BIOANALYTICAL
SYSTEMS, INC.

    


    EMPLOYEE
INCENTIVE STOCK OPTION AGREEMENT

    


    THIS AGREEMENT, made this 1st day of
December, 2008, by and between Bioanalytical Systems, Inc., an Indiana
corporation with its principal office at 2701 Kent Avenue, West Lafayette,
Indiana (hereinafter called “Company”), and Anthony S.
Chilton,  residing at 1035 Richmond Glen Circle, Alpharetta,
GA30004  (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  30,000
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 $3.53 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 opinion hereunder, in which event any exercise must be as to all
such shares and subject to the further limitation that the options represented
by the Agreement shall be exercisable in four equal installments as set forth in
Section 7 of the Plan.  The option may be exercised as to the shares
covered by the first installment from and after the first anniversary of the
grant of the option, with second and third installments becoming exercisable on
the two succeeding anniversary dates.  Unless sooner terminated under
the terms of the Plan on this Agreement, the Option shall expire as to all
shares subject to purchase hereunder on the 10th
anniversary date of this Agreement if not exercised on or before such
date.

    


    2.  Subject
to the limitation specified in Section 1 hereof 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
Optionee 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 Section 6(c) of 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 person who exercised the option, except as provided in Section 6(j) of the
Plan.  Until certificates representing such shares shall have been
issued and delivered, 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 shall be increased or decreased as provided in Section (g) of the
Plan.

    


    5.  The option and the rights
and privileges conferred by this Option 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 Option 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 Option Agreement shall be
addressed to the Secretary of the Company at 2701 Kent Avenue, West Lafayette,
Indiana, and to the Grantee at the address set forth on page one of this Option
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 Option 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 Option Agreement as of the day and year first above
written.

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  	 
      	 	
                                                                          “COMPANY”

                                                                        
	 
      	 	 
      
	 
      	 	
                                                                          BIOANALYTICAL
      SYSTEMS, INC.

                                                                        
	 
      	 	 
      
	 
      	 	
                                                                          By:

                                                                        
	 
      	 	 	 
      
	 
      	 	 
      
	      
                                                                          ATTEST:

                                                                        	 	
                                                                           

                                                                        
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	
                                                                          “GRANTEE”

                                                                        
	 
      	 	 
      
	 
      	 	
                                                                          By: