SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Bioanalytical Systems, Inc.
- -------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ----------------------------------------------------------------------------
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[OBJECT OMITTED]
Shareholders of Bioanalytical Systems, Inc.:
You are invited to attend the Annual Meeting of Shareholders of Bioanalytical
Systems, Inc. ("BAS") to be held Thursday, February 15, 2001,21, 2002, at 10:00 a.m.
Eastern Standard Time at BAS headquarters, 2701 Kent Avenue, West Lafayette,
Indiana USA.
At the meeting, shareholders will vote on the election of seven persons to the
Board of Directors and the ratification of the selection of Ernst & Young LLP as
independent auditors for the current year. Details can be found in the
accompanying Notice and Proxy Statement.
We hope that you are able to personally attend the Annual Meeting, 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 the Company or by
filing a properly executed proxy bearing a later date.
On behalf of the Board of Directors and management of Bioanalytical Systems,
Inc., I extend our appreciation for your continued support.
Sincerely,
Bioanalytical Systems, Inc.
/s/ PetePeter T. Kissinger
Peter T. Kissinger, Ph.D.
Chairman, President and Chief Executive Officer
[OBJECT OMITTED]
BIOANALYTICAL SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 15, 2001to Be Held February 21, 2002
To the Shareholders of Bioanalytical Systems, Inc.:
The Annual Meeting of Shareholders of Bioanalytical Systems, Inc. (the
"Company") will be held at the principal executive offices of the Company, 2701
Kent Avenue, West Lafayette, Indiana 47906 on Thursday, February 15, 200121, 2002 at
10:00 a.m. (EST) for the following purposes:
o To elect directors of the Company to serve for a one-year term;
o To ratify the selection by the Board of Directors of Ernst & Young LLP
as independent auditors for the Company for the fiscal year ending
September 30, 2001;2002; and
o To transact such other business as may properly come before the
meeting.
Holders of common shares of record at the close of business on December 29,
200031,
2001 are entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ Candice B. Kissinger
Candice B. Kissinger
Secretary
January 12, 200117, 2002
West Lafayette, Indiana
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 RETURN ENVELOPE IS PROVIDED FOR THIS PURPOSE.
BIOANALYTICAL SYSTEMS, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 15, 200121, 2002
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Bioanalytical Systems, Inc. (the "Company") of proxies to
be voted at the Annual Meeting of Shareholders to be held at 10:00 a.m. (EST) on
Thursday, February 15, 2001,21, 2002, and at any adjournment thereof. The meeting will be
held at the principal executive offices of the Company, 2701 Kent Avenue, West
Lafayette, Indiana 47906. This proxy statement and the accompanying form of
proxy were first mailed to shareholders on or about January 15, 2001.21, 2002.
A shareholder signing and returning the enclosed proxy may revoke it at any time
before it is exercised by written notice to the Secretary of the Company. The
signing of a proxy does not preclude a shareholder from attending the meeting in
person. All proxies returned prior to the meeting will be voted in accordance
with the instructions contained therein. Any proxy not specifying to the
contrary will be voted (1) FOR the election of the nominees for director named
below, and (2) FOR the proposal to ratify the selection of Ernst & Young LLP as
independent auditors for the Company for the fiscal year ending September 30,
2001.2002. Abstentions and broker non-votes are not counted for purposes of
determining whether a proposal has been approved, andbut will be counted for
purposes of determining whether a quorum is present.
As of the close of business on December 29, 2000,31, 2001, the record date for the Annual
Meeting, there were outstanding and entitled to vote 4,563,3974,575,509 common shares of
the Company. Each outstanding common share is entitled to one vote. The Company
has no other voting securities. Shareholders do not have cumulative voting
rights.
A quorum will be present if a majority of the common shares are present, in
person or by proxy, at the meeting. The nominees for director will be elected by
a plurality of the votes cast, assuming a quorum is present. All other matters,
including the approval of the independent auditors, will be approved by a
majority of the votes cast.
A copy of the Annual Report of the Company, including financial statements and a
description of operations for the fiscal year ended September 30, 2000,2001, has
preceded or accompanies this proxy statement. The financial statements contained
in that report are not incorporated by reference herein. The solicitation of
proxies is being made by the Company, and all expenses in connection with the
solicitation of proxies will be borne by the Company. The Company expects to
solicit proxies primarily by mail, but directors, officers and regular employees
of the Company may also solicit in person or by telephone.
Shareholder proposals to be considered for presentation to the 20012002 Annual
Meeting of Shareholders must be submitted in writing and received by the Company
on or before August 1, 2001.2002. Shareholder proposals to be considered for
presentation and inclusion in the proxy statement to the 20012002 Annual Meeting of
Shareholders must be submitted in writing and received by the Company on or
before September 15, 2001.29, 2002.
The mailing address of the principal offices of the Company is 2701 Kent Avenue,
West Lafayette, Indiana 47906.
1
BENEFICIAL OWNERSHIP OF COMMON SHARES
The following table sets forth certain data with respect to those persons known
by the Company to be the beneficial owners of five percent or more of the
outstanding common shares of the Company as of December 31, 2000,2001, and also sets
forth such data with respect to each director of the Company, each officer
listed in the Executive Compensation table, and all directors and executive
officers of the Company as a group. Except as otherwise indicated in the notes
to the table, each beneficial owner possesses sole voting and investment power
with respect to the common shares indicated.
SHARES BENEFICIALLY OWNED(1)
NAME NUMBER PERCENT
- ---- ------ -------
Primus Capital Fund II, L.P.
1375 East Ninth Street
Suite 2700
Cleveland, Ohio 44114.............................470,255 10.3%
Middlewest Ventures II, L.P.
201 North Illinois Street
Suite 300
Indianapolis, Indiana 46204.......................246,152 5.4%
Peter T. Kissinger(2)...........................1,282,055 28.1% 1,282,255 28.0%
Ronald E. Shoup(3).................................96,717 98,467 2.1%
Candice B. Kissinger(4).........................1,282,055 28.1% 1,282,255 28.0%
William E. Baitinger(5)...........................142,599 3.1% 148,627 3.2%
Michael K. Campbell(6).............................32,586 32,836 0.7%
John A. Kraeutler(6)..................................500 750 ---
W. Leigh Thompson(6)..................................500 750 ---
Michael P. Silvon(7) 2,500 ---
All executive officers and directors as a group....................................1,775,464 38.7%group 1,793,892 39.2%
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(1) Unless otherwise noted, all addresses are in care of the Company at 2701
Kent Avenue, West Lafayette, Indiana 47906.
(2) Includes (i) 252,559252,309 common shares beneficially owned by Candice B.
Kissinger, the wife of Dr. Kissinger, (ii) 595,904 common shares owned
jointly by Dr. and Mrs. Kissinger and (iii) the right for Candice B.
Kissinger to acquire 250500 common shares pursuant to vested options.options exercisable within
60 days from December 31, 2001.
(3) Includes (i) 75,45878,458 common shares owned jointly by Dr. Shoup and his wife
and (ii) the right to acquire 20,80719,557 common shares pursuant to vested
options.options
exercisable within 60 days from December 31, 2001.
(4) Includes (i) 433,542 common shares beneficially owned by Peter T.
Kissinger, (ii) 595,904 common shares owned jointly by Dr. and Mrs.
Kissinger and (iii) the right for Candice B. Kissinger to acquire 250500
common shares pursuant to vested options.options exercisable within 60 days from December 31,
2001.
(5) Includes 53,08953,454 common shares owned jointly by Mr. Baitinger and his wife
and (ii) the right to acquire 500750 common shares pursuant to vested options.options
exercisable within 60 days from December 31, 2001.
(6) Includes the right to acquire 500750 common shares pursuant options
exercisable within 60 days from December 31, 2001.
(7) Includes the right to vested options.acquire 2,500 common shares pursuant options
exercisable within 60 days from December 31, 2001.
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1. ELECTION OF DIRECTORS
NOMINEES
The Bylaws of the Company provide for no fewer than seven and no greater than
nine directors, each of whom is elected for a one-year term. The terms of all
incumbent directors will expire at the Annual Meeting. The Board of Directors
has nominated all of the current directors for re-election at the Annual
Meeting. The directors nominated for re-election are: Peter T. Kissinger, Ronald
E. Shoup, Candice B. Kissinger, William E. Baitinger, Michael K. Campbell, John
A. Kraeutler and W. Leigh Thompson (collectively, the "Nominated Directors").
Unless authority to vote for the Nominated Directors is withheld, the
accompanying proxy will be voted FOR the election of 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 will be unable or unwilling to serve. Proxies will not be voted for
more than seven nominees. Those nominees receiving at least a plurality of the
votes eligible to be cast will be elected to the Board of Directors.
The directors of the Company as of December 31, 20002001, which are the nominees,
are as follows:
SERVED AS TERM
NAME AGE POSITION DIRECTOR SINCE ENDSServed as Term
Name Age Position Director Since Ends
- ---- --- -------- -------------- ----
Peter T. Kissinger, Ph.D. 5657 Chairman of the Board; 1974 20012002
President; Chief Executive Officer
Ronald E. Shoup, Ph.D. 4950 President, 1991 2002
BAS Analytics; Director
1991 2001
Candice B. Kissinger 4950 Sr. Vice President, Marketing;
Secretary; Director 1978 20012002
William E. Baitinger 6768 Director 1979 20012002
Michael K. Campbell 4950 Director 1991 20012002
John A. Kraeutler 5253 Director 1997 20012002
W. Leigh Thompson, Ph.D. 6263 Director 1997 20012002
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BUSINESS EXPERIENCE OF NOMINEESNOMINATED DIRECTORS
PETER T. KISSINGER, PH.D. founded the Company in 1974 and has served as its
Chairman, President and Chief Executive Officer since 1974. He is also a
part-time Professor of Chemistry at Purdue University where he has been teaching
since 1975. Dr. Kissinger has a Bachelor of Science degree in Analytical
Chemistry from Union College and a Doctorate in Analytical Chemistry from the
University of North Carolina.
RONALD E. SHOUP, PH.D. has beenserves as President of the Company's services unit, BAS Analytics
since 1990.contract services and is Managing Director of BAS Analytics, Ltd. in the UK. He
has been instrumentaljoined BAS in developing many of1980 as an applications chemist, became Research Director in 1983
and initiated the Company's chromatographic applications.laboratory services group within BAS in 1988. Dr. Shoup has a
Bachelor of Science degree in Chemistry and Mathematics and a Ph.D. in Analytical Chemistry from Purdue University.University
and then attended Michigan State and Purdue University for his Ph.D in
Analytical Chemistry. He serves on the Company's board of directors and is a
member of the external advisory board to the Purdue University Department of
Chemistry.
CANDICE B. KISSINGERKISSINGEr has been Senior Vice President, Marketing since January
2000. She served as Vice President, International Sales and Marketing since July
1981. Mrs. Kissinger has a Bachelor of Science degree in Microbiology from Ohio
Wesleyan University and a Master of Science degree in Food Science from the
University of Massachusetts.
Mrs. Kissinger is the wife of Dr. Peter T.
Kissinger.
WILLIAM E. BALTINGERBAITINGER has served as a director of the Company since 1979. Mr.
Baitinger has beenwas Director of Technology Transfer atfor the Purdue University sinceResearch Foundation
from 1988 until 2000. In this capacity he was responsible for all aspects oflicensing and
commercialization activities from Purdue University. He currently serves as
Special Assistant to the program.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.
MICHAEL K. CAMPBELL has served as a director of the Company since 1991. Mr.
Campbell has been the PresidentChairman and Chief Executive Officer of Powerway, Inc., a
software company, since JanuaryMay 1993. From January 1992November 1989 until January 1993, he was
Chief Financial Officer of Hurco Companies, Inc. and presidentPresident of Hurco
Manufacturing, its largest division. He has a Bachelor of Science degree in
accountingAccounting from the University of Southern Indiana.
JOHN A. KRAEUTLER has served as a director of the Company since January 1997.
Mr. Kraeutler has been President and Chief Operating Officer of Meridian
Diagnostics,Bioscience, Inc. since August 1992 and is also a director. Prior to that time,joining
Meridian Bioscience, Inc., Mr. Kraeutler was Executive Vice Presidentheld a progression of technical,
marketing and Chief Operating Officergeneral management positions with a number of Meridian Diagnostics, Inc.healthcare companies
including Carter-Wallace, Becton Dickinson and Organon (Akzo Nobel). Mr.
Kraeutler has a Bachelor of Science degree in Biology from Fairleigh Dickinson
University as well asand a Master of Science
degree in Biology and a Master of Business
Administration in Marketing from Seton Hall University.
W. LEIGH THOMPSON, PH.D., M.D., has served as a director of the Company since
January 1997. Since 1995, Dr. Thompson has been Chief Executive Officer of
Profound Quality Resources, Inc., a scientific consulting firm. Prior to 1995,
Dr. Thompson held various positions at Lilly Research Laboratories.Laboratories, retiring as
Chief Scientific Officer. Dr. Thompson has a Bachelor of Science degree in
Biology from the College of Charleston, a Master of Science and a Doctorate in
Pharmacology from the Medical University of South Carolina and a Medical Doctor
degree from The Johns Hopkins University. Dr. Thompson is also a director of
Chrysalis International Corporation, Corvas
International, Inc., GeneMedicine, Inc., La Jolla Pharmaceutical Company,Inspire, Medarex, Inc., OphidianGuilford Pharma, DepoMed, Maret Pharmaceuticals, Inc.LaJolla
Pharmaceutical Company and Orphan Medical, Inc.Tanabe Research Laboratories.
- 4 -
SCIENTIFIC ADVISORY BOARD
In 1985, the Company established a Scientific Advisory Board to assist the
Company in its research and development activities. The Scientific Advisory
Board is comprised of distinguished scientists from outside the Company who have
significant accomplishments in areas of science and technology that are
important to the Company's future. The Scientific Advisory Board interacts with
the Company's scientific and management staff.
Each of the Scientific Advisory Board members is employed outside the Company
and may have commitments to, or consulting or advisory contracts with, other
entities that may conflict or compete with his or her obligations with the
Company. Generally, members of the Scientific Advisory Board are not expected to
devote a substantial portion of their time to Company matters. Members of the
Scientific Advisory Board do not receive any compensation in connection with
attending meetings of the Scientific Advisory Board. They do, however, from time
to time, receive compensation in connection with consulting services they render
to the Company. In fiscal 2000,2001, Dr. Thompson received $4,600$4,000 for consulting
serviceservices rendered to the Company, and no other member of the Scientific Advisory
Board received fees for consulting services.
FAMILY RELATIONSHIPS
Peter T. Kissinger and Candice B. Kissinger are husband and wife. There is no
other family relationship among the directors and executive officers of the
Company.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive $1,100$1,200 for each Board
meeting attended, plus out-of-pocket expenses incurred in connection with
attendance at such meetings. Directors of the Company or an affiliate of the
Company who are not employed by the Company or any affiliate may also
participate in the Company's 1997 Outside Director Stock Option Plan, as may be
determined from time to time by the Compensation Committee. However, no options
were issued pursuant to the plan in fiscal 2000.2001. Dr. Thompson received an
additional $4,600$4,000 as compensation for the services he rendered as a consultant
to the Company. Directors who are employees of the Company do not receive any
additional compensation for their services as directors.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has established a Compensation and Incentive Stock Option
Committee, an Audit Committee and an Executive Committee. The Compensation and
Incentive Stock Option Committee of the Board of Directors (the "Compensation
Committee") is comprised of Peter T. Kissinger, andCandice B. Kissinger, John A.
Kraeutler.Kraeutler and William E. Baitinger. The responsibilities of the Compensation
Committee include making recommendations to the Board of Directors with respect
to: compensation arrangements for the executive officers of the Company;
policies relating to salaries and job descriptions; insurance programs; and
benefit programs of the Company, including its retirement plans. The
Compensation Committee administers the 1990 and 1997 Employee Incentive Stock
Option Plans. The Compensation Committee met one time during fiscal 2000.
5
2001.
The Audit Committee of the Board of Directors is comprised of William E.
Baitinger, Michael K. Campbell and John A. Kraeutler. The Audit Committee
reviews with the auditors the scope of the audit work performed, audit
practices, any questions arising in the course of the audit work and inquiries
as to other pertinent matters such as internal accounting controls, financial
reporting, security and personnel staffing. The Board of Directors has adopted a
charter for the Audit Committee which is attached as Appendix A. Audit Committee
members are not employees of the Company and, in the opinion of the Board of
Directors, meet the independence requirements of the National Association of
Securities Dealers listing standards. The committee met twice during fiscal
2000.2001.
- 5 -
The Executive Committee is comprised of Messrs. Kissinger, Shoup, Baitinger,
Kraeutler and Thompson. The Executive Committee may exercise all of the
authority of the Board of Directors, subject to certain limitations with respect
to payment of dividends, filling of vacancies on the Board, amendment of the
Articles of Incorporation or Bylaws, andapproval of significant corporate
transactions, issuance of shares.shares and other matters specified under Indiana law.
The committee did not meet during fiscal 2001.
The Board of Directors has no nominating committee. The Board of Directors will
consider for nomination as directors persons recommended by shareholders. Such
recommendations must be in writing and delivered to the Secretary, Bioanalytical
Systems, Inc., 2701 Kent Avenue, West Lafayette, Indiana 47906.
The Board of Directors met four times during fiscal 2000.2001. No director 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.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the aggregate
compensation paid during each of the last three years to the Company's President
and Chief Executive Officer and each of the other executive officers of the
Company whose total compensation exceeded $100,000 during fiscal 20002001 (the
"Named Executive Officers").
ALL OTHER
FISCAL YEAR SALARY BONUS COMPENSATIONAll Other
Fiscal Year Salary Bonus Compensation
----------- ------ ----- ------------
Peter T. Kissinger, Ph.D 2000Ph.D. 2001 $ 85,000 $--- $ 25,965(1)16,000 $ 26,067(1)
Chairman of the Board; President 19992000 $ 85,000 $--- $ 25,558(1)--- $ 25,965(1)
and Chief Executive Officer 19981999 $ 85,000 $--- $ 26,893(1)--- $ 25,558(1)
Ronald E. Shoup, Ph.D 2000 $107,000 $---Ph.D. 2001 $ 6,407(2)108,000 $ 18,000 $ 6,403(2)
President, BAS Analytics; Director 2000 $ 107,000 $ --- $ 6,407(2)
1999 $ 99,996 $---$ --- $ 5,800(2)
1998 $ 92,500 $--- $ 6,177(2)
Candice B. Kissinger 20002001 $ 84,450 $---85,200 $ 25,922(3)18,000 $ 26,078(3)
Sr. Vice President, Marketing; 2000 $ 84,450 $ --- $ 25,922(3)
Secretary and Director 1999 $ 79,200 $---$ --- $ 25,459(3)
Secretary and Director 1998Michael P. Silvon, Ph.D. 2001 $ 74,512 $---88,800 $ 25,187(3)16,000 $ 5,434(4)
Vice President, 2000 $ 88,325 $ --- $ 5,293(4)
Business Development 1999 $ 85,000 $ --- $ 4,930(4)
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(1) Includes $20,865 of premiums paid on a life insurance policy on the lives
of Dr. Kissinger and Mrs. Kissinger, the beneficiary of which is a trust
established for their benefit, and contributions to the Company's 401(k)
plan on Dr. Kissinger's behalf.
(2) Represents contributions to the Company's 401(k) plan on Dr. Shoup's
behalf.
(3) Includes $20,865 of premiums paid on a life insurance policy on the lives
of Mrs. Kissinger and Dr. Kissinger, the beneficiary of which is a trust
established for their benefit, and contributions to the Company's 401(k)
plan on Mrs. Kissinger's behalf.
(4) Represents contributions to the Company's 401(k) plan on Dr. Silvon's
behalf.
- 6 -
OPTIONS
A total of 95,000 common shares have been reserved for issuance under the
Company's 1997 Employee Incentive Stock Option Plan ("Employee Plan") and a
total of 5,000 common shares have been reserved for issuance under the Company's
1997 Outside Director Stock Option Plan ("Director Plan"). There were no options
granted during fiscal 2001. Options to purchase an aggregate of 5,000 common
shares pursuant to the Employee Plan were granted during fiscal 2000 and remain
outstanding at December 31, 20002001 at an exercise price of $2.88. Options to
purchase an aggregate of 55,00073,000 common shares were granted pursuant to the
Employee Plan during fiscal 1999, and 49,00047,000 remain outstanding at December 31,
20002001 at an exercise price of $4.25. Options to purchase an aggregate of 31,50035,000
common shares pursuant to the Employee Plan and 4,000 common shares pursuant to
the Director Plan were granted during fiscal 1998, and 30,00029,500 and 4,000,
respectively, remain outstanding at December 31, 20002001 at an exercise price of
$8.00. Options to purchase a total of 44,48333,371 common shares remain outstanding
under the 1990 Employee Incentive Stock Option Plan at a weighted average
exercise price of $1.64$1.69 per share, and no options to purchase common shares are
outstanding under the 1990 Outside Director Stock Option Plan. No further
options may be granted under the 1990 Employee Stock Option Plan or the 1990
Outside Director Stock Option Plan. There were no grants of stock options to
Named Executive Officers in fiscal 2000.2001.
The following table sets forth certain information concerning exercisable and
unexercisable options held by the Named Executive Officers at September 30,
2000.2001.
AGGREGATED OPTION EXERCISES IN LAST YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES SEPTEMBERNumber of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
September 30, 2000 SEPTEMBER2001 September 30, 2000(1)
ACQUIRED ON VALUE2001 (1)
------------------ ---------------------
EXERCISE----------------------
Shares
Acquired on Value
Exercise (#) REALIZED(#) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLERealized ($) Exercisable Unexercisable Exercisable Unexercisable
------------ ----------------------- ----------- ------------- ----------- -------------
Peter T. Kissinger, Ph.D. --- --- --- --- --- ---
Ronald E. Shoup, Ph.D. 1,172 $ 2,376--- --- 20,807 4,250 $ 19,456 ---77,574 $ 3,578
Candice B. Kissinger --- --- 250 750 -$ 398 $ 1,193
Michael P. Silvon, Ph.D. --- --- 1,500 2,500 $ 795 $ 2,385
- -----------------------------
(1) Calculated on the basis of $2.688$5.84 per share which was the closing price of
the common shares as reported on the NASDAQ National Market System on
September 29, 2000.28, 2001.
401(K) SAVINGS PLAN
The Company has a defined contribution retirement plan (the "401(k) Plan"),
qualified under Sections 401(a) and 401(k) of the Code. All employees of the
Company are eligible to enroll in the 401(k) Plan on the first quarter after
completing one year of employment with the Company. The 401(k) Plan provides
that the Company will contribute 2% of each eligible employee's compensation to
the 401(k) Plan. In addition, each participant may contribute from 1% to 18% or
none of their annual compensation. The Company may also make discretionary
contributions based on a certain percentage of a participant's contributions
under the 401(k) Plan, as determined by the Board of Directors. The Board
approved a matching contribution of 40% of the first 10% of the participants'
contributions beginning October 1, 1999. Contribution expense for the 401(k)
Plan was $256,107 for the year ended September 30, 2000.
7
COMPENSATION COMMITTEE:COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Peter T. Kissinger, andCandice B. Kissinger, John A. Kraeutler and William E.
Baitinger serve on the Compensation Committee. Dr. Kissinger, the President and
Chief Executive Officer of the Company, does not participate in decisions
regarding his compensation. None of the Company's executive officers serves as a
director of, or in any compensation-related capacity for, companies with which
members of the Compensation Committee are affiliated.
REPORT OF THE:THE COMPENSATION AND INCENTIVE STOCK OPTION COMMITTEE
The Compensation and Incentive Stock Option Committee of the Board of Directors
(the "Compensation Committee") has responsibility for the Company's executive
compensation program. The Compensation Committee is currently comprised of Peter
T. Kissinger, andCandice B. Kissinger, John A. Kraeutler.Kraeutler and William E. Baitinger.
The following report is submitted by the members of the Compensation Committee.
- 7 -
The Company's executive compensation program is designed to align executive
compensation with financial performance, business strategies and Company values
and objectives. The Company's compensation philosophy is to ensure that the
delivery of compensation, both in the short and long-term,long term, is consistent with
the sustained progress, growth and profitability of the Company and acts as an
inducement to attract and retain qualified individuals. This program seeks to
enhance the profitability of the Company, and thereby enhance shareholder value,
by linking the financial interests of the Company's executives with those of its
long-term shareholders. Under the guidance of the Company's Compensation
Committee, of the Board of Directors, the Company has developed and implemented an executive compensation
program to achieve these objectives while providing executives with compensation
opportunities that are competitive with companies of comparable size in related
industries.
The Company's executive compensation program has been designed to implement the
objectives described above and is comprised of the following fundamental
elements:
o A base salary that is determined by individual contributions and
sustained performance within an established competitive salary range.
Pay for performance recognizes the achievement of financial goals,
accomplishmentaccomplish-ment of corporate and functional objectives, and
performance of individual business units of the Company.
o Grants of options under the Company's option plans reward executives
when shareholder value is created through increase in the market value
of the Company's common shares. Stock option grants focus executives
on managing the Company from the perspective of an owner with an
equity position in the business.
BASE SALARY. The salary, and any periodic increase thereof, of the President and
Chief Executive Officer were and are determined by the Board of Directors of the
Company based on recommendations made by the Compensation Committee, excluding
Dr. Kissinger. The salaries, and any periodic increases thereof, of all other
executive officers were and are determined by the Board of Directors based on
Committee recommendations.
The Company, in establishing base salaries, levels of incidental and/or
supplemental compensation, and incentive compensation programs for its officers
and key executives, assesses periodic compensation surveys and published data
covering the Company's industry and industry in general. The level of base
salary compensation for officers and key executives is determined by both their
scope of responsibility and the established salary ranges for officers and key
executives of the Company. Periodic increases in base salary are dependent on
the executive's proficiency of performance in the individual's position for a
given period and on the executive's competency, skill and experience.
8
Compensation levels for fiscal 20002001 for the President and Chief Executive
Officer, and for the other executive officers of the Company, reflected the
positive performance of the Company in fiscal 1999 as well as the accomplishment
of corporate and functional objectives.2000.
- 8 -
OPTION PLANS. Granting of options pursuant to the Company's option plans is
intended to align executive interest with the long-term interests of
shareholders by linking executive compensation with enhancement of shareholder
value. In addition, grants of options motivate executives to improve long-term
stock market performance by allowing them to develop and maintain a significant
long-term equity ownership position in the Company's common shares.
Respectfully submitted,
Peter T. Kissinger
Candice B. Kissinger
John A. Kraeutler
William E. Baitinger
AUDIT COMMITTEE REPORT
The Audit Committee reviews Bioanalytical Systems, Inc. financial reporting
process on behalf of the Board of Directors. In fulfilling its responsibilities,
the Committee has reviewed and discussed the audited financial statements
contained in the 20002001 Annual Report on SEC Form 10-K with Bioanalytical Systems,
Inc.'s management and the independent auditors.auditors including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements. Management is responsible for the financial statements and
the reporting process, including the systemsystems of internal controls. The
independent auditors are responsible for expressing an opinion on the conformity
of those audited financial statements with accounting principles generally
accepted in the United States.
The Committee discussed with the independent auditors, the matters required to
be discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended. In addition, the Committee has discussed with the
independent auditors, the auditors' independence from Bioanalytical Systems,
Inc. and its management including the matters in the written disclosures
required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees.Committees, and considered the compatibility of nonaudit
services with the auditors independence.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board has approved) that the
audited financial statements be included in Bioanalytical Systems, Inc.'s Annual
Report on SEC Form 10-K for the year ended September 30, 2000,2001, for filing with
the Securities and Exchange Commission.
Respectfully submitted,
Michael K. Campbell, Chair
William E. Baitinger
John A. Kraeutler
- 9 -
STOCK PRICE:PRICE PERFORMANCE GRAPH
The line graph below compares yearly percentage change in the cumulative total
stockholder return on the Company's common shares against the cumulative total
return on the Nasdaq Composite Index and a composite index based on a group of
ten publicly traded contract research and chemical instrumentation organizations
(the "Peer Group Index") for the period commencing November 24, 1997, the date
of the Company's initialinitital public offering, and ending September 30, 2000.2001.
The Peer Group Index is comprised of Applied Analytical Industries;AAIpharma, Inc.; Bioreliance Corporation; Clintrials Research, Inc.;
Kendle International; New Brunswick Scientific Co., Inc.; Pharmaceutical Product Development, Inc.; Isco, Inc.; Molecular
Devices Corporation; OI Corporation; Covalent Group, Inc.; BEI Medical Systems
Co., Inc.; and Premier Research Worldwide,
Ltd.Pharmaceutical Product Development, Inc. Because they were no
longer publicly traded at September 30, 2000, CEM Co.2001, Clintrials Research, Inc. and
Metrika Systems Co.Premier Research Worldwide, Ltd. were replaced with New Brunswick Scientific Co.,Covalent Group, Inc. and Pharmaceutical Product Development,BEI
Medical Systems Co., Inc. The graph is presented as if the
two new companies were
components of the peer index on November 24, 1997. The comparison of total
return on investment (change in year-end stock price plus reinvested dividends)
for the applicable period assumes that $100 was invested on November 24, 1997,
in each of Bioanalytical Systems, Inc. (at the initial public offering price),
the Nasdaq Composite Index and the Peer Group Index.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG BIOANALYTICAL SYSTEMS, INC., THE NASDAQ
COMPOSITE INDEX, AND THE PEER GROUP INDEX
[GRAPHIC OMITTED]
Comparison of Cumulative Total Return
Among Bioanalytical Systems, Inc., the NASDAQ
Composite Index and the Peer Group Index
Company 11/24/97 9/09/30/98 9/09/30/99 9/09/30/002000 09/30/2001
- ------- -------- ------- ------- --------------- -------- ---------- ----------
NASDAQ 100
Bioanalytical Systems, Inc. 100.00 67.19 38.28 33.59 72.99
Nasdaq Composite Index 100.00 106.73 173.04 231.42 PEER GROUP 100 100.07 87.76 135.76
BASI 100 67.19 38.28 33.5994.44
Peer Index 100.00 100.63 79.00 119.22 81.07
COMPLIANCE WITH REPORTING REQUIREMENTS OF SECTION 16(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 required the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of common shares and other equity securities of the
Company. Officers, directors and greater-than-ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) reports they file. ToBased solely upon the knowledgereview of Section 16(a) reports
furnished to the Company all Section 16(a)
filing requirements applicableduring or with respect to fiscal 2001 and written
representations by the Company's officers, directors and
greater-than-ten-percent beneficial owners have been made in a timely manner.that no other reports were required,
the Company is not aware of any instance of noncompliance or late compliance
during or with respect to fiscal 2001.
- 10 -
2. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Subject to ratification by the shareholders, the Board of Director'sDirectors has selected
Ernst & Young LLP as independent auditors for the Company for the fiscal year
ending September 30, 2001.2002. Fees for the latest annual audit were $107,000 and
all other fees were $52,000 which related to income tax services. The Company
has been advised by such firm that neither it nor any of its associates has any
direct or material indirect financial interest in the Company.
The Board of Directors recommends that shareholders vote FOR ratification of the
appointment of Ernst & Young LLP as independent auditors for fiscal year ending
September 30, 2002.
Ernst & Young LLP has acted as independent auditors for the Company since 1994.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions concerning the
audits of the Company's financial statements.
3. OTHER MATTERS
As of the date of this proxy statement, the Board of Directors of the Company
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 the Company.
By Order of the Board of Directors,
/s/ Candice B. Kissinger
Candice B. Kissinger
Secretary
January 12, 200117, 2002
- 11 -
Appendix A
AUDIT COMMITTEE CHARTER
ROLE AND INDEPENDENCE
The audit committee of the board of directors assists the board in fulfilling
its responsibilities for oversight of the quality and integrity of the
accounting, auditing and reporting practices of the corporation and other such
duties as directed by the board. The membership of the committee shall consist
of at least three directors who are generally knowledgeable in financial
management expertise. Each member shall be free of any relationship that, in the
opinion of the board, would interfere with his or her individual exercise of
independent judgement, and shall meet the director independence requirements for
serving on audit committees as set forth in the corporate governance standards
of the NASDAQ. The committee is expected to maintain free and open communication
(including private executive sessions at least annually) with the independent
accountantsauditors and the management of the corporation. In discharging this oversight
role, the committee is empowered to investigate any matter brought to its
attention, with full power to retain outside counsel or other experts for this
purpose.
The board of directors shall appoint one member of the audit 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 chairperson will also
maintain regular liaison with the CEO, CFO and the lead independent audit
partner.
RESPONSIBILITIES
The audit committee's primary responsibilities include:
o Recommending to the board the independent accountantauditor to be selected or
retained to audit the financial statements of the corporation. In so
doing, the committee will request from the auditor a written
affirmation that the auditor is in fact independent, discuss with the
auditor any relationships that may impact the auditor's independence,
and recommend to the board any actions necessary to oversee the
auditor's independence.
o Overseeing the independent auditor relationship by discussing with the
auditor the nature and rigor of the audit process, receiving and
reviewing audit reports, and providing the auditor full access to the
committee (and the board) to report on any and all appropriate
matters.
o Reviewing the audited financial statements and discussing them with
management and the independent auditor. These discussions shall
include consideration of the quality of the company's accounting
principles as applied in its financial reporting, including review of
estimates, reserves and accruals, review of judgmental areas, review
of audit adjustments whether or not recorded and such other inquiries
as may be appropriate. Based on the review, the committee shall make
its recommendation to the board as to the inclusion of the Company's
audited financial statements in the company's annual report on Form
10-K.
o Reviewing with management and the independent auditor the quarterly
financial information prior to the Company's filing of Form 10-Q. This
review may be performed by the committee or its chairperson.
- 12 -
o Discussing with management and the external auditors the quality and
adequacy of the Company's internal controls.
o Discussing with management the status of pending litigation, taxation
matters and other areas or oversight to the legal and compliance area
as may be appropriate.
o Reporting audit committee activities to the full board and issuing
annually a report to be included in the proxy statement (including
appropriate oversight conclusions) for submission to the shareholders.
- 13 -
REVOCABLE PROXY
BIOANALYTICAL SYSTEMS, INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
FEBRUARY 21, 2002
The undersigned shareholder of Bioanalytical Systems, Inc. ("the Company")
hereby appoints Peter T. Kissinger, Michelle Troyer, and each of them as proxy
for the undersigned, to vote all shares of the Company which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
on Thursday, February 21, 2002, at 10: 00 a. m., at the principal executive
offices of the Company, 2701 Kent Avenue, West Lafayette, Indiana USA, or any
adjournment thereof ("the Meeting"), in connection with all votes taken on the
following proposals, all of which were described in the Proxy Statement received
by the undersigned with the Notice of the Meeting:
1. PROPOSAL 1 - Approval of the election of the following individuals to the
Board of Directors of the Company: William E. Baitinger, Michael K.
Campbell, John A. Kraeutler, Candice B. Kissinger, Peter T. Kissinger,
Ronald E. Shoup, and W. Leigh Thompson.
[ ] For [ ] Against [ ] Abstain
Any shareholder may withhold authority to vote for any of the above- listed
individuals by striking out the name of such individual.
2. PROPOSAL 2 - Approval of Ernst & Young LLP as independent auditors for the
Company for the fiscal year ending September 30, 2002.
[ ] For [ ] Against [ ] Abstain
PROXY MUST BE SIGNED AND DATED - SEE REVERSE SIDE
PRESENTLY NO OTHER BUSINESS IS SCHEDULED TO BE PRESENTED AT THE MEETING.
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 Proposals 1 and 2 with respect to all votes taken on such proposals.
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 2001 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 this proxy and sign this proxy 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.
IF SHARES ARE JOINTLY HELD, BOTH
- -------------------------------------- SHAREHOLDERS MUST SIGN.
DATED
- -------------------------------------- ----------------------------------------
(SIGNATURE) (SIGNATURE)
- -------------------------------------- ----------------------------------------
PRINT NAME PRINT NAME
- -------------------------------------- ----------------------------------------
ADDRESS ADDRESS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE DATE, SIGN,
AND RETURN AS SOON AS POSSIBLE IN THE ENCLOSED ENVELOPE. YOUR VOTE IS IMPORTANT,
REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
Do you plan to personally attend the Annual Meeting of Shareholders?
[ ] Yes [ ] No