Document:

IM Draft

    February
1, 2010

    

    AMENDED
AND RESTATED

    EMPLOYMENT
AGREEMENT

     

    THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
effective the 1st day of
February, 2010 (the "Effective Date") by and among BIOANALYTICAL SYSTEMS, INC.,
a corporation organized under the laws of the State of Indiana ("BASi" or the
"Company"), and Anthony S. Chilton ("Employee").

     

    Preliminary
Statements:

     

    A.           BASi
is engaged in the business of providing contract research services and
manufacturing and distributing scientific instruments ("Business").

     

    B.           Employee
is experienced in the Business, and is familiar with the management and
operations of the Company. The Company wishes to employ Employee on the terms
and conditions contained herein.  Employee views entry into this
employment as a mutually beneficial long-term investment by both the Business
and by the Employee as a major career commitment.

     

    C.           BASi
and Employee entered into an Employment Agreement dated December 1, 2008 (the
"Original Agreement").  This Agreement amends and restates the
Original Agreement in its entirety.

     

    In
consideration of the premises and mutual covenants and agreements contained
herein, the Original Agreement is hereby amended and restated in its entirety to
read as follows:

     

    ARTICLE I

    TERM,
COMPENSATION, AND BENEFITS

     

    Section
1.1.  
Term.  The Company hereby agrees
to employ the Employee, and the Employee hereby accepts employment with the
Company, on the terms and conditions set forth in this Agreement from the
Effective Date until January 31, 2013 (the "Initial
Term").  The
Initial Term shall be extended for successive one year periods (the "Additional Terms," and together with the Initial Term, the
"Employment Period"), except that if either Employee or
Company gives the other party written notice of non-renewal at least thirty (30) days before the end of the Initial
Term or any Additional
Term, then this Agreement
shall expire at the end of its then current term.

     

    Section
1.2.   Compensation
and Benefits

     

    Section
1.2.1  Salary.  BASi will pay Employee a base salary of $16,250.00 per month; provided, however that for the period
during which Employee serves as interim President of the Company, the Employee's
base salary shall be $19,105 per month.  Salary shall be paid in
equal semi-monthly installments in arrears.  All amounts to be paid hereunder shall
be paid in accordance with normal payroll procedures of the Company and shall be
subject to all required withholdings and deductions.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    Section
1.2.2  Stock
Options.  On the
Effective Date, the Company shall grant to the Employee options to purchase 25,000 BASi shares pursuant to the terms of the Company's
Employee Stock Option Plan (the "Plan) and an Employee Stock Option Agreement to
be entered into between the Company and the Employee on the date
hereof.  The options shall be granted at their
fair market value as of the date of grant and shall vest and become exercisable
in three equal annual installments on January 31, 2011, 2012 and 2013, subject
to the conditions set forth in the Plan.  Employee shall be eligible
for additional grants of stock options from time to time during the Employment
Period as determined by the Board of Directors or any committee thereof and as
may be otherwise provided for in this Agreement.

     

    Section
1.2.3  Bonus.  Employee will be eligible for bonus grants under
bonus plans adopted by the Company at the discretion of the Compensation
Committee of the Board of Directors. For the period during which the Employee
serves as interim President of the Company, Employee will receive a cash bonus
(the "EBITDA Bonus") in an amount equal to two percent (2%) of the consolidated
earnings before interest expense, income tax expense, depreciation expense and
amortization expense of the Company (before any payment or accrual related to
the EBITDA Bonus) ("EBITDA") for the period during which he served as interim
President.  The EBITDA Bonus shall be paid not less frequently than
annually on the first regular payroll date of the Company after the Board of
Directors has confirmed the amount of the Company's EBITDA and the EBITDA Bonus
for the relevant period.  The Board of Directors shall make such
confirmation promptly upon completion of the audited consolidated financial
statements of the Company for each fiscal year.

     

    Section
1.2.4  Expense
Reimbursement.  Employee will be entitled to
reimbursement for reasonable out of pocket expenses incurred by him for living
quarters in the Lafayette, Indiana area and for travel to and from the
Employee's residence in Alpharetta, Georgia (excluding the Thanksgiving and
Christmas Holidays).  Employee will also be entitled to reimbursement
of travel, entertainment and other out of pocket expenses incurred by him in the
course of his employment in accordance with the Company’s standard reimbursement
policies.

     

    Section
1.2.5  Vacation
Policy.  Employee will accumulate one (1)
vacation day per month in accordance with policies described in the BASi
Employee Handbook.  Employee will be granted an additional
ten days vacation on each December 1 during the Employment Period, effectively
granting employee 15 years seniority.  Employee’s compensation
shall continue to be paid in full during any vacation period. Any vacation at the end of any year
ending on November 30
shall carry over to the
following one-year period commencing on December 1 (the "Following Year"), but shall not carry over beyond the
Following Year.  Vacation time not used prior to the expiration will
be banked for short-term disability as described in the BASi Employee
Handbook.

     

    Section
1.2.6  Other
Benefits.  During the Employment Period, the
Employee shall be entitled to participate in all employee benefit plans which
are generally made available to employees of the Company, subject to the
eligibility, qualification, waiting period and other terms and conditions of
such plans as they shall be in effect from time to time unless listed herein as
exceptions from those terms and conditions. The highlights of the benefits are
as follows: group health insurance; two weeks unpaid vacation (optional); term
life insurance ($100,000); long term disability insurance; and a 401K deferred
tax savings incentive/profit sharing plan.  Optional participation
benefits include a flexible spending account, dental, vision, and short-term
disability.

    
      
         

      

      
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    Section
1.2.7  Car
Allowance.  During the Employment
Period, the Company shall provide Employee with an automobile allowance in the
amount of $600.00 per month.  Employee shall be responsible for any
and all taxes imposed on such allowance.

     

    Section
1.2.8   Relocation
Package.  Employee shall be eligible
for a standard relocation package.

     

    Section
1.2.9   Required
Withholdings.  All amounts to be paid
under this Agreement, including any amounts to be paid under Article
IV or Article
V, shall be paid in
accordance with the Company's normal payroll procedures and shall be subject to
all required withholdings and deductions.

     

    ARTICLE II

    DUTIES

     

    Section
2.1.  
Duties. 

     

    Section
2.1.1  Chief
Operating Officer of Scientific Services.  During the Employment Period, the
Employee will be the ranking Chief Operating Officer of Scientific
Services of our business.  In that
capacity the Employee will
lead the scientific
staff, be the ultimate
contact with clients and scientific advisors, and have responsibility for the administration and oversight of the
strategic plan to advance BASi in the area of research activities.  In
addition, Employee is responsible for strengthening existing collaborations,
building new partnerships, plus executing programs and initiatives to support
the BASi mission statement.  Employee will be called upon to perform
certain services for the Company including, without limitation, the
following:

     

    (a)           Coordinating the communication between
Project Managers and BASi Senior Management;

     

    (b)           Identifying opportunities for proposed
direction of new and existing projects;

     

    (c)           Developing and managing global full
range of interactions on research related activities;

     

    (d)           Developing and implementing strategies
that support Company goals and milestones;

     

    (e)           Supporting other management/departments
by providing scientific resources advice, counsel, and decisions and analyzing
information and applications;

     

    (f)           Participating in departmental and
organizational meetings to ensure that employees are informed of new
initiatives;

    
      
         

      

      
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    (g)           Supporting operations and administration
of Board by advising and informing Board members of issues and trends related to
the sciences;

     

    (h)           Functioning as liaison between research
and operational departments at BASi with respect to scientific development and
progress of individual research activities;

     

    (i)           Ensuring BASi's compliance with current,
applicable laws and developing safety/security policies to  meet
Company needs and comply with state and federal laws;

     

    (j)           Motivating, leading and teaching
qualified staff to meet or exceed expectations;

     

    (k)           Enhancing the professional image of BASi
in public forums; and

     

    (l)           Managing relationships with outside
business leaders.

     

    Section
2.1.2   Interim
President.  Beginning on January 26,
2010, Employee shall also serve as the Interim President of the Company with
such duties as shall be assigned to him by the Chief Executive Officer or the
Board of Directors.  At any time during which the Company does not
have a Chief Executive Officer, Employee, so long as he continues to be Interim
President of the Company, shall have full responsibility and decision-making
authority for the day-to-day operations of the Company's business, subject to
the general control of the Board of Directors.  If the Company elects
a person other than Employee as Chief Executive Officer, the removal
of Employee from the position of Interim President without removing him as Chief
Operating Officer of Scientific Services shall not constitute "good reason" for
any purpose under this Agreement.

     

    Section
2.1.3   Permanent
President and Chief Executive Officer.  Employee and the Company
acknowledge and agree that, following the Effective Date, the Company intends to
conduct a search for a President and Chief Executive Officer.  The
Company agrees that Employee will be afforded the opportunity to be one of the
candidates for that position.  In the event that Employee becomes the
President and Chief Executive Officer, he shall be entitled to the additional
benefits and compensation set forth on Addendum
B
hereto.

     

    Section
2.2.  
Other
Duties.  The Employee shall serve the Company by
performing such other services as the Company may reasonably require
to conduct the Company’s
business.  The Company shall also have the absolute right and power to
direct and control the Employee in carrying out duties assigned by the Company,
including, but not limited to, the right (1) to review, modify and cancel all
work performed, and (2) to assign specific duties to be performed, including the
general means and manner by which such duties shall be
performed.  Notwithstanding any other provisions of this Agreement,
the Company shall not impose employment duties or constraints of any kind upon
the Employee which would require the Employee to violate any ordinance,
regulation, statute or other law.  The Employee shall devote his full
working time, attention and energy to the performances of the duties imposed
hereunder.  The Employee shall conform to such hours of work as may
from time to time reasonably be required of him and shall not be entitled to
receive any additional remuneration for work outside his normal
hours.  The
Employee will NOT be held financially, legally, or
otherwise liable for any practice or action or decision made by BASi, or its
predecessors or successors prior to the start date of Employee’s beginning date
of employment.

    
      
         

      

      
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    ARTICLE III

    CONFIDENTIALITY
AND OTHER MATTERS

     

    Section
3.1. 
Confidentiality
Agreement.  The
Employee, prior to and during the term of employment under this Agreement, has
had and will have access to and has become or will become familiar with
information, whether or not originated by the Employee, which is used in or
related to the Business or the business of BASi or certain subsidiaries or
affiliates of BASi and is (a) proprietary to, about, or created by the Company
its subsidiaries or its affiliates; (b) designated as confidential by the
Company, its subsidiaries or its affiliates; or (c) not generally known to or
ascertainable by proper means by the public ("Confidential Information").

     

    Further,
the Employee has had and will have access to items proprietary to the Company,
its subsidiaries or its affiliates ("Proprietary
Items").  "Proprietary Items" shall mean all legally-recognized rights
which result from or are derived from the Employee's work product or the work
product of others made for the Company, its subsidiaries or its affiliates,
including all past, present and future work product made for the Company, its
subsidiaries or its affiliates, or with knowledge, use or incorporation of
Confidential Information, including, but not limited to works of authorship,
developments, inventions, innovations, designs, discoveries, improvements, trade
secrets, trademarks, applications, techniques, know-how and ideas, whether or
not patentable or copyrightable, conceived or made or developed by the Employee
(solely or in cooperation with others) or others during the term of this
Agreement or prior to or during his tenure with the Company, or which are
reasonably related to the Business or the business of BASi or certain
subsidiaries or affiliates of BASi or the actual or demonstrably anticipated
research and development of the Company.

     

    The
Employee agrees that any Confidential Information and Proprietary Items will be
treated in full confidence and shall not be used, directly or indirectly, by
him, nor shall the same be disclosed to any other firms, organizations, or
persons outside of the Company's employees bound by similar agreement, during
the term of this Agreement or at any time thereafter, except as required in the
course of his employment with the Company.  All Confidential
Information and Proprietary Items, whether prepared by the Employee or
otherwise, coming into his possession, shall remain the exclusive property of
the Company and shall not be permanently removed from the premises of the
Company under any circumstances whatsoever, without the prior written consent of
the Company.

     

    The
Employee will not be obliged to keep information confidential to the extent that
the information has ceased to be confidential and has entered the public domain
otherwise than due to the Employee's acts.  The provisions of this
Section 3.1
shall be in addition to, and shall not affect, the Employee's common law duty of
fidelity to the Company.

    
      
         

      

      
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    Section
3.2. 
Disclosure
and Assignment of Inventions.  Employee will promptly disclose in
writing to the Company complete information concerning each and every invention,
discovery, improvement, device, design, apparatus, practice, process, method or
product, whether patentable or not, made, developed, perfected, devised,
conceived or first reduced to practice by Employee, either solely or in
collaboration with others, during his employment by the Company, or within six
(6) months thereafter, whether or not during regular working hours, relating
either directly or indirectly to the business, products, practices or techniques
of the Company (hereinafter referred to as "Inventions").  Employee hereby
acknowledges that any and all of said Inventions are the property of the Company
and hereby assigns and agrees to assign to the Company any and all of Employee's
right, title and interest in and to any and all of such
Inventions.

     

    Section
3.3. 
Non-Solicitation.  The Employee agrees that during the
Employee’s employment with the Company and for an additional period of the two
(2) years immediately following termination of the Employee’s employment with
the Company, the Employee shall not directly or indirectly, as an individual or
as a director, officer, contractor, employee, consultant, partner, investor or
in any other capacity with any corporation, partnership or other person or
entity, other than the Company (an "Other Entity"), (i) contact or communicate any then
current material customer or client of the Company in the Business, or any
person or entity with which the Company is then engaged in material discussions
regarding that person or entity becoming a client or customer of the Company in
the Business, for the purpose of inducing any such customer or client to move
its account from the Company to another company in the Business; provided,
however, that nothing in this sentence shall prevent the Employee from becoming
employed by or providing consulting services to any such customer or client of
the Company in the Business, or (ii) solicit any other employee of the Company
for employment or a consulting or other services arrangement with an Other
Entity.  The restrictions of this Section
3.3 shall not be deemed to
prevent the Employee from owning not more than 5% of the issued and outstanding
shares of any class of securities of an issuer whose securities are listed on a
national securities exchange or registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended.  In the event a court of
competent jurisdiction determines that the foregoing restriction is unreasonable
in terms of geographic scope or otherwise then the court is hereby authorized to
reduce the scope of said restriction and enforce this Section
3.3 as so
reduced.  If any sentence, word or provision of this Section
3.3 shall be determined to
be unenforceable, the same shall be severed herefrom and the remainder shall be
enforced as if the unenforceable sentence, word or provision did not
exist.  Notwithstanding any provision of this Agreement to the
contrary (other than
Section
4.6.1), the terms and conditions of this
Section
3.3 shall survive for a
period of two (2) years following termination of this Agreement or of the Employee’s employment with the
Company, at which time the terms and conditions of this Section
3.3 shall
terminate.

     

    Section
3.4. 
Code
of Conduct.  The
employee agrees to abide by all the conditions of the Company Code of Conduct
and Ethics.

     

    ARTICLE IV

    TERMINATION
OF EMPLOYMENT

     

    Section
4.1. 
Resignation
by the Employee.  The Employee may resign from his
employment with the Company at any time by providing written notice to the
Company of resignation as set forth below.

    
      
         

      

      
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    Section
4.1.1  Resignation
with "Good Reason".  Employee may resign at any time for
"good reason," due to:

     

    (a)           a material breach of this Agreement by
the Company which continues after the Employee has given the Company thirty (30)
days' written notice of such breach, or

     

    (b)           the assignment to the Employee of duties
materially inconsistent with this Agreement other than in accordance with the
terms of this Agreement, and the Company has not rectified such assignment
within thirty (30) days after the Employee has given the Company written notice
of such breach.

     

    A termination by the Employee for "good
reason" shall entitle the Employee to the same compensation and benefits as if
the Employee had been terminated by the Company without
Cause.

     

    Section
4.1.2  Resignation
Without "Good Reason".  The Employee may resign from
his employment with the Company at any time by providing written notice to the
Company at least fourteen (14) days prior to the effective date of the
resignation (the actual effective date of such resignation pursuant to any
subsection of Section
4.1 being the "Resignation
Date").

     

    Section
4.1.3   Post-Resignation
Undertakings.  Upon any resignation by the Employee,
the Employee shall use reasonable best efforts to assist the Company in good
faith to effect a smooth transition. 

     

    Section
4.2. 
Termination
by the Company without Cause.  At any time, the Company
may, in its sole and absolute discretion, terminate the Employee's employment
with the Company (the actual date of termination being referred to as the
"Termination Date") without cause, by providing written
notice thereof to the Employee ("Termination Notice").  Unless otherwise provided
in a Termination Notice, any Termination Notice shall be effective immediately
and Employee's employment shall terminate on the date of the Termination Notice
or, if specified in the Termination Notice, on the Termination Date so
specified.  Upon
receipt by the Employee of a Termination Notice pursuant to this Section
4.2, (a) the Employee shall
assist the Company in good faith to effect a smooth transition, and (b)
Employee shall vacate the premises owned by the Company
and used in connection with the Business as requested by the Company. 

     

    Section
4.3. 
Termination
by the Company With Cause.  This Agreement shall be
deemed to be terminated and the employment relationship between the Employee and
the Company shall be deemed severed upon written notice to the Employee by the
Company after the occurrence of any of the following:

     

    (a)           The final, non-appealable imposition of
any restrictions or limitations by any governmental authority having
jurisdiction over the Employee to such an extent that he cannot render the
services for which he was employed.

    
      
         

      

      
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    (b)           The Employee (i) willfully and
continually fails or refuses (without proper cause) to substantially perform the
duties of his employment and to adhere in all material respects to the
provisions of this Agreement and the written policies of the Company, which
failure shall not be
remedied within ten
(10) business days after written notice from the
Company to the Employee, or (ii) conducts himself in a fraudulent manner, or
(iii) conducts himself in an unprofessional or unethical manner which in the
reasonable judgment of the Board of Directors of the Company is detrimental to
the Company.

     

    (c)           The Employee willfully and continually
fails or refuses to adhere to any written agreements to which the Employee and
the Company or any of its affiliates are parties, which failure shall not be
remedied within ten (10) business days after written notice from the
Company to the Employee.

     

    (d)           Employee is convicted of a felony or a
crime involving moral turpitude or enters a plea of no contest or nolo
contendere thereto.

     

    Section
4.4.       
 Termination upon
Employee's Death.  The Employee's employment
shall be automatically terminated and the employment relationship between the
Employee and the Company shall be deemed severed upon the death of the Employee
during the Employment Period.

     

    Section
4.5.       
Termination upon
Employee's Permanent Disability.  The Company shall may
terminate Employee's employment upon fourteen (14) days notice in the event of
the permanent disability of the Employee, which for the purposes of this
Agreement is defined as the Employee's inability, through physical or mental
illness or other cause, to perform, in the opinion of the Board, his normal
duties as an employee for a period of ninety (90) days out of any one hundred
twenty (120) day period during the term of this Agreement or for a period of
ninety (90) consecutive days.

     

    Section
4.6.   
   Consequences of
Termination of Employment.

     

    Section
4.6.1    Termination
without Cause and Resignation with "Good Reason".  In the event of termination
of Employee's employment without Cause pursuant to Section
4.2 or the resignation by
Employee for "good reason" pursuant to Section
4.1.1, (a) the Company
shall pay to Employee (i) the Employee's then current salary through the
Termination Date or Resignation Date, payable to Employee no later than the
Company's next regular payroll payment date following the Resignation Date or
Termination Date, (ii) all vacation accrued as of the
Termination Date or
Resignation Date calculated in accordance with Section
1.2.5, payable to Employee
no later than the Company's next regular payroll payment date following the
Resignation Date or Termination Date, and (iii) all bonuses earned but not paid
as of the Termination Date or Resignation Date; (b) shall pay Employee as
compensation for loss of office twelve (12) months base salary at the Employee’s then current
salary in equal monthly installments over the
twelve month period following the Termination
Date (reduced pro rata if such termination occurs during the last year of the
Initial Term and based on estimated time worked pursuant to Article
I), provided that such
payments shall cease if the Employee becomes employed during such twelve (12) month period; and (c) the provisions of Section
3.3 shall not apply and
shall be of no further force or effect.  Payment of the bonus, if any,
shall be made on or before March 31 of the year following the Resignation Date
or Termination Date.

    
      
         

      

      
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    Section
4.6.2  Termination
for Cause and Resignation without "Good
Reason".  In the event of termination
of Employee's employment for Cause or the resignation by Employee without "good
reason", the Company shall pay to Employee the Employee's earned but unpaid
then-current base salary through the Termination Date or Resignation Date,
payable to Employee no later than the Company's next regular payroll payment
date following the Resignation Date or Termination Date, (b) all vacation
accrued as of the Termination Date or Resignation Date calculated in accordance
with Section 1.2.5, payable to Employee no later than the Company's next regular
payroll payment date following the Resignation Date or Termination Date, and (c)
all bonuses earned but not paid as of the Termination Date or Resignation
Date.  Payment of the bonus, if any, shall be made on or before March
31 of the year following the Resignation Date or Termination
Date.

     

    Section
4.6.3  Death of
Employee.  In the
event of the death of Employee, the Company shall pay to Employee's executor,
personal representative, administrator, or heirs, as the case may be, the
Employee's earned but unpaid then-current base salary through the date of the
Employee's death, payable no later than the Company's next regular payroll
payment date following the death of Employee, (b) all vacation accrued as of the
Termination Date calculated in accordance with Section 1.2.5, payable no later
than the Company's next regular payroll payment date following the death of
Employee, and (c) all bonuses earned but not paid as of the date of Employee’s
death.  Payment of the bonus, if any, shall be made on or before March
31 of the year following Employee's death.

     

    Section
4.6.4  Permanent
Disability of Employee.  In the event of termination
of Employee's employment as a consequence of Employee's Permanent Disability,
the Company shall pay to Employee the Employee's earned but unpaid then-current
base salary through the Termination Date, payable to Employee no later than the
Company's next regular payroll payment date following the Termination Date, (b)
all vacation accrued as of the Termination Date calculated in accordance with
Section 1.2.5, payable to Employee no later than the Company's next regular
payroll payment date following the Termination Date, and (c) all bonuses earned
but not paid as of the Termination Date.  Payment of the bonus, if
any, shall be made on or before March 31 of the year following the Termination
Date.

     

    Section
4.6.5   No
Additional
Compensation.  Employee shall not be
entitled to other compensation as a result of the termination of his employment
for any reason, except pursuant to Article V.

     

    ARTICLE V

    CHANGE IN
CONTROL

     

    The Board
of Directors of the Company (the "Board") has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will
have the continued dedication of the Chief Operating Officer, Scientific
Services, notwithstanding the possibility or occurrence of a Change in Control
of the Company.  The Board believes it is imperative to diminish the
inevitable distraction of the Employee by virtue of personal uncertainties and
risks created by a pending or threatened Change in Control and to encourage the
Executive’s full attention and dedication to the Company currently and in the
event of any pending, threatened or actual Change in Control and to provide the
Employee with compensation and benefits arrangements upon a Change in Control
which are consistent with the Employee’s significant leadership position and
which are competitive.  (See Addendum A for Definition of Change in
Control).

    
      
         

      

      
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    Section
5.1. 
Involuntary
Termination/Change in Control.  In the case of (a)
involuntary termination of the Employee's employment, or (b) the occurrence of
either of the events described in clauses (i) or (ii) below (such event being
deemed a termination of Employee's employment for purposes of this Article
V) followed by written
notice from Employee to the Company or its successor that such event has
occurred, in any case within one year following a Change in Control of the
Company, Employee will be paid the compensation and terminal pay described in
Section
5.3.

     

    (i)           Elimination or diminution of the
Employee’s position, authority, duties and responsibilities relative to the most
significant of those held, exercised and assigned at any time during the six
month period immediately preceding a Change in Control;

     

    (ii)           Change in location requiring the
Employee’s services to be performed at a location other than the location where
the Employee was employed immediately preceding a Change in Control, other than
any office which is the headquarters of the Company and is less that 35 miles
from such location.

     

    Section 5.2.   [Reserved]

     

    Section
5.3.  
Terminal
Pay.  Upon the
occurrence of any of the events described in Section
5.1, in addition to any
amounts Employee may otherwise be entitled to receive under this Agreement,
Employee shall be entitled to receive terminal pay equal to two (2) years annual
base salary, to be paid to Employee by the Company in twenty-four (24) equal
monthly installments.

     

    Section
5.4.  
Special
Bonus.  In
addition to the Terminal Pay and the other amounts described herein, the
Employee will be eligible, based on performance, for any special bonus program
which may be instituted by the Company in recognition of particular assignments,
duties or responsibilities required during the crucial transition period leading
up to, or following, the Change in Control.

     

    ARTICLE VI

    MISCELLANEOUS

     

    Section
6.1.  
Relationship
between the Parties.
 The relationship between the Company and
the Employee shall be that of an employer and an employee, and nothing contained
herein shall be construed or deemed to give the Employee any interest in any of
the assets of the Company.

     

    Section
6.2.  
Notices.  Any notice required or
permitted to be given under this Agreement shall be in writing and delivered
personally or sent by certified mail, addressed to the party entitled to receive
said notice, at the following addresses:

    
      
         

      

      
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    If to
Company:          
          Bioanalytical
Systems, Inc.

    2701 Kent Avenue

    West Lafayette,
IN  47906

    Attn:  Chairman of the
Board

    

    If to
Employee:           
        Anthony S. Chilton

    1035 Richmond Glen Circle

    Alpharetta,
GA  30004

    

    or at
such other address as may be specified from time to time in notices given in
accordance with the provisions of this Section
6.2.

     

    Section
6.3.  
Enforceability.  Both the Company and the
Employee stipulate and agree that if any portion, paragraph sentence, term or
provision of this Agreement shall to any extent be declared illegal, invalid or
unenforceable by a duly authorized court of competent jurisdiction, then, (a)
the remainder of this Agreement or the application of such portion, paragraph,
sentence, term or provision in circumstances other than those as to which it is
so declared illegal, invalid or unenforceable, shall not be affected thereby,
(b) this Agreement shall be construed in all respects as if the illegal, invalid
or unenforceable matter had been omitted and each portion and provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law
and (c) the illegal, invalid or unenforceable portion, paragraph, sentence, term
or provision shall be replaced by a legal, valid and enforceable provision which
most closely reflects the intention of the parties hereto as reflected
herein.

     

    Section
6.4.  
Nonwaiver.  The failure of either party
hereto to insist in any one or more instances upon performance of any of the
provisions of this Agreement or to pursue its or his rights hereunder shall not
be construed as a waiver of any such provisions or as the relinquishment of any
such rights.

     

    Section
6.5.  
Succession.  This Agreement shall inure
to the benefit of and be binding upon the parties hereto and upon their heirs,
personal representatives, and successor entities.  This Agreement may
not be assigned by either party without prior written agreement of both
parties.

     

    Section
6.6.  
Governing Law.  The laws of the State of
Indiana shall govern the construction and enforceability of this
Agreement, without regard
to conflict of laws principles.

     

    Section
6.7.  
Entire
Agreement.  This
Agreement constitutes the entire Agreement between the parties as to the subject
matter contained herein and all other agreements or understandings are hereby
superseded and terminated.

     

    Section
6.8.  
Collective
Agreements.  There are no collective
agreements which directly affect the terms and conditions of the Employee's
employment.

     

    Section
6.9.  
Grievance
and Disciplinary Procedures.  If the Employee wishes to
obtain redress of any grievance relating to his employment or if he is dissatisfied
with any reprimand, suspension or other disciplinary steps taken by the Company,
he shall apply in writing
to the Chairman of the Board of Directors of the Company, setting out the
nature and details of any such grievance or
dissatisfaction.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Section
6.10.  
Heading.  The headings of the
sections are inserted for convenience only and do not affect the interpretation
or construction of the sections.

     

    Section
6.11.  
Remedies.  Employee acknowledges that
a remedy at law for any breach or threatened breach of the provisions of
Sections
3.1 through 3.3 of this Agreement would be inadequate
and therefore agrees that the Company shall be entitled to injunctive relief,
both preliminary and permanent, in addition to any other available rights and
remedies in case of any such breach or threatened breach; provided, however,
that nothing contained herein shall be construed as prohibiting the Company from
pursuing any other remedies available for any such breach or threatened
breach.  Employee further acknowledges and agrees that in the event of
a breach by Employee of any provision of Sections
3.1 through 3.3 of this Agreement, the Company shall be entitled,
in addition to all other remedies to which the Company may be entitled under
this Agreement to recover from Employee its reasonable costs including
attorney's fees if the Company is the prevailing party in an action by the
Company.  This Agreement is entered into by the Company for itself and
in trust for each of its affiliates with the intention that each company will be
entitled to enforce the terms of this Agreement directly against
Employee.

     

    [SIGNATURES ON THE FOLLOWING
PAGE]

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Company and the Employee have executed, or caused to be
executed, this Agreement as of the day and year first written
above.

    
      
        
          
            
              
                
                  
                    
                      
                        	 	 	 	 
	"COMPANY"	 	"EMPLOYEE"
	 	 	 	 
	BIOANALYTICAL
      SYSTEMS, INC.	 	 
	 	 	 	 
	
                                By:

                              	
                                   

                              	 
      	
                                   

                              
	
                                Richard
      M. Shepperd

                              	 
      	
                                Anthony
      S. Chilton

                              
	
                                Chief
      Executive Officer

                              	 
      	 
      

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    ADDENDUM
B

    TO

    AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

    FOR

    ANTHONY
S. CHILTON

    

    If
Employee becomes the President and Chief Executive Officer of the Company during
the Employment Period, Employee shall be entitled to the following additional
benefits effective on the dates indicated:

    

    
      	
              1.

            	
              Employee's base salary will
      increase to $21,188.33 per month for the portion of the
      Employment Period during which he serves as President and Chief Executive
      Officer, commencing with the month in which he is elected as President and
      Chief Executive Officer.

            

    

     

    
      	
              2.

            	
              On the date he is elected as the
      President and Chief Executive Officer, Employee will receive a grant of
      options to purchase 125,000 common shares of the Company at an exercise
      price that is equal to the fair market value of the common shares on the
      date of grant.  The options will vest and become exercisable in
      equal installments on the same dates as the options granted to Employee
      pursuant to Section
      1.2.2.

            

    

     

    
      	
              3.

            	
              On each of the first and second
      anniversaries of the Effective Date, Employee will receive an additional
      grant of options to purchase 25,000 common shares of the Company (50,000
      shares in the aggregate) at an exercise price that is equal to the fair
      market value of the common shares on the date of grant.  The
      first such grant will vest and become exercisable in two equal
      installments on January 31, 2012 and 2013.  The second such
      grant will vest and become exercisable on January 31,
      2013.

            

    

     

    
      	
              4.

            	
              The EBITDA Bonus provided for in
      Section
      1.2.3 will continue
      to be earned during the period Employee is the President and Chief
      Executive Officer.

            

    

     

    
      	
              5.

            	
              Employee shall have such
      additional duties as are consistent with the office of Chief Executive
      Officer and as are delegated to him by the Board of
      Directors.

            

    

     

    
      	
              6.

            	
              As promptly as practicable
      following his election as President and Chief Executive Officer, Employee
      will be elected to the
Board.

            

    

    
      
         

      

      
        14BIOANALYTICAL
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

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