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                                                                    EXHIBIT 10.2

                    AMENDED AND RESTATED SEVERANCE AGREEMENT


                  This Agreement is made and entered into as of the 1st of
August, 2000, by and between CHATTEM, INC., a Tennessee corporation (the
"Company") and ____________ (the "Executive").

                                   WITNESSETH

                  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;

                  WHEREAS, the Company believes it is in the best interests of
the Company and its stockholders to provide the Executive with adequate
financial security and sufficient encouragement to the Executive to remain with
the Company notwithstanding the possibility of a change of control of the
Company;

                  WHEREAS, the Company and the Executive have previously entered
that certain Non-Competition and Severance Agreement dated November 6, 1985, as
amended May 31, 1995, which provides certain benefits in the event of a change
in control of the Company, which the Company desires to amend and restate in the
form hereinafter set forth; and

                  WHEREAS, the Executive is willing to continue to provide
services for the long-term benefit of the Company and its shareholders in
exchange for the specified severance benefits provided hereunder.

                  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.         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

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                       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: 1.

                       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.

                       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 style or philosophy of the conduct of the
                           Company's business, in the opinion of the Executive,
                           as to

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                           cause it to be undesirable to the Executive to
                           remain in the employ of the Company.

                       D.  "Severance Benefit": a payment equal to two-hundred
                           ninety-nine (299%) percent of the Executive's average
                           annual includible compensation from the Company
                           during the five (5) most recently completed taxable
                           years before the date on which the Change in Control
                           occurs. Any partial taxable years shall be
                           annualized. If the event that the Executive's
                           employment is less than five (5) years, the average
                           annual compensation should be calculated based on the
                           rate of compensation for the actual term of
                           employment.

                                 Notwithstanding the foregoing Severance Benefit
                           formula, any payments to which the Executive is
                           entitled upon Discharge or Constructive Discharge
                           from the Company shall be adjusted so that the
                           aggregate present value of all "parachute
                           payments" (as defined in Section 280G of the
                           Internal Revenue Code of 1986, as amended from
                           time to time (the "Code") to which the Executive
                           is entitled is less than 300% of the Executive's
                           "annualized includible compensation for the base
                           period" as defined in the Code, unless, taking
                           into account the applicable federal, state and
                           local income taxes and the excise tax imposed by
                           Section 4999, the payment of the full Severance
                           Benefit results in the receipt by the Executive on
                           an after-tax basis of the greatest amount of
                           benefit under this Section 2 notwithstanding that
                           all or some portion of such Severance Benefit may
                           be taxable under Section 4999 of the Code. The
                           determination as to whether there is any
                           adjustment (and the extent thereof) in the
                           payments due the Executive because of this
                           paragraph shall be made in writing within thirty
                           (30) days after Discharge or Constructive
                           Discharge or Election, by the Company's
                           independent certified public accounts on the date
                           of the Change in Control and shall be final and
                           binding on the Executive and the Company. The
                           Company shall furnish said independent certified

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                           public accountants with all data required to make
                           said determination within ten (10) days after
                           Discharge or Constructive Discharge or Election.
                           If there is any such adjustment, the Executive may
                           elect in the Executive's sole discretion which
                           payments or distributions shall be reduced and/or
                           which payments or distributions shall be deferred
                           and promptly notify the Company in writing of such
                           election.

                  3.       PAYMENT. The Severance Benefit shall be paid to the
                       Executive in a lump sum or, at the Executive's
                       election, in two (2) equal installments with the first
                       to be made not later than thirty (30) days after
                       Discharge or Constructive Discharge or Election and
                       the second installment one (1) year after the first
                       installment was paid. No interest shall be due upon
                       the Severance Benefit unless it is not paid when due
                       and in which case interest shall accrue thereon at the
                       applicable Federal rate used to determined present
                       value under Section 280G of the Internal Revenue Code
                       of 1986, as amended.

                  4.       ARBITRATION OF ALL DISPUTES. Any controversy or claim
                       arising out of or relating to this Agreement or the
                       breach thereof, shall be settled by arbitration in the
                       City of Chattanooga in accordance with the laws of the
                       State of Tennessee by three (3) arbitrators, one of
                       whom shall be appointed by the Company, one by the
                       Executive and the third of whom shall be appointed by
                       the first two arbitrators. If the first two
                       arbitrators cannot agree on the appointment of a third
                       arbitrator, then the third arbitrator shall be
                       appointed by the American Arbitration Association. The
                       arbitration shall be conducted in accordance with the
                       rules of the American Arbitration Association.
                       Judgement upon the award rendered by the arbitrators
                       may be entered in any court having jurisdiction
                       thereof. In the event that it shall be necessary or
                       desirable for the Executive to retain legal counsel
                       and/or incur other costs and expenses in connection
                       with the enforcement of any and all of his rights
                       under this Agreement, the Company shall pay (or the
                       Executive shall be entitled to recover from the
                       Company, as the case may be) his reasonable attorneys'
                       fees and costs and expenses in connection with the
                       enforcement of his

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                       said rights (including the enforcement of any
                       arbitration award in court), regardless of the final
                       outcome, unless the arbitrators shall determine that
                       under the circumstances recovery by the Executive of
                       all or a part of any such fees and costs and expenses
                       would be unjust.

                  5.       NOTICES. Any notices, requests, demands and other
                       communications provided for by this Agreement shall be
                       sufficient if in writing and if sent by registered or
                       certified mail to the Executive at the last address he
                       has filed in writing with the Company or, in the case
                       of the Company, at its principal executive offices
                       addressed to the President.

                  6.       NON-ALIENATION. The Executive shall not have any
                       right to pledge, hypothecate, anticipate or in any way
                       create a lien upon any amounts provided under this
                       Agreement; and no benefits payable hereunder shall be
                       assignable in anticipation of payment either by
                       voluntary or involuntary acts, or by operation of law.
                       Notwithstanding the foregoing provisions, in the event
                       that the Executive dies following Discharge or
                       Constructive Discharge after a Change in Control but
                       before receiving all of his Severance Benefit, the
                       unpaid Severance Benefit shall be paid to his Estate
                       in accordance with the terms of this Agreement.

                  7.       GOVERNING LAW. The provisions of this Agreement shall
                       be construed in accordance with the laws of the State of
                       Tennessee.

                  8.       AMENDMENT. This Agreement may not be amended or
                       cancelled except by the mutual agreement of the parties
                       in writing.

                  9.       SUCCESSORS TO THE COMPANY. Except as otherwise
                       provided herein, this Agreement shall be binding upon
                       and inure to the benefit of the Company and any
                       successor of the Company.

                  10.      SEVERABILITY. In the event that any provision or
                       portion of this Agreement shall be determined to be
                       invalid or unenforceable for any reason, the remaining
                       provisions of this Agreement shall be unaffected
                       thereby and shall remain in full force and effect.

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                  IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, and its
corporate seal to be hereunto affixed and attested by its Secretary, all as of
the day and year first above written.

                                       -------------------------------------
                                                [Executive]


                                       CHATTEM, INC.

                                       By:
                                          ----------------------------------
                                          Title:
                                                ----------------------------

ATTEST:

----------------------------
Secretary
(SEAL)