Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934
Filed by
the Registrant þ
Filed by
a Party other than the Registrant o
Check the
appropriate box:
o
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Preliminary
Proxy Statement
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o
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Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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þ
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to §240.14a-12
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Bioanalytical
Systems, Inc.
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
þ
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction
applies:
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3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was
determined):
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4)
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Proposed
maximum aggregate value of
transaction:
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¨
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Fee
paid previously with preliminary
materials.
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o
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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February
5, 2009
Dear BASi
Shareholders:
You are
invited to attend the Annual Meeting of Shareholders of Bioanalytical Systems,
Inc. (“BASi”) to be held Thursday, March 19, 2009, at 10:00 a.m. (EST) at BASi
headquarters located at 2701 Kent Avenue, West Lafayette, Indiana,
47906.
At the
meeting, we are asking the shareholders to elect five directors of BASi to serve
until the next annual meeting of shareholders.
Details
can be found in the accompanying Notice of Annual Meeting and Proxy
Statement.
We hope
you are able to attend the Annual Meeting personally, and we look forward to
meeting with you. Whether or not you currently plan to attend, please complete,
date and return the proxy card in the enclosed envelope. The vote of each
shareholder is very important. You may revoke your proxy at any time before it
is voted by giving written notice to the Secretary of BASi, by filing a properly
executed proxy bearing a later date or by attending the Annual Meeting and
voting in person.
On behalf
of the Board of Directors and management of BASi, I sincerely thank you for your
continued support.
Sincerely,
Richard
M. Shepperd
President
and Chief Executive Officer
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
DATE:
March 19, 2009
TIME:
10:00 a.m.
PLACE:
Bioanalytical Systems, Inc. Headquarters
2701 Kent
Avenue
West
Lafayette, IN 47906
MATTERS
TO BE VOTED UPON:
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1.
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To
elect five directors of BASi to serve until the next annual meeting of
shareholders.
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OUR BOARD
OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE NOMINEES NAMED
IN THE PROXY STATEMENT.
Holders
of BASi common shares of record at the close of business on January 30, 2009 are
entitled to notice of, and to vote at, the Annual Meeting.
By Order
of the Board of Directors,
Richard
M. Shepperd
President
and Chief Executive Officer
YOUR VOTE
IS IMPORTANT. IF YOU DO NOT EXPECT TO ATTEND THE ANNUAL MEETING, OR IF YOU DO
PLAN TO ATTEND BUT WISH TO VOTE BY PROXY, PLEASE DATE, SIGN AND PROMPTLY MAIL
THE ENCLOSED PROXY. A POSTAGE-PAID RETURN ENVELOPE IS PROVIDED FOR THIS
PURPOSE.
TABLE OF CONTENTS
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Page
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PROXY
STATEMENT
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1
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HOW
TO VOTE YOUR SHARES
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1
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COMMONLY
ASKED QUESTIONS AND ANSWERS
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2
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PROPOSAL
1 - ELECTION OF DIRECTORS
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3
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Required
Vote and Board of Directors’ Recommendation
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3
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Business
Experience of Nominated Directors
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3
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Committees
and Meetings of the Board of Directors
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4
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Family
Relationships
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6
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Certain
Relationships and Transactions
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6
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Communications
with the Board of Directors
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6
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Communications
with the Audit Committee
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7
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Non-employee
Director Compensation and Benefits
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7
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SELECTION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTING FIRM
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9
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REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
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10
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PRINCIPAL
SHAREHOLDERS TABLE
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12
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COMPENSATION
OF EXECUTIVE OFFICERS
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12
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Compensation
Committee and Compensation Methodology
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12
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Changes
in Senior Management during Fiscal 2008
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13
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Employment
Agreements and Post-termination Payments
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13
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Fiscal
2008 Summary Compensation Table
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17
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Outstanding
Equity Awards at Fiscal Year-End Table
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18
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Fiscal
2008 Option Exercises
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18
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Equity
Compensation Plan Information
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SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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SHAREHOLDER
PROPOSALS FOR 2010 ANNUAL MEETING
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19
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OTHER
BUSINESS
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20
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APPENDIX
A - NOMINATING COMMITTEE CHARTER
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APPENDIX
B - COMPENSATION COMMITTEE CHARTER
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APPENDIX
C - AUDIT COMMITTEE CHARTER
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APPENDIX
D – CODE OF BUSINESS CONDUCT AND ETHICS
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BIOANALYTICAL
SYSTEMS, INC., PROXY STATEMENT
ANNUAL
MEETING OF MARCH 19, 2009
PROXY
STATEMENT
This
proxy statement is furnished by Bioanalytical Systems, Inc. (“BASi” or the
“Company”) in connection with the solicitation by the Board of Directors of BASi
of proxies to be voted at the Annual Meeting of Shareholders to be held at 10:00
a.m. (EST) on Thursday, March 19, 2009, and at any adjournment thereof. The
meeting will be held at the principal executive offices of BASi, 2701 Kent
Avenue, West Lafayette, Indiana 47906. This proxy statement and the accompanying
form of proxy were first mailed to shareholders on or about February 9,
2009.
A
shareholder signing and returning the enclosed proxy may revoke it at any time
before it is exercised by delivering written notice to the Secretary of BASi, by
filing a properly executed proxy bearing a later date or by attending the Annual
Meeting and voting in person. The signing of a proxy does not preclude a
shareholder from attending the Annual Meeting in person. All proxies returned
prior to the Annual Meeting, and not revoked, will be voted in accordance with
the instructions contained therein. Any proxy not specifying to the contrary
will be voted FOR the election of each of the nominees for director named below.
Abstentions and broker non-votes are not counted for purposes of determining
whether a proposal has been approved, but will be counted for purposes of
determining whether a quorum is present.
As of the
close of business on January 30, 2009, the record date for the Annual Meeting,
there were outstanding and entitled to vote 4,915,318 common shares of BASi.
Each outstanding common share is entitled to one vote. BASi has no other voting
securities outstanding. Shareholders do not have cumulative voting
rights.
A quorum
will be present if a majority of the outstanding common shares are present, in
person or by proxy, at the Annual Meeting. If a quorum is present, directors
will be elected by a plurality of the votes cast.
A copy of
the BASi Annual Report and Form 10-K, including audited financial statements and
a description of operations for the fiscal year ended September 30, 2008,
accompanies this proxy statement. The financial statements contained in the
Annual Report and Form 10-K are not incorporated by reference in this proxy
statement. The solicitation of proxies is being made by BASi, and all expenses
in connection with the solicitation of proxies will be borne by BASi. BASi
expects to solicit proxies primarily by mail, but directors, officers and other
employees of BASi may also solicit proxies in person or by telephone. BASi will
pay any costs so incurred, but the directors, officers and other employees
involved in such solicitations will not receive any additional compensation for
such actions.
HOW
TO VOTE YOUR SHARES
We are
pleased to offer you four options for voting your shares:
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(1)
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You
can vote via the Internet at www.proxyvote.com
with the instructions provided on the proxy card; or
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(2)
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You
can vote via telephone by following the instructions provided on the proxy
card; or
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(3)
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You
can attend the Annual Meeting and cast your vote in person;
or
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(4)
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You
may complete, sign, date and return by mail the proxy
card.
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We
encourage you to register your vote via the Internet. If you attend the meeting,
you may also submit your vote in person and any votes that you previously
submitted—whether via the Internet, by phone or by mail—will be superseded by
the vote that you cast at the meeting. Whether your proxy is submitted by the
Internet, by phone or by mail, if it is properly completed and submitted and if
you do not revoke it prior to the meeting, your shares will be voted at the
meeting in the manner set forth in this proxy statement or as otherwise
specified by you. To vote at the meeting, beneficial owners will need to contact
the broker, trustee or nominee that holds their shares to obtain a "legal proxy"
to bring to the meeting.
COMMONLY
ASKED QUESTIONS AND ANSWERS
Why am I
receiving this proxy statement and proxy card?
This
proxy statement describes the proposal on which you, as a shareholder, are being
asked to vote. It also gives you information on the proposal, as well as other
information so that you can make an informed decision. You are invited to attend
the Annual Meeting to vote on the proposal, but you do not need to attend in
person in order to vote. You may, instead, follow the instructions above to
vote by mail using the enclosed proxy card. Even if you currently plan to attend
the meeting, it is a good idea to complete and return your proxy card before the
meeting date just in case your plans change.
Who can vote at
the Annual Meeting?
Shareholders
who owned common stock on January 30, 2009 may attend and vote at the
Annual Meeting. Each common share is entitled to one vote. There were
4,915,318 common shares outstanding on January 30, 2009.
What am I voting
on?
We are
asking you to elect five directors to the Board of Directors of the
Company.
What if I change
my mind after I give my proxy?
You may
revoke your proxy and change your vote at any time before the polls close at the
meeting. You may do this by:
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Sending
a signed statement to the Company that the proxy is revoked (you may send
such a statement to the Company’s Secretary at our corporate headquarters
address listed on the Notice of Meeting);
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Signing
another proxy with a later date; or
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Voting
in person at the meeting.
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Your
proxy will not be revoked if you attend the meeting but do not
vote.
How many shares
must be present to hold the meeting?
To hold
the meeting and conduct business, a majority of BASi’s outstanding voting shares
as of January 30, 2009 must be present in person or represented by proxies at
the meeting. On this date, a total of 4,915,318 common shares were
outstanding and entitled to vote. Shares representing a majority number of these
votes, or 2,457,659 shares, must be present at the meeting or in person or
by proxy to hold the meeting and conduct business. This is called a
quorum.
Shares
are counted as present at the meeting if:
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They
are voted via the Internet at www.proxyvote.com;
or
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They
are voted via the telephone; or
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They
are voted in person at the meeting; or
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The
shareholder has voted by properly submitting a proxy card to the Company
via mail or by hand delivery. Abstentions and broker non-votes are not
counted for purposes of determining whether a proposal has been approved,
but will be counted for purposes of determining whether a quorum is
present.
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Will my shares be
voted if I do not sign and return my proxy card?
If your
shares are registered in your name, they will not be voted unless you vote by
submitting your proxy card via mail, or vote in person at the
meeting.
How will my
shares be voted if they are held in “street name”?
If your
shares are held in “street name,” you should have received voting instructions
with these materials from your broker or other
nominee. We urge you to instruct your broker or other nominee how to vote your
shares by following those instructions. If you do
not give your broker or nominee instructions as to how to vote your shares, they
may be voted only on matters for which the broker or nominee has discretionary
authority under applicable rules. These “broker non-votes” will be counted for
purposes of determining whether a quorum is present but will not be counted for
any other purpose with respect to Proposal 1.
How many votes
must the nominees have to be elected as directors?
Directors
will be elected by a plurality of the votes cast, meaning that the persons
receiving the highest number of “for” votes, up to the total number of directors
to be elected at the Annual Meeting, will be elected. We expect that the
election to be held at the 2009 Annual Meeting will be an uncontested
election.
Shares
represented by your proxy will be voted by BASi’s management “for” the election
of the five nominees recommended by BASi’s Board of Directors unless
you withhold authority for any or all of such nominees.
Who will pay for
this proxy solicitation?
We will
bear the costs of soliciting proxies from our shareholders. These costs include
preparing, assembling, printing, mailing and distributing the proxy statements,
proxy cards and annual reports. We will also reimburse brokerage houses and
other custodians for their reasonable out-of-pocket expenses for forwarding
proxy and solicitation materials to the beneficial owners of common
shares.
PROPOSALS
TO BE VOTED UPON
PROPOSAL
1 - ELECTION OF DIRECTORS
Required Vote and Board of
Directors’ Recommendation
The
Bylaws of BASi provide for seven to nine directors unless the Board fixes a
different number of directors. By resolution adopted on May 14, 2008,
the Board has fixed the number of directors at five. Five directors
will be elected at the Annual Meeting. Each director is elected for a one-year
term. The terms of all incumbent directors will expire at the Annual Meeting.
The Nominating Committee of the Board of Directors has nominated the following
current directors for re-election at the Annual Meeting. The directors nominated
for election are: William E. Baitinger, David W. Crabb, Leslie B. Daniels, Larry
S. Boulet and Richard M. Shepperd (collectively, the “Nominated Directors”). The
Board of Directors has determined that each of the Nominated Directors, other
than Richard M. Shepperd, is an “independent director” as defined in the
applicable rules of the NASDAQ Stock Market.
The Board
of Directors recommends that shareholders vote FOR the election of all of the
Nominated Directors and, unless authority to vote for any Nominated Director is
withheld, the accompanying proxy will be voted FOR the election of all the
Nominated Directors. However, the persons designated as proxies reserve the
right to cast votes for another person designated by the Board of Directors in
the event any Nominated Director becomes unable to serve or for good cause will
not serve. Proxies will not be voted for more than five nominees. If a quorum is
present, those nominees receiving a plurality of the votes cast will be elected
to the Board of Directors.
The
following table shows certain information about the Nominated
Directors:
Name
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Age
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Position
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Served
as
Director Since
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William
E. Baitinger
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73
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Director,
Chairman of the Board
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1979
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David
W. Crabb
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55
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Director
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2004
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Leslie
B. Daniels
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61
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Director
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2003
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Larry
S. Boulet
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62
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Director
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2007
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Richard
M. Shepperd
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68
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Director,
President and Chief Executive Officer
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2007
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Business Experience of
Nominated Directors
William
E. Baitinger has served as a director of BASi since 1979. Mr. Baitinger was
Director of Technology Transfer for the Purdue Research Foundation from 1988
until 2000. In this capacity he was responsible for all licensing and
commercialization activities
from Purdue University. Since 2000, he has served as Special Assistant to the
Vice President for Research at Purdue University. Mr. Baitinger has a Bachelor
of Science degree in Chemistry and Physics from Marietta College and a Master of
Science degree in Chemistry from Purdue University.
David W.
Crabb, M.D. has served as a director of the Company since February 2004. He has
been Chairman of the Indiana University Department of Medicine since 2001.
Previously he had served as Chief Resident of Internal Medicine and on the
Medicine and Biochemistry faculty of Indiana University. He was appointed Vice
Chairman for Research for the department and later Assistant Dean for Research.
Dr. Crabb serves on several editorial boards. He is Director of the Indiana
Alcohol Research Center funded by NIAAA. He was a recipient of an NIH Merit
Award and numerous other research and teaching awards. He currently serves on
the Board of Directors of Polymer Technology Sciences, Inc., a privately owned
corporation, and the Board of Trustees of Health and Hospital Corporation of
Marion County, a public agency.
Leslie B.
Daniels joined the BASi Board of Directors in July 2003. Mr. Daniels is a
founding partner of CAI, a private equity fund in New York City, and has served
in that capacity for at least the last five years. He previously was President
of Burdge, Daniels & Co., Inc., a principal in venture capital and buyout
investments as well as trading of private placement securities, and before that,
a Senior Vice President of Blyth, Eastman, Dillon & Co. where he had
responsibility for the corporate fixed income sales and trading departments. Mr.
Daniels is a former Director of Aster-Cephac SA, IVAX Corporation, MIM
Corporation, Mylan Laboratories, Inc., NBS Technologies Inc. and MIST Inc. He
was also Chairman of Zenith Laboratories, Inc. and currently serves as Chairman
of Turbo Combustor Technology Inc. and as a Director of SafeGuard Health
Enterprises, Inc. and Aerosat, Inc.
Larry S.
Boulet has served as a director of the Company since May 2007. Mr. Boulet was a
Senior Audit Partner with PriceWaterhouseCoopers (PWC), retiring in July 2002,
and a National Financial Services Industry Specialist. For the last five years
of his career with PWC, Mr. Boulet served as Partner-in-charge of the
Indianapolis office’s Private Client Group. Prior to serving on our Board, he
served on the Board of Directors of Century Realty Trust, an Indiana based, real
estate investment trust. He also served as Audit Committee Chairman until the
Trust’s sale and liquidation in 2007. Currently, Mr. Boulet also serves on the
Indiana State University Foundation Board of Directors, where he is the
immediate past Chairman of the Board. He holds a Bachelor of Science degree in
Accounting from Indiana State University.
Richard
M. Shepperd was elected President and Chief Executive Officer of the Company in
September 2006, and in May, 2007 agreed to extend his term until December 2009.
Mr. Shepperd served for two years prior to joining the Company with Able
Laboratories, Inc., of Cranbury, New Jersey ("Able") as its Chief Restructuring
Officer and Director of Restructuring. Able was formerly a generic
pharmaceutical manufacturing company which filed a voluntary petition for
bankruptcy on July 18, 2005 following the loss of FDA approval for its product
line. Mr. Shepperd's duties for Able included exercising executive authority
over all operational and restructuring activities of Able, which included
advising its Board, creditors committee and courts regarding strategies to
maintain and realize the most value from the company's assets. Able was not
affiliated with the Company. For the two years prior to serving with Able, Mr.
Shepperd served as an independent management consultant for various businesses.
In that capacity, he advised these businesses on developing strategies to
improve their financial health and maximize the assets of those
organizations.
Committees and Meetings of
the Board of Directors
The Board
of Directors has established Compensation, Audit and Nominating Committees, each
of which has a written charter. Scheduled meetings are supplemented by frequent
informal exchange of information and actions taken by unanimous written consents
without meetings.
No member
of the Board of Directors attended fewer than 75% of the meetings of the Board
of Directors and meetings of any committee of the Board of Directors of which he
or she was a member. Three out of five members of the Board of Directors
attended the 2008 Annual Meeting of shareholders. All of the members of the
Board of Directors are encouraged, but not required, to attend BASi’s annual
meetings. The following chart shows the number of meetings of each of the
committees of the Board of Directors and meetings of the Board of Directors at
which a quorum was present:
Committee
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Members
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Meetings
in 2008
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Compensation
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Leslie
B. Daniels
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4
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William
E. Baitinger
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David
W. Crabb
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Audit
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Larry
S. Boulet
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4
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William
E. Baitinger
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Leslie
B. Daniels
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David
W. Crabb
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Nominating
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William
E. Baitinger
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1
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Leslie
B. Daniels
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David
W. Crabb
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Board
of Directors
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4
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The
Compensation Committee makes recommendations to the Board of Directors with
respect to:
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compensation
arrangements for the executive officers of BASi,
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policies
relating to salaries and job descriptions,
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insurance
programs,
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benefit
programs, including retirement plans,
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•
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administration
of the 2008 Stock Option Plan.
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The Audit
Committee is responsible for:
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reviewing
with the auditors the scope of the audit work
performed,
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•
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establishing
audit practices,
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overseeing
internal accounting controls,
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•
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reviewing
financial reporting, and
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accounting
personnel staffing.
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The Board
of Directors has adopted a written charter for the Compensation Committee, as
Appendix B in this Proxy Statement, and for the Audit Committee, as Appendix C
in this Proxy Statement. Audit Committee members are not employees of BASi and,
in the opinion of the Board of Directors, are “independent” (as defined by Rule
4200(a)(15) of the NASD listing standards). The Board of Directors has
determined that Larry S. Boulet and Leslie B. Daniels are “audit committee
financial experts” (as defined by Item 401(h) of Regulation S-K) and
“independent” (as defined by Item 7(d)(3)(iv) of Schedule 14A).
The
Nominating / Corporate Governance Committee is responsible for receiving and
reviewing recommendations for nominations to the Board of Directors and
recommending individuals as nominees for election to the Board of Directors.
Nominating Committee members are not employees of BASi and, in the opinion of
the Board of Directors, are “independent” (as defined by rule 4200 (a)(15) of
the NASD listing standards). The Board of Directors adopted a written charter
for the Nominating Committee on February 21, 2007.
The Board
of Directors will consider for nomination as directors persons recommended by
shareholders. Such recommendations must be made to the Board of Directors or to
an individual director in writing and delivered to Bioanalytical Systems, Inc.,
Attention: Corporate Secretary, 2701 Kent Avenue, West Lafayette, Indiana 47906.
The Secretary will forward all such communications to the
addressee. Nominations must set forth, with respect to the person
nominated, their name, age, business address and residence address, principal
occupation or employment, class and number of shares of BASi which are owned
beneficially or of record by the person, and any other information relating to
the person that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder. The shareholder making this proposal must
state their name and record address, the class and number of shares of BASi
which they own beneficially or of record, a description of all arrangements or
understandings between such shareholder and each proposed nominee and any other
person or persons (including their names) pursuant to which the nomination(s)
are to be made by such shareholder, a representation that such shareholder
intends to appear in person or by proxy at the meeting to nominate the persons
named in its notice, and any other information relating to such shareholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder. Such notice must be
accompanied by a written consent of each proposed nominee to being named as a
nominee and to serve as a director if elected. The Chair of the
Nominating/Corporate Governance Committee or his or her designee shall have the
authority to determine whether a nomination is properly made.
There is
no fixed process for identifying and evaluating potential candidates to be
nominees for directors, and there is no fixed set of qualifications that must be
satisfied before a candidate will be considered. Rather, the Nominating
Committee has the flexibility to consider such factors as it deems appropriate.
These factors may include education, diversity, experience with business and
other organizations comparable with BASi, the interplay of the candidate’s
experience with that of other members of the Board of Directors, and the extent
to which the candidate would be a desirable addition to the Board of Directors
and to any of the committees of the Board of Directors. The Nominating Committee
will evaluate nominees for directors submitted by shareholders in the same
manner in which it evaluates other director nominees. No shareholder has
properly nominated anyone for election as a director at the Annual
Meeting.
Family
Relationships
There are
no family relationships among the directors and executive officers of
BASi.
Certain Relationships and
Transactions
As part
of the acquisition of PharmaKinetics Laboratories, Inc. (“PKLB”) by the Company
in fiscal 2003, Leslie B. Daniels, a director of the Company nominated for
reelection, was one of several individuals who exchanged preferred stock of PKLB
for 6% convertible subordinated debt of the Company in the amount of $498,648.
The total of $4,000,000 of such debt issued in the acquisition was repaid in
December, 2007.
The Board
reviews transactions with related parties, but has no formal policies in place
with respect to such review or the approval of such transactions.
Communications with the
Board of Directors
Any
shareholder who desires to contact members of the Board of Directors, including
non-management members as a group, may do so by writing to:
Corporate
Secretary, Bioanalytical Systems, Inc.
2701 Kent
Avenue
West
Lafayette, IN 47906
The
corporate secretary will collect all such communications and organize them by
subject matter. Thereafter, each communication will be promptly forwarded to the
appropriate board committee chairperson according to the subject matter of the
communication. Communications addressed to the non-management members as a group
will be forwarded to each non-management member of the board.
Communications with the
Audit Committee
Any
person who would like to contact the Company for the purpose of submitting a
complaint regarding accounting, internal accounting controls, or auditing
matters may do so via email, by writing to:
Chairman
of the Audit Committee,
Larry S.
Boulet
Upon
receipt of a complaint, the Chairman of the Audit Committee will follow a review
process and actions dictated in the Company’s Code of Business Conduct and
Ethics to review and address the complaint. The Company’s Code of
Business Conduct and Ethics applies to all of BASI’s directors, employees and
officers. BASi’s Code of Business Conduct and Ethics is available as
Appendix D to this proxy statement.
Non-Employee Director
Compensation and Benefits
BASi's
compensation package for non-employee directors is generally comprised of cash
(annual retainers and committee meeting fees) and stock option awards. The
annual pay package is designed to attract and retain highly-qualified,
independent professionals to represent BASi's shareholders and reflect BASi's
position in the industry. With the 2008 Stock Option Plan, BASi intended to
better align director and shareholder interests through the use of stock option
awards to directors. Actual annual pay varies among directors based on Board
committee memberships, committee chair responsibilities and meetings attended.
BASi has not adopted guidelines with respect to non-employee director ownership
of common shares. Directors who are employees receive no additional compensation
for their service on the Board.
Compensation
for non-employee directors during the 2008 fiscal year consisted of the
following:
Type
of Compensation
|
|
Amount ($)
|
|
Annual
retainer for Board membership
|
|
|
3,300
|
|
Annual
retainer for director serving as Chair of the Audit
Committee
|
|
|
2,000
|
|
Annual
retainer for director serving as Chair of the Compensation
Committee
|
|
|
1,000
|
|
Annual
retainer for director serving as Chair of the Nominating
Committee
|
|
|
500
|
|
Meeting
fee for Board meeting, in person
|
|
|
1,000
|
|
Meeting
fee for Board meeting, by phone
|
|
|
500
|
|
Committee
meetings, non-Board meeting days, in person
|
|
|
500
|
|
Committee
meetings, non-Board meeting days, by phone
|
|
|
250
|
|
Daily
fee for consultation with management
|
|
|
1,000
|
|
For
meetings of the standing Board committees held in conjunction with a meeting of
the Board, no additional fees are paid.
Option Awards
The
awards disclosed under the heading "Option Awards" consist of the expense
recognized in fiscal 2008 for grants of stock options awarded under the 2008
Stock Option Plan and the 1997 Employee Stock Option Plan. The
recognized compensation expense of the option awards for financial reporting
purposes will likely vary from the actual amount ultimately realized by the
director based on a number of factors. The factors include BASi's actual
operating performance, Common Share price fluctuations, differences from the
valuation assumptions used, the restricted nature of shares acquired under
non-qualified stock option grants, the limited liquidity in the trading of the
Company’s shares and the timing of exercise or applicable vesting.
Business
Expenses
The
directors are reimbursed for their business expenses related to their attendance
at BASi meetings, including room, meals and transportation to and from Board and
committee meetings. Directors are also
encouraged to attend educational programs related to Board issues and corporate
governance, which are reimbursed by the Company.
Non-Employee
Directors' Compensation Table
The
following table shows information regarding the compensation of BASi's
non-employee directors for the 2008 fiscal year.
DIRECTOR
COMPENSATION FOR FISCAL 2008
|
|
Name
|
|
Fees paid in
cash
($)
|
|
|
Option
Awards
(1)
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
William
E. Baitinger
|
|
|
6,800
|
|
|
|
1,943 |
(2)
|
|
|
94 |
(6)
|
|
|
8,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry
S. Boulet
|
|
|
8,800
|
|
|
|
461 |
(3)
|
|
|
2,046 |
(7)
|
|
|
11,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr.
David W. Crabb
|
|
|
6,300
|
|
|
|
— |
(4)
|
|
|
—
|
|
|
|
6,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leslie
B. Daniels
|
|
|
6,050
|
|
|
|
461 |
(5)
|
|
|
—
|
|
|
|
6,511
|
|
|
(1)
|
Amounts
expensed in financial statements for fiscal 2008 for all options held by
the named director regardless of date of
grant.
|
|
(2)
|
Mr.
Baitinger has 21,000 options outstanding with 9,000 vested and
exercisable. The 9,000 vested options were granted on June 20, 2003 at an
exercise price of $2.80 under the 1997 Director Stock Option Plan,
expiring June 19, 2013. The remaining 12,000 unvested options
were granted on September 4, 2008 at an exercise price of $5.09 under the
2008 Stock Option Plan, expiring on September 3,
2018.
|
|
(3)
|
Mr.
Boulet has 10,000 options outstanding with zero vested and
exercisable. The 10,000 options were granted on September 4,
2008 at an exercise price of $5.09 under the 2008 Stock Option Plan,
expiring on September 3, 2018.
|
|
(4)
|
Dr.
Crabb has zero options outstanding.
|
|
(5)
|
Mr.
Daniels has 10,000 options outstanding with zero vested and
exercisable. The 10,000 options were granted on September 4,
2008 at an exercise price of $5.09 under the 2008 Stock Option Plan,
expiring on September 3, 2018.
|
|
(6)
|
Reimbursement
to Mr. Baitinger for travel expenses associated with Board
meetings.
|
|
(7)
|
Reimbursement
to Mr. Boulet for attendance at National Association of Corporate
Directors conference and travel expenses associated with the
conference.
|
SELECTION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Company’s Audit Committee engaged Crowe Horwath LLP (“Crowe”) as the Company’s
independent registered public accounting firm for the audit of the consolidated
financial statements for the fiscal years ended September 30, 2008, 2007 (as
Crowe Chizek and Company LLC) and 2006 (as Crowe Chizek and Company
LLC).
The
Company engaged Crowe as its principal independent registered public accountants
effective as of October 30, 2006. At no time prior to October 30, 2006 had the
Company consulted with Crowe regarding either: (i) the application of accounting
principles to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Company’s financial statements;
or (ii) any matter that was either the subject of a disagreement (as that term
is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions
to that Item) or a reportable event (as that term is defined in Item
304(a)(1)(v) of Regulation S-K).
Representatives
of Crowe are expected to be present at the Annual Meeting. They will have the
opportunity to make a statement if they desire to do so and will be available to
answer appropriate questions concerning the audit of the Company’s financial
statements.
Fees of Independent
Registered Public Accountants
The
aggregate fees billed for the last two fiscal years for each of the following
categories of services are set forth below:
|
|
2008
|
|
|
2007
|
|
Audit
Fees -
|
|
|
|
|
|
|
Aggregate
fees for annual audit, quarterly reviews
|
|
$ |
240,000 |
|
|
$ |
280,000 |
|
|
|
|
|
|
|
|
|
|
Tax
Fees -
|
|
|
|
|
|
|
|
|
Income
tax services related to compliance with tax laws
|
|
$ |
120,000 |
|
|
$ |
66,000 |
|
There
were no fees for services other than the above paid to the Company’s Independent
Registered Public Accountants.
BASi’s
policies require that the scope and cost of all work to be performed for BASi by
its independent registered public accountants must be approved by the Audit
Committee. Prior to the commencement of any work by the independent registered
public accountants on behalf of BASi, the independent registered public
accountants provide an engagement letter describing the scope of the work to be
performed and an estimate of the fees. The Audit Committee and the Chief
Financial Officer must review and approve the engagement letter and the estimate
before authorizing the engagement. All fees were reviewed and approved by
the Audit Committee during fiscal 2008 and 2007. Where fees charged by the
independent registered public accountants exceed the estimate, the Audit
Committee must review and approve the excess fees prior to their
payment.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
following Report of the Audit Committee shall not be deemed to be “soliciting
material” or to be “filed” with the Securities and Exchange Commission nor shall
this information be incorporated by reference into any existing or future filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, except to the extent that BASi specifically incorporates it by
reference into a filing.
The Audit
Committee of the Board operates under a written charter, which is reviewed on an
annual basis and was most recently amended in May, 2008. The Audit Committee is
comprised of four non-employee directors, each of whom in the opinion of the
Board of Directors meets the current independence requirements and financial
literacy standards of the NASDAQ Marketplace Rules, as well as the independence
requirements of the Securities and Exchange Commission (“SEC”). From October 1,
2006 through August 21, 2007, the Audit Committee consisted of William E.
Baitinger, Leslie B. Daniels and David W. Crabb. On August 21, 2007, the Board
elected Larry S. Boulet to be Chairman of the Audit Committee, serving with the
other three members of the Committee through the remainder of our fiscal year
ended September 30, 2007 and continuing through our fiscal year ended September
30, 2008. In the opinion of the Board of Directors, Mr. Boulet and Mr. Daniels
each meet the criteria for a “financial expert” as set forth in applicable SEC
rules.
BASi’s
management is primarily responsible for the preparation, presentation and
integrity of the Company’s financial statements. BASi’s independent registered
public accounting firm, Crowe Horwath LLP (‘independent auditors’), is
responsible for performing an independent audit of the Company’s financial
statements and expressing an opinion as to the conformity of the financial
statements with generally accepted accounting principles.
The
function of the Audit Committee is to assist the Board of Directors in its
oversight responsibilities relating to the integrity of BASi’s accounting
policies, internal controls and financial reporting. The Audit Committee reviews
BASi’s quarterly and annual financial statements prior to public earnings
releases and submission to the SEC; reviews and evaluates the performance of our
independent auditors; consults with the independent auditors regarding internal
controls and the integrity of the Company’s financial statements; assesses the
independence of the independent auditors: and is responsible for the selection
of the independent auditors. In this context, the Audit Committee has met and
held discussions with members of management and the independent auditors.
Management has represented to the Audit Committee that the Company’s
consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States, and the Audit Committee has
reviewed and discussed the consolidated financial statements with management and
the independent auditors. Management has also represented to the Audit Committee
that the Company’s internal control over financial reporting was not effective
as of the end of the Company’s most recently-completed fiscal year due to an
identified difference in the amounts of deferred and refundable income taxes in
the Company’s books and records as compared to the amounts included in the
Company’s income tax returns.. The failure to identify this difference and
resulting error in adopting FIN 48 through the normal financial statement
preparation process caused the Company to conclude that there was a material
weakness in the accounting for income taxes and that internal controls over
financial reporting were not effective as of September 30, 2008. To
prevent a recurrence of similar errors in future years, the Company plans to
implement in 2009 commercially available software that will accurately maintain
and track the differences between financial reporting and tax return
reporting.
The Audit
Committee also discussed with the independent auditors matters required to be
discussed by Statement on Auditing Standards No. 61 (Communications with Audit
Committees), as amended, including the quality and acceptability of the
Company’s financial reporting process and internal controls. The Audit Committee
has also discussed with the Company’s independent auditors the overall scope and
plans for their annual audit and reviewed the results of the audit with
management and the independent auditors.
In
addition, the Audit Committee has discussed the independent auditors’
independence from the Company and its management, including the matters in the
written disclosures required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent accountant's communications
with the audit committee concerning independence. The Audit Committee has also
considered whether the provision of any non-audit services (as discussed under
“Fees of Independent Auditors”) would impact the independence of the
auditors.
The
members of the Audit Committee are not engaged in the practice of auditing or
accounting. In performing its functions, the Audit Committee necessarily relies
on the work and assurances of the Company’s management and independent
auditors.
In
reliance on the reviews and discussions referred to in this report and in light
of it role and responsibilities, the Audit Committee recommended to the Board of
Directors that the audited financial statements of the Company included in the
Company’s Annual Report on Form 10-K for the year ended September 30, 2008 be
filed with the SEC.
AUDIT
COMMITTEE
Larry S.
Boulet (Chairman)
William
E. Baitinger
David W.
Crabb
Leslie B.
Daniels
PRINCIPAL
SHAREHOLDERS
Common
Stock
The
following table shows, as of January 30, 2009, the number of common shares owned
by our directors, executive officers named in the Summary Compensation Table
below, our current directors and executive officers as a group, and beneficial
owners known to us holding more than 5% of our outstanding common shares. As of
January 30, 2009, there were 4,915,318 common shares
outstanding.
NAME(4)
|
|
Shares
Owned
|
|
Shares
Owned
Jointly
|
|
Shares
/
Options
Owned
Beneficially
|
|
Total
|
|
%
|
|
Peter
T. Kissinger (1)
|
|
|
427,747
|
|
595,910
|
|
|
252,310
|
|
1,275,967
|
|
|
26.0
|
|
Candice
B. Kissinger (1)
|
|
|
250,956
|
|
595,910
|
|
|
429,101
|
|
1,275,967
|
|
|
26.0
|
|
William
B. Baitinger(2)
|
|
|
—
|
|
146,512
|
|
|
—
|
|
146,512
|
|
|
3.0
|
|
Ronald
E. Shoup(2)
|
|
|
361
|
|
89,760
|
|
|
—
|
|
90,121
|
|
|
1.8
|
|
Leslie
B. Daniels
|
|
|
38,042
|
|
—
|
|
|
—
|
|
38,042
|
|
|
0.8
|
|
Michael
R. Cox
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
0.0
|
|
Edward
M. Chait
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
0.0
|
|
Richard
M. Shepperd
|
|
|
15,750
|
|
—
|
|
|
—
|
|
15,750
|
|
|
0.3
|
|
Larry
S. Boulet
|
|
|
3,500
|
|
—
|
|
|
—
|
|
3,500
|
|
|
0.1
|
|
7
Executive Officers and Directors as a group
|
|
|
110,135
|
|
236,272
|
|
|
—
|
|
346,407
|
|
|
7.1
|
|
(1) Dr.
and Mrs. Kissinger’s shares owned beneficially include the shares owned
individually by the other spouse and 1,354 shares jointly owned with their
children.
(2)
Shares owned jointly by Mr. Baitinger and Dr. Shoup, with their wives,
respectively.
(4) All
addresses are in care of BASi at 2701 Kent Avenue, West Lafayette, Indiana
47906.
COMPENSATION OF EXECUTIVE
OFFICERS
Compensation Committee and
Compensation Methodology
During
the 2008 fiscal year, the Compensation Committee of the Board was responsible
for administering the compensation and benefit programs for BASi's team members,
including the executive officers. Historically, the Compensation Committee
annually reviewed and evaluated cash compensation and stock option award
recommendations along with the rationale for such recommendations, as well as
summary information regarding the aggregate compensation, provided to BASi's
executive officers. The Compensation Committee examined these recommendations in
relation to BASi's overall objectives and made compensation recommendations to
the Board for final approval. The Compensation Committee also historically sent
to the Board for approval its recommendations on compensation for the Chairman
of the Board and the President and Chief Executive Officer, who do not
participate in the decisions of the Board as to their compensation packages.
Neither the Chairman of the Board nor the President and Chief Executive Officer
was a member of the Compensation Committee during the 2008 fiscal
year.
BASi has
not hired a compensation consultant to review its compensation practices. The
compensation of BASi's executives who were employees as of September 30, 2007
(the end of our last fiscal year) was frozen by the Compensation Committee at
the last fiscal year’s compensation level through fiscal 2008 as part of the
effort to return the Company to profitability.
BASi's
executive compensation practices are also affected by the highly competitive
nature of the biotechnology industry and the location of BASi's executive
offices in West Lafayette, Indiana. The fact that West Lafayette, Indiana is a
small city in a predominantly
rural area can present challenges to attracting executive talent from other
industries and parts of the country; however, the favorable cost of living in
this area and the small number of competitive employers in this market, enable
the Company to pay generally lower salaries for comparable positions to others
in its industry. The Company has also recruited a number of key employees from
Purdue University, particularly for scientific and technical
responsibilities.
The
Compensation Committee, in collaboration with management, is in the process of
reviewing the compensation structure of the Company in order to provide the
proper incentives and necessary retention of key employees, including the named
executive officers, to achieve financial success and an appropriate return to
shareholders. These efforts will be ongoing in the current fiscal
year.
The
Company intends to develop compensation packages for BASi's executive officers
that meet each of the following three criteria: (1) market
competitive - levels competitive with companies of similar size and
performance to BASi; (2) performance-based "at risk" pay that is based on
both short- and long-term goals; and (3) shareholder-aligned incentives
that are structured to create alignment between the shareholders and executives
with respect to short- and long-term objectives.
Changes in Senior Management
During the 2008 Fiscal Year
During
the 2008 fiscal year and immediately following, there were significant changes
in BASi's executive management team. Among other changes, the following events
occurred:
|
–
|
on
September 30, 2008, Ronald E. Shoup, Chief Scientific Officer, retired
from BASi after nearly thirty years of
service;
|
|
–
|
on
October 1, 2008, Jon Brewer was hired as Vice President of Sales and
Marketing;
|
|
|
|
|
–
|
on
November 7, 2008, Edward M. Chait, Ph.D. resigned from his position as
Chief Business Officer of the Company;
and
|
|
–
|
on
December 1, 2008, Anthony S. Chilton, Ph.D., 52, joined the Company as
Chief Operating Officer, Scientific
Services.
|
Employment
Agreements and Post-Termination Payments
BASi has
Employment Agreements with Messrs. Shepperd, Cox, Brewer and
Chilton.
Employment Agreement with
Richard M. Shepperd
On
May 18, 2007, BASi entered into an Employment Agreement with
Mr. Shepperd to become President and Chief Executive Officer of BASi.
Pursuant to the terms of the agreement between BASi and Mr. Shepperd, the
agreement has an initial twenty-nine month term that provides for automatic
three-month extensions, beginning on January 1, 2010, unless either BASi or
Mr. Shepperd gives prior notice of termination. Mr. Shepperd will also
have the opportunity to earn an annual cash bonus at the discretion of the Board
of Directors.
On
January 12, 2009, BASi entered into an Amendment to Employment Agreement with
Mr. Shepperd. The Amendment reduces Mr. Shepperd's base salary from $35,000
per month to $20,000 per month, which will constitute an aggregate reduction of
$180,000 through December 31, 2009. Partially offsetting this, the
Amendment provides for a new housing allowance of $1,000 per month, for a total
of $12,000 in calendar 2009. The Amendment also contemplates that, if
a "Change in Control" (as defined in the employment contract) occurs prior to
the end of the term of the Agreement, Mr. Shepperd will receive a bonus payment
of $201,600.
The
agreement provides that Mr. Shepperd could be entitled to certain severance
benefits following termination of employment. If he is terminated by BASi
without "cause," or if Mr. Shepperd terminates his employment for "good
reason," he would be entitled to the following:
|
–
|
Mr. Shepperd's
base salary through December 31, 2009, to be paid
monthly;
|
|
–
|
All
vacation accrued as of the date of
termination;
|
|
–
|
All
bonus amounts earned but not paid as of the date of termination;
and
|
|
–
|
All
salary earned but not paid through the date of
termination.
|
In
addition, the non-solicitation provisions of Mr. Shepperd's employment
contract will not apply in the event of termination without cause or resignation
with good reason.
The
agreement further provides that if Mr. Shepperd's employment ends for any
reason other than termination without cause or resignation with “good reason,”
Mr. Shepperd shall receive his earned but unpaid salary through the date of
termination, all bonus amounts earned but not paid as of the date of termination
and all vacation accrued through the date of such termination.
Employment Agreement with
Michael R. Cox
On
November 6, 2007 BASi entered into an Employment Agreement with Mr. Cox to serve
as Vice President, Finance and Administration and Chief Financial Officer of
BASi. Pursuant to the terms of the agreement between BASi and Mr. Cox, the
agreement has an initial term that ends on December 30, 2010, but this
employment term can be extended for successive one year periods unless either
BASi or Mr. Cox gives the other party written notice at least 90 days before the
end of the term. Mr. Cox will receive a base salary of $165,000 per year in the
first year, which may be increased by the Company in the future. Mr. Cox will
also be eligible for any bonus plans adopted by the Company at the discretion of
the Compensation Committee of the Board of Directors.
The
Agreement provides that Mr. Cox could be entitled to severance benefits
following the termination of his employment, as is further described below under
the heading, “Change-in Control Agreements.” If he is terminated by BASi without
"cause", or if Mr. Cox terminates his employment for "good reason" he would be
entitled to the following:
|
·
|
Mr.
Cox's base salary, payable monthly for 12 months following
termination;
|
|
·
|
all
vacation accrued as of the date of termination;
|
|
·
|
all
bonus amounts earned but not paid as of the date of termination;
and
|
|
·
|
all
salary earned but not paid through the date of
termination.
|
In
addition, the non-solicitation provision of Mr. Cox's employment contract will
not apply in the event of termination without cause or resignation with good
reason.
Employment Agreement with
Jon Brewer
On
October 1, 2008, BASi entered into an Employment Agreement with Mr. Brewer to
serve as Vice President of Sales and Marketing of BASi. Pursuant to the terms of
the agreement between BASi and Mr. Brewer, the agreement has an initial term
that ends on March 31, 2010, but this employment term can be extended for
successive one year periods unless either BASi or Mr. Brewer gives the other
party written notice at least 90 days before the end of the term. Mr. Brewer
will receive a base salary of $155,000 per year in the first year, which may be
increased by the Company in the future. Additionally, Mr. Brewer will receive a
sign-on bonus in two installments of $5,000 each, payable on or before January
1, 2009 and June 1, 2009. Mr. Brewer will also be eligible for any
bonus plans adopted by the Company at the discretion of the Compensation
Committee of the Board of Directors.
The
Agreement provides that Mr. Brewer could be entitled to severance benefits
following the termination of his employment, as is further described below under
the heading, “Change-in Control Agreements.” If he is terminated by
BASi without "cause", or if Mr. Brewer terminates his employment for "good
reason" he would be entitled to the following:
|
·
|
Mr.
Brewer's base salary, payable monthly for 12 months following
termination;
|
|
·
|
all
vacation accrued as of the date of termination;
|
|
·
|
all
bonus amounts earned but not paid as of the date of termination;
and
|
|
·
|
all
salary earned but not paid through the date of
termination.
|
In
addition, the non-solicitation provision of Mr. Brewer’s employment contract
will not apply in the event of termination without cause or resignation with
good reason.
Employment Agreement with
Anthony S. Chilton
On
December 1, 2008, BASi entered into an Employment Agreement with Dr. Chilton to
serve as Chief Operating Officer, Scientific Services of BASi. Pursuant to the
terms of the agreement between BASi and Dr. Chilton, the agreement has an
initial term that ends on December 30, 2010, but this employment term can be
extended for successive one year periods unless either BASi or Dr. Chilton gives
the other party written notice at least 90 days before the end of the term. Dr.
Chilton will receive a base salary of $195,000 per year in the first year, which
may be increased by the Company in the future. Additionally, Dr. Chilton will
receive a sign-on bonus in two installments of $5,000 each, payable on or before
March 15, 2009 and July 15, 2009. Dr. Chilton will also be eligible
for any bonus plans adopted by the Company at the discretion of the Compensation
Committee of the Board of Directors.
The
Agreement provides that Dr. Chilton could be entitled to severance benefits
following the termination of his employment, as is further described below under
the heading, “Change-in Control Agreements.” If he is terminated by BASi without
"cause", or if Dr. Chilton terminates his employment for "good reason" he would
be entitled to the following:
|
·
|
Dr.
Chilton’s base salary, payable monthly for 12 months following
termination;
|
|
·
|
all
vacation accrued as of the date of termination;
|
|
·
|
all
bonus amounts earned but not paid as of the date of termination;
and
|
|
·
|
all
salary earned but not paid through the date of
termination.
|
In
addition, the non-solicitation provision of Dr. Chilton’s employment contract
will not apply in the event of termination without cause or resignation with
good reason.
Severance Agreement with Dr.
Edward M. Chait
On
November 7, 2008, BASi entered into a Severance Agreement with Dr. Chait in
connection with his separation from BASi. Pursuant to the terms of
the agreement between BASi and Dr. Chait, Dr. Chait will receive a continuation
of his salary for twelve months, paid monthly, for an aggregate of $165,000,
beginning on the date of separation. Additionally, BASi agreed to
provide Dr. Chait and his covered dependents with medical coverage under BASi’s
group health insurance program through December 31, 2008, with Dr. Chait
responsible for the employee portion of the premium.
Change-in-Control
Agreements
Mr.
Shepperd's Employment Agreement contains a change-in-control feature. Under Mr.
Shepperd's Employment Agreement, if Mr. Shepperd is “involuntarily terminated”
within one year following a "change in control," Mr. Shepperd will receive
$8,333.34 per month for each month remaining in his employment term. Included in
the Amendment to Employment Agreement entered into by the Company and Mr.
Shepperd on January 12, 2009, Mr. Shepperd also will receive a payment of
$201,600.00 in the event of a “change in control” of the Company, as defined by
Article 5 and Addendum A of the May 2007 Agreement. This amount shall
be paid within one (1) month of any such “change in control” and is intended to
be in addition to any Terminal Pay or other compensation that may become due and
owing pursuant to Article 5 of the May 2007 Agreement. Mr. Shepperd's
ordinary severance compensation under the Employment Agreement will not apply,
and he will be eligible for any special bonus program.
Mr.
Cox's, Mr. Brewer’s and Mr. Chilton’s Employment Agreements contain a change in
control feature. Under these Employment Agreements, if Mr. Cox, Mr. Brewer or
Mr. Chilton are “involuntarily terminated” for any reason following a change in
control, Mr. Cox, Mr. Brewer or Mr. Chilton would receive an amount equal to
their monthly base salary for the 12 months prior to termination payable for at
least 2 years. Each would also be eligible for any special bonus program and be
eligible to participate in Company sponsored benefits, savings and retirement
plans, practices, policies and programs, with the employee contribution paid by
the employee.
“Involuntarily
terminated” is defined in the Employment Agreements as resulting from a “change
in control” of the Company, and due to either (1) the 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”; or (2) a
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 than 35 miles from such location.
A "change
in control" is defined in Messrs. Shepperd’s and Chilton’s Employment Agreements
as (1) approval by shareholders of the Company of (a) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of stock of the Company would be
converted into cash, securities or other property, other than a consolidation or
merger of the Company in which holders of its common shares immediately prior to
the consolidation or merger have substantially the same proportionate ownership
of voting common stock of the surviving corporation immediately after the
consolidation or merger as immediately before, or (b) a sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all the assets of the Company; (2) a change in the majority of
members of the Board of Directors of the Company within a twenty-four (24) month
period unless the election, or nomination for election by the Company
shareholders, of each new director was approved by a vote of two-thirds (2/3) of
the directors then still in office who were in office at the beginning of the
twenty-four (24) month period; or (3) the Company combines with another company
and is the surviving corporation but, immediately after the combination, the
shareholders of the Company immediately prior to the combination do not hold,
directly or indirectly, more than fifty percent (50%) of the share of voting
common stock of the combined company (there being excluded from the number of
shares held by such shareholders, but not from the shares of voting common stock
of the combined company, any shares received by affiliates (as defined in the
rules of the SEC) of such other company in exchange for stock of such other
company). In addition, Messrs. Cox’s and Brewer’s Employment
Agreements also define a “change in control” to include (1) either (A) receipt
by the Company of a report on schedule 13D, or an amendment to such a report,
filed with the Securities and Exchange Commission (“SEC”) pursuant to Section
13(d) of the Securities Exchange Act of 1934 (the “1934 Act”) disclosing that
any person, group, corporation or other entity is the beneficial owner, directly
or indirectly, of 20 per cent or more of the outstanding stock of the company or
(B) actual knowledge by the company of facts, on the basis of which any person
is required to file such a report on schedule 13D, or an amendment to such a
report, with the SEC (or would be required to file such a report or amendment
upon the lapse of the applicable period of time Specified in Section 13(d) of
the 1934 Act) disclosing that such a person is the beneficial owner, directly or
indirectly, of 20 per cent or more of the outstanding stock of the company; or
(4) Either (A) receipt by the Company of a report on schedule 13D, or an
amendment to such a report, filed with the Securities and Exchange Commission
(“SEC”) pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the
“1934 Act”) disclosing that any person, group, corporation or other entity is
the beneficial owner, directly or indirectly, of 20 per cent or more of the
outstanding stock of the company or (B) actual knowledge by the company of
facts, on the basis of which any person is required to file such a report on
schedule 13D, or an amendment to such a report, with the SEC (or would be
required to file such a report or amendment upon the lapse of the applicable
period of time Specified in Section 13(d) of the 1934 Act) disclosing that such
a person is the beneficial owner, directly or indirectly, of 20 per cent or more
of the outstanding stock of the company.
Executive
Compensation Tables
Fiscal 2008 Summary
Compensation Table
The
following narrative, tables and footnotes describe the "total compensation"
earned during BASi's 2008 fiscal year by BASi's NEOs. The total compensation
presented below does not reflect the actual compensation received by BASi's NEOs
or the target compensation of BASi's NEOs during its 2008 fiscal year because
there was no value realized by BASi's NEOs during its 2008 fiscal year from
long-term incentives (exercise of options). The individual components
of the total compensation calculation reflected in the Summary Compensation
Table are broken out below:
Salary. Base salary earned
during BASi's 2008 fiscal year. The terms of the Employment Agreements governed
the base salary for Messrs. Shepperd, Cox and Chait.
Bonus. The amounts presented
as bonuses for NEO’s below represent amounts both paid and accrued in regards to
fiscal 2007 and 2008. Annual bonuses were paid in January, 2008 for fiscal 2007
and January, 2009 for fiscal 2008.
Option Awards. The awards
disclosed under the heading "Option Awards" consist of the expense recognized in
fiscal 2008 and 2007 for grants of stock options awarded under the 1997 Employee
Stock Option Plan and the non-qualifying option agreement of Mr. Shepperd
approved by shareholders at the 2008 Annual Meeting. The recognized
compensation expense of the option awards for financial reporting purposes will
likely vary from the actual amount ultimately realized by the NEO based on a
number of factors. The factors include BASi's actual operating performance,
Common Share price fluctuations, differences from the valuation assumptions
used, the restricted nature of shares acquired under non-qualified stock option
grants, the limited liquidity in the trading of the Company’s shares and the
timing of exercise or applicable vesting.
All Other Compensation. The
amounts included under the All Other Compensation are described in the footnotes
to the table.
SUMMARY
COMPENSATION TABLE
|
|
Name
and principal position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Option
Awards
(1)
($)
|
|
|
Company
Contributions
to
401(k)
($)
|
|
|
All
Other Compensation
($)
|
|
|
Total
($)
|
|
Richard
M. Shepperd, President & Chief
|
|
2007
|
|
|
420,000 |
|
|
|
295,000 |
(2) |
|
|
141,282 |
|
|
|
— |
|
|
|
8,774 |
(3) |
|
|
865,056 |
|
Executive
Officer; Director
|
|
2008
|
|
|
420,000 |
|
|
|
— |
|
|
|
381,216 |
|
|
|
5,125 |
|
|
|
— |
|
|
|
806,341 |
|
Michael
R. Cox, Vice President,
|
|
2007
|
|
|
153,000 |
|
|
|
40,000 |
|
|
|
6,241 |
|
|
|
1,530 |
|
|
|
— |
|
|
|
200,771 |
|
Finance
and Chief Financial Officer (4)
|
|
2008
|
|
|
165,000 |
|
|
|
25,000 |
|
|
|
27,980 |
(5) |
|
|
2,050 |
|
|
|
— |
|
|
|
220,030 |
|
Edward
M. Chait, Ph.D.,
|
|
2007
|
|
|
150,000 |
|
|
|
35,000 |
|
|
|
15,493 |
|
|
|
3,480 |
|
|
|
— |
|
|
|
203,973 |
|
Chief
Business Officer (6)
|
|
2008
|
|
|
165,000 |
|
|
|
— |
|
|
|
27,148 |
(7) |
|
|
4,640 |
|
|
|
|
(8) |
|
|
196,788 |
|
(1)
Amount expensed in financial statements for fiscal 2007 and 2008.
(2)
Includes $150,000 paid in fiscal 2007 and $145,000 accrued in fiscal 2007 and
paid in fiscal 2008 before renegotiation of Mr. Shepperd’s employment
agreement.
(3)
Housing allowance and travel expenses during period as interim CEO.
(4)
Effective October 4, 2007, Mr. Cox also assumed the responsibilities of Chief
Administrative Officer. In November, 2007, as discussed above, Mr. Cox entered
into a new employment agreement and was awarded additional stock option
grants.
(5) Includes
new grant on November 6, 2007 for 30,000 options on common shares, vesting
evenly beginning November 5, 2008 and each successive year through November 5,
2010. As of January 30, 2009, 10,000 option shares have vested and
are exercisable.
(6)
Effective November 7, 2008, Mr. Chait, Chief Business Officer, resigned from
BASi.
(7)
As part of the Severance Agreement with the Company, Dr. Chait relinquished all
rights to unexercised options on November 8, 2008. All expenses for
non-vested options for the year were accordingly reversed.
(8)
Also as part of the Severance Agreement with the Company, Dr. Chait will be paid
$165,000 in twelve equal monthly installments beginning on the date of
separation, November 7, 2008.
Outstanding Equity Awards at
Fiscal Year-End Table
BASi has
awarded stock options to members of its senior management and other BASi team
members. The terms of these awards typically provide for vesting over a defined
period of time. Option awards generally have a four-part vesting schedule in
which the first of the four installments vests on the second anniversary of the
grant date. Each subsequent one-fourth installment thereafter vests on the
anniversary of the grant date for the next three years: however, the
Compensation Committee and the Board has to ability to alter, and occasionally
does alter, the vesting schedule to meet specific objectives, such as the
matching of the period of Mr. Shepperd’s option grant in the current fiscal year
to match the period of his employment contract. The options expire if not
exercised within ten years from the date of grant.
The
following table shows the equity awards granted to BASi's NEOs that were
outstanding as of the end of BASi's 2008 fiscal year.
OUTSTANDING
EQUITY AWARDS AT FISCAL 2008YEAR-END
|
OPTION
AWARDS
|
|
|
|
|
|
|
|
|
|
Number of Securities Underlying
Unexercised
Options
|
|
|
|
|
Name
|
|
(#)
Exercisable
|
|
(#)
Unexercisable
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration Date
|
Richard
M. Shepperd
|
|
|
75,000
|
|
200,000
|
(1)
|
7.10
|
|
May
17, 2017
|
Michael
R. Cox
|
|
|
50,000
|
|
—
|
|
4.58
|
|
March
31, 2014
|
|
|
|
—
|
|
30,000
|
(2)
|
8.60
|
|
November
5, 2017
|
Edward
M. Chait, Ph.D
|
|
|
50,000
|
|
—
|
|
5.69
|
|
September
29, 2015
|
|
|
|
—
|
|
30,000
|
(3)
|
8.60
|
|
November
5,
2017
|
|
(1)
|
Options
on 100,000 shares vested on December 1, 2008 and 100,000 shares vest on
December 1, 2009.
|
|
(2)
|
Options
on 10,000 shares vested on November 5, 2008, 10,000 shares vest on
November 5, 2009 and 10,000 shares vest on November 5,
2010.
|
|
(3)
|
Options
on 10,000 shares vested on November 5, 2008, remaining 20,000 shares
forfeit as part of the Severance Agreement discussed
above.
|
Fiscal 2008 Option
Exercises
There
were no options exercised by NEO’s in fiscal 2008.
Equity Compensation Plan
Information
BASi
maintains stock option plans that allow for the granting of options to certain
key employees and directors of BASi. The following table gives information about
equity awards under the stock option plans of BASi:
Plan Category
|
|
Number of Securities to be
Issued upon Exercise of
Outstanding Options
|
|
|
Weighted Average
Exercise Price of
Outstanding Options
|
|
|
Number of Securities Remaining
Available for Future Issuance
under the Equity Compensation
Plan
(Excluding Securities Reflected in
First Column)
|
|
Equity
compensation plans approved by security holders
|
|
|
703,500 |
|
|
$ |
6.13 |
|
|
|
381,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders (1)
|
|
|
50,000 |
|
|
$ |
5.14 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
753,500 |
|
|
$ |
6.06 |
|
|
|
381,500 |
|
(1)
Includes option to purchase 25,000 shares at $4.57 granted to Michael R. Cox on
April 1, 2004, and 25,000 shares at $5.69 granted to Edward M. Chait on
August 1, 2005. Each of these grants is fully vested and expires after 10
years. Following his separation from BASi on November 7, 2008, Mr.
Chait’s 25,000 shares expired.
For
additional information regarding BASi’s stock option plans, please see Note 9 in
the Notes to Consolidated Financial Statements in BASi’s Annual Report on Form
10-K for the fiscal year ended September 30, 2008.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires the Corporation’s
directors and executive officers and persons who beneficially own more than ten
percent BASi’s Common Shares and any other person subject to section 16(a) with
respect to BASi to file with the Securities and Exchange Commission reports
showing ownership of and changes in ownership of BASi’s Common Shares and other
equity securities. On the basis of information available to us, we believe that
all filing requirements were met for fiscal 2008.
SHAREHOLDER
PROPOSALS FOR 2010 ANNUAL MEETING
Shareholder
proposals to be considered for presentation and inclusion in the proxy statement
for the 2010 Annual Meeting of Shareholders must be submitted in writing and
received by BASi on or before December 11, 2009. If notice of any other
shareholder proposal intended to be presented at the 2010 Annual Meeting of
Shareholders is not received by BASi on or before December 11, 2009, the proxy
solicited by the Board of Directors of BASi for use in connection with that
meeting may confer authority on the proxies to vote in their discretion on such
proposal, without any discussion in the BASi proxy statement for that meeting of
either the proposal or how such proxies intend to exercise their voting
discretion. The mailing address of the principal offices of BASi is 2701 Kent
Avenue, West Lafayette, Indiana 47906.
In
addition, any shareholder proposal must be in proper written form. To
be in proper written form, a shareholder's proposal must set forth as to each
matter such shareholder proposes to bring before the 2010 Annual Meeting
(a) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (b) the name and record address of such shareholder, (c) the
number of common shares of BASi which are owned beneficially or of record by
such shareholder, (d) a description of all arrangements or understandings
between such shareholder and any other person or persons (including their names)
in connection with the proposal of such business by such shareholder and any
material interest of such shareholder in such business and (e) a
representation that such shareholder intends to appear in person or by proxy at
the annual meeting to bring such business before the meeting.
OTHER
BUSINESS
As of the
date of this proxy statement, the Board of Directors of BASi has no knowledge of
any matters to be presented for consideration at the Annual Meeting other than
those referred to above. If (a) any matters not within the knowledge of the
Board of Directors as of the date of this proxy statement should properly come
before the meeting; (b) a person not named herein is nominated at the meeting
for election as a director because a nominee named herein is unable to serve or
for good cause will not serve; (c) any proposals properly omitted from this
proxy statement and the form of proxy should come before the meeting; or (d) any
matters should arise incident to the conduct of the meeting, then the proxies
will be voted in accordance with the recommendations of the Board of Directors
of BASi.
By Order
of the Board of Directors,
Richard
M. Shepperd
President
and Chief Executive Officer
February
5, 2009
APPENDIX
A - NOMINATING COMMITTEE CHARTER
BIOANALYTICAL
SYSTEMS, INC.
NOMINATING/CORPORATE
GOVERNANCE COMMITTEE
OF
THE BOARD OF DIRECTORS
CHARTER
This
Charter shall govern the operations of the Nominating/Corporate Governance
Committee ("Committee") of the Board of Directors of Bioanalytical Systems, Inc.
(the "Company"). The primary purpose of the Committee is to identify and
recommend the nomination of qualified directors to the Board of Directors of the
Company.
The
membership of the Committee shall consist of at least three directors who shall
be free of any relationship that, in the opinion of the board, would interfere
with his or her individual exercise of independent judgment, and shall be
"independent" as defined in NASDAQ Market Place Rule 4200. The Board of
Directors may, at any time and in its complete discretion, replace a Committee
member.
The Board
of Directors shall appoint one member of the Committee as chairperson. He or she
shall be responsible for leadership of the Committee, including preparing the
agenda, presiding over the meetings, making Committee assignments and reporting
to the Board of Directors.
The
Committee shall meet at least annually, or more frequently as circumstances
dictate.
The
Committee shall:
a.
Oversee the search for qualified individuals to serve on the Board of Directors.
Qualified individuals will complement the Company's mission of advancing health
care through innovative science. The Company's policy is that a majority of the
members of the Board of Directors be independent as defined by the listing
standards of NASDAQ and the rules of the Securities and Exchange Commission. To
assist in the search for qualified directors, the Committee will consider
shareholder suggestions for nominations that are submitted as required by the
Bylaws and, as it deems necessary, employ outside search firms to assist in
identifying qualified candidates.
b.
Recommend to the Board of Directors those director nominees who, in the
Committee's opinion, the full Board should recommend for shareholder approval at
the annual meeting. The Committee will base its recommendation for nomination on
criteria that it believes will provide a board perspective and depth of
experience in the Board of Directors. In general, when considering independent
directors, the Committee will consider the candidate's experience in areas
central to the Company, such as science, business, finance, legal and regulatory
compliance, as well as considering the candidate's personal qualities and
accomplishments.
c.
Oversee the administration of the Board of Directors, including, at least
annually, review and recommend the appointment of directors to committees of the
Board, monitor and review the functions of the committees, and review and advise
the Board concerning the directors' compensation and benefits.
d.
Draft such policies as it deems necessary to carry out its functions, and
annually review and evaluate this charter and any related policies.
e.
Be authorized to delegate any duties of the Committee to subcommittees, and hire
counsel and other experts as the Committee, in its sole discretion, deems
appropriate.
f.
Report, at least annually, to the Board of Directors.
g.
Perform any other duties assigned to it by the Board of Directors.
APPENDIX
B - COMPENSATION COMMITTEE CHARTER
BIOANALYTICAL
SYSTEMS, INC.
COMPENSATION
COMMITTEE
OF
THE BOARD OF DIRECTORS
CHARTER
This
Charter shall govern the operations of the Compensation Committee ("Committee")
of the Board of Directors of Bioanalytical Systems, Inc. (the "Company"). The
primary purpose of the Committee is to exercise the power and authority of the
Board of Directors relating to the compensation of officers of the
Company.
The
membership of the Committee shall consist of at least three directors who shall
(1) be free of any relationship that, in the opinion of the Board of Directors
("Board"), would interfere with the member's exercise of independent judgment,
(2) be "independent," as defined in NASDAQ Market Place Rule 4200, (3) be an
"outside director," as that term is used and defined in Section 162(m) of the
Internal Revenue Code, as amended ("Code"), and the relevant Treasury
Regulations promulgated thereunder, or any successor rule or regulation, and (4)
be a "Non-Employee Director" as that term is defined by Rule 16b-3 of the
Securities Exchange Act of 1934. The Board may, at any time and in its complete
discretion, appoint, dismiss, or replace a Committee member.
The Board
shall appoint one member of the Committee as chairperson, who shall be
responsible for leadership of the Committee, including preparing agenda,
presiding over meetings, making Committee assignments, and reporting to the
Board of Directors.
|
–
|
Authority
and Responsibilities
|
The
Committee shall have the authority and responsibility of the Board
to:
1. At
least annually, the Committee shall:
|
a)
|
review
and approve corporate goals and objectives relevant to compensation and
benefits for the officers of the Company. The Committee shall evaluate the
performance of each officer, including the Chief Executive Officer, in
light of those goals and
objectives;
|
|
b)
|
review
and approve all elements of each officer's compensation, including but not
limited to (i) annual base salary, (ii) annual incentive compensation
opportunity, whether in the form of cash or equity, (iii) long-term
incentive compensation opportunity, whether in the form of cash or equity,
(iv) special benefits, and (v) employment agreements, severance
agreements, and change in control agreements, if
appropriate;
|
|
c)
|
review
the compensation systems in place for officers to make sure that they are
appropriate in light of the Company's objectives and performance and the
compensation provided by comparable
companies;
|
|
d)
|
review
this Charter and any policies adopted by the Committee;
and
|
|
e)
|
evaluate
its own performance and the performance of any compensation consultant
retained by the Committee and provide a report of such evaluation to the
Board.
|
2.
The Committee shall draft such policies as it deems necessary or appropriate to
carry out its functions.
3.
The Committee may hire counsel and other experts, including compensation
consultants, as the Committee, in its sole discretion, deems
appropriate.
4.
The Committee shall review the proposed Compensation Discussion & Analysis
(CD&A) section of the Company's proxy statement, discuss that section with
management, and based on that review and discussion, make a recommendation to
the Board regarding the inclusion of the CD&A in the Company's filings with
the Securities and Exchange Commission, as required.
5.
The Committee shall make regular reports to the Board.
6.
The Committee shall have the authority to approve all transactions between the
Company and any director or officer, other than certain transactions pursuant to
an "employee benefit plan," as described by Rule 16b-3 of the Securities
Exchange Act of 1934 or any successor rule.
7.
The Committee shall establish "performance goals," as that term is used in Code
Section 162(m) and the Treasury Regulations promulgated thereunder, or any
successor rule or regulation, to determine the payment of any performance-based
compensation, disclose the material terms under which such compensation will be
paid to the Company's shareholders for approval, and certify in writing prior to
the payment of such compensation that the performance goals and any other
material terms have been satisfied.
8.
The Committee shall perform any other duties assigned to it by the Board of
Directors.
APPENDIX
C—AUDIT COMMITTEE CHARTER
BIOANALYTICAL
SYSTEMS, INC.
AUDIT
COMMITTEE OF THE BOARD OF DIRECTORS CHARTER
ADOPTED
FEBRUARY 19, 2004
AMENDED MAY 14,
2008
Purpose:
The
primary function of the Audit Committee of the board of directors (the “Board”)
of Bioanalytical Systems, Inc. (the “Corporation”) is to assist the Board in
fulfilling its oversight responsibilities for the financial reporting process
including responsibility for overseeing:
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·
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the
integrity of the Corporation’s financial statements and the financial
reporting process, including the system of internal control over financial
reporting, the audit process and the processes for identifying, evaluating
and managing the Corporation’s principal risks impacting financial
reporting;
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|
·
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compliance
with legal and regulatory requirements, other than those otherwise
assigned from time to time by the Board;
and
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·
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the
qualifications and independence of the Corporation’s independent
auditor
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Consistent
with these functions, the Audit Committee should encourage continuous
improvement of, and should foster adherence to, the Corporation’s policies,
procedures and practices.
Approval
of Charter
This
Charter and any future changes to this Charter require approval by the
Board.
Structure
and Composition
The Audit
Committee shall consist of no fewer than three members from among the
Board.
Each
member of the Audit Committee shall: (i) be free from any relationship that, in
the opinion of the Board, would reasonably be expected to interfere with the
exercise of his or her independent judgment as a member of the Audit Committee;
and (ii) meet the independence and financial literacy requirements of all
corporate, exchange and securities statutes, rules and regulations (the
“Regulations”) that apply to the Corporation.
Each
member of the Audit Committee shall be financially literate as determined by the
Board in its business judgment and, at a minimum, have the ability to read and
understand a set of financial statements that present the breadth and complexity
of accounting issues that can reasonably be expected to be raised by the
Corporation’s financial statements or be financially literate within a
reasonable period of time following his or her appointment.
At least
one member of the Audit Committee shall be an “audit committee financial expert”
as such term is defined by the Regulations. The Board shall make determinations
as to whether any particular member of the Audit Committee satisfies this
requirement.
The
members of the Audit Committee shall be appointed by the Board annually or until
successors are duly appointed.
The Board
shall normally designate the Chair of the Audit Committee. In the event a Board
designation is not made, the members of the Audit Committee shall elect a Chair
by majority vote of the full Audit Committee.
Once
appointed, Audit Committee members shall cease to be a member of the Audit
Committee only upon:
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a)
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resignation
from the Audit Committee or Board,
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|
c)
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not
being re-appointed pursuant to the annual appointment described above,
or
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|
d)
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removal
as a director of the Corporation in accordance with the Corporation’s
articles of incorporation and
bylaws.
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Members
of the Audit Committee shall not simultaneously serve on the audit committees of
more than three public companies, including the Corporation, unless the Board
determines that such simultaneous service would not impair the ability of such
member to effectively serve on the Audit Committee.
Meetings
The Audit
Committee shall meet at least three times each year and more frequently as
circumstances dictate.
A
majority of Audit Committee members is required for meeting quorum.
The Audit
Committee shall meet separately on a periodic basis with management and the
independent auditor in separate committee sessions.
The Chief
Financial Officer and representatives of the independent auditor shall normally
attend meetings of the Audit Committee. The Audit Committee may request any
officer or employee of the Corporation or the Corporation’s outside counsel or
independent auditor to attend a meeting of the Audit Committee or to meet or
provide consultations to the Audit Committee or any member thereof. Others may
also attend meetings as the Audit Committee may request.
Chair
The Chair
of the Committee shall have the duties and responsibilities set forth in Appendix “A”.
Resolutions
Resolutions
of the Audit Committee shall require approval by a simple majority of members
voting on such resolution at a meeting at which a quorum is present. Resolutions
may also be approved without a meeting by the unanimous written consent of all
the Audit Committee members.
Responsibilities
and Duties
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A.
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Minutes
and Reporting to the Board
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The Audit
Committee shall prepare written minutes of all its meetings and regularly make
reports to the Board of its actions and findings.
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B.
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Selection,
Evaluation and Oversight of Independent
Auditor
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The
Corporation’s independent auditor is accountable to the Audit Committee. With
respect to the Corporation’s independent auditor the Audit Committee
shall:
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·
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have
the sole authority to recommend to the Board the appointment, retention or
replacement of the independent auditor (subject to shareholder approval,
if required);
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·
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be
directly responsible for establishing the compensation of the independent
auditor;
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·
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have
the independent auditor report directly to the Audit Committee and
otherwise be directly responsible for overseeing the work of the
independent auditor;
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·
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meet
with the independent auditor prior to the annual audit to discuss the
planning, scope and staffing of the audit and approve the selection of the
partner having primary responsibility for the
audit;
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·
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at
least on an annual basis, evaluate the qualifications, performance and
independence of the independent auditor and the senior audit partner(s)
having primary responsibility for the
audit;
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·
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Obtain,
review and discuss with the independent auditor a report from the
independent auditor at least annually
regarding:
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|
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the
independent auditor’s internal quality control
procedures,
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|
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any
material issues raised by the most recent internal quality control review,
or peer review, of the audit firm, or raised by any inquiry or
investigation by governmental or professional authorities regarding audits
carried out by the firm and any steps taken to deal with any such
issues,
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|
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all
relationships between the independent auditor and the Corporation,
and
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iv.
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the
independence of the independent auditor, as required by the
Regulations;
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·
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Review
and approve the Corporation’s hiring policies regarding partners,
employees and former partners and employees of the present (and former)
independent auditor;
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·
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Pre-approve
all auditing services and permitted non-audit services to be performed for
the Corporation or its subsidiaries by the independent
auditor.
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[Note: In certain situations, the
Committee’s Chairman or another Committee member designated by the Chairman, may
perform the duties described above and report the findings/results to the
Committee.]
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C.
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Financial
Reporting of Quarterly Financial
Results
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With
respect to the Corporation’s reporting of unaudited quarterly financial results,
the Audit Committee (or the Committee’s Chairman or another Committee member
designated by the Chairman) shall:
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·
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Prior
to their release and filing with the securities regulatory agencies,
review and discuss with management and the independent auditor
the:
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o
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earnings
press release;
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o
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financial
statements and notes thereto; and
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o
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management’s
discussion and analysis,
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The
review of the Corporation’s unaudited quarterly financial results shall
include:
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·
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any
significant disagreements among management and the independent auditor in
connection with the preparation of the financial
statements;
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·
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significant
financial reporting issues and judgments made in connection with the
preparation of the Corporation’s financial statements, any changes in the
Corporation’s selection or application of accounting principles, and any
major issues as to the adequacy of the Corporation’s internal
controls;
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·
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results
of the independent auditor’s
review;
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·
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any
written communications between the independent auditor and management (e.
g. management letter and schedule of unadjusted
differences);
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·
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any
correspondence with, or published reports by, regulators or governmental
agencies which raise material issues regarding the Corporation’s financial
statements or accounting policies;
and
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·
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approve
the Corporation’s unaudited quarterly financial
statements.
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D.
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Financial
Reporting of Year-End Financial
Results
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With
respect to the Corporation’s annual audit, the Audit Committee (or the
Committee’s Chairman or another Committee member designated by the Chairman)
shall:
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·
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Prior
to their public release and filing with the regulatory agencies, review
and discuss with management and the independent auditor
the:
|
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o
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earnings
press release;
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o
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financial
statements and notes thereto;
|
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o
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management’s
discussion and analysis; and
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o
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results
of the independent auditor’s audit.
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The
review of the Corporation’s audited financial results shall
include:
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o
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all
matters described above under “Financial Reporting of Quarterly Financial
Results”;
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|
o
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results
of the independent auditor’s audit;
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o
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discussions
with the independent auditor on the matters required to be discussed by
Statement on Auditing Standards No. 61, including significant adjustments,
management judgments and accounting estimates, significant new accounting
policies, any difficulties encountered during the course of the audit
work, restrictions, if any, on the scope of activities or access to
requested information, and any significant disagreements with management;
and
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|
o
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a
report from the independent auditor describing (i) all critical accounting
policies and practices used, (ii) all alternative treatments of financial
information within generally accepted accounting principles that have been
discussed with management and the treatment preferred by the independent
auditor and (iii) other material communications between the independent
auditor and management (e. g. the annual management letter and schedule of
unadjusted differences).
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·
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recommend
to the Board whether the Corporation’s annual financial statements should
be approved by the Board.
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E.
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Related
Party Transactions
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The Audit
Committee shall:
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·
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review
all proposed non-routine transactions between the Corporation and any
“related party” (as that term is defined in applicable Regulations) and,
if deemed appropriate, recommend approval of any particular transaction to
the Board
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|
F.
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Internal
Controls, Risk Management and Legal
Matters
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The Audit
Committee shall:
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·
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consider
the effectiveness of the Corporation’s internal controls over financial
reporting and the related information technology security and control,
including the process to communicate such controls and roles
and responsibilities;
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·
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discuss
with management the Corporation’s major financial risk exposures and the
steps management has taken to monitor and control such exposures,
including the Corporation’s risk assessment and risk management policies.
Areas to be considered in this respect
include:
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|
o
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insurance
coverage; and
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|
o
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information
technology;
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·
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review
with management at least annually the Corporation’s compliance with risk
assessment and their actions taken to mitigate or manage identified risk
;
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·
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review
with management, and if necessary, the Corporation’s counsel, any legal
matter(s) which could reasonably be expected to have a material impact on
the Corporation’s financial
statements;
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·
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review
with the chief executive officer, chief financial officer and independent
auditor the following:
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|
o
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all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Corporation’s ability to record,
process, summarize and report financial information;
and
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|
o
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any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Corporation’s internal
control over financial reporting;
and
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|
o
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review
the adequacy of the Corporation’s external financial reporting disclosures
intended to comply with generally accepted accounting principles and
applicable securities and exchange
regulations.
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|
G.
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“Whistle
Blower” and Related Procedures
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The Audit
Committee shall establish procedures for the receipt, retention and treatment of
complaints and concerns received by the Corporation regarding accounting,
internal accounting controls or auditing matters and for the confidential and
anonymous submission by the Corporation’s employees of concerns regarding
questionable accounting or auditing matters. These procedures shall include the
requirement to advise the Audit Committee of all such complaints
received.
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H.
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Review
of Charter and Self
Assessment
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Periodically,
the Audit Committee shall:
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·
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review
and reassess the adequacy of this Charter,
and
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|
·
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review
the Audit Committee’s own
performance.
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The Audit
Committee shall carry out such other activities consistent with this Charter,
the Corporation’s bylaws and governing law, that the Audit Committee or the
Board deems necessary or appropriate.
Resources
and Authority
The Audit
Committee shall have the authority to retain independent legal, accounting or
other advisors, including consulting with representatives from the headquarter
office of the independent auditor, as it determines necessary to carry out its
duties. The Corporation shall provide for appropriate funding, as determined by
the Audit Committee, for payment of compensation to the independent auditor for
the purpose of rendering or issuing an audit report or performing other audit,
review or attest services and to any advisors engaged by the Audit Committee and
for ordinary administrative expenses of the Audit Committee.
The Audit
Committee shall have the authority to conduct any investigation necessary and
appropriate to fulfilling its duties and in connection therewith, to inspect all
books and records of the Corporation and any related affiliates and to discuss
such books and records and any matters relating to the financial position, risk
management and internal controls of the Corporation with the officers of the
Corporation and with the independent auditor and other advisors engaged by the
Audit Committee.
Limitations
on Duties
It is
recognized that the members of the Audit Committee are not full-time employees
of the Corporation and do not represent themselves to be practicing accountants
or auditors. Each member of the Audit Committee shall be entitled to rely on (i)
the integrity of those persons and organizations within and outside the
Corporation from whom such member receives information, and (ii) the accuracy of
the financial and other information provided to the Audit Committee by such
persons or organizations absent actual knowledge to the contrary.
While the
Audit Committee has the responsibilities and power set forth in this Charter, it
is not the duty of the Audit Committee to plan or conduct audits or to determine
that the Corporation’s financial statements and disclosures are complete and
accurate and prepared in accordance with generally accepted accounting
principles and applicable rules and regulations. These are the responsibilities
of either management and/or the independent auditor.
In
discharging its duties, each member of the Audit Committee shall be obliged only
to exercise the care, diligence and skill that a reasonably prudent person would
exercise in comparable circumstances. Nothing in this Charter, including
designating any member(s) of the Committee as an “audit committee financial
expert” is intended, or should be determined to impose on any member of the
Committee a standard of care or diligence that is in any way more onerous or
extensive than the standard to which all members of the Board are
subject.
The
essence of the Committee’s responsibilities is to monitor and review the
activities described in this Charter to gain reasonable assurance (but not to
ensure) that such activities are being conducted properly and effectively by the
Corporation.
Appendix
“A”
Position
Description —Chair of the Audit Committee
In
addition to the duties and responsibilities described in the Charter of the
Audit Committee, the chair (the “Chair”) of the Audit Committee (the
“Committee”) of Bioanalytical Systems, Inc. (the “Corporation”) has the duties
and responsibilities described below. The Committee Chair will:
1)
|
Provide
overall leadership to enhance the effectiveness of the Committee,
including:
|
|
a)
|
Recommend
and oversee the appropriate structure, composition, membership and
activities delegated to the
Committee;
|
|
b)
|
Chair
all meetings of the Committee and manage meeting agenda items so
appropriate consideration can be given to agenda
items;
|
|
c)
|
Encourage
Committee members to ask questions and express viewpoints during
meetings;
|
|
d)
|
Schedule
and set the agenda for Committee meetings with input from other Committee
members, the Chair of the Board of Directors and management, as
appropriate;
|
|
e)
|
Facilitate
the timely, accurate and proper flow of information to and from the
Committee;
|
|
f)
|
Arrange
for management, other internal personnel, external advisors and others to
attend and present at Committee meetings as
appropriate;
|
|
g)
|
Arrange
sufficient time during Committee meetings to fully discuss agenda items;
and
|
|
h)
|
Carry
out the responsibilities and duties of the Committee, as outlined in its
Charter and review the Charter and duties and responsibilities with
Committee members on a regular
basis.
|
2)
|
Foster
ethical and responsible decision-making by the Committee and its
individual members.
|
3)
|
Following
each meeting of the Committee, report to the Board of Directors on the
activities, findings and any recommendations of the
Committee.
|
4)
|
Carry
out such other duties as may reasonably be requested by the Board of
Directors.
|
APPENDIX
D—CODE OF ETHICS
Bioanalytical
Systems, Inc.
Code
of Business Conduct and Ethics
Adopted
by the Board of Directors
November
13, 2003
Amended
November 18, 2005
INTRODUCTION
The
Bioanalytical Systems, Inc. (the “Company”) Code of Business Conduct and Ethics
(“Code of Ethics”) is designed to deter wrongdoing and promote compliance with
legal requirements and our standards of business conduct. All Company directors,
officers and employees are expected to read and understand this Code of Ethics,
uphold these standards in day-to-day activities, comply with all applicable
policies and procedures, and ensure that all agents and contractors are aware
of, understand and adhere to these standards.
Because
the principles described in this Code of Ethics are general in nature, you
should also review all applicable Company policies and procedures for more
specific instruction, and contact the Human Resources Department if you have any
questions. Nothing in this Code of Ethics, in any company policies and
procedures, or in other related communications (verbal or written) creates or
implies an employment contract or term of employment.
Please
sign the acknowledgment form at the end of this Code of Ethics and return the
form to the Human Resources Department indicating that you have received, read,
understand and agree to comply with the Code of Ethics. The signed
acknowledgment form will be located in your personnel file. Periodically, or as
there are substantive changes to the Code of Ethics, you may be asked to sign an
acknowledgment indicating your continued understanding of the Code of
Ethics.
COMPLIANCE IS EVERYONE’S
BUSINESS
It is the
Company’s policy to comply with and require its directors, officers and
employees to comply with this Code of Ethics, including all applicable legal and
regulatory requirements relating to the matters contained in this Code of
Ethics, and to avoid and require its directors, officers and employees to avoid
violations relating to such legal and regulatory requirements, including without
limitation, the following:
|
o
|
Fraud
Against Shareholders
|
|
o
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Questionable
Accounting
|
|
o
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Internal
Controls and Procedures
|
|
o
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Auditing
Matters (both financial and with respect to all quality assurance
systems)
|
|
o
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Dishonest
or Unethical Conduct
|
|
o
|
Improper
Disclosures in SEC Reports
|
|
o
|
Improper
or Inadequate Public Disclosures
|
|
o
|
Integrity
of Scientific Data
|
The
Company’s internal operating controls and corporate reporting and disclosure
procedures are intended to prevent, deter and remedy any violation of this Code
of Ethics, including but not limited to applicable laws and regulations. Even
the best systems of controls and procedures, however, cannot provide absolute
safeguards against such violations. The Company has a responsibility to
investigate and report to appropriate governmental authorities, as required, any
violations of applicable legal and regulatory requirements relating to corporate
reporting and disclosure, accounting and auditing controls and procedures,
securities compliance and other matters pertaining to fraud against
shareholders, and the actions taken by the Company to remedy such
violations.
Reporting Alleged Violations
or Concerns
|
If
a director, officer or employee reasonably believes that the Company or
any its employees or others, acting on behalf of the Company, have
violated this Code of Ethics, the director, officer or employee is
required to immediately report or cause to be reported any such potential
violation to the following
individual:
|
The
designated representative of the Company's Audit Committee
(the
"Audit Committee Representative")
Chairman
of the Audit Committee
Larry S.
Boulet
2701 Kent
Avenue
West
Lafayette, IN 47906
(765)
463-4527
|
If
the complaint relates to the Audit Committee Representative or there is a
potential conflict of interest, the complaint should be submitted to the
Company’s Chief Financial Officer.
|
|
A
complaint may be submitted anonymously by mail or may be delivered
confidentially (e.g., in person, by internal mail, by regular mail or by
electronic mail). If the complaint is written and sent via the mail, the
envelope should be marked as “confidential and private.” Although a
violation report may be oral, written reports are preferred to assure a
clear understanding of the situation. In either case, the complaint should
be factual rather than speculative or conclusory, and should contain as
much specific information as possible to allow for proper assessment. The
complaint describing an alleged violation or concern should be candid and
set forth all of the information that the employee knows regarding the
allegation or concern. In addition, all complaints must contain sufficient
corroborating information to support the commencement of an investigation.
The Chief Financial Officer or the Audit Committee Representative may, in
its reasonable discretion, determine not to commence an investigation if a
complaint contains only unspecified or broad allegations of wrongdoing
without appropriate informational
support.
|
Investigation of
Complaints
|
Upon
receipt of the complaint by any of the Chief Financial Officer or the
Audit Committee Representative (the “Investigating Officer”), the
Investigating Officer shall make a determination, in his or her reasonable
judgment, whether a reasonable basis exists for commencing an
investigation into the complaint. To assist in making this determination,
the Investigating Officer may conduct an initial, informal inquiry. Other
parties may become involved in the inquiry based on their oversight
responsibility or expertise.
|
|
To
the extent possible, all complaints will be handled in a confidential
manner. In no event will information concerning the complaint be released
to persons without specific need to know about it. Investigation of
complaints will be prompt. The determination by the Investigating Officer
will be communicated to the person who brought the complaint (unless
anonymous) to the Audit Committee and to relevant management, as
appropriate.
|
|
Upon
making a determination to recommend a formal investigation, the
Investigating Officer will promptly notify the Audit Committee. The Audit
Committee will then determine, in its reasonable judgment, whether a
reasonable basis exists for commencing a formal investigation into the
complaint. If the Audit Committee makes such a determination, then it
shall instruct the Investigating Officer to proceed with a formal
investigation. The Investigating Officer shall oversee all investigations
under the authority of the Audit Committee. The Audit Committee shall
ensure coordination of each investigation and shall have overall
responsibility for implementation of this policy. The Audit Committee
shall have the authority to retain outside legal or accounting expertise
in any investigation as it deems necessary to conduct the investigation in
accordance with its charter and this
policy.
|
|
At
each meeting of the Audit Committee, the Chief Financial Officer and the
Audit Committee Representative shall prepare a report to the Audit
Committee stating the nature of each complaint submitted during the
quarter immediately preceding the meeting of the Audit Committee, whether
or not the complaint resulted in the commencement of a formal
investigation, and the status of each
investigation.
|
Corrective
Action
|
The
Audit Committee, with the input of the Investigating Officer and Company
management, if requested, will determine the validity of a complaint and
any corrective action, as appropriate. It is the responsibility of the
Audit Committee to report to Company management any noncompliance with
legal and regulatory requirements and to assure that management takes
corrective action including, where appropriate, reporting any violation to
the relevant federal, state or regulatory authorities. Directors, officers
and employees that are found to have violated any laws, governmental
regulations or Company policies will face appropriate, case-specific
disciplinary action, which may include demotion or
discharge.
|
No Retaliation for
Submitting Complaints, Providing Information or Participating in
Investigation
|
Neither
the Company nor any of its employees will retaliate or discriminate
against any employee who: (a) lawfully provides information regarding any
conduct which the employee reasonably believes constitutes a violation of
this Code of Ethics to a federal regulatory or law enforcement agency, to
any member or committee of Congress, or to any person with supervisory
authority over the employee or the authority to investigate misconduct
relating to potential violations by the Company or its employees; (b)
participates in or otherwise assists with a proceeding relating to
potential violations by the Company or its employees; or (c) submits a
complaint pursuant to this Code of Ethics regarding any conduct which the
employee reasonably believes constitutes a violation of this Code of
Ethics, even if after investigation the Company determines that there has
not been a violation. For certain violations of this Code of Ethics, an
employee who believes that his or her rights against retaliation or
discrimination have been violated may have the right to file a complaint
with the Department of Labor within ninety (90) days of the alleged
violation. If the Department of Labor has not issued a final decision
within one hundred eighty (180) days of the filing of the complaint, the
employee will have the right to file suit against the Company in a federal
court with proper jurisdiction.
|
Retention of Complaints and
Documents
|
All
complaints submitted by an employee regarding an alleged violation or
concern will remain confidential to the extent practicable. In addition,
all written statements, along with the results of any investigations
relating thereto, shall be retained by the Company for a minimum of six
(6) years. It is illegal and against the Company’s policy to destroy any
corporate audit records that may be subject to or related an investigation
by the Company or any federal, state or regulatory
body.
|
YOUR RESPONSIBILITIES TO THE
COMPANY AND ITS SHAREHOLDERS
General Standards of
Conduct
|
The
Company expects all directors, officers, employees, agents and contractors
to exercise good judgment to ensure the safety and welfare of employees,
agents and contractors and to maintain a cooperative, efficient, positive,
harmonious and productive work environment and business organization.
These standards apply while working on our premises, at offsite locations
where our business is being conducted, at Company-sponsored business and
social events, or at any other place where you are a representative of the
Company. Employees, agents or contractors who engage in misconduct or
whose performance is unsatisfactory may be subject to corrective action,
up to and including termination.
|
Applicable
Laws
|
All
Company directors, officers, employees, agents and contractors must comply
with all applicable laws, regulations, rules and regulatory orders.
Company employees located outside of the United States must comply with
laws, regulations, rules and regulatory orders of the United States,
including the Foreign Corrupt Practices Act and the U.S. Export Control
Act, in addition to applicable local laws. Each employee, agent and
contractor must acquire appropriate knowledge of the requirements relating
to his or her duties sufficient to enable him or her to recognize
potential dangers and to know when to seek advice on specific Company
policies and procedures. Violations of laws, regulations, rules and orders
may subject the employee, agent or contractor to individual criminal or
civil liability, as well as to discipline by the Company. Such individual
violations may also subject the Company to civil or criminal liability or
the loss of business.
|
Obligations Under Securities
Laws-“Insider Trading.”
|
Obligations
under the U.S. securities laws apply to everyone. In the normal course of
business, officers, directors, employees, agents, contractors and
consultants of the Company may come into possession of significant,
sensitive information. This information is the property of the Company –
you have been entrusted with it. You may not profit from it by buying or
selling securities yourself, or passing on the information to others to
enable them to profit or for them to profit on your behalf. The Company
has adopted a separate policy concerning insider trading and “tipping.”
The purpose of this policy is both to inform you of your legal
responsibilities and to make clear to you that the misuse of sensitive
information is contrary to Company policy and U.S. securities
laws.
|
Conflicts of
Interest
|
Each
of us has a responsibility to the Company, our shareholders and each
other. Although this duty does not prevent us from engaging in personal
transactions and investments, it does demand that we avoid situations
where a conflict of interest might occur or appear to occur. The Company
is subject to scrutiny from many different individuals and organizations.
We should always strive to avoid even the appearance of impropriety. A
conflict of interest exists where the interests or benefits of one person
or entity conflict with the interests or benefits of the Company. If you
think you have been, are, or may become subject to such a conflict, report
the situation to the Audit Committee Representative. The prompt reporting
of such a situation will be considered
favorably.
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Scientific
Integrity
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Medical
science is our business, and the highest standards of scientific integrity
are essential to our continued success. The U.S. Food and Drug
Administration’s Good Laboratory Practices, Current Good Manufacturing
Practices, and Current Good Clinical Practices, as further explained in
our related Standard Operating Procedures (SOPs), set forth many of our
obligations. Employees are expected to adhere to the SOPs and applicable
federal regulations, and to comport themselves to meet the highest
standards of scientific integrity. Full cooperation with quality assurance
audits is similarly an essential obligation of every
employee.
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Senior
Officers
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Senior
Officers (including the Chief Executive Officer, the Chief Financial
Officer and the Controller) hold an important and elevated role in the
corporate governance of the Company. The Senior Officers are vested with
both the responsibility and authority to protect, balance, and preserve
the interests of all of the enterprise stakeholders, including
shareholders, clients, employees, suppliers, and citizens of the
communities in which business is conducted. Senior Officers fulfill this
responsibility by prescribing and enforcing the policies and procedures
employed in the operation of the enterprise’s financial organization, and
by demonstrating the following:
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1.
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Honest and Ethical
Conduct. Senior Officers will exhibit and promote the highest
standards of honest and ethical conduct through the establishment and
operation of policies and procedures
that:
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a.
Encourage and support professional integrity in all aspects of the
financial organization, by eliminating inhibitions and barriers to
responsible behavior, such as coercion, fear of reprisal, or alienation
from the financial organization or the enterprise
itself.
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b.
Prohibit and eliminate the appearance or occurrence of conflicts between
what is in the best interest of the enterprise and what could result in
material personal gain for a member of the financial organization,
including Senior Officers.
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c.
Provide a mechanism for members of the finance organization to inform
senior management of deviations in practice from policies and procedures
governing honest and ethical
behavior.
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d.
Demonstrate their personal support for such policies and procedures
through periodic communication reinforcing these ethical standards
throughout the finance
organization.
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2.
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Financial Records and
Periodic Reports. Senior Officers will use best efforts to
establish and manage the transaction and reporting systems and procedures
to ensure that:
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a.
Business transactions are properly authorized and completely and
accurately recorded on the Company’s books and records in accordance with
Generally Accepted Accounting Principles (GAAP) and established company
financial policy.
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b.
The retention or proper disposal of Company records shall be in accordance
with established financial policies and applicable legal and regulatory
requirements.
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c.
Periodic financial communications and reports will be delivered in a
manner that facilitates the highest degree of clarity of content and
meaning so that readers and users will quickly and accurately determine
their significance and
consequence.
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3.
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Compliance with
Applicable Laws, Rules and Regulations. Senior Officers will
establish and maintain mechanisms
to:
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a.
Educate members of the finance organization about any federal, state
or local statute, regulation or administrative procedure that affects the
operation of the finance organization and the enterprise
generally.
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b.
Monitor the compliance of the finance organization with any applicable
federal, state or local statute, regulation or administrative
rule.
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c.
Identify, report and correct in a swift and certain manner, any detected
deviations from applicable federal, state or local statute or
regulation.
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WAIVERS
Any
waiver of any provision of this Code of Ethics for a member of the Company’s
Board of Directors or an executive officer must be approved in writing by the
Company’s Board of Directors and promptly disclosed along with the reason for
the waiver. Any waiver of any provision of this Code of Ethics with respect any
other employee, agent or contractor must be approved in writing by the Company’s
Chief Executive Officer.
DISCIPLINARY
ACTIONS
The
matters covered in this Code of Ethics are of the utmost importance to the
Company, its shareholders and its business partners, and are essential to the
Company’s ability to conduct its business in accordance with its stated values.
We expect all of our employees, agents, contractors and consultants to adhere to
these rules in carrying out their duties for the Company.
The
Company will take appropriate action against any employee, agent, contractor or
consultant whose actions are found to violate these policies or any other
policies of the Company. Disciplinary actions may include immediate termination
of employment or business relationship at the Company’s sole discretion. Where
the Company has suffered a loss, it may pursue its remedies against the
individuals or entities responsible. Where laws have been violated, the Company
will cooperate fully with the appropriate authorities. You should contact the
Company’s Human Resources Department for more detailed information.
Adhering
to this Code of Ethics is a condition of employment. The Company must have the
opportunity to investigate and remedy any alleged violations or employee
concerns, and each employee must ensure that the Company has an opportunity to
undertake such an investigation. This policy does not constitute a contractual
commitment of the Company. This policy does not change the at-will employment
status of an employee. Specifically, employment is for an indefinite period of
time and is terminable at anytime with or without cause.
ACKNOWLEDGMENT OF RECEIPT OF
BUSINESS CONDUCT AND ETHICS
I have
received and read the Company’s Code of Business Conduct and Ethics. I
understand the standards and policies contained in the Company Code of Business
Conduct and Ethics and understand that there may be additional policies or laws
specific to my job. I further agree to comply with the Company Code of Business
Conduct and Ethics.
If I have
questions concerning the meaning or application of the Company Code of Business
Conduct and Ethics, any Company policies, or the legal and regulatory
requirements applicable to my job, I know I can consult my manager, the Human
Resources Department or the Chief Financial Officer, knowing that my questions
or reports to these sources will be maintained in confidence.
Date
Employee
Name (Printed)
Employee
Signature
BIOANALYTICAL
SYSTEMS, INC.
2701
KENT AVENUE
WEST
LAFAYETTE, IN 47906
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VOTE BY INTERNET -
www.proxyvote.com
Use
the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before
the cut-off date or meeting date. Have your proxy card in hand when you
access the web site and follow the instructions to obtain your records and
to create an electronic voting instruction form.
ELECTRONIC
DELIVERY OF FUTURE PROXY MATERIALS
If
you would like to reduce the costs incurred by our company in mailing
proxy materials, you can consent to receiving all future proxy statements,
proxy cards and annual reports electronically via e-mail or the Internet.
To sign up for electronic delivery, please follow the instructions above
to vote using the Internet and, when prompted, indicate that you agree to
receive or access proxy materials electronically in future
years.
VOTE
BY PHONE - 1-800-690-6903
Use
any touch-tone telephone to transmit your voting instructions up until
11:59 P.M. Eastern Time the day before the cut-off date or meeting date.
Have your proxy card in hand when you call and then follow the
instructions.
VOTE
BY MAIL
Mark,
sign and date your proxy card and return it in the postage-paid envelope
we have provided or return it to Vote Processing, c/o Broadridge, 51
Mercedes Way, Edgewood, NY
11717.
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TO VOTE,
MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
BIOSY1
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KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
BIOANALYTICAL
SYSTEMS, INC.
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For
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Withhold
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For All
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To withhold authority to vote for any individual
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All
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All
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Except
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nominee(s), mark “For All Except” and write the
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THIS
PROXY IS SOLICITED ON BEHALF OF
THE
BOARD OF DIRECTORS.
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number(s) of the nominee(s) on the line below.
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Vote on Directors
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o
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o
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o
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1.
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Proposal
1
- To elect five directors of BASi
to
serve for a one-year term.
Nominated directors:
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01) William
E. Baitinger
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02) David
W. Crabb
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03) Leslie
B. Daniels
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04) Larry S. Boulet
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05) Richard
M. Shepperd
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Any
shareholder may withhold authority to vote for any of the above-listed
individuals by marking the
"For
All Except" box above and writing the number of the nominee(s) on the line
provided above.
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At
their discretion, the proxies are authorized to transact such other
business as may properly come before the
meeting.
Presently, no other business is scheduled to be presented at the meeting,
and the Company did not receive
notice
of any other matter to come before the meeting.
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IF
SHARES
ARE JOINTLY HELD, BOTH SHAREHOLDERS MUST SIGN
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Yes
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No
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Please
indicate if you plan to attend this meeting in person.
|
o
|
o
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Please
date this Proxy and sign it exactly as the name appears on
your
stock certificate. If the shares are jointly held, both
shareholders
must
sign. If signing as attorney, executor, administrator, guardian,
or
in
any other representative capacity, please give your full title as
such.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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Important
Notice Regarding the Availability of Proxy Materials for the Annual
Meeting:
The
Notice and Proxy Statement and Investor Letter Combo Document are available at
www.proxyvote.com.
REVOCABLE
ROXY
Bioanalytical
Systems, Inc.
Annual
Meeting of Shareholders to Be Held Thursday, March 19, 2009
The
undersigned shareholder of Bioanalytical Systems, Inc. (“BASi”) hereby
appoints Michael R. Cox and Lina Reeves-Kerner and each of them as proxies
for the undersigned, to vote all shares of BASi which the undersigned is
entitled to vote at the Annual Meeting of Shareholders (the “Meeting”) of
BASi to be held on Thursday, March 19, 2009, at 10:00 a.m., at the
principal executive offices of BASi, 2701 Kent Avenue, West Lafayette,
Indiana, or any adjournment thereof, in connection with all votes taken on
the following proposals, described in the Proxy Statement received by the
undersigned with the Notice of the Meeting.
PRESENTLY
NO OTHER BUSINESS IS SCHEDULED TO BE PRESENTED AT THE MEETING. BASi DID
NOT RECEIVE NOTICE OF ANY OTHER BUSINESS TO BE BROUGHT BEFORE THE ANNUAL
MEETING OF SHAREHOLDERS. HOWEVER, BY SIGNING THIS PROXY YOU ARE GIVING
THE HOLDER OF THIS PROXY DISCRETIONARY AUTHORITY TO ACT IN ACCORDANCE WITH
THE DIRECTION OF THE BOARD OF DIRECTORS ON SUCH
MATTERS.
This
Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no
direction is made, this Proxy will be voted FOR the election of each of
the nominees identified in Proposal 1.
All
Proxies previously given by the undersigned are hereby revoked. Receipt of
the Notice of Meeting of Shareholders of the Company, the Proxy Statement,
and the Company's 2008 Annual Report is hereby acknowledged. This
Revocable Proxy may be revoked by the undersigned at any time before it is
exercised by (i) executing and delivering to the Company a later-dated
Proxy, (ii) attending the Meeting and voting in person, or (iii) giving
written notice of revocation to the secretary of the Company.
PLEASE
DATE, SIGN, AND RETURN AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU
OWN.
Proxy
must be signed and dated. See reverse side.
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