any such right.

17.      DURATION OF THE 2000 PLAN

         Unless sooner terminated in accordance with Section 16 hereof, the 2000
Plan shall remain in effect for a period of five (5) years from the date of its
adoption by the Board of Directors. Expiration of such five (5) year period
shall not affect the vesting of previously granted Options pursuant to Section
10(b) hereof.

18. GOVERNING LAW

         The 2000 Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the State of Tennessee except to the
extent that such laws may be superseded by any Federal law.



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