[BASi Letterhead]
 
 
June 19, 2003
 
Ronald E. Shoup
BASi
2701 Kent Avenue
West Lafayette, IN 47906-1382
 
Dear Ron,
 
Bioanalytical Systems, Inc. is pleased to provide to you this severance
agreement in consideration of the services you render to the Company from and
after the date of this Agreement, which the Board of Directors believes are
important to the future growth and prosperity of the Company. The terms of the
agreement follow:
 
If you are terminated other than for "Just Cause" - hereinafter defined - at any
time during a two (2) year period after a "Significant Transaction" or a "Change
of Board Composition" - each, hereinafter defined - you will be entitled to a
continuance of your annual base salary for one (1) month for each year of
service from the date of termination.
 
Nothing in this agreement shall be deemed to alter the "at will" nature of your
employment by the Company. "Just Cause" is defined as a good faith determination
by the Company's Board of personal dishonesty, breach of fiduciary duty
involving personal profit, willful failure to perform stated duties, or willful
violation of any law, rule or regulation (other than traffic violation or
similar offenses). "Significant Transaction" is defined as any of: (a) the sale
of a block of stock representing greater than 50% or more of the combined voting
power of the Company's then outstanding securities; (b) upon the first purchase
of the Company's common stock pursuant to a tender or exchange offer; and (c)
upon the approval by the Company's shareholders of (i) a merger with or into
another corporation; (ii) a sale or disposition of all or substantially all of
the Company's assets; or (iii) a plan of liquidation or dissolution of the
Company. "Change of Board Composition" means any change in the composition of
the Board of Directors of the Company in connection with any transaction in
which stock of the Company is sold by the Company, such that a majority of the
non-employee directors of the Company at the time of the stock sale transaction
no longer constitute a majority.
 
If the foregoing is acceptable to you, please sign below and return this
agreement to me.
 
Sincerely,
 
/s/ Peter T. Kissinger
 
Peter T. Kissinger, Ph.D.
Chairman and CEO
 
PTK/cp
 
/s/ Ronald E. Shoup    
Ronald E. Shoup
 
 
 

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