Exhibit 10.1
EMPLOYEES RESTRICTED STOCK PURCHASE AGREEMENT
AGREEMENT made as of this 8th day of December, 2006, (the "Effective
Date") between Balchem Corporation, Inc., a Maryland corporation (the "Company")
and [employee] (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.
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1.1 Grant of Stock Purchase Right. The Company hereby grants to the
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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 __________________________ (_______) shares of the Common Stock,
$.06(2)/3 par value per share, of the Company (the "Shares") for a purchase
price of $.06(2)/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
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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
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Shares hereunder shall expire and be of no further force or effect on December
27, 2006.
1.4 Nontransferability of Stock Purchase Right. This Stock Purchase
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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.
2. Company Representations and Warranties. The Company represents and
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warrants to the Purchaser as follows:
2.1 Organization. The Company is a corporation duly organized, validly
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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
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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
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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
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and warrants to the Company as follows:
3.1 Investment. The Purchaser is purchasing the Shares for his own
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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
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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
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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
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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
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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.
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4. Intentionally omitted.
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5. Repurchase.
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5.1 Repurchase Option. The Shares shall be subject to a repurchase option
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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 ceases to be an employee of the Company by reason of
termination of the Purchaser's employment by the Company for cause or due to the
Purchaser's voluntary resignation from the Company's employ, 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 $.06(2)/3 per share (as adjusted for stock splits, stock dividends, stock
combinations, reorganization and the like) (the "Repurchase Price").
(b) In addition to the provisions of Section 5.1(a) above and subject
to approval of the Compensation Committee of the Board of Directors of the
Company, if, at any time prior to the Vesting Date, the Purchaser ceases to be
an employee of the Company as a result of: (1) the Purchaser's voluntary
retirement from the Company's employ at or after age 62; (2) the Purchaser's
death, major disability or significant illness; or (3) the termination of the
Purchaser's employment by the Company without cause, 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) 1/48 of the total number of Shares, times (B) the number of full months that
the Purchaser has remained an employee of the Company during the period from the
Effective Date through the date of such cessation of employment with the
Company.
5.2 Exercise of Repurchase Option. (a) The repurchase option hereunder
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shall only be exercised upon approval thereof by the Compensation Committee 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 the effective date of the termination
of Purchaser's service as an employee of the Company.
(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
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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 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
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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 four (4) years after the Effective Date;
(b) 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.
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6.1 Transfer Restrictions. The Purchaser shall not, directly or
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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 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
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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
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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
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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
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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.
9. Remedies. (a) The Purchaser acknowledges and agrees that any
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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.
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(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
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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
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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.
12. Severability. The invalidity or unenforceability of any provision
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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
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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
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the benefit of the Company and the Purchaser and their respective heirs,
executors, administrators, legal
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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
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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
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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
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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
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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
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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
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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.
21. Section 409A Compliance. This Stock Purchase Right is intended to
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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:
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Xxxx X. Xxxxx, President & CEO
PURCHASER:
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(Signature)
Address:
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