Exhibit 10.1

 

RESTRICTED STOCK PURCHASE AGREEMENT

 

AGREEMENT made as of this 29th day of December, 2005, (the “Effective Date”)
between Balchem Corporation, Inc., a Delaware corporation (the “Company”) and
[Director’s Name] (the “Purchaser”).

 

WHEREAS, pursuant to the Company’s Amended and Restated 1999 Stock Plan (the
“Plan”), the Company wishes to grant Purchaser a stock purchase right, as such
term is defined in Section 1 of the Plan, to purchase shares of the Company’s
common stock subject to the terms and conditions of the Plan and this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in the Plan and herein and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:             

 

 

1.

Stock Purchase Right.

 

1.1          Grant of Stock Purchase Right. The Company hereby grants to the
Purchaser the right and option (the “Stock Purchase Right”), for a period from
the date hereof until the “Expiration Date” (as defined in Section 1.3 below),
to purchase three thousand (3,000) shares of the Common Stock, $.062/3 par value
per share, of the Company (the “Shares”) for a purchase price of $.062/3 per
share, on the terms and subject to the conditions, repurchase options,
restrictions and other provisions set forth in this Agreement and in the Plan.

 

1.2          Exercise. Subject to the conditions set forth in this Agreement and
in the Plan, the Purchaser may exercise the Stock Purchase Right and subscribe
to purchase the Shares by executing and delivering this Agreement to the Company
at any time prior to the Expiration Date, accompanied by payment in full of the
purchase price for the Shares being purchased in cash or by check of the
Purchaser payable to the order of the Company. Upon receipt of such payment and
executed Agreement from the Purchaser, the Company shall issue one or more
certificates in the name of the Purchaser for that number of Shares purchased by
the Purchaser, which Shares shall be subject to the restrictions, conditions and
other provisions set forth in this Agreement and in the Plan.

 

1.3          Expiration. This Stock Purchase Right and the right to purchase the
Shares hereunder shall expire and be of no further force or effect on January
12, 2006.

 

1.4           Nontransferability of Stock Purchase Right. This Stock Purchase
Right is personal to the Purchaser, and neither the right to purchase the Shares
or any other right hereunder may be assigned, transferred, pledged or
hypothecated (whether by operation of law or otherwise), nor shall any such
rights be subject to execution, attachment or similar process. Upon any attempt
to assign, pledge, transfer, hypothecate or otherwise dispose of this Stock
Purchase Right or any rights granted hereunder, or upon the levy of any
attachment or similar process upon this Stock Purchase Right or any such rights,
this Stock Purchase Right and all of the rights of the Purchaser hereunder shall
thereupon automatically terminate and become null and void.

 

 

 

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2.            Company Representations and Warranties. The Company represents and
warrants to the Purchaser as follows:

 

2.1           Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland and has
the corporate power and authority to enter into, execute and deliver this
Agreement and to perform fully its obligations hereunder.

 

2.2           Authority to Execute and Perform Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of the Company. This
Agreement has been duly executed and delivered by the Company and, upon
execution hereof by the Purchaser, will constitute a valid and binding
obligation of the Company, enforceable in accordance with its terms.

 

2.3           Issuance of Shares. The issuance, sale and delivery of the Shares
in accordance with Section 1 of this Agreement have been duly authorized by all
necessary corporate action on the part of the Company. The Shares, when issued,
sold and delivered against payment therefore in accordance with the provisions
of this Agreement, will be duly and validly issued, fully paid and
nonassessable.

 

3.             Purchaser’s Representations and Warranties. The Purchaser
represents and warrants to the Company as follows:

 

3.1           Investment. The Purchaser is purchasing the Shares for his/her own
account for investment only, and not with a view to, or for resale in connection
with, any distribution of the Shares in violation of the Securities Act of 1933,
as amended (the “Securities Act”), or any rule or regulation thereunder.

 

3.2           Adequate Information. The Purchaser has had such adequate
opportunity to obtain from representatives of the Company such information as is
necessary to permit an evaluation of the risks and merits of the investment in
the Company.

 

3.3           Assessment of Risk. The Purchaser has had sufficient experience in
business, financial and investment matters to be able to evaluate the risks
involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.

 

3.4          Economic Risk. The Purchaser can afford a complete loss of the
value of the Shares and is able to bear the economic risk of holding such Shares
for an indefinite period.

 

3.5           Transfer Restrictions. The Purchaser understands that, in addition
to the restrictions on transfer of the Shares set forth in Section 6 hereof,
(i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act,
(ii) the Shares cannot be sold, transferred or otherwise disposed of until the
Shares have vested in accordance with this Agreement.

 

4.

Intentionally omitted.

 

 

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5.

Repurchase.

 

5.1          Repurchase Option. The Shares shall be subject to a repurchase
option in favor of the Company as follows:

 

(a)           If, at any time prior to the “Vesting Date” (as defined in Section
5.3 below), the Purchaser commits an act of gross misconduct in the performance
of his/her duties as a Director of the Company, as determined by majority vote
of the remaining Directors then in office (Gross Misconduct”), the Company shall
have the right and option to repurchase and acquire from the Purchaser, and upon
exercise of such right and option the Purchaser shall sell to the Company, all
or any portion of the Shares then owned by such Purchaser for a purchase price
of $.062/3 per share (as adjusted for stock splits, stock dividends, stock
combinations, reorganization and the like) (the “Repurchase Price”).

 

(b)           If, at any time prior to the Vesting Date, the Purchaser ceases to
be a Director of the Company for any reason other than those set forth in
Section 5.3(b) below, the Company shall have the right and option to repurchase
and acquire from the Purchaser, and upon exercise of such right and option the
Purchaser shall sell to the Company, for a price per share equal to the
Repurchase Price, that number of Shares which is equal to the difference between
(i) the total number of Shares, minus (ii) the product of (A) 1/84 of the total
number of Shares, times (B) the number of full months that the Purchaser has
served as a member of the Board of Directors during the period from the
Effective Date through the date of such resignation.

 

5.2          Exercise of Repurchase Option. (a) The repurchase option hereunder
shall only be exercised upon approval thereof by majority vote of the Board of
Directors of the Company, specifying the number of Shares to be repurchased.
Upon such approval, the Company shall exercise the repurchase option provided in
this Section by delivering or mailing to the Purchaser written notice of
exercise specifying the number of Shares to be repurchased by the Company within
thirty (30) days after (i) the date of the Board of Directors’ determination
that the Purchaser committed Gross Misconduct, in the event of a repurchase of
the Shares pursuant to Section 5.1(a) above, or (ii) the effective date of the
termination of Purchaser’s service as a Director of the Company, in the event of
a repurchase of the Shares pursuant to Section 5.1(b) above.

 

(b)  Within ten (10) days after the Purchaser’s receipt of the Company’s notice
of the exercise of the repurchase option pursuant to subsection (a) above, the
Purchaser (or his/her estate, executors, administrators, heirs or personal
representatives, as the case may be) shall tender to the Company at its
principal offices the certificate or certificates representing the Shares which
the Company has elected to re-purchase, duly endorsed in blank by the Purchaser
or with duly endorsed stock powers attached thereto, all in form suitable for
the transfer of such shares to the Company. Upon its receipt of such Shares, the
Company shall deliver or mail to the Purchaser a check in the amount of
aggregate re-purchase price therefore.

 

(c)  After the time at which any Shares are required to be delivered to the
Company for transfer to the Company pursuant to subsection (b) above, the
Purchaser shall cease to be the owner

 

 

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or holder of such Shares for all purposes, and the Company shall not pay any
dividend to the Purchaser on account of the purchased Shares or permit the
Purchaser to exercise any of the privileges or rights of a stockholder with
respect to such Shares.

 

5.3           Termination of Repurchase Option. The Company’s right of
repurchase of the Shares under this Section 5 shall terminate as to all of the
Shares upon the first to occur of the following dates (the “Vesting Date”):

 

 

(a)

the date which is seven (7) years after the Effective Date;

 

 

(b)

the date on which the Purchaser ceases to be a member of the Board of Directors
of the Company by reason of his/her: (i) voluntary retirement from the Board of
Directors upon attaining the age of 70 or as set forth in the then current
Balchem Director’s Manual; or (ii) death, or (iii) major disability; or (iv)
resignation as a Director of the Company due to a conflict of interest between
the Purchaser and the Company which is determined by majority vote of the Board
of Directors (excluding the Purchaser) to be sufficiently material to justify
the Purchaser’s resignation as a Director of the Company; or (v) resignation as
a Director of the Company due to a serious health issue suffered by the
Purchaser which materially impairs the Purchaser’s ability to perform his/her
duties and responsibilities as a Director of the Company, as determined by
majority vote of the Board of Directors (excluding the Purchaser); or

 

(c)

the date of a Change in Control of the Company. Change in Control shall mean the
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if more than 50% of the combined
voting power of the continuing or surviving entity’s securities outstanding
immediately after such merger, consolidation or other reorganization is owned by
persons who were not stockholders of the Company immediately prior to such
merger, consolidation or other reorganization; or any transaction (other than an
issuance of shares by the Company for cash) in or by means of which one or more
persons acting in concert acquire, in the aggregate, more than 50% of the
combined voting power of Company’s outstanding equity securities; or the sale,
transfer or other disposition of all or substantially all of the Company’s
assets.

 

 

6.

Restrictions on Transfer.

6.1           Transfer Restrictions. The Purchaser shall not, directly or
indirectly, sell, assign, transfer, encumber, pledge, hypothecate or otherwise
dispose of, by operation of law or otherwise (collectively, “Transfer”), any of
the Shares or any interest therein so long as they remain subject to the
repurchase option set forth in Section 5.1, except as expressly permitted
pursuant to Section 6.2

 

 

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below. Any sale or Transfer, or purported sale or Transfer, of Shares in
violation of the provisions of this Section shall be null and void.

 

6.2           Permitted Transfers. The following transactions shall be exempt
from the restrictions on Transfer set forth in Section 6.1:

 

(i)            the Purchaser’s transfer of any or all of the Shares either
during his/her lifetime or on death by will or intestacy to his/her immediate
family or to a trust the beneficiaries of which are exclusively one or more of
the Purchaser and a member or members of the Purchaser’s immediate family,
except any such transfers made pursuant to any divorce or separation proceedings
or settlement (for purposes hereof, the term “immediate family” shall mean
spouse, lineal descendant, father, mother, brother or sister of the Purchaser
making the transfer); or

 

(ii)           a Transfer of Shares to the guardian or conservator of the
Purchaser; provided, however, that in any such case, the transferee or other
recipient shall receive and hold such stock subject to the provisions of this
Agreement and there shall be no further Transfer of such stock except in
accordance with this Agreement. No Transfer pursuant to this paragraph shall be
effective, and the Company shall not be required to recognize any transferee of
Shares hereunder as a stockholder of the Company, unless and until the
conditions set forth in the preceding sentence have been met and the transferee
agrees in writing to be bound by the provisions of this Agreement.

 

7.            Restrictive Legend.            All certificates representing
Shares owned by the Purchaser shall have affixed thereto a legend in
substantially the following form, in addition to any other legends that may be
required under federal or state securities laws or under the Shareholders
Agreement:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER
AND AN OPTION TO PURCHASE SET FORTH IN A CERTAIN RESTRICTED STOCK PURCHASE
AGREEMENT BETWEEN THE CORPORATION (OR ITS PREDECESSOR IN INTEREST) AND THE
REGISTERED OWNER OF THIS CERTIFICATE (OR HIS/HER PREDECESSOR IN INTEREST), AND
SUCH AGREEMENT IS AVAILABLE FOR INSPECTION WITHOUT CHARGE AT THE OFFICE OF THE
CORPORATION.

 

8.             Adjustments for Stock Splits, Stock Dividends, etc.   If from
time to time while the Shares are subject to the repurchase option, or
restrictions on transfer set forth herein, there is any stock split-up, stock
dividend, stock distribution or other reclassification of the stock of the
Company, any and all new, substituted or additional securities to which the
Purchaser is entitled by reason of his ownership of the Shares shall be
immediately subject to such repurchase option and restrictions on transfer in
the same manner and to the same extent as the Shares and the price payable to
the Purchaser upon the Company’s exercise of the repurchase option shall be
appropriately adjusted.

 

 

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9.            Remedies. (a)  The Purchaser acknowledges and agrees that any
violation of the provisions of this Agreement will cause irreparable damage to
the Company and that the Company will have no adequate remedy at law for such
violation. Accordingly, the Purchaser agrees that the Company shall be entitled
as a matter of right to an injunction, specific performance or other appropriate
equitable relief from any court of competent jurisdiction, restraining any
further violation of such provision or affirmatively compelling the Purchaser to
carry out his or her obligations hereunder. Such right to equitable relief shall
be cumulative and in addition to any other right or remedy the Company may have
at law or in equity.

 

(b)           In the event that the Purchaser fails to deliver any certificates
representing Shares required to be transferred to the Company pursuant to the
terms of this Agreement, the Company may (i) elect to establish a segregated
account in which the purchase price for such Shares shall be placed, such
account to be turned over to the Purchaser upon delivery of the certificates
representing such Shares together with appropriate instruments of transfer duly
executed by the Purchaser, and (ii) immediately thereafter take such action as
may be required to transfer record title to such Shares to itself. The Purchaser
hereby grants the Company a power of attorney for effecting any transfer in
accordance with the previous sentence, such power of attorney to be deemed
coupled with an interest and irrevocable.

 

10.           Section 83(b) Election. Purchaser understands that under
Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), the
difference between the purchase price paid for the Shares and their fair market
value on the date any forfeiture restrictions applicable to such Shares lapse
will be reported as ordinary income at that time. For this purpose, the term
“forfeiture restrictions” includes the right of the Company to repurchase the
Shares pursuant to its repurchase option under Section 5 of this Agreement.
Purchaser understands that Purchaser may elect to be taxed at the time the
Shares are acquired hereunder to the extent the fair market value of the Shares
differs from the purchase price rather than when and as such Shares cease to be
subject to such forfeiture restrictions, by filing an election under
Section 83(b) of the Code with the I.R.S. within thirty (30) days after the date
of purchase hereunder. If the fair market value of the Shares at the date of
purchase equals the purchase price paid (and thus no tax is payable), the
election must be made to avoid adverse tax consequences in the future. Purchaser
understands that failure to make this filing within the thirty (30) day period
will result in the recognition of ordinary income by the Purchaser (in the event
the fair market value of the Shares increases after the date of purchase) as the
forfeiture restrictions lapse. PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER’S
SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER
SECTION 83(b). PURCHASER IS RELYING SOLELY ON PURCHASER’S ADVISORS WITH RESPECT
TO THE DECISION AS TO WHETHER OR NOT TO FILE AN 83(b) ELECTION. PURCHASER ALSO
AGREES TO PROVIDE COMPANY WITH A COPY OF THE 83(b) ELECTION IF SO FILED.

11.           Withholding.       The Company shall have the right to deduct from
payments of any kind otherwise due to the Purchaser any federal, state or local
taxes of any kind required by law to be withheld with respect to any of the
Shares issued hereunder.

 

 

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12.           Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.

 

13.           Waiver; Amendment. No provision of this Agreement shall be waived
or amended, either generally or in any particular instance, except in a writing
signed by the Company and the Purchaser.

 

14.          Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and the Purchaser and their respective heirs,
executors, administrators, legal representatives, successors and assigns. No
transfer of any of the Shares shall be effective unless the transferee first
agrees in writing to all of the terms hereof.

 

15.           No Rights To Employment. Nothing contained in this Agreement shall
be construed as giving the Purchaser any right to be retained, in any position,
as an employee of or consultant or advisor to the Company.

 

16.           Notices. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery, delivery by Federal
Express or other recognized overnight delivery service or upon deposit in the
United States Post Office, by registered or certified mail, postage prepaid,
return receipt requested, if to the Company at its executive offices and if to
the Purchaser at the address shown beneath his or her signature to this
Agreement, or in either case at such other address or addresses as either party
shall designate to the other in accordance with this Section.

 

17.           Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.

 

18.          Entire Agreement. This Agreement and the documents and agreements
referenced herein constitute the entire agreement between the parties, and
supersedes all prior agreements and understandings, relating to the subject
matter of this Agreement.

 

19.          Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New York. The Company and
each of the Purchasers hereby (a) agree that any action, suit or other
proceeding arising out of or based upon this Agreement shall be brought in the
courts of the State of New York or any federal court located in such state, and
(b) irrevocably consent and submit to the exclusive jurisdiction of such courts
for the purpose of any such action, suit or proceeding.

 

20.           1999 Stock Plan. The Shares are issued pursuant to the Company’s
Amended and Restated 1999 Stock Plan, a copy of which has been furnished to the
Purchaser, and are subject to such Plan in all respects.

 

 

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21.            Section 409A Compliance. This Stock Purchase Right is intended to
comply with the requirements of Section 409A, and the regulations issued
thereunder. To the extent of any inconsistencies with the requirements of
Section 409A, the Stock Purchase Right shall be interpreted and amended in order
to meet such Section 409A requirements. Notwithstanding anything contained in
this Agreement or in any amendments attached hereto to the contrary, it is the
intent of the Corporation to have this Plan interpreted and construed to comply
with any and all provisions Section 409A including any subsequent amendments,
rulings or interpretations from appropriate governmental agencies.

[END OF DOCUMENT]

 

[SIGNATURES FOLLOW]

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

 

 

BALCHEM CORPORATION

 

 

 

 

 

 

 

By:

/s/ Dino A. Rossi

 

 

Dino A. Rossi, President & CEO

 

 

 

 

 

 

 

 

 

 

 

PURCHASER:

 

 

 

 

 

 

 

 

 

 

 

 

Address: