THIS EMPLOYMENT AGREEMENT (" Agreement ") is made and entered into this 18th day of May,
2007 (the " Signing Date "), by and among BIOANALYTICAL SYSTEMS, INC., a corporation organized
under the laws of the State of Indiana (" Company "), and Richard M. Shepperd (" Employee ").
The Company is engaged in the business of providing contract research services and
manufacturing and distributing scientific instruments (" Business ").
The Company wishes to employ Employee on the terms and conditions contained herein, and
Employee wishes to enter into such employment.
In consideration of the premises and mutual covenants and agreements contained herein, the parties
hereby agree as follows:
Term, Compensation, and Benefits
Section 1.1 . Term . The Company hereby agrees to employ the Employee, and the Employee hereby
accepts employment with the Company, on the terms and conditions set forth in this Agreement until December
31, 2009 (the " Initial Term "). The Initial Term shall be extended for successive three month periods (the "
Additional Terms ," and together with the Initial Term, the " Employment Period "), except that if either the
Employee or the Company gives the other party written notice at least thirty (30) days before the end of the Initial
Term, or any Additional Term, then this Agreement shall expire at the end of its then current term.
Section 1.2 . Compensation and Benefits .
Section 1.2.1 . Salary . The Company will pay Employee a base salary of $35,000.00 per month. Salary
shall be paid in equal semi-monthly installments in arrears.
Section 1.2.2 . Discretionary Bonus . Employee will be eligible for an annual bonus, which shall be based
upon Employee’s performance of his duties during the preceding twelve (12) month period of employment. The
amount and terms of such bonus shall be determined by the Compensation Committee of the Board of Directors
of the Compa