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EXHIBIT 10.2
BIOANALYTICAL SYSTEMS, INC.
OUTSIDE DIRECTOR STOCK OPTION PLAN
1. DEFINITIONS. The following terms shall have the meanings
hereinafter set forth:
(a) "Affiliate" means a corporation which is a parent or
subsidiary corporation of the Company, or a corporation or a parent or a
subsidiary corporation of the Company issuing or assuming the options issued
under the Plan in a transaction in which Section 425(a) of the Code applies.
(b) "Board of Directors" means the board of directors of
the Company, as it shall exist from time to time.
(c) "Code" means the Internal Revenue Code of 1986, as it
shall be amended from time to time.
(d) "Committee" means the director stock option committee
administering the Plan as provided in paragraph 3 hereof.
(e) "Common Shares" means the Common Shares, $1.00 par
value, of the Company.
(f) "Company" means Bioanalytical Systems, Inc., an Indiana
corporation.
(g) "Nonstatutory Stock Option" means an option which is
not an incentive stock option within the meaning of Section 422A of the Code
and which is governed by Section 83 of the Code for Federal income tax
purposes.
(h) "Optionee" means an Outside Director granted an option
under the Plan.
(i) "Outside Director" means any director of the Company or
an Affiliate who is not employed by the Company or any Affiliate in any
capacity.
(j) "Plan" means this Bioanalytical Systems, Inc. Outside
Director Stock Option Plan.
2. PURPOSE. This Plan is intended to be an incentive to, and to
encourage ownership of the Common Shares by, Outside Directors of the Company
and its Affiliates in order to provide such Outside Directors with a more
direct and proprietary interest in the welfare and success of the Company and
to encourage their continuation as directors of the Company. The Plan is
further intended to promote continuity of membership on the Board of Directors
and to increase the incentive
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to promote the welfare of the Company by those who are primarily responsible
for shaping and carrying out the long-term plans and objectives of the Company,
thereby furthering and securing the Company s continued growth and financial
success. It is contemplated that only Nonstatutory Stock Options will be
granted under the Plan.
3. ADMINISTRATION. The Plan shall be administered by
the Committee which shall consist of all of the members of the Board of
Directors who are not Outside Directors and such Outside Directors who are not
then participating in the Plan. Members of the Committee shall not be eligible
to participate in the Plan while serving on the Committee. The Committee shall
have the power (a) to interpret and construe the provisions of the Plan or any
option granted under it, and such interpretation or construction shall be final
and binding; (b) to select Outside Directors to whom grants of options under
the Plan shall be made as more particularly set forth in paragraph 4 hereof;
(c) to determine the terms and conditions of each option granted hereunder; (d)
to determine the time at which such grants shall be made and the number of
Common Shares to be optioned under such grant; and (e) to make any other
determinations regarding the Plan which are not otherwise expressly provided
herein. The Committee may prescribe, amend and rescind rules and regulations
relative to the Plan or its construction or interpretation. A majority of the
Committee shall constitute a quorum. All determinations of the Committee shall
be made by the vote of a majority of its members; provided, however, that if
there are fewer than three (3) members of the Committee at any time, all
determinations shall be a joint determination of its members. No member of the
Committee shall be liable for any action or determination made in good faith.
4. ELIGIBILITY. Only those persons who are Outside
Directors shall be eligible to participate in the Plan. The Committee shall
determine from time to time the particular Outside Directors who shall be
eligible to participate in the Plan and the extent of their participation
therein.
5. SHARES. The shares subject to the options and other
provisions of the Plan shall be the Company's authorized, but unissued, or
reacquired Common Shares. The total number of the Common Shares on which
options may be granted under the Plan shall not exceed in the aggregate
twenty-four thousand (24,000) shares, except as such number of shares shall be
adjusted in accordance with the provisions set forth in paragraph 6(g) hereof.
The total amount of Common Shares on which options may be granted in any
calendar year shall not exceed six thousand (6,000), adjusted in accordance
with paragraph 6(g) hereof. In the event any outstanding option under the Plan
expires or is terminated for any reason prior to the end of the period during
which options may be granted, the Common Shares allocable to the unexercised
portion of such option may again be subject to an option under the Plan.
During the period that any options granted hereunder are outstanding, the
Company shall reserve and keep available such number of Common Shares as will
be sufficient to satisfy all outstanding, unexercised options.
6. TERMS AND CONDITIONS OF OPTIONS. Options granted
pursuant to the Plan shall be evidenced by agreements in such form as the
Committee shall from time to time prescribe, which agreements shall comply with
and be subject to the following terms and conditions:
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(a) MEDIUM AND TIME OF PAYMENT. The option price shall
be payable in United States dollars upon the exercise of the option and shall
be paid in cash, by certified check, or by bank cashier's check, personal check
or by the delivery to the Company of Common Shares owned by the grantee, the
fair market value of which equals the option price, or by a combination of cash
and Common Shares which together equal the option price. Fair market value of
any Common Shares surrendered shall be determined by the Committee in the same
manner that it is determined in establishing option prices. Payment of the
option price shall be accompanied by a written subscription agreement in a form
to be prescribed by the Committee.
(b) NUMBER OF SHARES; DATE OF GRANT. The option agreement
shall state the total number of shares to which it pertains, and the date of
the grant of the option.
(c) OPTION PRICE. The option price shall be an amount per
share not less than the fair market value per share of the Common Shares on the
date of grant of the option. Fair market value shall be determined by the
Committee in accordance with such procedures as the Committee shall from time
to time prescribe.
(d) TERM OF OPTIONS. Each option granted under the Plan
shall expire within the period prescribed in the agreement relating thereto,
which shall not be more than ten (10) years from the date the option is
granted.
(e) TIME OF EXERCISE. Each option granted pursuant to the
Plan shall be exercisable in four equal installments. The option may be
exercised as to the shares covered by the first installment from and after the
second anniversary of the grant of the option, with second, third and fourth
installments becoming exercisable on the three succeeding anniversary dates.
Except as specifically restricted by the provisions of this paragraph 6(e) or
by the Committee acting hereunder, any option may be exercised in whole at any
time or in part from time to time during its term.
(f) CESSATION OF SERVICE AS A DIRECTOR. In the event an
Optionee ceases to serve as a director of the Company or an Affiliate all
options outstanding in the hands of the Optionee shall terminate immediately as
to any unexercised portion thereof; provided, however, that if any cessation of
service is due to retirement with the consent of the Company or is due to
permanent and total disability, the Optionee shall have the right, subject to
the provisions of paragraphs 6(d) and 6(e) hereof, to exercise the option, with
respect to the Common Shares for which it could have been exercised on the
effective date of the Optionee's cessation of service, at any time within three
(3) months after such cessation of service due to retirement with the consent
of the Company or at any time within twelve (12) months after such cessation of
service due to permanent and total disability; and provided further, that if
the Optionee shall die while serving as a director of the Company or an
Affiliate, the Optionee's personal representative shall have the right, subject
to the provisions of paragraphs 6(d) and 6(e) hereof, to exercise the option
with respect to the Common Shares
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for which the option could have been exercised on the date of death, at any
time within twelve (12) months from the date of the Optionee's death. Whether
a cessation of service is a retirement with the consent of the Company or due
to permanent and total disability, and whether an authorized leave of absence
or absence on military or government service shall be deemed to constitute
cessation of service for the purposes of the Plan, shall be determined by the
Committee in its sole discretion, which determination shall be final and
conclusive.
(g) RECAPITALIZATION. The aggregate number of Common
Shares on which options may be granted hereunder, the number of Common Shares
covered by each outstanding option, and the price per share set forth in each
option agreement, shall all be proportionately adjusted for any increase or
decrease in the number of issued Common Shares resulting from a subdivision or
consolidation of shares of the Company or any other capital adjustment of the
Company, the payment of a share dividend, a share split or any other increase
or decrease in the Common Shares effected without receipt of consideration by
the Company. In the event that, prior to the delivery by the Company of the
Common Shares remaining unexercised under any outstanding option hereunder,
there shall be a capital reorganization or reclassification of the capital of
the Company resulting in a substitution of other shares for the Common Shares,
there shall be substituted the number of substitute shares which would have
been issued in exchange for the Common Shares then remaining under the option
if such Common Shares had been then issued and outstanding.
(h) MERGER, DISSOLUTION. If the Company shall be a party
to any merger or consolidation, the Company shall have the right to terminate
any option outstanding on thirty (30) days' written notice; provided, however,
if such merger or consolidation is not consummated within 180 days from the
date of the aforementioned notice, all options terminated shall be deemed to
have been continuously in effect since the date of execution thereof. In the
event of a dissolution or liquidation of the Company, the Company shall give
each optionee thirty (30) days written notice specifying the effective date
thereof. Every unexercised option outstanding hereunder on the date set by the
Company as the effective date of the dissolution or liquidation shall be deemed
to be terminated upon such dissolution or liquidation.
(i) NONASSIGNABILITY. No option granted under the Plan
shall be assignable or transferable except by will or under the laws of descent
and distribution. During the lifetime of an Optionee, the option shall be
exercisable only by the Optionee.
(j) ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES LAWS.
The Company may postpone the issuance and delivery of certificates representing
Common Shares until (a) the admission of such shares to listing on any stock
exchange on which shares of the Company of the same class are then listed and
(b) the completion of such registration or other qualification of such shares
under any state or Federal law, rule or regulation or the rules and regulations
of any exchange upon which the Common Shares are treated as the Company shall
determine to be necessary or advisable, which registration or other
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qualification the Company shall use its best efforts to complete. Any person
purchasing Common Shares pursuant to the Plan may be required to make such
representations and furnish such information as may, in the opinion of counsel
for the Company, be appropriate to permit the Company, in light of the
existence or non- existence with respect to such shares of an effective
registration under the Securities Act of 1933, as amended, or any similar state
statute, to issue the shares in compliance with the provisions of those or any
comparable acts.
(k) RIGHTS AS A SHAREHOLDER. An Optionee shall have no
rights as a shareholder with respect to Common Shares covered by an option
until the date of issuance of a certificate to the Optionee. The certificate
shall not be issued until the Optionee has exercised the option and has fully
paid for the Common Shares acquired thereby. No adjustment will be made for
dividends or other rights for which the record date is prior to the date such
certificate is issued.
(l) OTHER PROVISIONS. The option agreements entered into
under the Plan shall contain such other provisions, limitations, restrictions
and requirements as the Committee shall deem advisable.
7. TERM OF PLAN. The Plan shall become effective upon the
receipt of approval by the holders of a majority of the issued and outstanding
Common Shares voting in person or by proxy at a duly held shareholders'
meeting; provided, however, that the Plan shall become effective only if
approved by such shareholders within twelve (12) months before or after the
date the Plan is adopted by the Board of Directors. The Plan shall terminate
ten (10) years after the earlier of the date the Plan is adopted by the
Board of Directors or the date the Plan is approved by the shareholders, or on
such earlier date as the Board of Directors may determine. No option shall be
granted under the Plan after such termination date.
8. AMENDMENT OF THE PLAN. The Board of Directors,
excluding any members of the Board of Directors participating in the Plan, may
from time to time, alter, amend, suspend, or discontinue the Plan with respect
to any Common Shares as to which options have not been granted; provided,
however, that no action may be taken hereunder which would alter or impair any
of the rights or obligations of the Company or any Optionee with respect to any
outstanding option without the consent of the Optionee thereof.
9 APPLICATION OF FUNDS. The proceeds received by the
Company from the sale of Common Shares pursuant to options granted hereunder
will be used for general corporate purposes.
10. NO OBLIGATION TO EXERCISE OPTION. The granting of an
option hereunder shall impose no obligation upon the Optionee to exercise such
an option.
11. NO RIGHT TO REELECTION. Neither the adoption of the
Plan, the granting of an option hereunder, nor any other action taken relating
to the Plan shall impose any obligation on the
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Company or any Affiliate or the Board of Directors of either to nominate any
Outside Director for reelection as a director by the shareholders of the
Company or any Affiliate.
12. APPLICABILITY OF AMENDMENTS. All outstanding options shall
be deemed to be amended so as to include, to the extent applicable thereto, any
amendments made to the Plan subsequent to the granting of such options.
13. WITHHOLDINGS. The Company shall have the right to require
the Optionee to remit to the Company amounts sufficient to satisfy any
applicable withholding requirements set forth in the Code or under state or
local law relating to options granted to the Optionee. The Company shall have
the right, to the extent permitted by law, to deduct from any payment of any
kind otherwise due to an Optionee who exercises an option any federal, state or
local taxes of any kind required by law to be withheld with respect to the
Common Shares subject to such option.
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