Document:

EXHIBIT 10.8

 

SUMMARY OF

2006 INCENTIVE COMPENSATION 

 

The Incentive Compensation Program (ICP) is a compensation and reward mechanism that shares with certain Balchem Corporation personnel, gains realized by the corporation as a result of successful effort, individually or as a member of the corporate team, beyond the basic tasks of their job responsibilities. These achievements are critical to the company’s attainment of its corporate goals. 

 

The ICP also assists in communication and professional growth. To derive optimum benefits from the efforts, the person must be fully acquainted with corporate goals and the value system under which they have been created. Achievements that require the individual to exceed minimum, acceptable performance will result in sharpened job skills, enhanced creative thinking and a greater level of professional satisfaction. 

 

The ICP is, as its name implies, an incentive for certain employees to meet successfully specific objectives beneficial to the corporation. A safeguard requires that before an employee receives any bonus payments, the basic responsibilities of the job description must have been carried out satisfactorily. This ensures that normal operations will not be sacrificed, but maintained at desired levels. In order for any and all participants to be eligible to receive any portion of the ICP payout, the defined minimum Corporate NIBIT (Net Income Before Interest and Taxes) objective must be met. Failure of the Company to reach the NIBIT objective will result in no payout of ICP’s for that year under this program. 

 

BONUSABLE GOALS 

 

The process of establishing bonusable goals requires a well-defined annual business plan from which most goals can be measured. The annual business plan, approved by the Board of Directors, evolves from the Corporate Strategic Plan that can also be the basis for some goals. 

 

• Identification with corporate goals 

• Identification of key objectives 

• A minimum NIBIT will be established annually which must be achieved in order for any portion of bonus to be paid. 

 

The Board of Directors reserves the right to approve a bonus payment, even when the Corporate NIBIT objective is not met, for individuals that achieved extraordinary performance in any given year. 

 

DETERMINE RELATIVE VALUE OF GOALS 

 

A. The goal must be a stretch, beyond job responsibilities and the person’s overall job performance must be rated at least as “meets expectations” level. 

 

B. Placing value on specific goal will be arrived at by: 

• To what degree will the objective help Balchem meet its stated goal for the year? 

 

• What is the relative degree of difficulty required to achieve the goal, i.e., creativity, involvement or negotiation with others, problem solving and other indices? 

 

• The intrinsic value of the goal: magnitude of income enhancement or cost savings? 

 

C. Typical number of ICP goals: Each employee will normally have from 4 to 6 bonusable goals. 

 

BONUSABLE RANGE: 

 

ICP may be implemented in a range of 10-50% of an eligible employee’s current salary. 

 

A 10% of salary bonus target will be established as a minimum for those employees entering the ICP for the first time. 

 

Lower acceptable level and upper attainable levels are to be established for each goal wherever possible: 

 

The lower limit is to be the level that would be the equivalent of excellent effort to achieve the goal in its entirety, but not total achievement. 

 

• Achieving the lower limit results in receiving 70% of the 100% bonus for that goal. 

 

The upper level is the maximum that can be reasonably expected. 

 

• Attainment of the upper level or more will result in receiving 130% of the 100% bonus for that goal. 

 

Attainment of a goal between the lower limit and upper level may result in a bonus in proportion to the deviation from the 100% level for that goal. 

 

In determining the extent of fulfillment, judgment may have to be used when deciding the appropriate award level when hard accounting numbers are not available. When there is unclear distinction between levels of fulfillment, the following questions can be used to help make the final determination: 

 

• Were there advantages/benefits to the company above and beyond that which the business plan projected? 

• Were there extenuating or unanticipated circumstances or events that either benefited or hindered the accomplishment of results? 

 

ICP Eligible Personnel and levels of compensation are reviewed and approved annually by the Corporation Compensation Committee of the Board of Directors. 

 

Weighting Guidelines: 

 

A. Approximately 20-30% of the bonus will be tied to corporate goals. 

 

 

 

 

B. Approximately 40% of the bonus will be based upon how successfully the division or group contributes to corporate performance; i.e., sales & profits, new customers, new products, cost reductions, efficiencies, etc. 

 

C. Approximately 30-40% will be based upon individual objectives. 

 

A minimum NIBIT objective will be established annually. This minimum NIBIT  

objective must be achieved in order for any portion of bonus to be paid. The  

Compensation Committee of the Board of Directors will redefine this goal annually based on prior year’s performance and new annual plan. 

 

All participating personnel will receive annual merit performance evaluations that measure both job performance per the job description and accomplishment toward ICP goals that are directly linked to corporate plans. Thus, total compensation for eligible participants will be determined based upon both merit and ICP program goal achievement. 

 

Employees must receive an overall annual evaluation of at least “Meets Expectations” to be eligible to participate in or receive any portion of a bonus.sec document

                                                                    Exhibit 10.6

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

                             [Amended and Restated]

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         THIS ASSIGNMENT AND ASSUMPTION  AGREEMENT  (Amended and Restated) (this
"Assumption  Agreement") is made by and between Grand Oaks  Development,  LLC, a
South Carolina limited liability company (the "Assignor"), and Enclaves of Grand
Oaks LLC, a South  Carolina  limited  liability  company  (the  "Assignee")  and
subsidiary  of Enclaves  Group,  Inc.,  a Delaware  corporation  (the  "Contract
Purchaser"):

         IN  CONSIDERATION  of the sale and transfer as of December 9, 2005,  of
the Property (or the Assignor's  contracts to acquire the Property) described in
the Sale  Contract  (described  below),  the  parties  hereto  enter  into  this
Assignment and  Assumption  Agreement and  represent,  warrant,  and covenant as
follows:

         1. The  Contract  Purchaser  hereby  assigns to the Assignee all right,
title,  and interest in that certain  Purchase  and Sale  Agreement  dated as of
October 20, 2005 (the "Sale Contract"),  by and between the Assignor as "Seller"
and the Contract Purchaser as "Purchaser", with the consent of the Assignor.

         2. The Assignor as "Seller" under the Sale Contract hereby acknowledges
and credits to the  Assignee as earnest  money  deposits  thereunder  the sum of
Three Hundred Fifty Thousand Dollars ($ 350,000).

         3. The Assignor as "Seller" and the Assignee as  "Purchaser"  under the
Sale Contract each hereby  acknowledges the release of the conditions to Closing
set forth in  sections 9 (c) (Zoning and Plat  Approval),  9 (f) (Seller  Lender
consent), and 9 (g) (Land Development Agreement.

         4. The Assignee  further  agrees to pay to the order of South  Carolina
Development  Partners  LLC,  a South  Carolina  limited  liability  company  and
affiliate  of  Assignor,  a separate fee of Three  Hundred  Thousand  Dollars ($
300,000),  in consideration of its consent to transfer of the subject  property,
to be paid upon the first to occur of (i) the  initial  funding  obtained by the
Contract  Purchaser under the "equity line"  described in its SB-2  registration
statement  filed with the  Securities  and Exchange  Commission  on November 29,
2005, (ii) the refinancing of any real property project by Contract Purchaser or
its  subsidiaries  (to the  extent of net cash  proceeds  available),  (iii) the
initial  construction draw under the Assignee's  construction  financing for the
Project,  and (iv)  March  31,  2006;  which  fee  shall  bear  interest  on the
outstanding balance from the date of the transfer of the Property to the date of
payment  and be  evidenced  by a  promissory  note  of  Contract  Purchaser  and
Assignee.

         5. In  consideration  of an option  fee in the  amount  of Two  Million
Fifteen  Thousand  Dollars  ($  2,015,000)  to be paid in  full  at  Closing  in
immediately  available  funds, the Assignee as successor  "Purchaser"  under the
Sale Contract hereby grants and assigns to the Assignor,  or to the order of its
designee, the right and option (without any obligation to exercise), to

Assignment and Assumption Agreement                 Grand Oaks Development, LLC
 (Amended and Restated)                               Enclaves of Grand Oaks LLC
                                                            Enclaves Group, Inc
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repurchase building lots, or portions of the Property, upon designation by the
Assignee of any Lots or Property portions it does not intend to hold for
development and construction of an "Enclaves" community housing project, for a
fixed repurchase price equal to the product of (i) the sum of (A) the Assignee's
pro rata acquisition costs for such repurchased property, (B) together with the
Assignee's pro rata costs to hold, maintain, and finance such repurchased
property from the date hereof to the date of repurchase, (C) together with the
Assignee's pro rata development costs for such repurchased property from the
date hereof to the date of repurchase, and (ii) an amount equal to ten percent
(10 %) per annum on the sum of the amounts in (i) (A), (B), and (C) from the
date incurred to the date of repurchase; provided that the Owner and the
Assignor shall enter into a separate option agreement setting forth the terms
and conditions of notice and exercise of the foregoing right and option. The
right and option to purchase must be renewed, if not exercised in writing on or
before the last day of the month of Closing, by the delivery of a monthly
renewal fee of Ten Thousand Dollars ($ 10,000) in immediately available funds to
the order of Assignee, and the last day of each month during any renewal period,
or this right and option shall expire without notice or opportunity to cure.

         7. This  Assumption  Agreement:  (i) contains the entire  understanding
between the parties  hereto with respect to the  Property and the Sale  Contract
and is intended to be an integration of all prior or contemporaneous agreements,
conditions,  or  undertakings  between  the  parties  hereto  and  there  are no
promises, agreements, conditions, undertakings,  warranties, or representations,
oral or written,  express or implied,  between and among the parties hereto with
respect to the Property or Sale Contract  other than as set forth  herein;  (ii)
shall not be amended or  modified  except by written  instrument  signed by each
party thereto; and (iii) may be executed in several counterparts,  each of which
shall be deemed and original and all of which together shall  constitute but one
instrument;  the parties may  exchange and rely upon  counterparts  delivered by
facsimile transmission or PDF-format documents.

            [Signatures of parties commence on next succeeding page.]

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Assignment and Assumption Agreement                 Grand Oaks Development, LLC
 (Amended and Restated)                               Enclaves of Grand Oaks LLC
                                                            Enclaves Group, Inc
--------------------------------------------------------------------------------

         IN  WITNESS  WHEREOF  THE  parties  to  the  foregoing  Assignment  and
Assumption  Agreement (Amended and Restated) have executed this instrument as of
the day and year last subscribed below.

                                     ASSIGNOR:

                                     GRAND OAKS DEVELOPMENT, LLC

Date: December 16, 2005              By: /s/ Richard J. deGorter          (SEAL)
                                         --------------------------------
                                             Richard J. deGorter
                                             Manager

                                     ASSIGNEE:

                                     ENCLAVES OF GRAND OAKS LLC

                                     By:  Enclaves Group, Inc.
                                     Its: Managing Member

Date: December 16, 2005              By: /s/ Daniel G. Hayes              (SEAL)
                                         --------------------------------
                                             Daniel G. Hayes
                                     Its:    President and CEO

                                     CONTRACT PURCHASER:

                                     ENCLAVES GROUP, INC.

Date: December 16, 2005              /s/ Daniel G. Hayes                  (SEAL)
                                     ------------------------------------
                                             Daniel G. Hayes
                                     Its:    President and CEO

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