UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): December 8, 2006
Balchem Corporation
(Exact name of registrant as specified in its charter)
Maryland 1-13648 13-2578432
(State or other jurisdiction (Commission File Number) IRS Employer
of incorporation) Identification No.)
P.O. Box 600, New Hampton, NY 10958
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (845) 326-5600
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02: Compensatory Arrangements for Certain Officers
On December 8, 2006, the Board of Directors (the "Board") of Balchem
Corporation (the "Company") granted certain options to, authorized certain
restricted stock arrangements for, and approved the bonus program for fiscal
2007 for its executive officers, including the executive officers who were
listed as "named executive officers" in the Company's proxy statement for its
2006 annual meeting of stockholders, Dino A. Rossi, the Company's President &
Chief Executive Officer, Francis Fitzpatrick, the Company's Chief Financial
Officer, David Ludwig, the Company's Vice President, General Manager ARC
Specialty Products, Paul Richardson, the Company's Vice President, Research &
Development, and Robert Miniger, the Company's Vice President, Human Resources.
Options. The Board granted options to purchase shares of its Common
Stock to certain executive officers of the Company pursuant to the Company's
1999 Stock Plan, as amended and restated (the "Plan"). Mr. Rossi, Mr.
Fitzpatrick, Mr. Ludwig, Mr. Richardson and Mr. Miniger were granted options to
purchase 30,000, 23,000, 18,000, 15,000, and 7,000 shares of Common Stock,
respectively, at an exercise price of $26.71 per share. The options granted vest
as follows: 20% on the first anniversary of the grant date; 40% on the second
anniversary of the grant date; and 40% on the third anniversary of the grant
date, and otherwise pursuant to the terms of the applicable Stock Option Grant
agreement. These options expire on December 7, 2015.
Restricted Stock. The Board authorized the Company to enter into
Employee Restricted Stock Purchase Agreements (the "Employee Restricted Stock
Agreements") with certain executive officers of the Company to purchase
restricted shares of the Company's Common Stock pursuant to the Plan. The Board
granted Mr. Rossi, Mr. Fitzpatrick, Mr. Ludwig, Mr. Richardson and Mr. Miniger
the right to purchase up to 9,000, 3,000, 2,000, 3,000, and 1,000 shares of
restricted Common Stock, respectively, at a purchase price equal to the par
value of the shares ($.06-2/3 per share). The purchased stock is subject to a
repurchase option in favor of the Company and to restrictions on transfer until
it vests in accordance with the provisions of the Employee Restricted Stock
Agreements. The purchased stock will vest in full four years from the date of
the Employee Restricted Stock Agreements, or upon an earlier change of control
of the Company (as defined in the Employee Restricted Stock Agreements),
provided the purchaser is employed by the Company on that date. In the event the
purchaser's employment with the Company is terminated for cause or upon the
purchaser's voluntary resignation from the Company's employ, prior to vesting in
full, the Company may repurchase all of the purchased shares at a purchase price
of $.06-2/3 per share. The Company may repurchase a pro-rated amount of the
purchased shares, based on the amount of time remaining until the vesting date,
at a purchase price of $.06-2/3 per share in the event the purchaser ceases to
be an employee of the Company prior to vesting by reason 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) termination
of the purchaser's employment by the Company without cause. Repurchases are
subject to the approval of the Compensation Committee of the Board.
Bonus Program. The Board also approved the Company's Incentive
Compensation Program for the 2007 calendar year (the "ICP"). The ICP provides
for the awarding of bonus compensation to executive officers and certain other
employees, based
upon the level of achievement of specific goals established for the particular
officer or employee, and for the weighting of those goals to determine the
amount of the bonus. No bonuses are required to be paid under the ICP unless a
specified minimum level of consolidated net income before interest and taxes
("NIBIT") is achieved. The Target Bonuses of the named executive officers of the
Company is based upon a percentage of each executive officer's base yearly
salary and is set forth in the table below.
Name Target Bonus
---- ------------
Dino A. Rossi 50%
Francis Fitzpatrick 35%
David Ludwig 35%
Paul Richardson 35%
Robert Miniger 35%
The Compensation Committee of the Board will determine actual bonus
amounts paid to the executive officers, which may be higher or lower than the
Target Bonus, based upon each executive officer's performance relative to the
specific established performance goals upon which the Target Bonus amounts were
based.
Pursuant to the terms of the employment agreement between the Company
and Mr. Rossi, Mr. Rossi is entitled to annual bonus of up to 100% of his base
salary, based upon Balchem achieving operating and/or financial targets
established by the Board or an authorized committee thereof. Half of such bonus
compensation is determined pursuant to the ICP. The Compensation Committee has
established a minimum level of consolidated net income for the 2007 fiscal year
to be achieved by the Company in order for Mr. Rossi to be entitled to the
portion of such bonus compensation not covered by the ICP.
The foregoing description of the terms of Employee Restricted Stock
Agreements and the Stock Option Grant agreements is qualified in its entirety by
the terms and provisions of such agreements, the forms of which are attached
hereto as Exhibits 10.1 and 10.2, respectively.
Item 7.01: Regulation FD.
On December 12, 2006, the Company issued a press release announcing
that on December 8, 2006 the Board of Directors of the Company approved and
declared a 3-for-2 stock split, to be effected in the form of a stock dividend
on its issued and outstanding Common Stock, as of 5:00 PM, New York City time,
on December 29, 2006. Also, the Board of Directors of Balchem declared a cash
dividend of $0.09 per share on all issued and outstanding shares of Common Stock
held as of such record date, with the number of shares to which such cash
dividend is to apply adjusted to give effect to the stock dividend. Both
dividends will be payable on January 19, 2007 to stockholders of record as of
the December 29, 2006 record date. A copy of the press release is filed herewith
as Exhibit 99.1 and incorporated by reference herein.
Item 9.01: Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Description
-------------- -----------
10.1 Form of Restricted Stock Purchase Agreement for
Employees pursuant to the Balchem Corporation 1999 Stock
Plan, as amended and restated.
10.2 Form of Agreement for Stock Option Grant to Employees
pursuant to the Balchem Corporation 1999 Stock Plan, as
amended and restated (incorporated by reference to
Exhibit 10.3.1 to the Current Report on Form 8-K of the
Company, dated September 22, 2004).
99.1 Press Release dated December 12, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALCHEM CORPORATION
By:/s/ Francis J. Fitzpatrick
-----------------------------
Francis J. Fitzpatrick
Chief Financial Officer
Dated: December 14, 2006
Exhibit Index
Exhibit Number Description
-------------- -----------
10.1 Form of Restricted Stock Purchase Agreement for
Employees pursuant to the Balchem Corporation 1999 Stock
Plan, as amended and restated.
10.2 Form of Agreement for Stock Option Grant to Employees
pursuant to the Balchem Corporation 1999 Stock Plan, as
amended and restated (incorporated by reference to
Exhibit 10.3.1 to the Current Report on Form 8-K of the
Company, dated September 22, 2004).
99.1 Press Release dated December 12, 2006.