BIOANALYTICAL
SYSTEMS, INC.

     

    EMPLOYEE
INCENTIVE STOCK OPTION AGREEMENT

     

    THIS
AGREEMENT, made this 1st day of February, 2010, by and between Bioanalytical
Systems, Inc., an Indiana corporation with its principal office at 2701 Kent
Avenue, West Lafayette, Indiana  47906 (hereinafter called "Company"),
and Anthony S. Chilton, residing at 1035 Richmond Glen Circle, Alpharetta,
GA  30004 (hereinafter called the "Grantee"), pursuant to the terms,
conditions and limitations contained in the Company’s 2008 Stock Option Plan
(hereinafter called the "Plan"), a copy of which is attached hereto as Exhibit
A.

     

    WITNESSETH
THAT:

     

    WHEREAS, in the interests of
affording an incentive to the Grantee to give his best efforts to the Company as
a company officer, key employee, or member of the Board of Directors, the
Company wishes to provide that the Grantee shall have an option to buy Common
Shares of the Company:

     

    NOW, THEREFORE, it is hereby
mutually agreed to as follows:

     

    1.           The
Company hereby grants to the Grantee the right and option to purchase, on the
terms and conditions hereinafter set forth, all or any part of an aggregate of
25,000 shares (hereinafter called "Subject Shares") of the presently authorized,
but unissued, or treasury, Common Shares of the Company (hereinafter called the
"Common Shares"), at a purchase price of $0.7894 per share, exercisable in whole
or in part from time to time subject to the limitation that no option may be
exercised with respect to fewer than twenty-five (25) shares then subject to
option hereunder, in which event any exercise must be as to all such shares and
subject to the further limitation that the options represented by this Agreement
shall be exercisable in three equal installments as set forth in Section 7 of
the Plan.  The option may be exercised (i) as to the first installment
of 8,333 shares, on and after January 31, 2011, (ii) as to the second
installment of 8,333 shares, on and after January 31, 2012, and (iii) as to the
third installment of 8,334 shares, on and after January 31,
2013.  Unless sooner terminated under the terms of the Plan or this
Agreement, the option shall expire as to all shares subject to purchase
hereunder on the 10th anniversary date of this Agreement (February 1, 2020) if
not exercised on or before such date.

     

    2.           Subject
to the limitation specified in Section 1 hereof and the terms and conditions of
the Plan (including, but not limited to, the exercise provisions of Section 7 of
the Plan, the termination provisions of Section 8 of the Plan and the Incentive
Stock Option Special Rules provisions of Section 9 of the Plan), the Grantee may
from time to time exercise this option by delivering a written notice of
exercise and subscription agreement to the Secretary of the Company specifying
the number of whole shares to be purchased, accompanied by payment (i) in cash,
(ii) by certified check or bank cashier’s check, (iii) through the tender to the
Company of Common Shares of the Company owned by the Grantee or by withholding
of Common Shares of the Company that are subject to the option, which Common
Shares shall be valued, for purposes of determining the extent to which the
purchase price has been paid, at their fair market value on the date of exercise
as determined in accordance with the Plan, or (iv) by a combination of the
methods described in (i), (ii), or (iii).  The Company may, in its
sole discretion, refuse to withhold Common Shares of the Company as payment of
the exercise price of the option.  Such exercise shall be effective
upon receipt by the Secretary of such written notice, subscription agreement and
payment of the purchase price.  Only the Grantee may exercise the
option during the lifetime of the Grantee.  No fractional shares may
be purchased at any time hereunder.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    3.           Upon
the effective exercise of the option, or any part thereof, certificates
representing the shares so purchased, marked fully paid and non-assessable,
shall be delivered to the Grantee, except as provided in Section 14 of the
Plan.  Until the Subject Shares have been recorded on the Company's
official shareholder records (or the records of its transfer agents or
registrars) as having been issued and transferred to the Grantee, the Grantee
shall not have any of the rights or privileges of a shareholder of the Company
in respect of any such shares.

     

    4.           In
the event that, prior to the delivery by the Company of all the Subject Shares,
there shall be an increase or reduction in the number of Common Shares of the
Company issued and outstanding by reason of any subdivision or consolidation of
Common Shares or any other capital adjustment, the number of shares then subject
to this option and the exercise price per share shall be increased or decreased
as provided in Section 11 of the Plan.

     

    5.           The
option and the rights and privileges conferred by this Agreement shall not be
assigned or transferred by the Grantee in any manner except by will or under the
laws of descent and distribution.  In the event of any attempted
assignment or transfer in violation of this Section 5, the option, rights
and privileges conferred by this Agreement shall become null and
void.

     

    6.           Nothing
herein contained shall be deemed to create any limitation nor restriction upon
such rights as the Company would otherwise have to terminate a person as an
employee of the Company.

     

    7.           The
option, rights and privileges herein conferred are granted subject to the terms
and conditions set forth herein and in the Plan.

     

    8.           Any
notices to be given or served under the terms of this Agreement shall be
addressed to the Secretary of the Company at 2701 Kent Avenue, West Lafayette,
Indiana  47906, and to the Grantee at the address set forth on page
one of this Agreement, or such other address or addresses as either party may
hereafter designate in writing to the other.  Any such notice shall be
deemed to have been duly given or served, and deposited in the United States
mail.

     

    9.           The
interpretation by the Compensation Committee, appointed by the Company’s Board
of Directors to administer the Plan, or any provisions of the Plan or of this
Agreement shall be final and binding on the Grantee unless otherwise determined
by the Company’s Board of Directors.

     

    10.          This
Option Agreement shall be governed by the laws of the State of
Indiana.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the Company and the Grantee have signed this Agreement as of
the day and year first above written.

     

    
      
        
          
            
              
                
                  
                    	 
      	 
      	
                            "COMPANY"

                          
	 	 	 
	 
      	 
      	
                            BIOANALYTICAL
      SYSTEMS, INC.

                          
	 
      	 
      	 
      
	 
      	 
      	
                            By:

                          	  
      
	 
      	 
      	 
      	
                            Richard
      M. Shepperd,

                          
	 
      	 
      	 
      	
                            Chief
      Executive Officer

                          
	 
      	 
      	 
      
	 
      	 
      	
                            "GRANTEE"

                          
	 	 	 
	 
      	 
      	  
      
	 
      	 
      	
                            Anthony
      S.
Chilton