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April 9, 2012

 

Mrs. Jacqueline M. Lemke

14239 Kingdom Court

Fishers, IN 46040

 

Dear Jacqueline:

 

The Board of Directors of Bioanalytical Systems, Inc. (the “Company”) has
approved the grant of non-qualified stock options to you. This letter will serve
as notice of the grant, effective as of April 9, 2012 (the “date of grant”), of
an option to purchase (the “Option”) 125,000 of the Common Shares of the Company
(the “Option Shares”) on the terms and conditions set forth herein, and upon
your execution and delivery to the Company of the copy of this letter included
herein will constitute our agreement as to those terms. This Option has not been
granted under the terms of the Company’s employee stock option plans, and is not
an “incentive stock option” as defined by the U.S. Internal Revenue Service. You
are urged to consult with your tax advisors concerning the tax effect of the
grant and exercise of this Option.

 

1.OPTION PRICE. The purchase price of the Option Shares is $1.38 per share (the
“Option Price”).

 

2.MEDIUM AND TIME OF PAYMENT. You must pay the Option Price with respect to the
Option Shares being purchased at the time you exercise the Option. The Option
Price may be paid either (a) in cash; (b) by certified check or by bank
cashier’s check; (c) if you can do so without violating Section 16(b) of the
Securities Exchange Act of 1934, through the tender to the Company of
outstanding Common Shares or through the withholding and surrender to the
Company of Option Shares being purchased, which shall be valued, for purposes of
determining the extent to which the purchase price has been paid, at the fair
market value of the Common Shares on the date of exercise of the Option; or (d)
or by a combination of (a), (b) or (c).

 

3.TERM AND EXERCISABILITY OF OPTIONS. The Option is effective immediately upon
your acceptance of this letter and will become exercisable in two installments.
The Option may be exercised as to the shares covered by the first installment on
and after March 31, 2013, with the second installment becoming exercisable on
March 31, 2014. The Option will be considered to have been effectively exercised
only upon delivery to the Company of the Option Price and a “Notice of Exercise”
in the form attached hereto, and the satisfaction of all other conditions
described in this letter. The Option shall expire as to all unexercised Option
Shares at the close of business on the tenth anniversary of the date of this
letter (or on the next business day if that date is a Saturday, Sunday or
holiday).

 

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4.CESSATION OF SERVICE WITH THE COMPANY. In the event you cease to serve as an
employee of the Company or any of its subsidiaries, this Option shall terminate
immediately upon termination of employment as to any unexercised Option Shares;
provided, however, that if termination of employment is due to retirement with
the consent of the Company or is due to a permanent and total disability; you
shall have the right to exercise the Option with respect to the Option Shares
for which it could have been exercised on the effective date of termination of
employment at any time within three months after the termination date, if
termination is due to retirement with the consent of the Company, or at any time
within 12 months after the termination date, if termination is due to permanent
and total disability. In the event of your death while serving as an employee of
the Company or any of its subsidiaries, your executor or personal representative
shall have the right to exercise this Option with respect to the Common Shares
for which it could have been exercised on the date of your death. Whether
termination is a retirement with the consent of the Company or due to permanent
and total disability, and whether an authorized leave of absence on military or
government service shall be deemed to constitute termination of employment for
the purposes of this Option, shall be determined by the Board of Directors in
its sole discretion, which determination shall be final and conclusive.

 

5.RECAPITALIZATION. The number of Option Shares and the Option Price each shall
be proportionally adjusted for any increase or decrease in the number of issued
Common Shares of the Company resulting from a subdivision or consolidation of
shares of the Company, the payment of a share dividend, a share split or other
increase or decrease in the outstanding Common Shares effected without receipt
of consideration by the Company (including an increase or decrease effected as a
part of the Recapitalization of the Company, as defined herein). In the event
that there shall be a recapitalization or reorganization of the Company or a
reclassification of its outstanding shares (each a “Recapitalization”) as a
result of which other shares (the “New Shares”) are issued in exchange for
Common Shares, then there shall be substituted for the Option Shares then
issuable hereunder that number of New Shares into which those Option Shares
would have been converted had they been outstanding at the effective date of the
Recapitalization.

 

6.MERGER, DISSOLUTION. If the Company shall enter into any agreement of merger
or consolidation (whether or not it shall be the surviving entity thereunder),
the Company shall have the right to terminate this Option as of any date
specified in a written notice given to you not less than 30 days prior to the
termination date. If the merger or consolidation described in that notice is not
consummated within 180 days following the termination date of this Option
specified in the notice, this Option thereafter shall be deemed to have been
continuously in effect since the date hereof. In the event of the sale of all or
substantially all of the assets of the Company and the distribution of the
proceeds thereof to shareholders in liquidation of the Company, the Company
shall give you 30 days prior written notice specifying the record date for the
purpose of determining the shareholders entitled to participate in that
distribution and this Option shall expire as to all Option Shares that remain
unexercised as of the date of that distribution.

 

 

 

 

7.NONASSIGNABILITY. This Option is not assignable or transferable except by will
or under the laws of descent and distribution. During your lifetime, this Option
shall be exercisable only by you (or if you become incapacitated, on your behalf
by your legal guardian or attorney-in-fact).

 

8.ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES LAWS. The Company may
postpone the issuance and delivery of certificates representing Common Shares
until (a) the admission of such shares to listing on any exchange on which
shares of the Company of the same class are then listed and (b) the completion
of any requirements for registration or other qualification of the shares under
any state or Federal law, rule or regulation or the rules and regulations of any
exchange upon which the Common Shares are traded as the Company shall determine
to be necessary or advisable. You have no right to require the Company to
register the Common Shares acquired upon the exercise of this Option under
federal or state securities laws. As a condition to the effective exercise of
this Option you may be required to make such representations and furnish such
information as may, in the opinion of counsel for the Company, be appropriate to
permit the Company to determine whether registration or qualification of those
shares is required in connection with that transaction.

 

9.RIGHTS AS A SHAREHOLDER. You shall have no rights as a shareholder with
respect to Common Shares subject to this Option until the date of issuance of a
certificate to you representing Option Shares acquired upon exercise of this
Option. A certificate will not be issued until you have exercised the Option,
fully paid for the Common Shares acquired thereby and satisfied all other
details described in this letter. No adjustment will be made for dividends or
other rights for which the record date is prior to the date a certificate is
issued.

 

10.NO OBLIGATION TO EXERCISE OPTION. The grant of this Option imposes no
obligation upon you to exercise the Option.

 

11.NO OBLIGATION TO CONTINUE EMPLOYMENT. The grant of this Option to you does
not constitute any contract of employment between you and the Company, and does
not impose any obligation on the Company to continue your employment.

 

12.WITHHOLDINGS. To the extent required by law in effect at the time the Option
is exercised, the Company has the right and power to deduct or withhold, or
require you to remit to the Company, an amount sufficient to satisfy all
applicable tax withholding requirements. The Company, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit or
require you to satisfy all or part of the tax withholding obligations in
connection with an Option by (a) having the Company withhold otherwise
deliverable Option Shares, or (b) delivering to the Company Common Shares
already owned by you for a period of at least six months and, in each case,
having a value equal to the amount that the Company determines, not to exceed
the amount determined by using the maximum federal, state or local marginal
income tax rates applicable to you with respect to the Option on the date that
the amount of tax to be withheld is to be determined for these purposes. For
these purposes, the value of the Option Shares to be withheld or delivered will
be equal to the “Fair Market Value “of the Company’s Common Shares as defined in
the Company’s 2008 Stock Option Plan, as of the date that the taxes are required
to be withheld.

 

 

 

 

13.POWER AND AUTHORITY. The Board of Directors shall have the full power and
authority to take all actions and make all determinations required or provided
for under the terms of this Option; to interpret and construe the provisions of
this letter, which interpretation or construction shall be final, conclusive and
binding on the Company and you; and to take any and all other actions and make
any and all other determinations which the Board of Directors deems necessary or
appropriate.

 

Please acknowledge your receipt of this letter and your agreement to the terms
set forth herein by signing and returning the copy enclosed for that purpose.

 

Very Truly Yours,

 

Anthony Chilton

President

 

Accepted and agreed to: __________________________

 

Date: __________________