SCHEDULE 14A INFORMATION
                    Proxy Statement Pursuant to Section 14(a)
                     of the Securities Exchange Act of 1934

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Check the appropriate box:

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      14a-6(e)(2))
[X]  Definitive Proxy Statement
[_]  Definitive Additional Materials
[_]  Soliciting Material Pursuant to Section 14a-12

                               BALCHEM CORPORATION
                (Name of Registrant as Specified In Its Charter)

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

     (Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
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     1)   Title of each class of securities to which transaction applies: N/A

     2)   Aggregate number of securities to which transaction applies: N/A

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          pursuant to Exchange  Act Rule 0-11 (Set forth the amount on which the
          filing fee is calculated and state how it was determined): N/A

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[_]  Fee paid previously with preliminary materials.

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previously.  Identify the previous filing by registration  statement  number, or
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     4)   Date Filed: N/A




                               BALCHEM CORPORATION
                               -------------------

                    ----------------------------------------
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON JUNE 24, 2005
                    ----------------------------------------

     TO OUR STOCKHOLDERS:

     NOTICE IS HEREBY GIVEN that the Annual Meeting of  Stockholders  of BALCHEM
CORPORATION  will be held in the  Board  of  Governors  Room,  13th  floor,  the
American Stock Exchange,  86 Trinity Place, New York, New York, on Friday,  June
24, 2005 at 11:00 a.m. for the following purposes:

     1.   To elect two Class 3  directors  to the  Board of  Directors  to serve
          until the  annual  meeting  of  Stockholders  in 2008 and until  their
          respective successors are elected and qualify.

     2.   To approve an  amendment  to the  Corporation's  Restated  Articles of
          Incorporation  which  increases  the total  number of shares of common
          stock which the  Corporation  has  authority to issue from ten million
          (10,000,000)   shares  of   common   stock  to   twenty-five   million
          (25,000,000) shares.

     3.   To  transact  such other  business  as may  properly  come  before the
          Meeting or any adjournment thereof.

     Information  with  respect  to the above  matters is set forth in the Proxy
Statement, which accompanies this Notice.

     Only  stockholders of record on April 8, 2005 are entitled to notice of and
to vote at the Meeting or any adjournment thereof.

     We hope that all  stockholders  who can  conveniently do so will attend the
Meeting.  Stockholders  who do not expect to be able to attend the  Meeting  are
requested to fill in, date and sign the enclosed  proxy and promptly  return the
same in the stamped,  self-addressed  envelope  enclosed  for your  convenience.
Stockholders  who are present at the Meeting may withdraw their proxies and vote
in person, if they so desire.

                                        BY ORDER OF THE BOARD OF DIRECTORS

                                        /s/ Dino A. Rossi

                                        Dino A. Rossi, President & CEO
Dated:  April 29, 2005
       --------------------

P.O. Box 600, New Hampton,  New York 10958 Tel:  845-326-5600 Fax:  845-326-5702
                                www.balchem.com
                                ---------------




                                 PROXY STATEMENT

                               BALCHEM CORPORATION


                                     GENERAL

     This Proxy  Statement is furnished in connection  with the  solicitation of
proxies  on  behalf  of the  Board of  Directors  of  Balchem  Corporation  (the
"Company") for the 2005 Annual Meeting of  Stockholders  (sometimes  referred to
herein as the "Annual Meeting" or as the "Meeting").  This Proxy Statement and a
proxy card are expected to be mailed to stockholders beginning on or about April
29, 2005.

     You can  ensure  that  your  shares  are  voted at the  Annual  Meeting  by
completing,  signing,  dating  and  returning  the  enclosed  proxy  card in the
envelope  provided.  Sending in a signed  proxy  will not  affect  your right to
attend the Meeting and vote.  A  stockholder  who gives a proxy may revoke it at
any time before it is  exercised by voting in person at the Annual  Meeting,  by
submitting  another proxy bearing a later date or by notifying the Inspectors of
Election or the Secretary of the Company in writing prior to the Annual  Meeting
of such revocation. Please note, however, that if your shares are held of record
by a broker,  bank or other nominee and you wish to attend and vote in person at
the Annual  Meeting,  you must obtain from the record  holder a proxy  issued in
your  name.  Proxies  may be  solicited,  without  additional  compensation,  by
directors,  officers and other  regular  employees of the Company by  telephone,
email,  telefax or in person.  All  expenses  incurred in  connection  with this
solicitation will be borne by the Company.

                                  PROPOSAL NO.1
                              ELECTION OF DIRECTORS

     Effective as of the Annual Meeting,  the Company's By-laws will provide for
a staggered  term Board of Directors  consisting  of six (6)  members,  with the
classification  of the Board of Directors  into three classes  (Class 1, Class 2
and Class 3). The term of the two current  Class 3 directors  who are  nominated
for election as directors will expire at the Annual Meeting. One current Class 3
director,  Francis X. McDermott, will retire effective on the date of the Annual
Meeting and the number of Class 3 directors  authorized by the Company's By-laws
will be reduced to two (2),  effective  on the date of the Annual  Meeting.  The
Class 1 and Class 2 directors will remain in office until their terms expire, at
the  annual  meetings  of  stockholders  to be held in the years  2007 and 2006,
respectively.

     Accordingly,  at the 2005 Annual  Meeting,  two Class 3 directors are to be
elected to hold office until the annual  meeting of  stockholders  to be held in
2008 and until their  successors  have been  elected and  qualify.  The nominees
listed below with brief biographies are currently directors of the Company.  The
Board is not aware of any reason why any such  nominee may be unable to serve as
a director.  If either or both of such nominees are unable to serve,  the shares
represented  by all valid  proxies  will be voted for the election of such other
person or persons, as the case may be, as the Board may recommend.

Vote Required to Elect Directors

                                       3



     Under the rules of the  Securities  and  Exchange  Commission,  boxes and a
designated  blank space are  provided on the form of proxy for  stockholders  to
mark if they  wish to vote in favor  of or  withhold  authority  to vote for the
Company's nominees for director.

     Assuming a quorum has been reached,  a determination must be made as to the
results of the vote on each matter submitted for stockholder approval.

     A  Director  nominee  must  receive a  plurality  of the votes  cast at the
Meeting, which means that a broker non-vote or a vote withheld from a particular
nominee or nominees will not affect the outcome of the election of directors.

     All  shares  represented  by duly  executed  proxies  will be voted For the
election of the  nominees  named in this Proxy  Statement  as  directors  unless
authority to vote For any such nominee has been withheld.  If for any reason any
                  ---
such named  nominee  should not be available as a candidate  for  director,  the
proxies will be voted in accordance  with the  authority  conferred in the proxy
for  such  other  candidate  as  may be  nominated  by the  Company's  Board  of
Directors.

Recommendation of the Board of Directors Concerning the Election of Directors

     The Board of Directors of the Company recommends a vote For the election of
Hoyt Ammidon, Jr. and Dr. John Y. Televantos as Class 3 directors to hold office
until the  Annual  Meeting  of  Stockholders  for the Year 2008 and until  their
successors are elected and qualify.  Proxies  received by the Company will be so
voted unless such proxies withhold authority to vote for such nominees.

                        DIRECTORS AND EXECUTIVE OFFICERS

Nominees for Election as Director

     Hoyt Ammidon, Jr., age 67, has been a director of the Company since October
2001.  Mr.  Ammidon  served  as  a  managing   director  of  Berkshire   Capital
Corporation,  a private  company that provides  merger and  acquisition  related
services to the investment management and securities  industries,  from November
1994 to January 2004 and has been an advisory  director  thereof  since  January
2004.  Prior  thereto,   he  held  various   executive   positions  at  Cazenove
Incorporated,  a brokerage  firm, The Chase  Manhattan  Investment Bank and E.F.
Hutton & Co.,  Inc. Mr.  Ammidon is currently a Director of Tetra  Technologies,
Inc. a publicly traded company.

     Dr. John Y. Televantos,  age 52, joined Hercules in April 2002 as President
of the Aqualon  Division and Vice  President of Hercules.  He had been President
and Chief  Executive  Officer,  and prior to that Chief  Operating  Officer,  of
Foamex  International  during the period from June 1999 through  December  2001.
Prior to that, he was Vice  President,  Development  Businesses  and Research at
Lyondel Chemical Company since 1998. Dr. Televantos holds B.S. and Ph.D. degrees
in Chemical  Engineering from the University of London,  United Kingdom.  He was
appointed  as a director of the Company in  February  2005.  He also has been on
several  public and  private  company  Boards and is  affiliated  with other key
industry-related groups.

Directors

     In addition to Hoyt  Ammidon,  Jr. and John Y.  Televantos,  the  Company's
Board of Directors includes the following members:

                                       4


     Francis X.  McDermott,  age 71, has been a director  of the  Company  since
1992.  Mr.  McDermott is retired.  He was President of the  Specialty  Chemicals
Group of Merck & Co.,  Inc. from 1985 through 1992.  Mr.  McDermott  will retire
effective on the date of the Annual Meeting.

     Edward L.  McMillan,  age 59,  has been a  director  of the  Company  since
February   2003.   Mr.   McMillan   owns   and   manages   McMillan,    LLC,   a
transaction-consulting  firm that  provides  strategic  consulting  services and
facilitates   mergers  and/or   acquisitions   predominantly  to  the  food  and
agribusiness  industry  sectors.  From 1988 to 1996, he was President and CEO of
Purina Mills,  Inc., where he was involved for approximately 25 years in various
senior level positions in marketing,  strategic  planning,  and business segment
management.  Since June 2004,  he has been a director  of The RiceX  Company,  a
publicly traded company.

     Kenneth P. Mitchell, age 65, has been a director of the Company since 1993.
Mr. Mitchell is retired.  He was Chief Executive Officer of Oakite Products Inc.
from  1986 to  1993.  Since  February  1997,  he has  been a  director  of Tetra
Technologies,  Inc., a publicly traded  company.  

     Dino A. Rossi,  age 50, has been a director of the Company since 1997.  Mr.
Rossi has been  President  and Chief  Executive  Officer  of the  Company  since
October 1997, Chief Financial  Officer of the Company from April 1996 to January
2004 and  Treasurer  of the  Company  from June 1996 to June  2003.  He was Vice
President,  Finance and  Administration  of Norit  Americas Inc., a wholly-owned
subsidiary  of Norit N.V.,  a chemicals  company,  from January 1994 to February
1996, and Vice President,  Finance and Administration of Oakite Products Inc., a
specialty chemicals company, from 1987 to 1993.

     Dr. Elaine R. Wedral,  age 61, has been a director  since October 2003. Ms.
Wedral has held various executive level positions within Nestle over the last 20
years and is currently the President of Nestle's Research and Development,  Food
Service  Systems,  worldwide,  a position she has held since 1988. Ms.  Wedral's
career  has  concentrated  in  research  and  development  in the  areas of food
nutrition, development and commercialization of food and beverage products.

     Mr.  Ammidon is a Class 3 director whose current term expires in connection
with the 2005 Annual  Meeting and is a nominee for election for a term  expiring
at the 2008  annual  meeting.  Dr.  Televantos  was  appointed  to the  Board of
Director  as a Class 3  director  on  February  21,  2005 and is a  nominee  for
election as a Class 3 director for a term  expiring at the 2008 annual  meeting.
Mr. McDermott is retiring  effective on the date of the Annual Meeting.  Messrs.
Mitchell  and  McMillan  are Class 2 directors  whose  current  terms  expire in
connection  with the 2006 annual  meeting.  Mr. Rossi and Ms. Wedral are Class 1
Directors whose current terms expire in connection with the 2007 annual meeting.
There are no family  relationships  between any of the  directors  or  executive
officers of the Company.

                                       5



Executive Officers

     Set forth below is certain information concerning the executive officers of
the Company (other than Mr. Rossi, whose background is described above under the
caption  "Directors"),  which  officers  serve at the discretion of the Board of
Directors:

     Francis J.  Fitzpatrick,  CPA, age 44, has been the Chief Financial Officer
of the Company  since January 2004 and Treasurer of the Company since June 2003,
and was  Controller  of the Company from April 1997 to January 2004. He has been
an executive officer and Assistant  Secretary of the Company since June 1998. He
was  Director of  Financial  Operations/Controller  of  Alliance  Pharmaceutical
Corp., a pharmaceuticals company, from September 1989 through March 1997.

     David F.  Ludwig,  age 47, has been Vice  President  and  General  Manager,
Specialty Products since July 1999 and an executive officer of the Company since
June 2000. He was Vice President and General Manager of Scott Specialty Gases, a
manufacturer  of high  purity  gas  products  and  specialty  gas  blends,  from
September 1997 to June 1999. From 1986 to 1997 he held various international and
domestic sales and marketing positions with Engelhard Corporation's Pigments and
Additives Division.

     Robert T. Miniger,  age 51, has been Vice President,  Human Resources since
April 2001 and an executive  officer of the Company  since June 2003. He was the
Global  Director  of  Human  Resources  for the  Industrial  Coatings  Strategic
Business Unit of PPG  Industries  Inc. from 1995 to 2000.  From 1980 to 1995, he
held several human resource  positions within PPG including glass  manufacturing
and corporate office assignments.

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

Director Independence, Meetings and Compensation of Directors

     The Board of Directors has made an affirmative  determination  that each of
the Company's  directors,  other than Mr. Rossi, are independent as such term is
defined under the listing standards of the American Stock Exchange ("AMEX").

     During  fiscal 2004,  the Board of  Directors  met 5 times.  Each  director
attended  at least 75% of the  meetings  of the Board  held when he or she was a
director and of all meetings of those Committees of the Board on which he or she
served.

     The Company has adopted a policy to strongly encourage  directors to attend
each annual meeting of stockholders. Historically attendance has been excellent.
All  directors  were in  attendance  at the  Company's  2004  annual  meeting of
stockholders.

     For 2004, the Company paid each of its directors,  other than Mr. Rossi, an
annual fee of $12,000,  and $3,600 for each Board meeting  attended.  For fiscal
2004,  the Company also paid to each of its directors  serving on Committees the
following fees, plus expenses, for each Committee meeting attended:  Chairman of
the Audit Committee, $2,000; Chairman of all other Committees, $1,500; all other
Committee members, $1,000.

                                       6


     The Board of Directors has approved,  commencing in 2005,  that the Company
pay to each of the  directors,  other than Mr. Rossi,  an annual fee of $13,000,
and $4,000 for each Board meeting attended. Commencing in 2005, the Company will
also pay to each of its directors serving on Committees the following fees, plus
expenses, for each Committee meeting attended:  Chairman of the Audit Committee,
$2,500;  Chairman of the Compensation  Committee,  $2,000; Chairman of all other
Committees, $1,500; all other Committee members, $1,000.

     In February 2005, each director, except for Dr. Televantos,  also received,
in respect of service for the 2004 year, non-qualified stock options to purchase
9,922 shares of the Company's  Common Stock (at an exercise  price of $24.70 per
share), which numbers of shares were determined in accordance with the following
earnings-based  formula  consistent with the formula originally set forth in the
Company's  1994 Stock Option Plan for  Directors  referred to below under "Stock
Plans". The formula is as follows: each director was granted options 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 (i.e.,  after  adjustment  for the
December 2004  three-for-two  stock split effected by means of a stock dividend,
2,382)  multiplied  by the  quotient  obtained by dividing  (i) the net earnings
after  taxes of the  Company  for the year then  ended by (ii) the net  earnings
after  taxes of the Company for 1996,  rounded to the  nearest  whole  number of
shares.  Dr.  Televantos  was granted  options to purchase  2,000  shares of the
Company's  Common  Stock (at an  exercise  price of $22.87 per  share)  upon his
acceptance  of his  appointment  to the Board on February 21,  2005.  See "Stock
Plans" below.

     The  Company  does not pay any other  direct or  indirect  compensation  to
directors in their capacity as such.

Committees of the Board of Directors

     The  Company's  Board of Directors  has a standing  Audit  Committee  and a
standing  Compensation  Committee,  as  well  as an  Executive  Committee  and a
Directors  Planning  Committee.  The Board of Directors does not have a standing
Nominating Committee.  See the discussion below under "Nomination Process".  The
Board of Directors appoints the members of each Committee. In 2004, the Director
Planning and Compensation Committees each held two meetings. The Audit Committee
held five meetings in 2004. Mr. Rossi is an ex-officio, nonvoting, member of all
Committees.

     Audit Committee. The Audit Committee, in its capacity as a committee of the
Board of Directors,  is directly  responsible for appointing,  compensating  and
overseeing  the  work  of the  accounting  firm  retained  for the  purposes  of
preparing or issuing  audit reports or related work.  The Audit  Committee  also
assists the Board of Directors in fulfilling its oversight responsibilities with
respect to the Company's financial  reporting,  internal controls and procedures
and audit functions. Responsibilities,  activities and independence of the Audit
Committee  are  discussed  in  greater  detail  under the  section of this Proxy
Statement entitled "Audit Committee Report."

     The current members of the Audit Committee are Messrs.  Ammidon,  McMillan,
and Mitchell.

     The  Board of  Directors  of the  Company  has  determined  that the  Audit
Committee  Chairman,  Mr. Ammidon,  qualifies as an "audit  committee  financial
expert",  and that all members of the Audit Committee are  "independent",  under
the AMEX corporate  governance  rules. The Board of Directors of the Company has

                                       7


adopted a written  charter  for the Audit  Committee,  and a copy is attached as
Exhibit A to this Proxy Statement.

     Compensation Committee. The duties of the Compensation Committee are to (i)
recommend  to  the  Board  of  Directors  a  compensation   program,   including
incentives,  for the Chief  Executive  Officer and other senior  officers of the
Company,  for  approval by the full Board of  Directors,  (ii) prepare an Annual
Report of the  Compensation  Committee  for  inclusion  in the  Company's  Proxy
Statement as contemplated by the  requirements of Schedule 14A of the Securities
Exchange Act of 1934,  as amended,  (iii) propose to the full Board of Directors
the compensation of directors, a significant part of which compensation is to be
in the form of stock or stock options, and (iv) to administer the Company's 1999
Stock Plan.

     The current members of the  Compensation  Committee are Messrs.  McDermott,
McMillan, and Mitchell, each of whom are independent directors.

     See "Report of the Compensation Committee of the Board of Directors" below.

     Executive  Committee.  This  Committee  is  authorized  to exercise all the
powers of the Board of Directors in the interim  between  meetings of the Board,
subject to the limitations  imposed by Maryland law. The Executive  Committee is
also  responsible  for the  recruitment,  evaluation  and  selection of suitable
candidates for the position of Chief Executive Officer ("CEO"),  for approval by
the full Board, for the preparation,  together with the Compensation  Committee,
of objective  criteria for the evaluation of the performance of the CEO, and for
reviewing the CEO's plan of succession for officers of the Company.

     The  current  members  of the  Executive  Committee  are  Messrs.  Ammidon,
McDermott, McMillan and Mitchell, and Ms. Wedral.

     Directors Planning  Committee.  The duties of this Committee include to (i)
recruit and evaluate new  candidates  for possible  nomination by the full Board
for election as directors,  (ii) prepare and update an  orientation  program for
new directors, (iii) evaluate the performance of current directors in connection
with the  expiration  of their term in office,  and  provide  advice to the full
Board  in its  determination  of  whether  to  nominate  any such  director  for
reelection,  and (v) review and recommend  policies on director  retirement age.
This Committee does not act as a nominating  committee with respect to the Board
of Directors or the Committees thereof.

     The  current  members  of the  Directors  Planning  Committee  are  Messrs.
Ammidon, McDermott and Mitchell and Ms. Wedral.

Nomination Process

     The Board of Directors  of the Company does not have a standing  nominating
committee.  The full Board of Directors  performs the  functions of a nominating
committee.  The Board of  Directors  believes  that it does not need a  separate
nominating committee because the full Board is relatively small, has the time to
perform the  functions  of  selecting  Board  nominees  and in the past has as a
practical matter acted by consensus in regard to nominees.

     In  selecting  candidates  for  nomination  at the  annual  meeting  of the
Company's  stockholders,  the Board begins by determining  whether the incumbent
directors whose terms expire at the meeting desire and are qualified to continue

                                       8


their service on the Board. The Company believes that the continuing  service of
qualified  incumbents  promotes  stability and  continuity  of the Board,  which
provides  the  Company  the  benefit of the  familiarity  and  insight  into the
Company's affairs that its directors have accumulated during their tenure, while
contributing to the Board's ability to work as a collective  body.  Accordingly,
the  process  for  identifying  nominees  reflects  the  Company's  practice  of
re-nominating incumbent directors who continue to satisfy the Company's criteria
for  membership  on the Board,  whom the Board  believes  will  continue to make
contributions  to the Board and who  consent to  continue  their  service on the
Board.

     If there are Board  positions for which the Board will not be nominating an
incumbent,  the Board may solicit recommendations for nominees from persons whom
the  Board  believes  are  likely  to be  familiar  with  qualified  candidates,
including members of the Board and senior management.

     In considering an incumbent director whose term of office is to expire, the
Board of Directors  reviews the director's  overall  service during the person's
term, the number of meetings  attended,  level of  participation  and quality of
performance.

     The Board has recently  adopted  guidelines  for  identifying or evaluating
nominees for director, including incumbent directors and nominees recommended by
stockholders.  The Company's current policy is to require that a majority of the
Board of  Directors be  independent;  at least three of the  directors  have the
financial literacy necessary for service on the audit committee and at least one
of  these  directors  qualifies  as an  audit  committee  financial  expert.  In
addition,  directors may not serve on the boards of more than three other public
companies,  without the approval of the Board of Directors;  and directors  must
satisfy the Company's age limit policy for directors  which requires that that a
director  retire at the  conclusion  of his or her term or calendar  year during
wherein  he or she  reaches  the  age of 70.  The  guidelines  do not  otherwise
establish specific minimum  qualifications that must be met for nomination for a
position on the Board of  Directors,  but provide for the  selection of nominees
based on the nominees' skills, achievements and experience, and contemplate that
the following will be  considered,  among other things,  in selecting  nominees:
knowledge,  experience and skills in areas critical to understanding the Company
and its business, personal characteristics,  such as integrity and judgment, and
the candidate's commitment to the boards of other companies.

     The  Company  has in the past and may in the future  engage a  professional
search firm to locate nominees for the position of director of the Company.  The
selection of a nominee by the Board of Directors requires a majority vote of the
Company's independent directors.

     If the  procedures  outlined  below  are  followed  and the  Board  has not
determined to nominate an incumbent director,  then the Board will consider,  or
will  refer to its  Director  Planning  Committee  for  consideration,  director
candidates  recommended  by one or  more  substantial,  long-term  stockholders.
Generally,  stockholders  who  individually or as a group hold 5% or more of the
Company's  common  stock and have  continued  to do so for over one year will be
considered  substantial,   long-term  stockholders.  The  Board  generally  will
evaluate candidates recommended by stockholders in the same manner as candidates
recommended by other persons,  except that the Board may consider, as one of the
factors in its evaluation of a stockholder recommended candidate,  the number of
shares of capital  stock of the Company owned and the length of time such shares
have  been  owned by the  recommending  stockholder  or  stockholder  group.  To

                                       9


recommend a  candidate,  a  stockholder  must send the  candidate's  name,  age,
credentials   (including   principal  occupation  and  employment)  and  contact
information,  and the  candidate's  consent to be  considered  and to serve as a
director if elected,  to the Director Planning Committee Chairman in care of the
Company at its principal  executive  office address.  The stockholder  must also
provide  such   stockholder's   contact   information,   a  description  of  the
stockholder's  relationship with the candidate,  a statement as to the number of
shares of capital stock of the Company owned by the  stockholder  and the length
of time such shares have been owned,  a statement  as to the number of shares of
common stock owned by the proposed candidate and any other stockholders known by
such  stockholder to be supporting  such candidate as of the date of the notice,
and such other  information  regarding  the candidate as would be required to be
included in a proxy  statement filed pursuant to the rules of the Securities and
Exchange  Commission.

     In  order  to be  considered  for  the  next  upcoming  annual  meeting  of
stockholders,  stockholder  recommendations  for  nomination  by  the  Board  of
Directors  must be received at least 120  calendar  days before the  anniversary
date of the Company's proxy statement for the previous year's annual meeting.

     Each of the two Class 3 director nominees has been unanimously  approved by
the independent  directors on the Board.  Mr. Ammidon is an incumbent  director.
Dr.  Televantos was appointed to the Board of Directors in February 2005 and was
originally  recommended to the President of the Company by an independent  third
party  search  firm that was  retained  to assist  the  Company  in  identifying
potential director candidates.

Communicating With the Board of Directors

     Members of the Board and executive  officers are accessible by mail in care
of the Company.  Any matter intended for the Board, or for any individual member
or members of the Board,  should be directed to the  Company's  Chief  Financial
Officer with a request to forward the  communication to the intended  recipient.
In the alternative,  stockholders can direct  correspondence to the Board to the
attention of the Chief Executive Officer, or to the attention of the Chairman of
the Audit Committee, in care of the Company at the Company's principal executive
office  address.  The Company will  periodically  forward  such  communications,
unless of an obviously inappropriate nature, to the intended recipient.

Code of Business Conduct and Ethics

     The Company has adopted a Code of Ethics for Senior Financial Officers that
applies to the Company's chief executive  officer and senior financial  officer.
The Code  requires  that any  waiver  of any  provision  in the Code in favor of
members of the Board or in favor of executive  officers,  principal financial or
accounting officers, or the controller (or persons performing similar functions)
may be made only by the Board.  Any such waiver will be publicly  disclosed in a
Current Report on Form 8-K. A copy of the Code of Ethics was filed as an exhibit
to the Company's  Annual Report on Form 10-K for the fiscal year ended  December
31, 2003.

     The Company has also adopted a Business  Ethics  Policy  applicable  to its
employees  and a further  Policy  Statement  which  confirms  that,  as and when
appropriate,  the  Business  Ethics  Policy  and the Code of Ethics  for  Senior
Financial Officers are applicable to the Company's directors and officers. Under
applicable  AMEX  rules,  any  waiver  of these  applicable  requirements  for a
director or  executive  officer of the Company is to be publicly  disclosed in a

                                       10


Current Report on Form 8-K within five (5) days. This Business Ethics Policy and
further Policy Statement is available on the Company's website.


Compensation of Executive Officers

     The following table sets forth information  concerning the compensation for
services to the Company during each of the fiscal years ended December 31, 2004,
2003, and 2002, for Dino A. Rossi,  the Company's  President and Chief Executive
Officer, and each other executive officer of the Company whose annual salary and
bonus compensation with respect to the 2004 calendar year exceeded $100,000 (the
"Named Executive Officers"):




                                   SUMMARY COMPENSATION TABLE

                                                                               Long Term
                                                                               Compensation
                                            Annual Compensation                Awards
                                    ---------------------------------------    ------------ ------------
                                                                               Securities
                                                              Other Annual     Underlying   All Other
Name                       Year      Salary        Bonus      Compensation     Options      Compensation
--------------------------------------------------------------------------------------------------------
                                                                              
Dino A. Rossi              2004     $285,000     $206,336     $  6,075  (1)      33,000     $ 13,412  (4)
   President and CEO       2003     $268,923     $      0     $  5,074  (2)      30,000     $ 12,830  (5)
                           2002     $230,000     $229,500     $  3,370  (3)      30,000     $ 12,420  (6)

Francis J. Fitzpatrick     2004     $155,000     $ 62,711     $  7,431  (7)      27,000     $ 10,316 (10)
    Chief Financial        2003     $126,438     $      0     $  6,000  (8)      22,500     $ 10,118 (11)
    Officer                2002     $108,769     $ 54,172     $  6,000  (9)      18,000     $ 10,245 (12)

David F. Ludwig            2004     $175,615     $ 58,850     $  4,486 (13)      22,500     $ 11,828 (16)
    Vice President/GM      2003     $157,615     $ 50,000     $  4,332 (14)      18,000     $ 11,300 (17)
    Specialty Products     2002     $147,000     $ 63,798     $  4,184 (15)      13,500     $ 10,418 (18)

Robert T. Miniger          2004     $144,808     $ 39,785     $  6,231 (19)       9,000     $  9,562 (22)
    Vice President         2003     $128,942     $      0     $  6,000 (20)       7,500     $ 10,051 (23)
    Human Resources        2002     $117,307     $ 30,000     $  6,000 (21)       6,000     $ 10,159 (24)



----------

(1)  Includes $6,075 in automobile lease payments made by the Company.
(2)  Includes $5,074 in automobile lease payments made by the Company.
(3)  Includes $3,370 in automobile lease payments made by the Company.
(4)  Includes $1,584 in life/disability insurance premium payments and $4,550 in
     401(k)  and  $7,278 in profit  sharing  contributions  under the  Company's
     combined 401(k)/profit sharing plan.
(5)  Includes $1,530 in life/disability insurance premium payments and $4,200 in
     401(k) and $7,100 in profit  sharing  contributions  made by the Company to
     Mr.  Rossi's  account under the Company's  combined  401(k)/profit  sharing
     plan.
(6)  Includes 1,470 in life/disability  insurance premium payments and $3,850 in
     401(k) and $7,100 in profit  sharing  contributions  made by the Company to
     Mr.  Rossi's  account under the Company's  combined  401(k)/profit  sharing
     plan.
(7)  Includes $7,431 in automobile allowance payments by the Company.
(8)  Includes $6,000 in automobile allowance payments by the Company.
(9)  Includes $6,000 in automobile allowance payments by the Company.

                                       11


(10) Includes $4,550 in 401(k) and $5,766 in profit sharing  contributions  made
     by the Company to Mr.  Fitzpatrick's  account under the Company's  combined
     401(k)/profit sharing plan.
(11) Includes $4,200 in 401(k) and $5,918 in profit sharing  contributions  made
     by the Company to Mr.  Fitzpatrick's  account under the Company's  combined
     401(k)/profit sharing plan.
(12) Includes $3,850 in 401(k) and $6,395 in profit sharing  contributions  made
     by the Company to Mr.  Fitzpatrick's  account under the Company's  combined
     401(k)/profit sharing plan.
(13) Includes $4,486 in automobile lease payments made by the Company.
(14) Includes $4,332 in automobile lease payments made by the Company.
(15) Includes $4,184 in automobile lease payments made by the Company.
(16) Includes $4,550 in 401(k) and $7,278 in profit sharing  contributions  made
     by the  Company  to Mr.  Ludwig's  account  under  the  Company's  combined
     401(k)/profit sharing plan.
(17) Includes $4,200 in 401(k) and $7,100 in profit sharing  contributions  made
     by the  Company  to Mr.  Ludwig's  account  under  the  Company's  combined
     401(k)/profit sharing plan.
(18) Includes $3,850 in 401(k) and $6,568 in profit sharing  contributions  made
     by the  Company  to Mr.  Ludwig's  account  under  the  Company's  combined
     401(k)/profit sharing plan.
(19) Includes $6,231 in automobile allowance payments made by the Company.
(20) Includes $6,000 in automobile allowance payments made by the Company.
(21) Includes $6,000 in automobile allowance payments made by the Company.
(22) Includes $4,200 in 401(k) and $5,362 in profit sharing  contributions  made
     by the  Company  to Mr.  Miniger's  account  under the  Company's  combined
     401(k)/profit sharing plan.
(23) Includes $4,200 in 401(k) and $5,851 in profit sharing  contributions  made
     by the  Company  to Mr.  Miniger's  account  under the  Company's  combined
     401(k)/profit sharing plan.
(24) Includes $5,442 in profit sharing  contributions made by the Company to Mr.
     Miniger's account under the Company's combined  401(k)/profit  sharing plan
     and $4,717 in relocation expenses.

Incentive Compensation Plan

     At the end of each calendar year, the  Compensation  Committee of the Board
of  Directors  approves an  Incentive  Compensation  Program for the  succeeding
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 Compensation Committee has established such minimum level of NIBIT
for 2005 based upon the Company's  estimated  results of operations for the 2004
calendar year.

     Pursuant to the terms of the employment  agreement  between the Company and
Dino A. Rossi, its President and Chief Executive Officer,  Mr. Rossi is entitled
to annual discretionary bonuses of up to 100% of his base salary, based upon the
Company achieving operating and/or financial targets established by the Board of
Directors or an authorized  committee thereof. 50% of such bonus compensation is
determined  pursuant to the ICP. The  Compensation  Committee has  established a
minimum level of consolidated net income for the 2005 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.

                                       12


Stock Plans

     In 1999, the Company adopted the Balchem  Corporation  1999 Stock Plan (the
"1999 Stock Plan") for officers, directors,  directors emeritus and employees of
and  consultants  to the Company and its  subsidiaries.  The 1999 Stock Plan was
approved by the Company's stockholders.  Under the 1999 Stock Plan, the officers
and  other  employees  of the  Company  and any  present  or  future  parent  or
subsidiaries of the Company  (collectively,  "Related Companies") may be granted
options to purchase  Common  Stock of the Company  which  qualify as  "incentive
stock options"  ("ISO" or "ISOs") under Section  422(b) of the Internal  Revenue
Code of 1986,  as amended  (the  "Code");  directors,  officers,  employees  and
directors  emeritus of and consultants to the Company and Related  Companies may
be  granted  options  to  purchase  Common  Stock  which do not  qualify as ISOs
("non-Qualified Option" or "Non-Qualified  Options");  and directors,  officers,
employees,  and directors emeritus of and consultants to the Company and Related
Companies may be granted the right to make direct purchases of Common Stock from
the Company ("Purchases").

     In April 2003, the Board of Directors of the Company adopted  amendments to
the 1999 Stock Plan, reflected in an Amended and Restated 1999 Stock Plan, which
were  subsequently  approved  by the  stockholders  of the Company at the Annual
Meeting of  Stockholders on June 20, 2003, and which amended the 1999 Stock Plan
by: (i)  increasing  the number of shares of Common Stock  reserved for issuance
under the 1999 Stock Plan by 900,000 shares,  to a total of 1,800,000  shares of
Common Stock;  and (ii)  confirming  the right of the Company to grant awards of
Common Stock  ("Awards") in addition to the other Stock Rights  available  under
the 1999 Stock Plan, and providing  certain language  changes relating  thereto.
Both ISOs and  Non-Qualified  Options are  referred  to in this Proxy  Statement
individually as an "Option" and  collectively as "Options."  Options,  Purchases
and  Awards  are  referred  to in this Proxy  Statement  collectively  as "Stock
Rights."

     All share  amounts  described in this  section and  elsewhere in this Proxy
Statement  have been adjusted to give effect to the December 2004  three-for-two
stock split effected by means of a stock dividend.

     The 1999  Stock  Plan is  administered  by the  Board of  Directors  of the
Company or, if the Board of Directors so determines,  the Compensation Committee
thereof.  Subject  to the  terms of the  1999  Stock  Plan,  the  Board  (or the
Compensation  Committee, as the case may be), has the authority to determine the
persons to which Stock Rights shall be granted  (subject to certain  eligibility
requirements  for  grants of ISOs),  the  number of shares  covered by each such
grant,  the  exercise  or purchase  price per share,  the time or times at which
Stock  Rights shall be granted,  and other terms and  provisions  governing  the
Stock  Rights,  as well as the  restrictions,  if any,  applicable  to shares of
Common Stock issuable under Stock Rights. The exercise price per share specified
in the agreement  relating to each ISO granted under the 1999 Stock Plan may not
be less than the fair market value per share of Common Stock on the date of such
grant.  In  the  case  of an ISO  to be  granted  to an  employee  owning  stock
possessing  more than 10% of the total  combined  voting power of all classes of
stock of the Company or any Related  Company,  the price per share  specified in
the agreement  relating to such ISO may not be less than 110% of the fair market
value per share of Common Stock on the date of grant. In addition, each eligible
employee may be granted ISOs only to the extent that, in the aggregate under the
1999 Stock Plan and all  incentive  stock  option  plans of the  Company and any
Related Company,  such ISOs do not become exercisable for the first time by such

                                       13


employee  during any calendar  year in a manner which would entitle the employee
to purchase, pursuant to the exercise of ISOs (whether under the 1999 Stock Plan
or any other plan),  more than $100,000 in fair market value  (determined at the
time the ISOs were  granted) of Common  Stock in that year.  The 1999 Stock Plan
requires that each Option shall expire on the date specified by the Compensation
Committee  or the  Board,  but not more than ten  years  from its date of grant.
However,  in the case of any ISO granted to an  employee or officer  owning more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company or any Related Company, the ISO will expire no more than five years from
its date of grant.  In 2004,  options to purchase an aggregate of 224,998 shares
at a weighted  average exercise price of $18.90 per share were granted under the
1999 Stock Plan.  At December  31,  2004,  options to purchase an  aggregate  of
677,568  shares  were  outstanding  pursuant  to the 1999 Stock  Plan,  of which
options for an aggregate of 342,528 shares were then exercisable.

     The 1999 Stock Plan  replaced the  Company's  1994  Incentive  Stock Option
Plan, as amended (the "ISO Plan"),  and its non-qualified 1994 Stock Option Plan
for Directors,  as amended (the "Non-Qualified  Plan"), both of which expired on
June  24,  1999.  Unexercised  options  granted  under  the  ISO  Plan  and  the
Non-Qualified  Plan prior to such termination are exercisable in accordance with
their respective terms until their respective expiration dates.

     The ISO Plan  provided  for the  grant of ISO's to  officers  and other key
employees.  Such  options  are  exercisable  at a price equal to the fair market
value of the Common Stock on the date of grant.  An aggregate of 871,875  shares
of Common Stock had been reserved for issuance upon exercise of options  granted
under the ISO Plan.  At December 31,  2004,  options to purchase an aggregate of
105,528 shares were outstanding pursuant to the ISO Plan, all of which were then
exercisable.  Options  granted  under  the ISO Plan may be  exercised,  upon and
subject to the vesting  thereof,  in whole or part, at any time and from time to
time, between the first and tenth anniversary of the date of grant.

     The ISO Plan also  provided that if options  granted to an employee  permit
the employee to purchase shares having an aggregate market value  (determined at
the time of grant) in excess of  $100,000  in any year in which the option as it
applies to such  shares  first  becomes  exercisable,  then the  portion of such
options  in excess  of such  $100,000  limitation  will not be  incentive  stock
options and will not be entitled to the favorable income tax treatment  afforded
to grantees of incentive stock options.

     The  Non-Qualified  Plan  provided  for  the  grant  of  stock  options  to
directors,  directors  emeritus  and  other  employees  and  consultants  of the
Company,  which options do not qualify as incentive stock options,  with options
to non-employee  directors and directors emeritus granted in accordance with the
earnings based formula set forth in the Non-Qualified  Plan. The option exercise
price was the reported  closing  price per share of the Common Stock on the date
of grant.  Such options  expire no later than ten years after the date of grant,
subject to earlier termination in the event the grantee ceases to be a director,
director  emeritus  or employee as the case may be. An  aggregate  of  1,017,000
shares of Common Stock had been  reserved for issuance  upon exercise of options
granted under the Non-Qualified  Plan. At December 31, 2004, options to purchase
an aggregate of 6,750 shares were outstanding under the Non-Qualified  Plan, all
of which were then exercisable.

                                       14


                  OPTION GRANTS IN LAST FISCAL YEAR

     The  following  table sets forth  certain  information  concerning  options
granted to the Named Executive Officers during 2004:



                                            Individual Grants
                             ----------------------------------------------
                             Number of
                             Shares     % of Total
                             Under-     Options
                             lying      Granted To     Exercise                Grant Date
                             Options    Employees        Price   Expiration    Present
Name                         Granted     In 2004       ($/Share)    Date       Value (1)
-----------------------------------------------------------------------------------------
                                                            
Dino A. Rossi                33,000 (2)        18%     $ 19.73     9/16/14     $200,640
Francis J. Fitzpatrick       27,000 (3)        14%     $ 19.73     9/16/14     $164,160
David F. Ludwig              22,500 (4)        12%     $ 19.73     9/16/14     $136,800
Robert T. Miniger             9,000 (5)         5%     $ 19.73     9/16/14     $ 54,720



----------

(1)  The value of options  granted is  estimated  on the date of grant using the
     Black-Scholes  option-pricing  model with the  following  weighted  average
     assumptions used for grants:  dividend yield of 0.40%;  expected volatility
     of 27%; risk-free rate of return of 3.7% and expected life of five years.
(2)  Of such options,  options for 6,600 shares (20%),  13,200 shares (40%), and
     13,200   shares  (40%)  vest  on  September  16,  2005,   2006,   and  2007
     respectively.
(3)  Of such options,  options for 5,400 shares (20%),  10,800 shares (40%), and
     10,800   shares  (40%)  vest  on  September  16,  2005,   2006,   and  2007
     respectively.
(4)  Of such options,  options for 4,500 shares (20%),  9,000 shares (40%),  and
     9,000 (40%) vest on September 16, 2005, 2006, and 2007 respectively.
(5)  Of such options,  options for 1,800 shares (20%),  3,600 shares (40%),  and
     3,600 (40%) vest on September 16, 2005, 2006, and 2007 respectively.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

     The following table sets forth information with respect to option exercises
during  the year  ended  December  31,  2004 and the number and value of options
outstanding at December 31, 2004 held by the Named Executive Officers:

                                       15




                                                        Number of Shares
                                                        Underlying
                                                        Unexercised               Value of
                          Shares                        Options at                Unexercised
                          Acquired                      December 31,2004          In-the-Money
                          On              Value         Exercisable("E")/         Options at
Name                      Exercise       Realized       Unexcercisable("U")       December 31, 2004(1)
----                      --------       --------       -------------------       --------------------
                                                                            
Dino A. Rossi               41,100       $600,042      226,500(E)/69,000(U)     $2,162,845(E)/394,930(U)
Francis Fitzpatrick         13,875        172,678       40,050(E)/52,200(U)        411,002(E)/289,866(U)
David F. Ludwig             37,200        460,550       25,200(E)/42,300(U)        213,240(E)/232,155(U)
Robert T. Miniger                0              0       30,600(E)/17,400(U)        377,318(E)/ 96,622(U)



----------

(1)  Value as of December 31, 2004 is based upon the closing  price on that date
     as  reported on the  American  Stock  Exchange  minus the  exercise  price,
     multiplied by the number of shares underlying the option.

EQUITY COMPENSATION PLAN INFORMATION

     The  following  table  provides  information  with respect to shares of the
Company's Common Stock that may be issued pursuant to Stock Rights granted under
the 1999 Stock Plan as of December 31, 2004, and also includes  shares of Common
Stock issuable  pursuant to  outstanding  options  previously  granted under the
Company's  ISO and  Non-Qualified  Plans which  plans were  replaced by the 1999
Stock Plan in 1999. These plans are the Company's only equity compensation plans
approved by security holders,  and there are no equity  compensation  plans that
have not been  approved by security  holders.  It should be noted that shares of
the  Company's  Common  Stock may be  allocated  to, or  purchased on behalf of,
participants  in the Company's  401(k)/Profit  Sharing Plan  (described  below).
Consistent with Securities and Exchange Commission  regulations governing equity
compensation plans,  information  relating to shares issuable or purchased under
the Company's 401(k)/Profit Sharing Plan has been omitted from the table below.



-----------------------------------------------------------------------------------
                             (a)                  (b)                   (c)

                                                                  Number of shares
                                                                     remaining
                                                                   available for
                        Number of shares    Weighted-average      future issuance
                       to be issued upon   exercise price per      under equity
                          exercise of          share of          compensation plans
                          outstanding         outstanding        (excluding shares
                       options, warrants    options, warrants      reflected in
Plan Category             and rights          and rights            column (a))
-----------------------------------------------------------------------------------
                                                          
Equity
compensation plans         789,846               $13.96              722,185
approved by
security holders
-----------------------------------------------------------------------------------
Equity
compensation plans
not approved by
security holders              -                     -                   -
-----------------------------------------------------------------------------------
Total                      789,846               $13.96              722,185
-----------------------------------------------------------------------------------


401(k)/Profit Sharing Plan

                                       16


     Effective January 1, 1998, the Company terminated its defined  contribution
pension  plan and  amended its 401(k)  savings  plan.  Assets of the  terminated
defined  contribution  pension  plan were merged into an enhanced  401(k)/profit
sharing plan (the "New  Plan"),  intended to be a qualified  plan under  Section
401(a) of the  Internal  Revenue  Code of 1986,  as amended,  and subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Employees
of the Company are eligible to  participate in the New Plan once they attain age
18 and complete 60 days of  continuous  service  with the Company.  The New Plan
provides that participating  employees may make elective  contributions of up to
15% of pre-tax salary, subject to ERISA limitations, and for the Company to make
matching  contributions  on a  monthly  basis  equal  in  value  to 35% of  each
participant's  elective  contributions.  Such matching contributions are made in
shares of the Company's Common Stock. The profit-sharing portion of the New Plan
is  discretionary  and   non-contributory.   Profit  sharing  contributions  are
restricted  to  employees  who have  completed  1,000  hours of service  and are
employed on the last day of a plan year.  The Company  contributes  a minimum of
3.55% of an  eligible  participant's  taxable  compensation  (subject to certain
exclusions)  unless the  Company  announces a  different  rate.  Amounts in each
participant's  matching  contribution and profit sharing accounts are not vested
until  such  participant  has two years of  service,  at which time 100% of such
amounts vest. All amounts contributed to the New Plan are deposited into a trust
fund administered by the plan trustee. Participants have the right to direct how
their  accounts are invested  among a selection of mutual funds and/or  selected
trustee portfolios, and may transfer any portion of the matching contribution to
other  available   investment  choices.  Up  to  10%  of  participant   elective
contributions  and Company profit sharing  contributions  may be invested at the
participant's   election  in  the  Company's  Common  Stock.  On  retirement  or
termination of employment,  participants  are entitled to a distribution  of all
vested amounts and accrued income in their accounts.

     The Company provided for profit sharing  contributions  and matching 401(k)
savings  plan  contributions  of $301,000  and  $257,000 in 2004,  $307,000  and
$273,000 in 2003 and $241,000 and $320,000 in 2002, respectively.

Employment Agreement

     As of January 1, 2001,  the Company  entered into an  Employment  Agreement
with Dino A. Rossi (replacing his previous employment agreement), which provides
for Mr. Rossi to serve as the Company's  President and Chief Executive  Officer.
The Employment Agreement provides that following its initial term, which expired
on  December  31,  2001,  its term is deemed to be  automatically  extended  for
successive  one (1)  year  periods  ending  on each  successive  anniversary  of
December 31, 2001,  unless either party gives written  notice of  termination to
the other not less than  sixty  (60) days  prior to the end of the then  current
extension  period.  The  Employment  Agreement  provides  for a base  salary  of
$194,700,  which is  subject  to annual  increase  if  approved  by the Board of
Directors.  Mr. Rossi is also  eligible to receive a  discretionary  performance
bonus (as  determined by the Board of Directors)  based on a target figure of up
to 100% of annual  salary,  consistent  with  operating  and/or other  financial
targets  established by the Board of Directors,  for each fiscal year during the
term of the  Employment  Agreement.  Mr.  Rossi is  entitled to the use of a car
leased by the Company and to be reimbursed for a specified level of premiums for
life and disability  insurance.  The Employment  Agreement  provides that if the
Company  terminates his  employment  other than for cause (as defined) or in the
event  Mr.  Rossi  shall   terminate  his  employment   under  certain   limited
circumstances  effectively amounting to a constructive termination (as defined),

                                       17


he will be entitled to  severance  payments of 150% of his then  current  annual
salary,  and if such  termination by the Company occurs within two years after a
change of control event (as defined)  involving the Company he would be entitled
to severance payments equal to 200% of the sum of his then current annual salary
plus the annual  bonus earned by him for the fiscal year  immediately  preceding
the year in which the change of control  event  occurred.  If Mr.  Rossi were to
terminate his  employment  prior to the second  anniversary  of such a change of
control event,  he would be entitled to severance  payments equal to 100% of his
then  current  annual  salary.  In the event of any  termination  by the Company
entitling Mr. Rossi to severance payments,  his theretofore granted but unvested
options to purchase  Common Stock of the Company would  immediately  vest and be
exercisable in accordance with their terms. Mr. Rossi's entitlement to severance
payments  would be subject to  reduction  to the extent  necessary to avoid such
payments being considered an "excess parachute  payment" for purposes of Section
280G of the Internal Revenue Code.  During the period of Mr. Rossi's  employment
(or, in the case of a voluntary termination by Mr. Rossi or a termination of his
employment by the Company for cause,  the balance of the term of the  Employment
Agreement before giving effect to such termination) and for a period of one year
thereafter,   the   Employment   Agreement   imposes   on  Mr.   Rossi   certain
non-competition and non-solicitation  obligations  regarding the Company and its
customers and its employees.

Security Ownership of Certain Beneficial Owners and of Management

     The table  below  sets  forth as of March 18,  2005 the number of shares of
Common Stock  beneficially  owned by (i) each  director,  (ii) each of the Named
Executive  Officers  who is  currently  an  officer of the  Company,  (iii) each
beneficial owner of, or institutional  investment manager exercising  investment
discretion with respect to, 5% or more of the outstanding shares of Common Stock
known to the  Company  based  upon  filings  with the  Securities  and  Exchange
Commission,  and (iv) all directors  and executive  officers of the Company as a
group, and the percentage  ownership of the outstanding  Common Stock as of such
date held by each such holder and group:



Name and Address of                                  Amount and Nature of         Percent of
Beneficial Owner                                     Beneficial Ownership (1)      Class (2)
----------------                                     -----------------------       ---------
                                                                                
Ashford Capital Management, Inc.(3)                         819,005                    10.7%
Segall, Bryand & Hamill(4)                                  449,546                     5.9%
Royce & Associates, LLC (5)                                 392,550                     5.2%
Dalton, Greiner, Hartman, Maher & Co(6)                     391,800                     5.1%
Dino A. Rossi(7)*                                           173,043                     2.3%
David F. Ludwig (8)*                                         64,781                       **
Frank Fitzpatrick (9)*                                       43,824                       **
Francis X. McDermott (10)*                                   35,806                       **
Robert T. Miniger (11)*                                      32,081                       **
Kenneth P. Mitchell (12)*                                    29,811                       **
Edward L. McMillan (13)*                                     18,813                       **
Hoyt Ammidon, Jr. (14)*                                      16,893                       **
Elaine R. Wedral (15)                                        13,165                       **
John Y. Televantos (16)                                       2,000                       **
All  directors and executive officers as
a group  (9persons) (17)                                    430,216                     5.6%



                                       18


*    Such person's  address is c/o the Company,  P.O. Box 600, New Hampton,  New
     York 10958.
**   Indicates less than 1%.
(1)  Beneficial  ownership is  determined  in  accordance  with the rules of the
     Securities and Exchange Commission ("SEC") and generally includes voting or
     investment power with respect to securities.  In accordance with SEC rules,
     shares  which may be  acquired  upon  exercise of stock  options  which are
     currently  exercisable or which become exercisable within 60 days after the
     date of the information in the table are deemed to be beneficially owned by
     the  optionee.  Except as indicated  by footnote,  and subject to community
     property laws where applicable,  to the Company's knowledge, the persons or
     entities  named in the table  above are  believed  to have sole  voting and
     investment  power  with  respect  to all  shares of Common  Stock  shown as
     beneficially owned by them.
(2)  For purposes of calculating  the  percentage of outstanding  shares held by
     each  person  named  above,  any shares  which such person has the right to
     acquire  within 60 days after the date of the  information in the table are
     deemed  to be  outstanding,  but not for the  purpose  of  calculating  the
     percentage ownership of any other person.
(3)  Based upon information as of December 31, 2004 provided in a Schedule 13G/A
     for such entity filed with the SEC.  Such  entity's  address as reported in
     its Schedule 13G/A is P.O. Box 4172, Wilmington, DE 19807.
(4)  Based upon  information  as of December 31, 2004 provided in a Schedule 13G
     for such entity filed with the SEC.  Such  entity's  address as reported in
     its Schedule 13G is 10 S.Wacker Dr., Chicago, IL 60606.
(5)  Based upon  information as of January 21, 2005 Schedule 13G for such entity
     filed with the SEC. Such  entity's  address as reported in its Schedule 13G
     is 1414 Avenue of Americas, New York, NY 10019.
(6)  Based upon  information  as of February 10, 2005 provided in a Schedule 13G
     for such entity filed with the SEC.  Such  entity's  address as reported in
     its Schedule 13G/A is 565 Fifth Ave. Suite 2101, New York, NY 10017.
(7)  Includes  options to purchase  157,500  shares,  4,893  shares held in such
     person's Company 401(k)/profit sharing plan account, and 10,650 shares held
     individually.
(8)  Includes  options to  purchase  25,200  shares,  2,381  shares held in such
     person's Company 401(k)/profit sharing plan account, and 37,200 shares held
     individually.
(9)  Includes  options to  purchase  40,050  shares,  3,774  shares held in such
     person's Company 401(k)/profit sharing plan account.
(10) Includes   options  to  purchase   9,922  shares  and  25,884  shares  held
     individually.
(11) Includes  options  to  purchase  3,396  shares  1,481  shares  held in such
     person's Company 401(k)/profit sharing plan account, and 27,204 shares held
     individually.
(12) Includes   options  to  purchase   26,061  shares  and  3,750  shared  held
     individually.
(13) Includes   options  to   purchase   18,393   shares  and  420  shared  held
     individually.
(14) Includes options to purchase 16,893 shares.
(15) Includes options to purchase 13,165 shares.
(16) Includes options to purchase 2,000 shares.
(17) Includes options to purchase 312,580 shares,  12,528 shares in the accounts
     of four executive officers under the Company's  401(k)/profit sharing plan,
     and 105,108 shares held by individuals.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's  directors and executive  officers and holders of more than 10% of
the Company's  Common Stock to file with the Securities and Exchange  Commission
initial reports of ownership and reports of any subsequent  changes in ownership
of Common Stock and other equity  securities of the Company.  Specific due dates
for these reports have been  established and the Company is required to disclose
any  failure  to file by  these  dates.  Based  upon a  review  of such  reports
furnished  to the  Company,  or written  representations  that no  reports  were
required,  the Company  believes that during the fiscal year ended  December 31,
2004,  its officers and  directors and holders of more than 10% of the Company's

                                       19


Common Stock complied with Section 16(a) filing date  requirements  with respect
to transactions during such year.

Report of the Compensation Committee of the Board of Directors

     This Report of the Compensation  Committee shall not be deemed incorporated
by  reference by any general  statement  incorporating  by reference  this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or under
the Securities  Exchange Act of 1934, as amended,  except to the extent that the
Company specifically  incorporates this information by reference,  and shall not
otherwise be deemed filed under such Acts.

     The  Compensation  Committee  is currently  comprised  of three  directors,
Francis X.  McDermott,  Edward L.  McMillan and Kenneth P.  Mitchell.  It is the
responsibility  of the  Compensation  Committee to recommend an effective  total
compensation  program for the Company's Chief Executive Officer and other senior
officers based on the Company's  performance and consistent  with  stockholders'
interests.  The Committee's  duties entail reviewing the Company's  compensation
practices and recommending compensation for such executives.

     Compensation Philosophy

     The Company's overall compensation philosophy has been to offer competitive
salaries,  cash incentives,  stock options and benefit plans consistent with the
Company's financial  performance.  Rewarding key employees who contribute to the
continued  success of the Company plus equity  participation are key elements of
the Company's  compensation policy. The Company's executive  compensation policy
is to attract and retain key  executives  necessary for the Company's  short and
long-term success by establishing a direct link between  executive  compensation
and the performance of the Company, by rewarding  individual  initiative and the
achievement of annual corporate goals through salary and cash bonus awards,  and
by  providing  equity  awards to allow  executives  to  participate  in enhanced
stockholder value.

     In awarding  salary  increases  and  bonuses,  the  Compensation  Committee
relates various  elements of corporate  performance to the elements of executive
compensation.  The Compensation  Committee  considered  whether the compensation
package as a whole  adequately  compensated  the  applicable  executive  for the
Company's  performance during the past year and the executive's  contribution to
such performance.

     Base Salary

     Base salary  represents the fixed  component of the executive  compensation
program.  The Company's  philosophy  regarding  base  salaries is  conservative,
maintaining salaries at reasonably  competitive industry levels.  Determinations
of base salary levels are  established  based on an annual review of marketplace
competitiveness and on the Company's existing compensation  structure.  Periodic
increases in base salary  relate to  individual  contributions  to the Company's
overall  performance  and industry  competitive  pay  practices.  In determining
appropriate levels of base salary, the Compensation  Committee relied in part on
industry compensation surveys.



                                       20

     Bonus

     Bonuses  represent  the variable  component of the  executive  compensation
program that is tied to individual  achievement  and the Company's  performance.
The Company's policy is to base a meaningful  portion of its senior  executives'
cash  compensation  on bonus.  In  determining  bonuses,  the Company  considers
factors such as the individual's  contribution to the Company's  performance and
the relative performance of the Company during the year.

     Stock Options

     The  Compensation  Committee  believes  that  one  important  goal  of  the
executive compensation program should be to provide executives and key employees
-- who have  significant  responsibility  for the management,  growth and future
success of the Company -- with an opportunity  to increase  their  ownership and
potentially gain  financially  from Company stock price  increases.  The goal of
this  approach  is  that  the  interests  of the  stockholders,  executives  and
employees will be closely aligned.  Therefore,  executive officers and other key
employees  of the Company  have been  granted  stock  options from time to time,
giving  them a right to  purchase  shares  of the  Company's  Common  Stock at a
specified price in the future. Grants of options have been based primarily on an
employee's potential contribution to the Company's growth and financial results.
Options  generally  have been  granted  at the  prevailing  market  value of the
Company's  Common Stock and  accordingly  will only have value if the  Company's
stock price increases.  With limited exceptions,  grants of options to employees
have provided for vesting over three years and the  individual  must be employed
by the Company for such options to vest.

     2004 Compensation to Chief Executive Officer

     In reviewing and  recommending Mr. Rossi's salary and bonus and in awarding
him  stock  options  for  fiscal  year  2004 and for his  future  services,  the
Compensation  Committee  followed  its  compensation  philosophy.   Mr.  Rossi's
employment  agreement  was  amended  and  restated  effective  January  1,  2001
following  the  expiration of his previous  employment  agreement.  Mr.  Rossi's
annual  salary was  $285,000 for 2004.  For the 2004 fiscal year,  Mr. Rossi was
paid a cash bonus of 206,336.  In 2004, Mr. Rossi was granted  options under the
Company's  1999 Stock Plan to purchase  33,000  shares of the  Company's  Common
Stock at an exercise  price of $19.73,  the fair  market  value per share on the
date of grant.  The options will be exercisable in  installments of 20%, 40% and
40% over three years on the first three  anniversaries of the date of grant. The
Compensation  Committee  recommended  and the Board of  Directors  approved  Mr.
Rossi's employment agreement and the above-described  option grant to secure the
long-term services of the Company's Chief Executive Officer and to further align
the Chief Executive Officer's compensation with stockholder interests.


                                          Francis X. McDermott
                                          Edward L. McMillan
                                          Kenneth P. Mitchell

                                          being the members of the Compensation
                                          Committee of the Board of Directors


Compensation Committee Interlocks and Insider Participation

                                       21


     Messrs. McDermott, McMillan and Mitchell, each of whom is a director of the
Company,  served as the members of the Compensation  Committee during 2004. None
of Mr.  McDermott,  Mr.  McMillan  or Mr.  Mitchell  (i)  was,  during  the last
completed fiscal year, an officer or employee of the Company,  (ii) was formerly
an officer of the Company or (iii) had any relationship  requiring disclosure by
the Company under Item 404 of Regulation  S-K under the  Securities Act of 1933,
as amended, which has not been disclosed.

                             STOCK PERFORMANCE GRAPH

     The graph below sets forth the cumulative total  stockholder  return on the
Company's  Common  Stock  (referred to in the table as "BCP") for the five years
ended  December 31, 2004, the overall stock market return during such period for
shares comprising the Russell 2000(R) Index (which the Company believes includes
companies with market  capitalization  similar to that of the Company),  and the
overall  stock  market  return  during  such  period for shares  comprising  the
Standard & Poor's  500 Food  Group  Index,  in each case  assuming a  comparable
initial investment of $100 on December 31, 1999 and the subsequent  reinvestment
of dividends.  The Russell  2000(R) Index measures the performance of the shares
of the 2000 smallest  companies  included in the Russell 3000(R) Index. In light
of the Company's industry segments,  the Company does not believe that published
industry-specific indices are necessarily representative of stocks comparable to
the Company.  Nevertheless, the Company considers the Standard & Poor's 500 Food
Group Index to be  potentially  useful as a peer group index with respect to the
Company in light of the Company's  encapsulated / nutritional  products segment.
The  performance  of the  Company's  Common  Stock  shown on the graph  below is
historical only and not indicative of future performance.

     The graph  below  shall  not be deemed  incorporated  by  reference  in any
general  statement  incorporating  by reference  this Proxy  Statement  into any
filing under the  Securities  Act of 1933, as amended,  or under the  Securities
Exchange Act of 1934, as amended,  except to the extent the Company specifically
incorporates  this  information by reference,  and shall not otherwise be deemed
filed under such Acts.

                              Russell          S&P Food
                 BCP       2000(R) Index     Group Index
               -----------------------------------------
12/31/99       $100.00           $100.00         $100.00
12/31/00       $165.63            $96.98         $126.61
12/31/01       $266.88            $99.39         $129.16
12/31/02       $303.75            $79.03         $132.84
12/31/03       $285.00           $116.38         $115.58
12/31/04       $433.63           $137.71         $134.28



               Stock Price       Value           Value
               -----------------------------------------
12/31/99             $5.33     $1,953.31        185.1459
12/31/00             $8.83     $1,894.30        234.4207
12/31/01            $14.23     $1,941.39        239.1297
12/31/02            $16.20     $1,543.73        245.9495
12/31/03            $15.20     $2,273.20        213.9892
12/31/04            $23.13     $2,689.86        248.6118

                                       22



                                  PROPOSAL NO.2

                            APPROVAL OF AMENDMENT TO
              THE CORPORATION'S RESTATED ARTICLES OF INCORPORATION

     On February 10, 2005, the Board of Directors adopted a resolution to amend,
and is  recommending  that the  shareholders  approve an amendment  to,  article
FOURTH of the Company's  Restated  Articles of  Incorporation  (the "Charter" or
"Articles  of  Incorporation")  to increase the total number of shares of Common
Stock that the  Company is  authorized  to issue from ten  million  (10,000,000)
shares to twenty-five  million  (25,000,000) and to increase the total number of
shares of the  Company's  capital  stock from  twelve  million  (12,000,000)  to
twenty-seven  million  (27,000,000)  shares  to  reflect  the  increase  in  the
authorized  Common Stock (the  "Amendment").  The Company also is  authorized to
issue 2,000,000  shares of Preferred  Stock, par value $25.00 per share, and the
proposed amendment will not affect this authorization.

     If the  amendment  to the  Articles  of  Incorporation  is  approved by the
stockholders,  the Company will  promptly  file  Articles of Amendment  with the
Maryland  Secretary of State reflecting the increase in authorized  shares.  The
amendment  will  become  effective  on the date the  Articles  of  Amendment  is
accepted for filing by the Maryland Secretary of State.

Amendment

     The Amendment to the Company's  Articles of  Incorporation  approved by the
Board of Directors on February 10, 2005 and to be voted on at the Meeting is set
forth on Exhibit B hereto.

     The Company's Articles of Incorporation  currently  authorizes the issuance
of twelve million (12,000,000) shares of capital stock. Ten million (10,000,000)
shares of which are  designated as Common  Stock,  par value $.06 2/3 per share,
and two million  (2,000,000)  shares of which have been  designated as Preferred
Stock, par value of $25.00 per share.

     As of  March  18,  2005,  there  were  7,680,399  shares  of  Common  Stock
outstanding.  Balchem  has never  issued  any  shares  of  Preferred  Stock.  In
addition,  approximately 1,720,000 shares of Common Stock have been reserved for
future  issuance  under the 1999 Stock  Plan and the stock  option  plans  which
preceded  the 1999 Stock Plan  whether  by  outstanding  options or by reason of
future grants or awards.

     The Company has also  historically  made matching  contributions  under its
401(k)/Profit Sharing Plan in shares of Common Stock,  corresponding in value to
up to 35% of employee elective contributions.  Also, plan participants may elect
to invest up to 10% of their elective  contributions  in shares of Common Stock.
For 2004,  an  aggregate  of 14,060  shares of Common  Stock were  issued by the
Company to be held by the trustee under the 401(k)/Profit  Sharing Plan for plan
participant accounts.

     The Board of Directors  believes that  increasing  the number of authorized
shares of capital  stock will provide the Company with  greater  flexibility  to
pursue actions that enhance  stockholder  value.  After  adjusting for shares of
capital stock reserved for issuance  under the 1999 Stock Plan, its  predecessor
stock option plans and shares  authorized for issuance  under the  401(K)/Profit
Sharing Plan, the Company currently has fewer than 600,000  additional shares of

                                       23



capital  stock  available for issuance.  The Board of Directors  considers  this
amount to be  insufficient  for the Company to meet various needs that may arise
from time to time in the  future.  If approved by  stockholders,  the  Amendment
would  provide  sufficient  shares,  without  additional  expense or delay,  for
investments or acquisitions by the Company, stock sales, grants, sales or awards
under future management incentive and employee benefit plans and programs, stock
splits or stock dividends and other general corporate purposes.

     As of the date of this  Proxy  Statement,  the Board of  Directors  has not
taken any action which would use the proposed  additional  authorized shares for
any such purposes.

     Each  additional  share of our Common Stock  authorized by the Amendment to
the Company's Articles of Incorporation will have the same rights and privileges
as each share of Common Stock currently  authorized or outstanding.  The holders
of Common Stock have no preemptive rights. Authorized but unissued shares of our
Common  Stock  may be  issued  at such  times,  for such  purposes  and for such
considera7tion as the Board of Directors may determine to be appropriate without
further  authority  from our  stockholders,  except  as  otherwise  required  by
applicable law or stock exchange policies.

     The approval of the Amendment  will result in a greater number of shares of
Common Stock available for issuance.  Stockholders could therefore  experience a
reduction in their  stockholders'  percentage  interest with respect to earnings
per share,  voting,  liquidation  value and/or book or market value per share if
the  additional  authorized  shares are issued other than through a proportional
issuance such as a stock split or stock dividend.

Required Vote for Approval of Amendment to Articles of Incorporation

     Under  the  rules of the  Securities  and  Exchange  Commission,  boxes are
provided on the form of proxy for  stockholders  to mark if they wish to vote in
favor of,  against or withhold  authority  to vote for the proposal to amend the
Company's Articles of Incorporation.

     Assuming a quorum has been reached,  a determination must be made as to the
results of the vote on each matter submitted for stockholder approval.

     The  affirmative  vote of the  holders  of  two-thirds  of the  issued  and
outstanding  shares of Common Stock is required to approve the  Amendment to the
Company's Articles of Incorporation. Since the affirmative vote of two-thirds of
the issued and  outstanding  shares of Common  Stock is  required to approve the
Amendment,  as opposed to a specified  percentage  of the shares  present at the
Annual Meeting, the failure to vote in person or by proxy, or an abstention from
voting,  will  have  the  same  effect  as a  vote  against  the  Amendment.  If
stockholders  do not approve the  Amendment,  then the Charter will  continue in
effect without amendment.

     All  shares  represented  by duly  executed  proxies  will be voted For the
proposed Amendment to the Company's  Articles of Incorporation  unless authority
to vote For any such  proposal has been  withheld or a vote Against is specified
on such proxy.

Recommendation  of the  Board  of  Directors  Concerning  the  Amendment  to the
Articles of Incorporation

                                       24


     The Board of Directors has  unanimously  approved the proposal to amend the
Articles of Incorporation to increase the authorized  number of shares of Common
Stock, and unanimously  recommends that the Company's  stockholders vote For the
                                                                         ---
approval of the Amendment.

                         INDEPENDENT PUBLIC ACCOUNTANTS

Audit Committee Report

     The  following  report  of the  Audit  Committee  shall not be deemed to be
soliciting  material or to be filed with the Securities and Exchange  Commission
or incorporated by reference by any general statement incorporating by reference
this  Proxy  Statement  into any filing  under the  Securities  Act of 1933,  as
amended, or under the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically requests that the information be treated as
soliciting  material  or  that  the  Company   specifically   incorporates  this
information  by  reference,  and shall not  otherwise be deemed filed under such
Acts.

     The Board of Directors has appointed an Audit Committee consisting of three
directors.  Each member of the Audit  Committee is  independent as defined under
the American  Stock  Exchange's  listing  standards.  The Board of Directors has
adopted   a   written   charter   with   respect   to  the   Audit   Committee's
responsibilities.  The Audit  Committee  oversees  the  Company's  internal  and
independent  auditors and assists the Board of Directors in  overseeing  matters
relating to the Company's financial reporting process.

     In  fulfilling  its  responsibilities,  the Audit  Committee  reviewed  and
discussed the audited  financial  statements  for the fiscal year ended December
31, 2004 with  management and discussed the audit with  McGladrey & Pullen,  LLP
("M&P"), the Company's independent auditors.  The Audit Committee also discussed
with the Company's  independent auditors the matters required to be discussed by
Statement on Auditing Standards No. 61  (Communications  with Audit Committees),
as amended.  This included a discussion of the independent auditors' judgment as
to  the  quality,  not  just  the  acceptability,  of the  Company's  accounting
principles,  and such other matters that generally  accepted auditing  standards
require to be  discussed  with the Audit  Committee.  The Audit  Committee  also
received from M&P the written  disclosures  and letter  required by Independence
Standards Board Standard No. 1 (Independence  Discussion with Audit  Committees)
and the Audit Committee discussed with M&P and management M&P's independence.

     Management is responsible for maintaining  internal controls over financial
reporting and assessing the  effectiveness  of internal  control over  financial
reporting. The independent registered public accounting firm's responsibility is
to  express  an  opinion  on  management's  assessment  and  an  opinion  on the
effectiveness of the Company's  internal control over financial  reporting based
on  their  audit.  In  fulfilling  its  oversight  responsibilities,  the  Audit
Committee  reviewed the Company's  assessment  process of internal controls over
financial   reporting.   The  Audit  Committee  reviewed  with  the  independent
registered  public  accounting  firm any  deficiencies  that had been identified
during their engagement.

     The Audit  Committee  also  considered  whether the  provision of non-audit
services  by M&P to the  Company  is  compatible  with M&P's  independence.  M&P
advised  the  Audit  Committee  that  M&P was and  continues  to be  independent
accountants with respect to the Company.

                                       25


     Based upon the reviews  and  considerations  referred  to above,  the Audit
Committee  recommended  to the Board of Directors  (and the Board has  approved)
that the audited  financial  statements be included in the Annual Report on Form
10-K for the year ended  December  31, 2004 for filing with the  Securities  and
Exchange Commission.

     The Audit Committee has also recommended,  subject to approval by the Board
of Directors,  the selection of M&P as the  Company's  independent  auditors for
2005.

                                             Hoyt Ammidon, Jr.
                                             Edward L. McMillan
                                             Kenneth P. Mitchell

                                             being the members of the Audit
                                             Committee of the Board of Directors

Selection of Auditors for Year 2004 and 2005

     On September 30, 2004, the Audit Committee of the Board of Directors of the
Company engaged  McGladrey & Pullen LLP ("M&P") as the Company's new Independent
Registered  Public Accounting Firm for the fiscal year ending December 31, 2004.
The engagement was effective immediately.

     The  Board of  Directors  has  selected  M&P to  serve  as the  independent
auditors of the Company for the year ending  December 31, 2005.  Representatives
of such firm are expected to be present at the Annual Meeting. They will have an
opportunity to make a statement to the  stockholders if they desire to do so and
are expected to be available to respond to stockholder  questions  raised orally
at the Meeting.

Resignation of KPMG as Auditors of the Company

     KPMG  LLP  ("KPMG")  resigned  as  the  Company's  principal   accountants,
effective  August 18, 2004.  KPMG's audit reports on the Company's  consolidated
financial  statements as of and for the fiscal years ended December 31, 2002 and
2003 did not contain an adverse opinion or a disclaimer of opinion, and were not
qualified or modified as to uncertainty, audit scope, or accounting principles.

     During the Company's fiscal years ended December 31, 2002 and 2003, and the
subsequent interim period from January 1, 2004 through August 18, 2004, the date
of KPMG's  resignation,  (i) there were no disagreements with KPMG on any matter
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing  scope or  procedure,  which  disagreements,  if not resolved to KPMG's
satisfaction,  would have caused KPMG to make reference to the subject matter of
the  disagreements  in  connection  with  its  report,  and (ii)  there  were no
"reportable  events" as such term is defined in Item  304(a)(1)(v) of Regulation
S-K.

                                       26


Independent Auditor Fees

     During 2004, the Company retained M&P to audit the  consolidated  financial
statements  for 2004.  In  addition,  the Company  also  retained M&P to provide
services relating to Management's Assessment of Internal Controls as required by
Section 404 of the  Sarbanes-Oxley  Act, as well as with the  preparation of the
Company's tax returns and other audit-related and tax-related services. KPMG LLP
also provided audit and tax related services for 2004. The following table shows
the  fees  paid  or  accrued  by the  Company  to M&P for the  audit  and  other
professional  services provided by M&P and KPMG LLP for 2004 and by KPMG LLP for
2003:

                               2004              2003
                               ----              ----
Audit fees (1)               $226,800 (4)      $133,920

Audit-related fees (2)         12,500 (5)        19,500

Tax fees (3)                   72,000 (6)        66,033
                             --------------------------
Total fees                   $311,300          $219,453
                             ==========================

(1)  Fees relating to audit of the annual consolidated  financial statements and
     quarterly reviews.

(2)  Fees relating to employee benefit plan audit.

(3)  Fees for tax compliance and advisory services.

(4)  Of these fees, $34,800 was paid to KPMG LLP and the remainder to M&P.

(5)  These fees were paid to M&P.

(6)  Of these fees, $46,000 was paid to KPMG LLP and the remainder to M&P.

Pre-Approval of Audit and Non-Audit Services

     All  auditing  and  non-audit  services  provided  to  the  Company  by the
independent  accountants  are  pre-approved by the Audit Committee or in certain
instances by one or more of its members pursuant to delegated authority.  At the
beginning of each year, the Audit Committee reviews and approves all known audit
and  non-audit  services and fees to be provided by and paid to the  independent
accountants.  During the year, specific audit and non-audit services or fees not
previously  approved by the Audit Committee are approved in advance by the Audit
Committee  or in certain  instances  by one or more of its  members  pursuant to
delegated  authority.  In addition,  during the year the Chief Financial Officer
and the Audit Committee  monitor actual fees to the independent  accountants for
audit and non-audit services.

OTHER MATTERS

Quorum Required

                                       27


     Maryland law and the Company's By-laws require the presence of a quorum for
the  Meeting,  defined  as the  presence  in person or by proxy of  stockholders
entitled to cast a majority of all the votes entitled to be cast at the Meeting.
Abstentions  and broker  non-votes  will be treated as "present" for purposes of
determining whether a quorum has been reached.

     Broker non-votes are shares held by brokers or nominees that are present in
person or represented by proxy, but are not voted on a particular matter because
instructions  have not been received from the beneficial owner and the broker or
nominee does not have discretion to vote without such instructions.  Brokers and
nominees  generally do not have such discretion when the matter is deemed by the
American Stock Exchange to be "non-routine."

     However,  the American Stock Exchange  generally  considers the election of
directors and an amendment to a listed  company's  articles of  incorporation to
increase the number of authorized shares of Common Stock to be "routine" matters
with  respect to which  brokers and  nominees  could vote shares held by them in
street-name  in their  discretion  absent  any  instructions  received  from the
beneficial  owners of such shares. No assurance can be made,  however,  that the
American  Stock  Exchange  would deem Proposal No. 2 to be "routine" and thereby
permit brokers and nominees to vote in their discretion  absent any instructions
received from the beneficial owners of such shares.

Voting Securities

     Stockholders  of  record  on April 8,  2005  (the  "Record  Date")  will be
eligible to vote at the Meeting. The voting securities of the Company consist of
its Common Stock, $.06-2/3 par value, of which 7,697,312 shares were outstanding
on the Record Date.  Each share of Common Stock  outstanding  on the Record Date
will be entitled to one vote.

Stockholder Proposals for 2006 Annual Meeting

     From  time to time,  the  stockholders  of the  Company  may wish to submit
proposals  which  they  believe  should be voted upon by the  stockholders.  The
Securities  and Exchange  Commission  has adopted  regulations  which govern the
inclusion of such proposals in the Company's annual meeting proxy materials. All
such  proposals  must be submitted to the Secretary of the Company no later than
December 31, 2005 in order to be considered  for inclusion in the Company's year
2006 proxy materials.

Matters Not Determined at the Time of Solicitation

     The Board of  Directors  is not aware of any  matters  to come  before  the
Meeting  other than as  described  above.  If any matter other than as described
above  should come before the  Meeting,  then the persons  named in the enclosed
form of proxy will have discretionary authority to vote all proxies with respect
thereto in accordance with their judgment.


New Hampton, New York

----------


     The Annual Report to  Stockholders of the Company for the fiscal year ended
December 31, 2004 is being mailed to  stockholders.  The Annual  Report does not
form part of these proxy materials for the solicitation of proxies.

                                       28


                                                                       Exhibit A
Balchem Corporation

Amended and Restated Charter of the Audit Committee of the Board of Directors

I.   Audit Committee Purpose

     The Audit  Committee  is  appointed by the Board of Directors to assist the
Board in  fulfilling  its  oversight  responsibilities.  The  Audit  Committee's
primary duties and responsibilities are to:

o    Monitor the  integrity of the  Company's  financial  reporting  process and
     systems of  internal  controls  regarding  finance,  accounting,  and legal
     compliance.

o    Monitor the independence,  qualifications  and performance of the Company's
     independent auditors.

o    Provide  an  avenue  of  communication  among  the  independent   auditors,
     management, and the Board of Directors.

     The  Audit  Committee  has  the  authority  to  conduct  any  investigation
appropriate to fulfilling  its  responsibilities.  The Audit  Committee may meet
with the  Company's  investment  bankers or  financial  analysts  who follow the
Company.

     While the Audit Committee has the  responsibilities and powers set forth in
this  Charter,  it is not the duty of the  Audit  Committee  to plan or  conduct
audits or to determine that the Company's financial  statements are complete and
accurate and are in accordance with generally  accepted  accounting  principles.
This is the responsibility of management and the independent auditors. Nor is it
the  duty  of  the  Audit  Committee  to  conduct  investigations  or to  assure
compliance  with  laws  and  regulations  and  the  Company's  business  conduct
guidelines.

II.  Audit Committee Composition and Meetings

     Audit  Committee   members  shall  meet  the  independence  and  experience
requirements  of the American  Stock Exchange (the "Amex  Requirements")  and as
provided in the applicable  sections of the Securities Exchange Act of 1934 (the
"Exchange  Act").  The  Audit  Committee  shall  be  comprised  of three or more
directors  as  determined  by the  Board,  each of  whom  shall  be  independent
nonexecutive directors, free from any relationship that would interfere with the
exercise of his or her independent judgment.  All members of the Audit Committee
shall be, at the time of their appointment,  financially literate, in accordance
with the Amex Requirements, and at least one member of the Audit Committee shall
be financially sophisticated in accordance with the Amex Requirements.

     Audit Committee  members shall be appointed by the Board on  recommendation
of the Director Planning Committee and the Chair of the Audit Committee shall be
designated by majority vote of the Audit Committee membership.

     The Audit Committee shall meet, in person or telephonically,  on at least a
quarterly  basis,  or  more  frequently  as  circumstances  dictate.  The  Audit
Committee  Chair shall review and approve an agenda in advance of each  meeting.
Audit Committee members will strive to be present at all meetings.  As necessary

                                       29


or desirable,  the Audit  Committee Chair may request that members of management
and representatives of the independent accountants be present at Audit Committee
meetings.

III. Audit Committee Responsibilities and Duties

Authority and Responsibilities:

o    The Audit  Committee  shall have the sole  authority to  appointment  or to
     replace the independent  auditor and shall be directly  responsible for the
     compensation  and oversight of the work of the independent  auditor engaged
     for the purpose of  preparing or issuing an audit report or related work or
     performing  other audit,  review or attest  services  for the Company.  The
     independent auditor shall report directly to the Audit Committee. The Audit
     Committee shall also be responsible for the resolution of disagreements, if
     any, between  management and the independent  auditor  regarding  financial
     reporting.

o    The Audit  Committee shall  pre-approve  all audit and permitted  non-audit
     services,  including  engagement  fees and  terms of such  services,  to be
     performed for the Company by its independent  auditor.  The Audit Committee
     may  delegate  the  authority  to  pre-approve  services to a  subcommittee
     consisting  of one or more  members of the Audit  Committee.  To the extent
     deemed necessary, the Audit Committee may establish policies and procedures
     for the pre-approval of all permitted  non-audit services to be provided by
     the independent auditor.

o    The Audit Committee shall establish  procedures for the receipt,  retention
     and treatment of complaints  received by the Company regarding  accounting,
     internal  accounting  controls or auditing  matters,  and the  confidential
     anonymous  submission  by  employees  of the Company of concerns  regarding
     questionable accounting or auditing matters.

o    The Audit Committee shall have the authority to retain independent  outside
     legal,  accounting or other advisors, to the extent that it deems necessary
     to carry out its duties.

o    The Company  shall  provide the Audit  Committee  appropriate  funding,  as
     determined by the Audit  Committee,  for payment of compensation to (i) the
     independent  auditor  engaged  for the purpose of  rendering  or issuing an
     audit report or related work or  performing  other audit,  review or attest
     services  for the  Company;  and (ii) any  advisors  retained  by the Audit
     Committee.

Review Procedures

1.   The Audit  Committee shall review and reassess the adequacy of this Charter
     at least  annually  and  recommend  any  proposed  changes  to the Board of
     Directors  for  approval.  The Audit  Committee  shall  have  this  Charter
     published  following any material  amendments or at least every three years
     in accordance with Securities and Exchange Commission regulations.

2.   Review the Company's annual audited financial statements prior to filing or
     distribution.  Review should  include  discussion  with  management and the
     independent auditors of significant issues regarding accounting principles,
     practices, and judgments.

                                       30


3.   In consultation with management and the independent auditors,  consider the
     integrity  of the  Company's  financial  reporting  processes  and internal
     controls.  Discuss  significant  financial  risk  exposures  and the  steps
     management has taken to monitor, control, and report such exposures. Review
     significant  findings prepared by the independent auditors and any internal
     auditing department together with management's responses.

4.   Review and  discuss  reports  prepared by the  independent  auditors on (i)
     critical  accounting  policies  and  practices  used by the  Company;  (ii)
     alternative accounting treatments of financial information within generally
     accepted  accounting  principles that have been discussed with  management,
     including  the  ramifications  of using  such  alternative  treatments  and
     disclosures  and the treatment  preferred by the independent  auditor;  and
     (iii) other material written communications between the independent auditor
     and  management,  such as  management  letters or schedules  of  unadjusted
     differences.

5.   Review and discuss with  management  the  accounting  policies  that may be
     viewed as critical  and review and discuss any  significant  changes in the
     accounting policies of the Company.

6.   Review  with  management  and  the  independent   auditors  the  effect  of
     regulatory and accounting initiatives.

7.   Review  and  discuss  with  management  and the  independent  auditors  any
     material  financial or  non-financial  arrangements of the Company which do
     not appear on the Company's financial statements.

8.   Review  and  discuss  with  management  and the  independent  auditors  any
     transactions  or courses of dealing  with  parties  related to the  Company
     which are  significant in size,  involve terms or other aspects that differ
     from those that would likely be negotiated with independent parties, or are
     relevant to an understanding of the Company's financial statements.

9.   Review with management and the independent auditors the Company's quarterly
     financial statements and the results of the independent auditors' review of
     the quarterly financial statements prior to the filing or distribution.

Auditor Independence Review

1.   The independent auditors are accountable to the Audit Committee.  The Audit
     Committee shall review the independence and performance of the auditors and
     annually  recommend  to the  Board  of  Directors  the  appointment  of the
     independent  auditors  or any  discharge  of  auditors  when  circumstances
     warrant.

2.   Review the experience and  qualifications  of the key partners and managers
     of the  independent  auditors  and the quality  control  procedures  of the
     independent auditors.

3.   Review the rotation of the audit partners having primary responsibility for
     the audit as required  pursuant to the Exchange Act. Review and discuss the
     fees  and  other  significant  compensation  to be paid to the  independent
     auditors.

4.   On an annual basis, the Audit Committee should request from the independent
     auditors a formal written statement  delineating all relationships  between

                                       31


     the auditors and the Company  consistent with  Independent  Standards Board
     Standard  No.1.  The Audit  Committee  should  review and discuss  with the
     independent  auditors  all  significant  relationships  they  have with the
     Company  that  could  impair  the  auditors'  independence.  Prior  to  the
     retention of the independent  auditors for any non-audit service, the Audit
     Committee  should  review the scope and fee for such  service to  determine
     whether such service could impair the auditors' independence.

5.   Review the  independent  auditors'  audit plan - discuss  scope,  staffing,
     locations,  reliance upon management,  and internal audit and general audit
     approach.

6.   Discuss the  results of the audit with the  independent  auditors.  Discuss
     certain  matters  required  to  be  communicated  to  audit  committees  in
     accordance with AICPA SAS 61.

7.   Consider  the  independent   auditors'  judgments  about  the  quality  and
     appropriateness  of the Company's  accounting  principles as applied in its
     financial reporting.

8.   Recommend to the Board of Directors  guidelines for the Company's hiring of
     employees of the  independent  auditors  who were engaged on the  Company's
     account.

9.   Discuss  with the national  office of the  independent  auditors  issues on
     which it was  consulted  by the  Company's  audit team and matters of audit
     quality and consistency.

10.  Review with management and the independent auditors any correspondence with
     regulators  or  governmental   agencies  and  any  employee  complaints  or
     published  reports  which raise  material  issues  regarding  the Company's
     financial statements or accounting policies.

Legal Compliance

1.   When appropriate, review with the Company's counsel, any legal matters that
     could have a significant impact on the organization's financial statements,
     the  Company's  compliance  with  applicable  laws  and  regulations,   and
     inquiries received from regulators or governmental agencies.

Other Audit Committee Responsibilities

1.   Annually prepare a report to stockholders as required by the Securities and
     Exchange Commission.  The report should be included in the Company's annual
     proxy statement.

2.   Perform any other  activities  consistent with this Charter,  the Company's
     by-laws,  and  governing  law,  as the Audit  Committee  or the Board deems
     necessary or appropriate.

3.   Periodically report to the Board of Directors on significant results of the
     foregoing activities.

                                       32


                                                                       Exhibit B

                               BALCHEM CORPORATION

                              PROPOSED AMENDMENT TO
                       RESTATED ARTICLES OF INCORPORATION

     The Restated  Articles of  Incorporation  of Balchem  Corporation  would be
amended by  deleting  the  existing  first  paragraph  of Article  FOURTH in its
entirety and substituting in lieu thereof a new paragraph to read as follows:

     "FOURTH:  The total  number of shares of stock  which the  Corporation  has
     authority to issue is twenty-seven  million  (27,000,000) shares consisting
     of twenty five million  (25,000,000)  shares of common stock,  $.06 2/3 par
     value per share,  and two million  (2,000,000)  shares of preferred  stock,
     $25.00  par value per  share.  The  aggregate  par value of all  authorized
     shares of all classes  having a par value is fifty-one  million six hundred
     sixty-six thousand six hundred sixty-seven dollars ($51,666,667)."




                                       33



 
                                 REVOCABLE PROXY
                               BALCHEM CORPORATION

[X]  PLEASE MARK VOTES
     AS IN THIS EXAMPLE

                          PROXY SOLICITED ON BEHALF OF
                             THE BOARD OF DIRECTORS
                 FOR THE ANNUAL MEETING TO BE HELD JUNE 24, 2005

The undersigned hereby appoints Dino A. Rossi,  Francis J. Fitzpatrick and David
Ludwig,  and  each  of  them  individually,  as  attorneys  and  proxies  of the
undersigned,  with  full  power  of  substitution,  at  the  Annual  Meeting  of
Stockholders of Balchem  Corporation  scheduled to be held on June 24, 2005, and
at any  adjournments  thereof,  and to vote all  shares of  Common  Stock of the
Company which the  undersigned  is entitled to vote on all matters coming before
said meeting.

The undersigned  hereby revokes all proxies  heretofore given by the undersigned
to vote at said meeting or any adjournment thereof.


                         Please be sure to sign and date
                          this Proxy in the box below.


                        ---------------------------------
                                      Date


                        ---------------------------------
                             Stockholder sign above


                        ---------------------------------
                          Co-holder (if any) sign above





--------------------------------------------------------------------------------
Election of Directors:                  For All    Withhold All    For All
                                                                   Except*
Election of two (2)
Class 3 Directors                         [_]          [ ]           [ ]

Nominees for Election as Class
3 Directors: Hoyt Ammidon, Jr.,
and John Y. Televantos
--------------------------------------------------------------------------------
Proposal to approve an                    FOR        ABSTAIN       AGAINST
amendment to the Articles of
Incorporation increasing the              [ ]          [ ]           [ ]
number of authorized shares of
Common Stock from 10,000,000
 to 25,000,000.
--------------------------------------------------------------------------------

*INSTRUCTION:  To  withhold  authority  to vote  for any one or more  individual
nominee(s)  for  election to the Board of  Directors,  mark "For All Except" and
write the name of such nominee in the space provided below:

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

The proxies are directed to vote as  specified  and in their  discretion  on all
other matters  coming before the Annual  Meeting.  If no direction is made,  the
proxies will vote FOR the nominees for election as Directors named above and FOR
the proposal to amend the Articles of Incorporation as described above.

The Board of Directors  recommends a vote FOR each named nominee for election as
a Director  and FOR the  proposal  to amend the  Articles  of  Incorporation  as
described above.

PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. [_]

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE.

Please sign  exactly as your name  appears on this proxy card.  When  signing as
attorney,  executor,  administrator,  trustee or guardian, please give your full
title.  If shares are held jointly,  each holder should sign. If the signer is a
corporation,  please sign full corporate name by duly authorized  officer.  If a
partnership  or a limited  liability  company,  please  sign in  partnership  or
limited liability company name by authorized persons.

                               PLEASE ACT PROMPTLY
                     SIGN, DATE & MAIL YOUR PROXY CARD TODAY