Document:

Exhibit 10.3.1

                               BALCHEM CORPORATION
                               STOCK OPTION GRANT

     This STOCK OPTION GRANT (the "Grant"), dated as of          , is between
                                   -----                ---------
BALCHEM CORPORATION, a Maryland corporation (the "Corporation") and
                                                  -----------
                     (the "Optionee").
--------------------       --------
                              W I T N E S S E T H:

     1. Grant of Options.  Pursuant to the  provisions of the 1999 Stock Plan of
        ----------------
the Corporation,  as the same may be amended from time to time (the "Plan"), the
Corporation  has on the date set forth on Exhibit A hereto  granted to Optionee,
                                          ---------
subject to the terms and conditions of the Plan and subject further to the terms
and  conditions  herein set forth,  the right and  option to  purchase  from the
Corporation  the number of shares of Common Stock of the  Corporation  ("Stock")
                                                                         -----
set forth in  Exhibit A at the  price per share set forth in  Exhibit  A, as (i)
              ---------                                       ----------
incentive stock options ("Incentive  Options") under Section 422 of the Internal
                          ------------------
Revenue Code of 1986, as amended (the "Code"),  and/or (ii) non-incentive  stock
                                       ----
options  ("Non-Qualified  Options"),  as set forth in  Exhibit A (the  Incentive
           ----------------------                      ---------
Options and  Non-Qualified  Options  granted  hereby being  referred to together
herein  as the  "Option"  or the  "Options").  Notwithstanding  anything  to the
                 ------            -------
contrary  contained  in this Grant,  the  aggregate  fair market  value of Stock
(determined  as of the date of grant) with respect to which options  intended as
Incentive  Options,  whether granted to Optionee hereby or heretofore granted to
Optionee  by the  Corporation,  become  exercisable  for the  first  time in any
calendar year may not exceed $100,000.  Accordingly, to the extent that the fair
market value of the Stock subject to such options intended as Incentive  Options
exceeds that amount,  the Options  corresponding to such excess,  whether or not
referred  to  as  or  originally   intended  to  be  Incentive  Options,   shall
nevertheless be for all purposes  Non-Qualified Options. All determinations with
respect to the foregoing  shall be made in the order that the  particular  stock
options in question were granted. This limitation is intended to acknowledge and
comply with the annual vesting  limitation on incentive  stock option  treatment
contained in Section  422(d) of the Code and shall be  interpreted  consistently
therewith.

     2. Terms and  Conditions.  The term of the  Option  shall be for the period
        ---------------------
specified in Exhibit A. The Option shall be  exercisable at any time in whole or
             ---------
in part and from time to time  subject to earlier  termination  as  provided  in
Paragraphs 3 and 4 of this Grant, unless otherwise expressly provided in Exhibit
                                                                         -------
A. Unless  otherwise  provided  in Exhibit A as to  Non-Qualified  Options,  the
-                                  ---------
Option may not be exercised  (a) as to fewer than 100 shares at any one time (or
for the remaining  shares then purchasable  under the Option,  if fewer than 100
shares),  and (b) until  fulfillment  of any  conditions  precedent set forth in
Paragraph  7 hereof.  The  holder of any  Option  shall not have any rights as a
stockholder  with respect to the Stock issuable upon exercise of an Option until
certificates  for such Stock shall have been issued and  delivered  to him after
the exercise of the Option.

     3. Termination of Employment.  In the event that the employment (as defined
        -------------------------
in the Plan) of Optionee shall be terminated (otherwise than by reason of death,
or disability or for cause, as defined  below),  the Option shall be exercisable
(to  the  extent  that  Optionee  shall  have  been  entitled  to do  so at  the
termination of his employment) at any time prior to the expiration of the period
of sixty  (60) days  after  such  termination,  but in no event  later  than the
specified expiration date, except as may be expressly provided in Exhibit A with
                                                                  ---------
respect  to  Non-Qualified  Options.  Notwithstanding  anything  herein  to  the
contrary,  in the event that the  employment of Optionee shall be terminated for
cause,  all vested and  unvested  portions  of the Option  shall be  immediately
forfeited  by  Optionee  without any  consideration.  For the  purposes  hereof,
"cause" shall be defined as: any illegal or  disreputable  conduct which impairs
 -----
or is injurious to the reputation, goodwill or business of the Corporation or is
seriously  injurious to its stockholders,  or involves the  misappropriation  of
funds  or  property  of  the  Corporation  or  any of  its  direct  or  indirect
subsidiaries  or any of the  customers  or  vendors  thereof  or  others  having
business  relations with any of them. A termination for "cause" will include any
resignation  in  anticipation  of  discharge  for  "cause"  or  accepted  by the
Corporation in lieu of a formal discharge for "cause."

     This Grant does not constitute an employment contract.  Nothing in the Plan
or in this Grant shall  confer upon  Optionee  any right to be  continued in the
employ of the  Corporation  or its  subsidiaries  for the length of any  vesting
schedule  or for any  portion  thereof  or for any  other  period  of  time,  or
interfere in any way with the right of the Corporation or any such subsidiary to
terminate or otherwise modify the terms of Optionee's employment; provided, that
a change in Optionee's  duties or position shall not affect Optionee's Option so
long as Optionee is still an employee of the  Corporation or any Related Company
(as defined in the Plan).

     4.   Death or Disability of Optionee.
          -------------------------------

     (a) Death.  If Optionee  ceases to be employed by the  Corporation  and all
         -----
Related Companies by reason of his death, any unexercised  portion of the Option
shall be exercisable (to the extent that Optionee shall have been entitled to do
so at the  time  of  his  death),  by his  estate,  personal  representative  or
beneficiary  who has  acquired  the Option by will or by the laws of descent and
distribution,  at any time prior to the earlier of the specified expiration date
of the Option or 180 days from the date of  Optionee's  death,  except as may be
provided in Exhibit A with respect to Non-Qualified Options.
            ---------

     (b)  Disability.  If Optionee  ceases to be employed by the Corporation and
          ----------
all Related  Companies by reason of his disability,  any unexercised  portion of
the Option shall be  exercisable  (to the extent that  Optionee  shall have been
entitled to do so at the date of termination of his  employment),  to the extent
of the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the specified  expiration  date of the
Option or 180 days from the date of the  termination  of Optionee's  employment,
except as may be provided in Exhibit A with  respect to  Non-Qualified  Options.
                             ---------
For the purposes of the Plan, the term  "disability"  shall mean  "permanent and
                                         ----------
total  disability"  as  defined  in Section  22(e)(3)  of the Code or  successor
statute.

     5.  Transferability of Option.  Incentive Options shall not be transferable
         -------------------------
otherwise  than  by  will  or the  law  of  descent  and  distribution  and  are

<PAGE>

exercisable  during the  lifetime of Optionee  only by  Optionee.  Non-Qualified
Options shall not be  transferable,  except as, and then only to the extent,  if
any, provided in Exhibit A hereto.

     6. Adjustments Upon Changes in  Capitalization.  In the event of changes in
        -------------------------------------------
the  outstanding  stock of the Corporation by reason of stock  dividends,  stock
splits, recapitalizations, mergers, consolidations, combinations or exchanges of
shares,  separations,  reorganizations or liquidations,  the number and class of
shares  subject to the Option shall be  correspondingly  adjusted as provided in
the Plan.

     7.  Conditions  Precedent  To  Exercise  of  Option.  In the event that the
         -----------------------------------------------
exercise of the Option or the  issuance  and  delivery  of the shares  hereunder
shall be  subject  to, or shall  require,  any  prior  exchange  listing,  prior
approval of the  stockholders  of the  Corporation,  or other prior condition or
act,  pursuant  to the  applicable  laws,  regulations  or policies of any stock
exchange, federal or local government or its agencies or representatives, and/or
pursuant  to the Plan,  then the  Option  shall not be deemed to be  exercisable
under this Grant until such condition is satisfied. The Corporation shall not be
liable in any manner to  Optionee or any other party for any failure or delay by
the Corporation on its part to fulfill any such condition.

     8. Methods of  Exercising  Option.  Subject to the terms and  conditions of
        ------------------------------
this  Grant,  the Option may be  exercised  by  delivering  a signed,  completed
exercise  notice in the form of  Exhibit B hereto,  as the same may be  modified
                                 ---------
from time to time by determination of the Corporation in its discretion,  to the
Corporation,  at its office at 52 Sunrise Park Road,  P.O. Box 600, New Hampton,
New York,  10958.  Such notice shall (i) identify the Option to which it applies
(i.e., Incentive Option and/or Non-Qualified Option), (ii) state the election to
exercise the Option,  (iii)  designate  the number of shares in respect of which
the  Option is being  exercised,  and (iv) be signed by the person or persons so
exercising the Option,  and shall otherwise be in such form and substance as the
Corporation may require. Such notice shall be accompanied by payment of the full
purchase price of such shares.  The  Corporation  shall deliver to Optionee,  at
such  address as is  provided  in the  notice,  a  certificate  or  certificates
representing  such  shares  as soon as  practicable  after the  notice  shall be
received  and all  conditions  to the exercise of the Option are  fulfilled  and
satisfied.  Payment of such  purchase  price shall be made (a) in United  States
dollars  in cash or by  check,  or (b)  through  delivery  of  shares  of  Stock
theretofore  owned by Optionee  for at least six months and having a fair market
value  equal as of the date of the  exercise to the cash  exercise  price of the
Option, or (c) by any combination of the above.  Notwithstanding  the foregoing,
Optionee may not pay any part of the exercise price hereof by transferring Stock
to the  Corporation  if such  Stock is both  subject  to a  substantial  risk of
forfeiture  and not  transferable  within the meaning of Section 83 of the Code.
The certificate or certificates for the shares as to which the Option shall have
been so  exercised  shall be  issued  in the name of the  person  or  person  so
exercising  the Option (or, if the Option  shall be exercised by Optionee and if
Optionee shall so request in the notice  exercising the Option,  the certificate
shall be issued in the name of Optionee and another person  jointly,  with right
of survivorship) and shall be delivered as provided above to or upon the written
order of the person or persons  exercising  the Option.  In the event the Option
shall be  exercised,  pursuant to  Paragraph 4 hereof,  by any person or persons
other than Optionee,  such notice shall be  accompanied by appropriate  proof of
the right of such person or persons to exercise  the Option.  At the election of
the Corporation,  such  certificate may bear such legends  regarding the limited

<PAGE>

transferability  of the shares under applicable  securities laws the Corporation
may require.  All shares that shall be purchased upon the exercise of the Option
as provided herein shall be fully paid and non-assessable.

     9. Certain  Securities Law Matters.  By acceptance of the Option,  Optionee
        -------------------------------
agrees that a purchase  of shares  under the Option will not be made with a view
to their  distribution,  as that term is used in the  Securities Act of 1933, as
amended (the "Act"),  unless in the opinion of the Corporation such distribution
is  in  compliance  with  or  exempt  from  the   registration   and  prospectus
requirements  of the Act,  and  Optionee  agrees to sign a  certificate  to such
effect  at the time of  exercising  the  Option  (which  certificate  shall,  if
required by the  Corporation,  be in such form and substance,  and pertaining to
such  securities  law related  matters,  as the  Corporation  may require in its
discretion), and agrees that the certificate for the shares so purchased may, if
deemed  appropriate  by the  Corporation,  be inscribed  with a legend to ensure
compliance  with the Act.  Optionee  agrees that, in order to ensure  compliance
with the  restrictions  referred to herein and the  requirements of the Act, the
Corporation may issue appropriate  "stop transfer"  instructions to its transfer
agent.  The  Corporation  shall not be required (i) to transfer on its books any
shares  purchased  upon the  exercise  of the  Option  that  have  been  sold or
otherwise transferred in violation of any of the provisions of this Grant and/or
the Plan,  or (ii) to treat as owner of such  shares  or to accord  the right to
vote or receive  dividends  to any  purchaser or other  transferee  to whom such
shares shall have been so sold or transferred.

     10. Capital Changes and Business Successions.  The Plan contains provisions
         ----------------------------------------
covering the treatment of the Option in a number of contingencies  such as stock
splits and mergers.  Provisions in the Plan for adjustment with respect to stock
subject to options and the related  provisions with respect to successors to the
business  of the  Corporation  are  hereby  made  applicable  hereunder  and are
incorporated  herein by reference.  In general,  Optionee should not assume that
the Option necessarily would survive the acquisition of the Corporation.

     11. Early Disposition. Optionee agrees to notify the Corporation in writing
         -----------------
immediately  after  Optionee  makes a  Disqualifying  Disposition  of the  Stock
received  pursuant  to  the  exercise  of  any  of  the  Incentive   Options.  A
"Disqualifying  Disposition"  is any  disposition  (including  any sale) of such
 --------------------------
Stock before the later of (a) two years after the date  Optionee was granted the
                 -----
Option or (b) one year after the date Optionee  acquired Stock by exercising the
Option.  If Optionee has died before such Stock is sold,  these  holding  period
requirements do not apply and no Disqualifying Disposition can occur thereafter.
Optionee also agrees to provide the Corporation  with any  information  which it
shall request concerning any such disposition.  Optionee acknowledges that he or
she will forfeit the favorable  income tax treatment  otherwise  available  with
respect to the exercise of any of the  Incentive  Options,  if he or she makes a
Disqualifying Disposition of the Stock received upon exercise of the Option.

     12.  Withholding  Taxes. Upon the exercise of a Non-Qualified  Option,  the
          ------------------
making of a Disqualifying Disposition,  the exercise of an Option transferred by
the original Optionee in accordance with the terms of this Grant or the Plan, or
the vesting of restricted Stock acquired on the exercise of the Option under the
Plan, the Corporation may require Optionee or the purchaser or original Optionee
to pay to the Corporation in cash an amount equal to all applicable  withholding

<PAGE>

taxes in respect of the amount that is  considered  compensation  includable  in
such person's gross income.  The Corporation in its discretion may condition (i)
the exercise of the Option,  (ii) the vesting of  restricted  Stock  acquired by
exercising  the  Option,  or (iii) the  exercise  of a  transferred  Option,  on
Optionee's payment of such amount. At the Corporation's  discretion,  the amount
required  to be  withheld  may be  withheld  in cash from such  wages,  or (with
respect to  compensation  income  attributable to the exercise of the Option) in
kind from the Stock otherwise deliverable to Optionee on exercise of the Option.
Optionee  further  agrees that, if the  Corporation  does not withhold an amount
from  Optionee's  wages  sufficient  to satisfy  the  Corporation's  withholding
obligation,  Optionee will reimburse the Corporation on demand, in cash, for the
amount underwithheld.

     13. Fair Market Value of Stock. If, at the time the Option is granted under
         --------------------------
the Plan, the Corporation's Stock is publicly traded,  "fair market value" shall
                                                        -----------------
be  determined  as of the last  business  day for  which  the  prices  or quotes
discussed  in this  sentence  are  available  prior to the date  such  Option is
granted and shall mean (i) the average (on that date) of the high and low prices
of the Stock on the principal national securities exchange on which the Stock is
traded, if the Stock is then traded on a national securities  exchange;  or (ii)
the last reported sale price (on that date) of the Stock on the NASDAQ  National
Market List, if the Stock is not then traded on a national  securities  exchange
and is reported on the NASDAQ  National Market List; or (iii) the average of the
closing  bid and asked  prices  last  quoted  (on that  date) by an  established
quotation  service  for  over-the-counter  securities,  if the Stock is not then
traded on a national  securities exchange and is not then reported on the NASDAQ
National Market List.  However,  if the Stock is not publicly traded at the time
the Option is granted under the Plan,  "fair market value" shall be deemed to be
the  fair  value  of the  Stock  as  determined  by the  Corporation's  Board of
Directors or any Compensation Committee thereof (the "Committee"),  after taking
                                                      ---------
into  consideration all factors which it deems appropriate,  including,  without
limitation,  recent sale and offer  prices of the Stock in private  transactions
negotiated at arm's length,  if any. The determination by the Board of Directors
or the Committee of fair market value shall be conclusive and binding.  The fair
market value of the Stock in question shall be determined as of the day on which
the event occurs.

     14. Terms of Plan Control. The Option granted hereunder is granted pursuant
         ---------------------
to the provisions of the Plan,  the receipt of a copy of which  Optionee  hereby
acknowledges.  Nothing  contained  in this  Grant  shall in any way be deemed to
alter or modify the provisions of the Plan and no act of the  Corporation or its
directors,  officers or employees shall be deemed to be a waiver or modification
of any provision of the Plan.  The  provisions of the Plan shall in all respects
govern the Option.  The Committee  shall have authority in its  discretion,  but
subject to the express  provisions  of the Plan,  to interpret the Plan and this
Grant;  to prescribe,  amend and rescind rules and  regulations  relating to the
Plan and the Option;  and to make all other  determinations  deemed necessary or
advisable  for the  administration  of the Plan or the Option.  The  Committee's
determination on the foregoing matters shall be conclusive.

     IN WITNESS WHEREOF, the Corporation has caused this Grant to be executed by
its duly authorized  officer and Optionee has executed this Grant as of the date
first written above.

<PAGE>

                                           BALCHEM CORPORATION

                                           By:
                                              ---------------------------------

AGREED AND ACCEPTED:

-------------------------------------
OPTIONEE:

<PAGE>

                                    EXHIBIT A
                                    ---------

                                GRANT OF OPTIONS

(1) Name of Optionee:   ____________________

(2) Date of Grant:   ____________________
<TABLE>
<CAPTION>
<S>                                       <C>                                  <C>
                                          Incentive Option                     Non-Qualified Option
                                          ----------------                     --------------------
(3) Number of shares of Stock:
                                          -------------------------------      ---------------------------------
(4) Price per share:
                                          -------------------------------      ---------------------------------
(5) Expiration date:
                                          -------------------------------      ---------------------------------
(6)Earliest date on which Options
can be exercised for the number of
shares ofStock indicated:                 Date           Number of Shares      Date             Number of Shares
                                                                   ------                                 ------

                                          ------------   ----------------      -------------    ----------------

                                          ------------   ----------------      -------------    ----------------

                                          ------------   ----------------      -------------    ----------------
</TABLE>

(7) Transferability (applicable to Non-Qualified Option only). [Select one
choice]:

|_|  The Non-Qualified  Option shall not be transferable  otherwise than by will
     or the law of  descent  and  distribution  and are  exercisable  during the
     lifetime of Optionee only by Optionee.

|_|  Except as expressly  provided below, the Non-Qualified  Option shall not be
     transferable  other than by will or the law of descent and distribution and
     is  exercisable  during the  lifetime of  Optionee  only by  Optionee.  The
     Non-Qualified  Option shall be transferable by Optionee,  under the limited
     circumstances  and  conditions  set  forth  below,  to  Family  Members  of
     Optionee, provided that (i) such transfer is not a transfer for value, (ii)
     the  specific  transfer  has been  approved  by the  Committee,  and  (iii)
     subsequent  transfers  of said  Option  shall be  prohibited  (except for a
     transfer  to a Family  Member of Optionee  from  another  Family  Member of
     Optionee which  otherwise  complies with the foregoing  requirements).  For
     purposes  hereof,  a  "Family  Member"  of  Optionee  includes  any  child,
     stepchild,  grandchild,  parent,  stepparent,  grandparent,  spouse, former
     spouse, sibling, niece, nephew, mother-in-law,  father-in-law,  son-in-law,
     daughter-in-law,  brother-in-law,  or sister-in-law, of Optionee, including
     adoptive relationships, any person sharing Optionee's household (other than
     a tenant or employee of  Optionee),  a trust in which such  above-described
     Family Members have more than fifty percent of the beneficial  interest,  a
     foundation  in which such  above-described  Family  Members  (or  Optionee)
     control  the  management  of  assets,  and any other  entity in which  such
     above-described Family Members (or Optionee) own more than fifty percent of
     the  voting  interests.  The  following  transactions  shall  not be deemed
     transfers for value:  (A) a transfer  under a domestic  relations  order in
     settlement of marital property  rights;  and (B) a transfer to an entity in
     which more than fifty  percent of the voting  interests are owned by Family
     Members (or Optionee) in exchange for an interest in that entity.

<PAGE>

                                    EXHIBIT B
                               BALCHEM CORPORATION
                                 1999 STOCK PLAN
             EXERCISE NOTICE [INCENTIVE/NON-QUALIFIED] STOCK OPTIONS

Balchem Corporation
52 Sunrise Park Road
P.O. Box 600 New Hampton, New York 10958 Attention: _________

     1.  Exercise  of  Option.  Effective  as  of  today,  ________,  ____,  the
         --------------------
undersigned  ("Optionee")  hereby elects to exercise  Incentive Stock Options to
               --------
purchase  ______  shares  and/or  Non-Qualified  Options to purchase  __________
shares  of  the  Common  Stock  (the  "Shares")  of  Balchem   Corporation  (the
                                       ------
"Corporation"),  under and pursuant to Balchem  Corporation  1999 Stock Plan, as
 -----------
the same may be amended  from time to time (the  "Plan"),  and the Stock  Option
                                                  ----
Grant between the Corporation  and Optionee dated as of  ______________________,
as the same may be amended from time to time (the "Option Grant").
                                                   ------------

     2. Delivery of Payment.  Optionee  herewith delivers to the Corporation the
        -------------------
full purchase price of the Shares, as set forth in the Option Grant.

     3.  Representation  of Optionee.  Optionee  acknowledges  that Optionee has
         ---------------------------
received,  read and understood the Plan and the Option Grant and agrees to abide
by and be bound by their terms and conditions.

     4. Rights as Stockholder. Until the stock certificate evidencing the Shares
        ---------------------
is issued (as evidenced by the appropriate entry on the books of the Corporation
or of a duly authorized transfer agent of the Corporation),  no right to vote or
receive  dividends or any other rights as a stockholder shall exist with respect
to the  Shares,  notwithstanding  the  exercise of the Option (as defined in the
Option  Grant).  No adjustment  will be made for any dividend or other right for
which the record date is prior to the date the stock  certificate for the Shares
is issued.

     5. Tax Consultation.  Optionee understands that Optionee may suffer adverse
        ----------------
tax  consequences  as a result of  Optionee's  purchase  or  disposition  of the
Shares. Optionee represents that Optionee has consulted with any tax consultants
Optionee deems  advisable in connection  with the purchase or disposition of the
Shares and that Optionee is not relying on the Corporation for any tax advice.

     6. Certain  Securities Law Matters.  Without limiting the provisions of the
        -------------------------------
Plan  and/or  the  Option  Grant,  Optionee  understands  and  agrees  that  the
Corporation shall be entitled to cause appropriate legends to be placed upon any
certificate(s)  evidencing  ownership  of the Shares that may be required by the
Corporation  in connection  with state or federal  securities  laws,  the Option
Grant and/or the Plan.

<PAGE>

     7.  Successors and Assigns.  The  Corporation  may assign any of its rights
         ----------------------
under this Exercise  Notice to single or multiple  assignees,  and this Exercise
Notice  shall  inure to the  benefit of the  successors  and the  assigns of the
Corporation. Subject to any restrictions on transfer set forth or referred to in
the Option Grant  and/or the Plan,  this  Exercise  Notice shall be binding upon
Optionee  and  his or  her  heirs,  executors,  administrators,  successors  and
assigns.

     8.  Interpretation.  Any  dispute  regarding  the  interpretation  of  this
         --------------
Exercise Notice shall be determined by the  Corporation's  Board of Directors or
the Committee (as defined in the Plan), whose  determination  shall be final and
binding on the Corporation and on Optionee.

                    Submitted by:        OPTIONEE:

                                         -----------------------------------
                                         Name:
                                         Address:Exhibit 10.3.2

                               BALCHEM CORPORATION
                         DIRECTOR STOCK OPTION AGREEMENT

     This  DIRECTOR  STOCK  OPTION  AGREEMENT  (the  "Agreement"),  dated  as of
                                                      ---------
_______________,  is between BALCHEM  CORPORATION,  a Maryland  corporation (the
"Corporation"), and ____________ ("Optionee").
 -----------                       --------

                              W I T N E S S E T H :

     1. Grant of Options or Purchase  Rights.  Pursuant to the provisions of the
        ------------------------------------
1999 Stock Plan of the Corporation, as the same may be amended from time to time
(the "Plan"),  the Corporation has, as of the date hereof,  granted to Optionee,
      ----
subject to the terms and conditions of the Plan and subject further to the terms
and  conditions  herein set forth,  the right and  option to  purchase  from the
Corporation  the number of shares of Common Stock of the  Corporation  ("Stock")
                                                                         -----
determined  pursuant to Exhibit A at the price per share set forth in Exhibit A,
                        ---------                                     ---------
as  non-qualified  options  (such  non-qualified  options  granted  hereby being
referred to together herein as the "Option" or the "Options").
                                    ------          -------

     2. Terms and  Conditions.  The term of the  Option  shall be for the period
        ---------------------
specified in Exhibit A. The Option shall be  exercisable at any time in whole or
             ---------
in part and from time to time  subject to earlier  termination  as  provided  in
Paragraphs  3 and 4 of this  Agreement.  The holder of any Option shall not have
any rights as a stockholder  with respect to the stock issuable upon exercise of
an Option until certificates for such Stock shall have been issued and delivered
to him after the exercise of the Option.

     3. Termination as a Director.  In the event that Optionee shall cease to be
        -------------------------
a director, or, if Optionee is a director emeritus of the Corporation,  Optionee
shall cease to be a director  emeritus,  of the  Corporation  (otherwise than by
reason of death or  disability),  the Option shall be exercisable (to the extent
that Optionee  shall have been entitled to do so at the time of said  cessation)
at any time prior to such  cessation,  but in no event later than the  specified
expiration date of the Option.

     Nothing in the Plan or in this  Agreement  shall  confer upon  Optionee any
right to be continued as a director or as a director emeritus of the Corporation
for the term of the Option or for any portion thereof or for any other period of
time,  or  interfere  in any way with the right of the  stockholders  and/or the
directors of the  Corporation  to replace or remove  Optionee as a director or a
director emeritus of the Corporation,  with or without cause, in accordance with
the Corporation's By-laws and applicable law.

<PAGE>

     4. Death or Disability of Optionee.
        --------------------------------

     (a) Death. If Optionee ceases to be a director or director  emeritus of the
         -----
Corporation by reason of his death, any unexercised  portion of the Option shall
be exercisable (to the extent that Optionee shall have been entitled to do so at
the time of his death),  to the extent of the number of shares  with  respect to
which  he  could  have  exercised  it on  that  date,  by his  estate,  personal
representative or beneficiary who has acquired the Option by will or by the laws
of descent and  distribution,  at any time prior to the earlier of the specified
expiration date of the Option or 90 days from the date of Optionee's death.

     (b) Disability.  If Optionee resigns,  or otherwise ceases to be a director
         ----------
or  director  emeritus  by the  Corporation  by  reason of his  disability,  any
unexercised  portion  of the Option  shall be  exercisable  (to the extent  that
Optionee  shall have been  entitled to do so at the date of  termination  of his
membership on the Board),  to the extent of the number of shares with respect to
which he could have  exercised it on that date, at any time prior to the earlier
of the  specified  expiration  date of the  Option  or 90 days  from the date of
resignation  or  cessation.  For  all  purposes  of  this  Agreement,  the  term
"disability"  shall mean "permanent and total  disability" as defined in Section
 ----------
22(e)(3) of the Internal Revenue Code (the "Code") or successor statute.
                                            ----

     5. Transferability of Option. The Option shall not be transferable,  except
        -------------------------
as, and then only to the extent, provided in Exhibit A hereto.
                                             ---------

     6. Adjustments Upon Changes in  Capitalization.  In the event of changes in
        -------------------------------------------
the  outstanding  stock of the Corporation by reason of stock  dividends,  stock
splits, recapitalizations, mergers, consolidations, combinations or exchanges of
shares,  separations,  reorganizations or liquidations,  the number and class of
shares  subject to the Option shall be  correspondingly  adjusted as provided in
the Plan.

     7.  Conditions  Precedent  To  Exercise  of  Option.  In the event that the
         -----------------------------------------------
exercise of the Option or the  issuance  and  delivery  of the shares  hereunder
shall be  subject  to, or shall  require,  any  prior  exchange  listing,  prior
approval of the  stockholders  of the  Corporation,  or other prior condition or
act,  pursuant  to the  applicable  laws,  regulations  or policies of any stock
exchange, federal or local government or its agencies or representatives, and/or
pursuant  to the Plan,  then the  Option  shall not be deemed to be  exercisable
under this Agreement until such condition is satisfied.  The  Corporation  shall
not be liable in any manner to  Optionee  or any other  party for any failure or
delay by the Corporation on its part to fulfill any such condition.

<PAGE>

     8.  Methods of  Exercising  Option. Subject to the terms and  conditions of
         ------------------------------
this  Agreement,  the Option may be exercised by delivering a signed,  completed
exercise  notice in the form of  Exhibit B hereto,  as the same may be  modified
                                 ----------------
from time to time by determination of the Corporation in its discretion,  to the
Corporation,  at its office at P.O. Box 175, Slate Hill, New York,  10973.  Such
notice shall (i) identify the Option to which it applies (i.e., Incentive Option
and/or  Non-Qualified  Option),  (ii) state the election to exercise the Option,
(iii)  designate  the  number of shares in  respect of which the Option is being
exercised, and (iv) be signed by the person or persons so exercising the Option,
and  shall  otherwise  be in such  form and  substance  as the  Corporation  may
require.  Such notice shall be accompanied by payment of the full purchase price
of such shares. The Corporation shall deliver to Optionee, at such address as is
provided in the notice, a certificate or certificates representing such Stock as
soon as practicable after the notice shall be received and all conditions to the
exercise of the Option are  fulfilled  and  satisfied.  Payment of such purchase
price  shall be made (a) in United  States  dollars in cash or by check,  or (b)
through delivery of shares of Stock  theretofore  owned by Optionee for at least
six months and having a fair market  value equal as of the date of the  exercise
to the cash  exercise  price of the  Option,  or (c), in the  discretion  of the
Compensation  Committee of the Board of Directors  (the  "Committee")  (that is,
                                                          ---------
only in the event of the express prior approval  thereof by the  Committee),  by
delivery (including by telecopier) to the Corporation or its designated agent of
an executed irrevocable  exercise notice together with irrevocable  instructions
to a  broker-dealer  to sell (or margin) a sufficient  portion of the shares and
deliver the sale (or margin loan)  proceeds  directly to the  Corporation to pay
for the  exercise  price,  or (d) by any  combination  of the above if permitted
hereunder.  Notwithstanding the foregoing,  Optionee may not pay any part of the
exercise price hereof by transferring  Stock to the Corporation if such Stock is
both subject to a substantial risk of forfeiture and not transferable within the
meaning of Section  83 of the Code.  The  certificate  or  certificates  for the
shares as to which the Option  shall have been so  exercised  shall be issued in
the name of the person or person so  exercising  the Option  (or,  if the Option
shall be exercised  by Optionee  and if Optionee  shall so request in the notice
exercising the Option,  the certificate  shall be issued in the name of Optionee
and another person jointly,  with right of survivorship)  and shall be delivered
as  provided  above  to or upon  the  written  order of the  person  or  persons
exercising the Option.  In the event the Option shall be exercised,  pursuant to
Paragraph 4 hereof,  by any person or persons other than  Optionee,  such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise the Option. At the election of the Corporation, such certificate may
bear such  legends  regarding  the limited  transferability  of the shares under
applicable securities laws the Corporation may require. All shares that shall be
purchased upon the exercise of the Option as provided herein shall be fully paid
and non-assessable.

<PAGE>

     9. Certain  Securities Law Matters.  By acceptance of the Option,  Optionee
        -------------------------------
agrees that a purchase  of shares  under the Option will not be made with a view
to their  distribution,  as that term is used in the  Securities Act of 1933, as
amended (the "Act"),  unless in the opinion of the Corporation such distribution
is  in  compliance  with  or  exempt  from  the   registration   and  prospectus
requirements  of the Act,  and  Optionee  agrees to sign a  certificate  to such
effect  at the time of  exercising  the  Option  (which  certificate  shall,  if
required by the  Corporation,  be in such form and substance,  and pertaining to
such  securities  law related  matters,  as the  Corporation  may require in its
discretion), and agrees that the certificate for the shares so purchased may, if
deemed  appropriate  by the  Corporation,  be inscribed  with a legend to ensure
compliance  with the Act.  Optionee  agrees that, in order to ensure  compliance
with the  restrictions  referred to herein and the  requirements of the Act, the
Corporation may issue appropriate  "stop transfer"  instructions to its transfer
agent.  The  Corporation  shall not be required (i) to transfer on its books any
shares  purchased  upon the  exercise  of the  Option  that  have  been  sold or
otherwise  transferred  in violation of any of the  provisions of this Agreement
and/or the Plan, or (ii) to treat as owner of such shares or to accord the right
to vote or receive  dividends to any purchaser or other  transferee to whom such
shares shall have been so sold or transferred.

     10. Capital Changes and Business Successions.  The Plan contains provisions
         ----------------------------------------
covering the treatment of the Option in a number of contingencies  such as stock
splits and mergers.  Provisions in the Plan for adjustment with respect to stock
subject to options and the related  provisions with respect to successors to the
business  of the  Corporation  are  hereby  made  applicable  hereunder  and are
incorporated  herein by reference.  In general,  Optionee should not assume that
the Option necessarily would survive the acquisition of the Corporation.

     11.  Withholding  Taxes. Upon the exercise of a Non-Qualified  Option,  the
          ------------------
exercise of an Option  transferred by the original  Optionee in accordance  with
the terms of this  Agreement or the Plan,  or the vesting of  restricted  Common
Stock  acquired  on the  exercise  of the Option,  the  Corporation  may require
Optionee or the purchaser or original Optionee to pay to the Corporation in cash
an amount  equal to all  applicable  withholding  taxes in respect of the amount
that is considered  compensation  includable in such person's gross income.  The
Corporation in its discretion may condition (i) the exercise of the Option, (ii)
the vesting of restricted  Common Stock  acquired by exercising  the Option,  or
(iii) the  exercise  of a  transferred  Option,  on  Optionee's  payment of such
amount. At the Corporation's discretion,  the amount required to be withheld may
be withheld in cash from fees and/or other compensation payable to Optionee,  or
(with respect to compensation income attributable to the exercise of the Option)
in kind from the Stock  otherwise  deliverable  to Optionee upon exercise of the
Option.  Optionee  further agrees that, if the Corporation  does not withhold an
amount from  Optionee's  fees or other  compensation  sufficient  to satisfy the
Corporation's withholding obligation, Optionee will reimburse the Corporation on
demand, in cash, for the amount underwithheld.

<PAGE>

     12. Fair Market Value of Stock. If, at the time the Option is granted under
         --------------------------
the Plan, the Corporation's Stock is publicly traded,  "fair market value" shall
                                                        -----------------
be  determined  as of the last  business  day for  which  the  prices  or quotes
discussed  in this  sentence  are  available  prior to the date  such  Option is
granted and shall mean (i) the average (on that date) of the high and low prices
of the Stock on the principal national securities exchange on which the Stock is
traded, if the Stock is then traded on a national securities  exchange;  or (ii)
the last reported sale price (on that date) of the Stock on the NASDAQ  National
Market List, if the Stock is not then traded on a national  securities  exchange
and is reported on the NASDAQ  National Market List; or (iii) the average of the
closing  bid and asked  prices  last  quoted  (on that  date) by an  established
quotation  service  for  over-the-counter  securities,  if the Stock is not then
traded on a national  securities exchange and is not then reported on the NASDAQ
National Market List.  However,  if the Stock is not publicly traded at the time
the Option is granted under the Plan,  "fair market value" shall be deemed to be
the  fair  value  of the  Stock  as  determined  by the  Corporation's  Board of
Directors or any Committee, after taking into consideration all factors which it
deems appropriate,  including, without limitation,  recent sale and offer prices
of the Stock in private  transactions  negotiated at arm's  length,  if any. The
determination  by the Board of Directors  or the  Committee of fair market value
shall be conclusive and binding. The fair market value of the shares in question
shall be determined as of the day on which the event occurs.

     13. Terms of Plan Control. The Option granted hereunder is granted pursuant
         ---------------------
to the provisions of the Plan,  the receipt of a copy of which  Optionee  hereby
acknowledges.  Nothing contained in this Agreement shall in any way be deemed to
alter or modify the provisions of the Plan and no act of the  Corporation or its
directors,  officers or employees shall be deemed to be a waiver or modification
of any provision of the Plan.  The  provisions of the Plan shall in all respects
govern the Option.  The Committee  shall have authority in its  discretion,  but
subject to the express  provisions  of the Plan,  to interpret the Plan and this
Agreement; to prescribe, amend and rescind rules and regulations relating to the
Plan and the Option;  and to make all other  determinations  deemed necessary or
advisable  for the  administration  of the Plan or the Option.  The  Committee's
determination on the foregoing matters shall be conclusive.

     IN WITNESS  WHEREOF,  the  Corporation  has  caused  this  Agreement  to be
executed by its duly authorized officer and Optionee has executed this Agreement
as of the date first written above.

                                           BALCHEM CORPORATION

                                           By:_________________________________

AGREED AND ACCEPTED:

-----------------------------------
OPTIONEE:

<PAGE>

                                    EXHIBIT A
                                    ---------
                          GRANT OF NON-QUALIFIED OPTION

Name of Optionee: __________________

Date of Grant: ____________________

No. of Shares covered by
Non-Qualified Options: _________________

Expiration Date: ______________

Price per share for all Shares: $ ___

Exercisability:     Earliest date on
                    which Non-Qualified
                    Option can be exercised
                    for the  number of
                    Shares indicated                  Number of Shares
                    -----------------------           ----------------

                    Date of Grant                         All Shares covered
                                                          by the Option

Transferability:    Except as expressly provided below, the Non-Qualified Option
                    shall not be  transferable  other than by will or the law of
                    descent  and  distribution  and is  exercisable  during  the
                    lifetime of Optionee  only by  Optionee.  The  Non-Qualified
                    Option shall be transferable by Optionee,  under the limited
                    circumstances  and  conditions  set forth  below,  to Family
                    Members of Optionee,  provided that (i) such transfer is not
                    a transfer for value,  (ii) the  specific  transfer has been
                    approved by the Committee, and (iii) subsequent transfers of
                    said Option shall be prohibited  (except for a transfer to a
                    Family  Member of Optionee  from  another  Family  Member of
                    Optionee  which   otherwise   complies  with  the  foregoing
                    requirements).  For purposes  hereof,  a "Family  Member" of
                    Optionee includes any child, stepchild,  grandchild, parent,
                    stepparent,  grandparent,  spouse,  former spouse,  sibling,
                    niece,  nephew,  mother-in-law,  father-in-law,  son-in-law,
                    daughter-in-law,   brother-in-law,   or  sister-in-law,   of
                    Optionee,  including  adoptive  relationships,   any  person
                    sharing  Optionee's   household  (other  than  a  tenant  or
                    employee of Optionee), a trust in which such above-described
                    Family   Members  have  more  than  fifty   percent  of  the
                    beneficial    interest,   a   foundation   in   which   such
                    above-described  Family  Members (or  Optionee)  control the
                    management  of  assets,  and any other  entity in which such
                    above-described  Family  Members (or Optionee) own more than
                    fifty  percent  of  the  voting  interests.   The  following
                    transactions  shall not be deemed transfers for value: (A) a
                    transfer under a domestic  relations  order in settlement of
                    marital property rights;  and (B) a transfer to an entity in
                    which more than fifty  percent of the voting  interests  are
                    owned by Family  Members (or  Optionee)  in exchange  for an
                    interest in that entity.  Notwithstanding  any such transfer
                    by Optionee, the transferee, and any subsequent transferees,
                    shall be subject to the Agreement,  including the provisions
                    as to and limitations on the  exerciseability  of the Option
                    in the event the original  Optionee  ceases to be a director
                    of the Corporation as provided under Sections 3 and 4 of the
                    Agreement,  it being  understood that, such provisions shall
                    apply in the  event  the  original  Optionee  ceases to be a
                    director  even  if  the  Option  has  been   transferred  as
                    permitted hereby.

<PAGE>

                                    EXHIBIT B
                               BALCHEM CORPORATION
                                 1999 STOCK PLAN
                   EXERCISE NOTICE NON-QUALIFIED STOCK OPTION

Balchem Corporation
P.O. Box 175
Slate Hill
New York, New York 10973
Attention: ___________

     1.  Exercise  of  Option.   Effective  as  of  today,  ,  the   undersigned
         --------------------
("Optionee")  hereby elects to exercise  Non-Qualified Stock Options to purchase
  --------
______  shares of the Common Stock (the  "Shares") of Balchem  Corporation  (the
                                          ------
"Corporation"),  under and pursuant to the Balchem  Corporation 1999 Stock Plan,
 -----------
as the same may be amended from time to time (the "Plan"),  and the Stock Option
                                                   ----
Agreement  between  the  Corporation  and  Optionee  dated as of  _____________,
_____________,  as the  same  may be  amended  from  time to time  (the  "Option
                                                                          ------
Agreement").
---------

     2. Delivery of Payment.  Optionee  herewith delivers to the Corporation the
        -------------------
full purchase price of the Shares, as set forth in the Option Agreement.

     3.  Representation  of Optionee.  Optionee  acknowledges  that Optionee has
         ---------------------------
received,  read and understood  the Plan and the Option  Agreement and agrees to
abide by and be bound by their terms and conditions.

     4. Rights as Stockholder. Until the stock certificate evidencing the Shares
        ---------------------
is issued (as evidenced by the appropriate entry on the books of the Corporation
or of a duly authorized transfer agent of the Corporation),  no right to vote or
receive  dividends or any other rights as a stockholder shall exist with respect
to the  Shares,  notwithstanding  the  exercise of the Option (as defined in the
Option  Agreement).  No adjustment  will be made for any dividend or other right
for which the  record  date is prior to the date the stock  certificate  for the
Shares is issued.

     5. Tax Consultation.  Optionee understands that Optionee may suffer adverse
        ----------------
tax  consequences  as a result of  Optionee's  purchase  or  disposition  of the
Shares. Optionee represents that Optionee has consulted with any tax consultants
Optionee deems  advisable in connection  with the purchase or disposition of the
Shares and that Optionee is not relying on the Corporation for any tax advice.

<PAGE>

     6. Certain  Securities Law Matters.  Without limiting the provisions of the
        -------------------------------
Plan  and/or the Option  Agreement,  Optionee  understands  and agrees  that the
Corporation shall be entitled to cause appropriate legends to be placed upon any
certificate(s)  evidencing  ownership  of the Shares that may be required by the
Corporation  in connection  with state or federal  securities  laws,  the Option
Agreement and/or the Plan.

     7.  Successors and Assigns.  The  Corporation  may assign any of its rights
         ----------------------
under this Exercise  Notice to single or multiple  assignees,  and this Exercise
Notice  shall  inure to the  benefit of the  successors  and the  assigns of the
Corporation. Subject to any restrictions on transfer set forth or referred to in
the Option Agreement and/or the Plan, this Exercise Notice shall be binding upon
Optionee  and  his or  her  heirs,  executors,  administrators,  successors  and
assigns.

     8.  Interpretation.  Any  dispute  regarding  the  interpretation  of  this
         --------------
Exercise Notice shall be determined by the  Corporation's  Board of Directors or
the Committee (as defined in the Plan), whose  determination  shall be final and
binding on the Corporation and on Optionee.

                   Submitted by:             OPTIONEE:

                                             -----------------------------------
                                             Name:
                                             Address:

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