EXHIBIT 4.3
STOCK OPTION PLAN
FOR DIRECTORS
OF
BALCHEM CORPORATION
(As Amended)
SECTION 1. Purpose. The purpose of the Option Plan for Directors (the "Plan") of
Balchem Corporation (the "Corporation") is to assist the Corporation in
attracting and retaining persons to be directors by providing an incentive which
permits directors to share directly in the growth of the Corporation and to
further the identity of their interests with those of the stockholders of the
Corporation.
SECTION 2. Administration. The Plan shall be administered by the Board of
Directors of the Corporation (the "Board").
SECTION 3. Stock Available. The stock subject to the Plan shall be such
authorized but unissued or treasury shares of Common Stock of the Corporation
("Common Stock") as shall from time to time be determined by the Board. The
total amount of Common Stock which may be issued pursuant to the Plan is 452,000
shares, subject, however, to adjustment in accordance with the provisions of
Section 15.
SECTION 4. Eligibility. Directors and directors emeriti of the Corporation are
eligible to receive options under Section 5 of the Plan; other employees and
consultants of the Corporation are eligible to receive options under the terms
of the Plan (other than Section 5) at the discretion of the Board, in an amount
determined by the Board, at an exercise price equal to the reported closing
price of the Common Stock on the date of grant of an option and under such other
terms not inconsistent with the Plan as the Board may direct. In no case shall
any employee be granted options to purchase more than 100,000 shares in any
calendar year.
SECTION 5. Grant of Options. On each December 31,commencing with December 31,
1997, each director and director emeritus ("Optionee") shall be granted options
under the Plan to purchase that number of shares of Common Stock which is equal
to the maximum number of shares for which options were granted in 1996, namely,
1,059, multiplied by the quotient obtained by dividing (i) the net earnings of
the Corporation for the year then ended by (ii) the net earnings of the
Corporation for 1996, computed to the nearest whole number of shares. The option
exercise price (the "Price") shall be the reported closing price per share of
the Common Stock on the last trading date of the year in which such December 31
falls.
SECTION 6. Exercise of Right to Purchase Shares. An Optionee may exercise his
right to purchase shares of Common Stock in respect of any option granted during
the ten-year period beginning immediately after the grant of such option,
provided that he is still a director or director emeritus, officer or employee
of the Corporation on the date of such exercise. In order to
so exercise such right to purchase, the Optionee shall give written notice to
the Corporation of such election. The consideration for the shares to be issued
shall be tendered in cash at the time such notice is given.
Any option granted hereunder shall terminate and may no longer be exercised if
the Optionee ceases to be a director or director emeritus, officer or employee
of the Corporation except that if such cessation results from the death or
permanent and total disability of the Optionee such option may be exercised for
ninety days thereafter or until the expiration of such option, whichever first
occurs, by the Optionee or his legal representatives.
If the Optionee was granted options hereunder in his capacity as a consultant,
the duration of his options and the conditions of defeasance shall be as the
Board directs at the time of grant.
SECTION 7. Government and Other Regulations and Restrictions. The obligation of
the Corporation to issue Common Stock upon exercise of an option hereunder shall
be subject to all applicable laws, rules and regulations and to such approvals
by governmental agencies as may be required. Shares of Common Stock acquired
pursuant to the Plan shall not be sold, transferred or otherwise disposed of
unless and until either (a) such shares shall have been registered by the
Corporation under the Securities Act of 1933, as amended (the "Securities Act"),
(b) the Corporation shall have received either a "no action" letter from the
Securities and Exchange Commission or an opinion of counsel acceptable to the
Corporation to the effect that such sale, transfer or other disposition of the
shares may be effected without such registration or (c) such sale, transfer or
disposition of the shares is made pursuant to Rule 144 of the General Rules and
Regulations promulgated under the Securities Act, as the same may from time to
time be in effect, and the Corporation shall have received an opinion of counsel
acceptable to the Corporation to such effect. In the event that at the time an
option is exercised there shall not be on file with the Securities and Exchange
Commission an effective Registration Statement under the Securities Act covering
the shares of Common Stock to be issued pursuant thereto the Optionee will
execute and deliver to the Corporation upon receipt by him of any such shares an
undertaking in form and substance satisfactory to the corporation that (i) it is
his intention to acquire and hold such shares for investment and not for the
resale or distribution thereof, (ii) he will comply with the Securities Act with
respect to such shares, and (iii) he will indemnify the Corporation for any
costs, liabilities and expenses which it may sustain by reason of any violation
of the Securities Act occasioned by any act on his part with respect to such
shares. The Corporation may require that any certificate or certificates
evidencing shares issued pursuant to the Plan bear a restrictive legend intended
to effect compliance with the Securities Act or any other applicable regulatory
measures.
SECTION 8. Registration of Shares. The Corporation shall be under no obligation
to register any shares of Common Stock under the Securities Act.
SECTION 9. No Rights in Common Stock. No Optionee shall have any interest in or
be entitled to any voting rights or dividends or other rights or privileges of
stockholders of the Corporation
with respect to any shares of Common Stock unless, and until shares of Common
Stock are actually issued to such option and then only from the date the
Optionee becomes the record owner thereof.
SECTION 10. Adjustments for Changes in Common Stock. In the event that each of
the outstanding shares of Common Stock of the Corporation (other than shares
held by dissenting shareholders) should be changed into, or exchanged for, a
different number or kind of shares of stock or other securities of the
Corporation, or, if further changes or exchanges of any stock or other
securities into which such Common Stock shall have been changed, or for which it
shall have been exchanged, shall be made (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividends,
reclassification, split up, combination of shares, or otherwise), then, for each
share of Common Stock of the Corporation subject to the Plan (whether or not
such shares are at the time subject to outstanding options) there shall be
substituted and exchanged therefor the number and kind of shares of stock or
other securities into which each outstanding share of Common Stock of the
Company (other than shares held by dissenting shareholders) shall be so changed
or exchanged. In the event of any such changes or exchanges, then, if the Board,
in its sole discretion, should determine that in order to prevent dilution or
enlargement of rights under the Plan, an adjustment should be made in the
number, kind, or option exercise price of the shares of stock or other
securities then subject or potentially subject to an option or options, such
adjustment shall be made and shall be effective and binding for all purposes of
the Plan.
SECTION 11. Non-transferability of Option. No option granted under the Plan
shall be transferable by the Optionee, either voluntarily or involuntarily,
except by will or the laws of descent and distribution, and then only to the
extent provided in Section 6 of the Plan. Any attempt to do so shall void the
option. An option shall be exercisable during the Optionee's lifetime only by
the Optionee and, after the Optionee's death, only by the Optionee's legal
representative.
SECTION 12. Effective Date and Termination Date. The Plan shall be effective on
the date it is approved by affirmative vote of the holders of a majority of the
outstanding Common Stock. If the holders of a majority of the outstanding Common
Stock fail to approve the Plan, any options granted under the Plan in
anticipation of that approval shall be null and void, it being the condition of
any such grant that the options so granted were contingent upon shareholder
approval of the Plan as aforesaid. Except as to options previously granted and
outstanding under the Plan, the Plan shall terminate at midnight on the date
occurring five years after the date on which this Plan is approved by the
Shareholders of the Company, and no option shall be granted after that time.
Options then outstanding may continue to be exercised in accordance with their
terms.