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<SEC-DOCUMENT>0000927946-04-000010.txt : 20040120
<SEC-HEADER>0000927946-04-000010.hdr.sgml : 20040119
<ACCEPTANCE-DATETIME>20040120142015
ACCESSION NUMBER:		0000927946-04-000010
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040930
FILED AS OF DATE:		20040120
EFFECTIVENESS DATE:		20040120

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BIOANALYTICAL SYSTEMS INC
		CENTRAL INDEX KEY:			0000720154
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731]
		IRS NUMBER:				351345024
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-23357
		FILM NUMBER:		04532179

	BUSINESS ADDRESS:	
		STREET 1:		2701 KENT AVE
		CITY:			WEST LAFAYETT
		STATE:			IN
		ZIP:			47906-1382
		BUSINESS PHONE:		3174634527

	MAIL ADDRESS:	
		STREET 1:		2701 KENT AVENUE
		CITY:			WEST LAFAYETTE
		STATE:			IN
		ZIP:			47906-1382
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>basdef14a.htm
<DESCRIPTION>PROXY STATEMENT - BAS
<TEXT>





<HTML>
<HEAD>
<TITLE>Bioanalytical Systems, Inc. - DEF14A</TITLE>
</HEAD>
<BODY>


<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Shareholders of Bioanalytical Systems, Inc.:</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>You are
invited to attend the Annual Meeting of Shareholders of Bioanalytical Systems,
Inc. (&#147;BASi&#148;) to be held Thursday, February 26, 2004, at 10:00 a.m.
(EST) at BASi headquarters located at 2701 Kent Avenue, West Lafayette,
Indiana.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At the
meeting, shareholders will vote on the election of six persons to the Board of
Directors, and the ratification of the selection of Ernst &amp; Young LLP as
independent auditors for the current year. Details can be found in the
accompanying Notice of Annual Meeting and Proxy Statement.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On behalf of
the Board of Directors and management of BASi, I sincerely thank you for your
continued support.</FONT></P>

<P align=justify><FONT FACE="Times New Roman, Times, Serif" size=2>
Sincerely,<BR>
<BR>
Bioanalytical Systems, Inc.<BR>
<BR>
<BR>
<BR>

Peter T. Kissinger, Ph.D.<BR>
Chairman, President and Chief Executive Officer
</font></P>



<PAGE>


<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>[LOGO]<BR>
BIOANALYTICAL SYSTEMS, INC.<BR>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS<BR>
TO BE HELD FEBRUARY 26, 2004</B> </FONT></P>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To the Shareholders of Bioanalytical Systems, Inc.:</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Annual
Meeting of Shareholders of Bioanalytical Systems, Inc. (&#147;BASi&#148;) will
be held at the principal executive offices of BASi, at 2701 Kent Avenue, West
Lafayette, Indiana 47906 on Thursday, February 26, 2004 at 10:00 a.m. (EST) for
the following purposes:</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To elect directors of BASi to serve for a one-year term;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to ratify the selection by the Audit Committee of the Board of Directors of
Ernst &amp; Young LLP as independent auditors for BASi for the fiscal year
ending September 30, 2004; and<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to transact such other business as may properly come before the meeting.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Holders of BASi common
shares of record at the close of business on December 31, 2003 are entitled to notice of,
and to vote at, the Annual Meeting.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
By Order of the Board of Directors,<BR>
<BR>
<BR>
<BR>
Candice B. Kissinger<BR>
Secretary<BR>
<BR>
January 23, 2004<BR>
West Lafayette, Indiana</FONT></P>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=2>
YOUR VOTE IS IMPORTANT. IF YOU DO NOT EXPECT TO ATTEND THE<BR>
ANNUAL MEETING, OR IF YOU DO PLAN TO ATTEND BUT WISH TO VOTE<BR>
BY PROXY, PLEASE DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY.<BR>
A RETURN ENVELOPE IS PROVIDED FOR THIS PURPOSE.
</font></P>

<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
2</font></P>

<PAGE>



<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>[LOGO]<BR>
BIOANALYTICAL SYSTEMS, INC.<BR>
PROXY STATEMENT<BR>
ANNUAL MEETING OF SHAREHOLDERS<BR>
TO BE HELD FEBRUARY 26, 2004</B></FONT></P>
<BR>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>General Information</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This proxy
statement is furnished 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, February 26, 2004, 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
January 27, 2004.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 (1) FOR the election of the nominees for director named below, and (2) FOR
the proposal to ratify the selection of Ernst &amp; Young LLP as independent
auditors for BASi for the fiscal year ending September 30, 2004. 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As of the
close of business on December 31, 2003, the record date for the Annual Meeting,
there were outstanding and entitled to vote 4,869,502 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A quorum will
be present if a majority of the common shares are present, in person or by
proxy, at the Annual Meeting. If a quorum is present, the nominees for director
will be elected by a plurality of the votes cast and the independent auditors
will be approved by a majority of the votes cast.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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, 2003,
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.</FONT></P>


<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
3</font></P>

<PAGE>


<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Proposals for 2005 Annual Meeting</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shareholder
proposals to be considered for presentation and inclusion in the proxy statement
for the 2005 Annual Meeting of Shareholders must be submitted in writing and
received by BASi on or before September 29, 2004. If notice of any other
shareholder proposal intended to be presented at the 2005 Annual Meeting of
Shareholders is not received by BASi on or before December 13, 2004, 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The mailing
address of the principal offices of BASi is 2701 Kent Avenue, West Lafayette,
Indiana 47906.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Beneficial Ownership of Common Shares</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following
table sets forth certain data with respect to those persons known by BASi to be
the beneficial owners of five percent or more of the outstanding common shares
of BASi as of December 31, 2003, and also sets forth such data with respect to
each director of BASi, each officer listed in the Executive Compensation table
(on page 7 of this proxy statement), and all directors and executive officers of
BASi 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.</FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=90%>
<TR VALIGN=Bottom>
     <Td align=left COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u><B>Name</B></u><sup>(1)</sup></FONT></Td>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Number</u></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH>
     <TH align=right COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2><u>Percent</u></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=33% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Peter T. Kissinger<sup>(2)</sup></FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=4% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,282,755</FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.2%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ronald E. Shoup<sup>(3)</sup></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>100,966</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.1%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Candice B. Kissinger<sup>(4)</sup></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,282,755</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.2%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>William E. Baitinger<sup>(5)</sup></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>150,634</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.1%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Leslie B. Daniels<sup>(6)</sup></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>38,042</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.8%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>W. Leigh Thompson<sup>(7)</sup></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,500</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.1%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Michael P. Silvon<sup>(8)</sup></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,500</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.1%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Eleven executive officers and directors as a group<sup>(9)</sup></FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,804,070</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>36</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.8%</FONT></TD></TR>
</TABLE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(1)</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All addresses are in care of BASi at 2701 Kent Avenue, West Lafayette, Indiana 47906</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Ownership Includes common shares in the following denominations:</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(2)</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(i)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
430,947</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
beneficially owned by Candice B. Kissinger, Dr. Kissinger's wife</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(ii)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
598,504</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
owned jointly by Dr. and Mrs. Kissinger</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(iii)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
1,000</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
options held by Mrs. Kissinger and exercisable within 60 days from December 31,
2003</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(3)</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(i)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
93,966</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
owned jointly by Dr. Shoup and his wife</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(ii)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
7,000</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
options exercisable within 60 days from December 31, 2003</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(4)</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(i)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
252,309</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
beneficially owned by Dr. Kissinger</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(ii)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
598,504</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
owned jointly by Dr. and Mrs. Kissinger</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(iii)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
1,000</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
options exercisable within 60 days from December 31, 2003</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(5)</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(i)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
148,412</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
owned jointly by Mr. Baitinger and his wife</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(ii)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
5,500</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
options exercisable within 60 days from December 31, 2003</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(6)</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Excludes shares that may be acquired by Mr. Daniels upon conversion of a
$100,000 convertible note, the conversion price for which is based upon the
market price of the Company's common shares for the 10 trading days prior to the
date of conversion.</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(7)</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
5.500</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
options exercisable within 60 days from December 31, 2003</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(8)</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(i)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
500</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
owned jointly by Dr. Silvon and his wife</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(ii)</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
4,000</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
options exercisable within 60 days from December 31, 2003</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(9)</FONT></TD>
<TD align=right WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=right WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
31,000</FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
options exercisable by various executive officers and directors within 60 days
from December 31, 2002</FONT></TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
4</font></P>

<PAGE>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ELECTION OF DIRECTORS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Nominees</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Bylaws of
BASi provide for no fewer than seven and no more 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:</FONT></P>

<P align=justify><FONT FACE="Times New Roman, Times, Serif" size=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peter T. Kissinger,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ronald E. Shoup,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Candice B. Kissinger,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;William E. Baitinger,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leslie B. Daniels and<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;W. Leigh Thompson<BR>
</font></P>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(collectively, the &#147;Nominated Directors&#148;). Following the recent
resignation of John A. Kraeutler, the Board of Directors is conducting a search
for two new directors.</FONT></P>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 or for good cause will not
serve. Proxies will not be voted for more than six nominees. If a quorum is
present, those nominees receiving a plurality of the votes cast will be elected
to the Board of Directors.</FONT></P>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The directors
of BASi as of December 31, 2003, who are also the Nominated Directors, are as
follows:</FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=100%>
<TR VALIGN=Bottom>
     <TH align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Name<hr></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Age<hr></FONT></TH>
     <TH align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Position<hr></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Served as<BR>Director Since<hr></FONT></TH></TR>
<TR VALIGN=top>
     <TD WIDTH=45% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Peter T. Kissinger, Ph.D.</FONT></TD>
     <TD WIDTH=8% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>59</FONT></TD>
     <TD WIDTH=29% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Chairman of the Board<BR>
President; Chief Executive Officer</FONT></TD>
     <TD WIDTH=14% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1974</FONT></TD></TR>
<TR VALIGN=top>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ronald E. Shoup, Ph.D.</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>52</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Chief Operating Officer, BASi<BR>
Contract Research Services; Director</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1991</FONT></TD></TR>
<TR VALIGN=top>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Candice B. Kissinger</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>52</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Senior Vice President; Director of<BR>
Research; Director</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1978</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>William E. Baitinger</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>70</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1979</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Leslie B. Daniels</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>56</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>W. Leigh Thompson, Ph.D., M.D.</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>65</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1997</FONT></TD></TR>
</TABLE>


<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
5</font></P>

<PAGE>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Business Experience of Nominated Directors</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Peter T.
Kissinger, Ph.D. </B>founded BASi 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 Ph.D. in Analytical Chemistry from the University of
North Carolina.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Ronald E.
Shoup, Ph.D.</B> serves as Chief Operating Officer of BASi&#146;s Contract
Research Services and is Managing Director of BAS Analytics, Ltd. in the UK. He
joined BASi in 1980 as an applications chemist, became Research Director in 1983
and launched the Contract Research services group within BASi in 1988. Dr. Shoup
has a Bachelor of Science degree in Mathematics and Chemistry from Purdue
University and attended Michigan State and Purdue University for his Ph.D.
in Analytical Chemistry. He has served on BASi&#146;s Board of Directors since
1991 and is a member of the external advisory board to the Purdue University
Department of Chemistry.</FONT></P>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Candice B.
Kissinger</B> currently devotes all of her time to branding, client relationship
management, sales, product development, and managing installation and service
for in vivo products and services, principally the Culex&reg; ABS. She was named
Senior Vice President, Marketing in January 2000 and is currently Director of
Research. From 1981 to 2000 she served as Vice President, International Sales
and Marketing. Ms. 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. She has served as a director and Secretary
of BASi since 1978.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>William E.
Baitinger</B> 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. He currently serves 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Exhibit Header" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>W. Leigh Thompson, Ph.D., M.D.,</B> has served as a director of BASi 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 was Professor of Medicine at Case Western Reserve and Indiana
Universities, President of the Society of Critical Care Medicine and Chief
Scientific Officer at Eli Lilly and Company. He earned a Bachelor of Science
degree in Biology from the College of Charleston, a Master of Science and a
Ph.D. in Pharmacology from the Medical University of South Carolina, a Medical
Doctor degree from The Johns Hopkins University and was awarded a Ph.D. of
Science from the Medical University of South Carolina. Dr. Thompson is also a
director of La Jolla Pharmaceutical Company, Diabetogen, Bioscience, Inc.,
Medarex, Inc., Guilford Pharmaceuticals, Inc., Inspire Pharmaceuticals, Inc.,
Sontra Medical Corp. and DepoMed, Inc.</FONT></P>



<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
6</font></P>

<PAGE>


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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Leslie B.
Daniels</B> joined the BASi Board of Directors in 2003. He was a director of
PharmaKinetics Laboratories, Inc., acquired by BASi in 2003. Mr. Daniels is a
founding partner of CAI, a private equity fund in New York City. He previously
was President of Burdge, Daniels &amp; 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 &amp; 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 a Director of SafeGuard Health Enterprises, Inc.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Scientific Advisory Board</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In 1985, BASi
established a Scientific Advisory Board to assist BASi in its research and
development activities. The Scientific Advisory Board is comprised of
distinguished scientists from outside BASi who have significant accomplishments
in areas of science and technology that are important to BASi&#146;s future. The
Scientific Advisory Board interacts with BASi&#146;s scientific and management
staff. Each member of the Scientific Advisory Board is employed outside BASi and
may have commitments to, or consulting or advisory contracts with, other
entities that may conflict or compete with his or her obligations to BASi.
Generally, members of the Scientific Advisory Board are not expected to devote a
substantial portion of their time to BASi 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
BASi.</FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Family Relationships</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Peter T.
Kissinger and Candice B. Kissinger are husband and wife. There is no other
family relationship among the directors and executive officers of
BASi.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Compensation of Directors</B></I></FONT></P>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Directors who
are not employees of BASi receive $1,500 for each Board meeting attended, plus
out-of-pocket expenses incurred in connection with attendance at such meetings.
Directors of BASi or an affiliate of BASi who are not employed by BASi or any
affiliate may also participate in the BASi 1997 Outside Director Stock Option
Plan, as may be approved from time to time by the Compensation Committee.
Options were issued to William E. Baitinger and W. Leigh Thompson in fiscal
2003, in the amount of 9,000 shares each. Directors who are employees of BASi do
not receive any additional compensation for their services as
directors.</FONT></P>


<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
7</font></P>

<PAGE>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Certain Relationships and Transactions</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Leslie B.
Daniels, a director of the Company currently up for reelection, was a director
of PKLB at the time it was acquired by the Company in June 2003. As a result of
that acquisition, Mr. Daniels received a 6% convertible subordinated note in the
amount of $498,809 due January 1, 2008 (the &#147;6% Note&#148;), in exchange
for Series A Convertible Preferred Shares of PKLB which he held at the effective
time of the acquisition. The 6% Note is convertible at any time after June 30,
2004, into a total of approximately 31,175 of the Company&#146;s common shares.
In addition, prior to the acquisition of PKLB, Mr. Daniels made various loans to
PKLB totaling $350,000. These loans were consolidated into a $350,000 promissory
note which was convertible into shares of common stock of PKLB (the &#147;PKLB
Note&#148;). On December 31, 2003, BASi Maryland, Inc. (the former PKLB)
assigned the PKLB Note to the Company. On that same date, the Company issued a
$350,000 8% convertible note (the &#147;New Note&#148;) to Mr. Daniels in
exchange for the PKLB Note, which was cancelled. The New Note matured on June 1,
2005 and was convertible into the Company&#146;s common shares at a price based
upon the market price of the Company&#146;s common shares at or about the time
of conversion. Immediately following the issuance of the New Note on December
31, 2003, the Company prepaid $100,000 of the outstanding principal amount of
the New Note, plus approximately $31,000 in accrued interest, and Mr. Daniels
converted $150,000 of the principal amount of the New Note into 38,042 of the
Company&#146;s common shares. Following the payment and conversion, the Company
issued a new 8% convertible note due June 1, 2005, to Mr. Daniels on
substantially the same terms as the New Note for the remaining $100,000
principal amount.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Committees and Meetings of the Board of Directors</B></I></FONT></P>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of
Directors has established Compensation and Incentive Stock Option, Audit, and
Executive Committees. Scheduled meetings are supplemented by frequent informal
exchange of information and actions taken by unanimous votes without
meetings.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR"  -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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. Four out of six members of the Board of Directors attended the
2003 Annual Meeting of shareholders. All of the members of the Board of
Directors are encouraged, but not required, to attend BASi&#146;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:</FONT></P>

<!-- MARKER FORMAT-SHEET="Signature Block w/Company Name" FSL="Workstation" -->
<TABLE WIDTH=80% align=center CELLPADDING=0 CELLSPACING=0 BORDER=0>

<TR VALIGN=bottom>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Committee<hr></FONT></TD>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Members<hr></FONT></TD>
<TD align=center WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Meetings<BR>
in 2003<hr align=left width=80%></FONT></TD></tr>

<TR VALIGN=bottom>
<TD>&nbsp;</td>
</TR>

<TR VALIGN=TOP>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Compensation and Incentive Stock Option</FONT></TD>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Peter T. Kissinger<BR>
Candice B. Kissinger<BR>
William E. Baitinger</FONT></TD>
<TD align=center WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
0</FONT></TD></tr>

<TR VALIGN=bottom>
<TD>&nbsp;</td>
</TR>

<TR VALIGN=TOP>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Audit</FONT></TD>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
William E. Baitinger<BR>
Leslie B. Daniels<BR>
W. Leigh Thompson<BR></FONT></TD>
<TD align=center WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
2</FONT></TD></tr>


<TR VALIGN=bottom>
<TD>&nbsp;</td>
</TR>


<TR VALIGN=TOP>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Executive</FONT></TD>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Peter T. Kissinger<BR>
Ronald E. Shoup<BR>
William E. Baitinger<BR>
W. Leigh Thompson<BR>
</FONT></TD>
<TD align=center WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
0</FONT></TD></tr>

<TR VALIGN=bottom>
<TD>&nbsp;</td>
</TR>

<TR VALIGN=TOP>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Board of Directors</FONT></TD>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;</FONT></TD>
<TD align=center WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
6</FONT></TD></tr>

</TABLE>
<BR>









<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
8</font></P>

<PAGE>






<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
<B>Compensation Committee</B> makes recommendations to the Board of Directors
with respect to:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
compensation arrangements for the executive officers of BASi,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
policies relating to salaries and job descriptions,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
insurance programs,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
benefit programs, including retirement plans,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
administration of the 1990 and 1997 Employee Incentive Stock Option Plans, and<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the 1997 Outside Director Stock Option Plan.</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold w/spaces" FSL="Default" -->
<p ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The <B>Audit
Committee</B> is responsible for:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
reviewing with the auditors the scope of the audit work performed,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
establishing audit practices,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
establishing internal accounting controls,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
reviewing financial reporting, and<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
accounting personnel staffing.</FONT></p>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of
Directors has adopted a written charter for the Audit Committee. Audit Committee
members are not employees of BASi and, in the opinion of the Board of Directors,
are &#147;independent&#148; (as defined by Rule 4200(a)(15) of the NASD listing
standards). The Board of Directors has determined that Leslie B. Daniels is an
&#147;audit committee financial expert&#148; (as defined by Item 401(h) of
Regulation SK) and is &#147;independent&#148; (as defined by Item 7(d)(3)(iv) of
Schedule 14A).</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
<B>Executive Committee</B> 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, approval of significant corporate transactions, issuance of shares and
other matters specified under Indiana law. The Executive Committee did not meet
during fiscal 2003.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of
Directors has no <B>Nominating Committee</B>. Nominees for the Board of
Directors are currently selected by the entire Board of Directors. The Board of
Directors will consider for nomination as directors persons recommended by
shareholders. Such recommendations must be in writing and delivered to
Bioanalytical Systems, Inc., Attention: Corporate Secretary, 2701 Kent Avenue,
West Lafayette, Indiana 47906. The NASD has adopted new rules regarding the
process for selecting nominees to the Board of Directors. These new NASD rules
are effective as of the date of the Annual Meeting and the Board of Directors is
in the process of reviewing its nominating procedures to ensure that BASi is in
compliance with the new rules on a timely basis.</FONT></P>


<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
9</font></P>

<PAGE>



<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Executive Compensation</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following
table sets forth information with respect to the aggregate compensation paid
during each of the last three years to BASi&#146;s President and Chief Executive
Officer and each of the other executive officers of BASi whose total
compensation exceeded $100,000 during fiscal 2003 (the &#147;Named Executive
Officers&#148;). There were no grants of options, restricted stock or stock
appreciation rights in fiscal 2003.</FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fiscal Year<hr></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Salary<hr></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bonus<hr></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All Other<BR>Compensation<hr></FONT></TH></TR>


<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD WIDTH=40% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Peter T. Kissinger, Ph.D</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=8% ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  30,683</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   ---</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH=8% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  22,829</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(1)</sup></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Chairman of the Board, President</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 101,001</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     ---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  28,067</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(1)</sup></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and Chief Executive Officer</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  85,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  16,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  25,965</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(1)</sup></FONT></TD></TR>

<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ronald E. Shoup, Ph.D</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 112,700</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     ---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   6,837</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(2)</sup></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Chief Operating Officer, BASi Contract</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 113,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     ---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   7,438</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(2)</sup></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Research Services; Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 108,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  18,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   6,403</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(2)</sup></FONT></TD></TR>

<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Candice B. Kissinger</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  94,300</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     ---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  26,900</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(3)</sup></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Senior Vice President &amp; Research Director,</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  90,700</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     ---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  27,822</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(3)</sup></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Secretary and Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  85,200</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  18,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  26,073</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(3)</sup></FONT></TD></TR>

<tr>
<td>&nbsp;</td>
</tr>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Michael P. Silvon, Ph.D</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  98,500</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     ---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   6,304</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(4)</sup></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interim Chief Financial Officer;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2002</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  94,800</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     ---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   7,074</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(4)</sup></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vice President, Planning and Development</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2001</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  88,800</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  16,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   5,434</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(4)</sup></FONT></TD></TR>
</TABLE>




<!-- MARKER FORMAT-SHEET="Exhibit Header" FSL="Default" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Includes premiums paid on a
life insurance policy on the life of Dr. Kissinger and Mrs. Kissinger, the
beneficiary of which is a trust established for their benefit, in the amount of
$20,865 in each of 2003, 2002 and 2001 and contributions to BASi&#146;s 401(k)
plan on Dr. Kissinger&#146;s behalf.</FONT></P>

<!-- MARKER FORMAT-SHEET="Exhibit Header" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Represents contributions to
BASi&#146;s 401(k) plan on Dr. Shoup&#146;s behalf.</FONT></P>

<!-- MARKER FORMAT-SHEET="Exhibit Header" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Includes 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, in the amount of
$20,865 in each of 2003, 2002 and 2001 and contributions to BASi&#146;s 401(k)
plan on Mrs. Kissinger&#146;s behalf</FONT></P>

<!-- MARKER FORMAT-SHEET="Exhibit Header" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Represents contributions to
BASi&#146;s (401k) plan on Dr. Silvon&#146;s behalf.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Aggregated Option Exercises In Last Fiscal Year And Fiscal Year-End Option
Values</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR"  -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following
table sets forth certain information concerning exercisable and unexercisable
options held by the Named Executive Officers at September 30, 2003:</FONT></P>



<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=1>
10</font></P>

<PAGE>


<TABLE CELLPADDING=1 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Number of Securities<BR>Underlying Unexercised<br>Options At September 30, 2003<hr width=95%></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Value of Unexercised<BR>In-The-Money Options At<br>September 30, 2003<sup>(1)</sup><hr width=95%></FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shares<BR>Acquired on<BR>Exercise (#)<hr width=95%></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Value<BR>Realized ($)<hr width=95%></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exerciseable<hr width=95%></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unexerciseable<hr width=95%></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exerciseable<hr width=95%></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unexerciseable<hr width=95%></FONT></TH></TR>
<TR VALIGN=Bottom>
<TD WIDTH=28% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Peter T. Kissinger, Ph.D.</FONT></TD>
<TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=4% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=4% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=4% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=4% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=4% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=4% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
<TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Candice B. Kissinger</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>750</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>250</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ron E. Shoup, Ph.D.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15,057</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 21,961</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,250</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>750</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  9,675</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  3,225</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Michael P. Silvon, Ph.D.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,500</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>500</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  6,450</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  2,150</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Calculated on the basis of
$4.30 per share, which was the closing price of the common shares as reported on
the NASDAQ National Market System on September 30, 2003.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Equity Compensation Plan Information</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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:</FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1><U>Plan Category</U></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Number of Securities<BR>
to be Issued upon Exercise<BR>
<U>of Outstanding Options</U></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Weighted Average<BR>
Exercise Price of<BR>
<U>Outstanding Options</U></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Number of Securities<BR>
Remaining Available for<BR>
Future Issuance under<BR>
the Equity Compensation<BR>
Plan (Excluding Securities<BR>
<U>Reflected in First Column)</U></FONT></TH></TR>
<TR VALIGN=Bottom>
<TD WIDTH=40% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Equity compensation plans approved by security holders</FONT></TD>
<TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=10% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>103,527</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 4</FONT></TD>
<TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.60</FONT></TD>
<TD WIDTH=3% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=7% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>320,750</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Equity compensation plans not approved by security holders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    8</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>---</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>106,527</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    4</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.70</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>320,750</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For additional
information regarding the Company&#146;s stock option plans, please see Note 9
in the Notes to Consolidated Financial Statements in the Company&#146;s Annual
Report on Form 10-K for the fiscal year ended September 30, 2003, which is
incorporated herein by reference.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Report of the Compensation and Incentive Stock Option
Committee</B></I></FONT></P>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Peter T.
Kissinger, Candice B. Kissinger and William E. Baitinger serve on the
Compensation Committee. The Compensation Committee has responsibility for the
administration of BASi&#146;s executive compensation program. Dr. Kissinger, the
President and Chief Executive Officer of BASi, does not participate in decisions
regarding his compensation. None of BASi&#146;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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following
report is submitted by the members of the Compensation Committee:</FONT></P>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BASi&#146;s
executive compensation program is designed to align executive compensation with
financial performance, business strategies and the values and objectives of
BASi. BASi&#146;s compensation philosophy is to ensure that the delivery of
compensation, both in the short and long term, is consistent with the sustained
progress, growth and profitability of BASi and acts as an inducement to attract
and retain qualified individuals. This program seeks to enhance the
profitability of BASi, and thereby enhance shareholder value, by linking the
financial interests of BASi&#146;s executives with those of its long-term
shareholders. Under the guidance of BASi&#146;s Compensation Committee, BASi 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.</FONT></P>

<BR>
<BR>
<BR>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" size=1>
11</font></P>

<PAGE>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BASi&#146;s
executive compensation program has been designed to implement the objectives
described above and is comprised of the following fundamental
elements:</FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><div align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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, accomplishment of corporate and functional objectives, and
performance of individual business units of BASi. </FONT></div></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><div align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Grants of options under BASi&#146;s option plans reward executives when shareholder value
is created through increase in the market value of BASi&#146;s common shares. Stock option
grants focus executives on managing BASi from the perspective of an owner with an equity
position in the business. </FONT></div></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Base Salary.</B> The
salary, and any periodic increase thereof, of the President and Chief Executive Officer
were and are determined by the Board of Directors of BASi 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 also determined by the
Board of Directors based on Committee recommendations.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BASi, 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 both the BASi industry and other industries. The level
of base salary compensation for officers and key executives is determined by both the
scope of their responsibility and the salary ranges for officers and key executives of
BASi established by the Board of Directors and the Compensation Committee. Periodic
increases in base salary are dependent on the executive&#146;s proficiency of performance
in the individual&#146;s position for a given period and on the executive&#146;s
competency, skill and experience.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On his own initiative
the fiscal 2003 compensation level for the President and Chief Executive Officer was
significantly reduced and redistributed to select BASi staff. Dr. Kissinger has expressed
his intention to stay at this compensation level until BASi&#146;s financial performance
improves. Base salary increases for other eligible BASi staff were distributed in the
first fiscal quarter of 2004.</FONT></P>

<!-- MARKER FORMAT-SHEET="Exhibit Header" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Bonus.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In years in which
the after-tax net income of BASi exceeds 7% of revenue, the Compensation
Committee is authorized to award bonuses to any BASi employee at the
Committee&#146;s discretion.</FONT></P>

<BR>
<BR>
<BR>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" size=1>
12</font></P>

<PAGE>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR"  -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Option Plans.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Granting of
options pursuant to BASi&#146;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 BASi&#146;s common shares. No options were granted to executives or
staff in fiscal 2003.</FONT></P>

<P align=justify><FONT FACE="Times New Roman, Times, Serif" size=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Respectfully submitted,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peter T. Kissinger<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Candice B. Kissinger<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;William E. Baitinger<BR>
</font></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Audit Committee Report</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Audit
Committee reviews BASi&#146;s financial reporting process on behalf of the Board
of Directors. In fulfilling its responsibilities, the Committee has reviewed the
audited financial statements contained in the Annual Report on Form 10-K for the
year ended September 30, 2003 with BASi&#146;s management and the independent
auditors. These reviews included quality, not just acceptability, of accounting
principles, reasonableness of significant judgments, and clarity of disclosures
in financial statements. Management is responsible for the financial statements
and the reporting process, including administering the systems of internal
control. 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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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&#146; independence from BASi and its management, including the
matters in the written disclosures required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees, as amended, and
considered the compatibility of non-audit services with the auditors&#146;
independence.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR"  -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In reliance
on the reviews and discussions referred to above, the Committee recommended to
the Board of Directors that the audited financial statements be included in
BASi&#146;s Annual Report on Form 10-K for the year ended September 30, 2003
for filing with the SEC, and the Board has so approved the audited financial
statements.</FONT></P>

<P align=justify><FONT FACE="Times New Roman, Times, Serif" size=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Respectfully submitted,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;William E. Baitinger<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leslie B. Daniels<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;W. Leigh Thompson<BR>
</font></P>


<BR>
<BR>
<BR>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" size=1>
13</font></P>

<PAGE>


<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Stock Price Performance Graph</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The line
graph below compares yearly percentage change in the cumulative total
stockholder return on BASi&#146;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 &#147;Peer Group Index&#148;) for the period commencing September 30, 1998
and ending September 30, 2003.</FONT></P>

<P align=justify><FONT FACE="Times New Roman, Times, Serif" size=2>
The Peer Group Index is comprised of:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AAIpharma, Inc.;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bioreliance Corporation;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Covance, Inc.;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kendle International;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Isco, Inc.;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Molecular Devices Corporation;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New Brunswick Scientific Co., Inc.;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OI Corporation;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Covalent Group, Inc.; and<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pharmaceutical Product Development, Inc.
</font></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 September 30, 1998 in each of BASi, the NASDAQ Composite Index and the Peer
Group Index.</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B><I>Comparison of Cumulative Total Return<BR>
among Bioanalytical Systems, Inc., the NASDAQ<BR>
Composite Index and the Peer Group Index </I></B></FONT></P>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" size=2>
<IMG SRC="chart.gif"></font></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=70%>
<TR VALIGN=Bottom>
     <TH COLSPAN=4><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1998<hr></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1999<hr></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2000<hr></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2001<hr></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2002<hr></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003<hr></FONT></TH></TR>
<TR VALIGN=Bottom>
<TD WIDTH=20% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bioanalytical Systems, Inc.</FONT></TD>
<TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>100</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>57</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>50</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>109</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>57</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=2% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>80</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nasdaq Composite Index</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>100</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>173</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>231</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>94</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>74</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>113</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Peer Index</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>100</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>74</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>131</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>98</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>91</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>110</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.00</FONT></TD></TR>
</TABLE>


<BR>
<BR>
<BR>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" size=1>
14</font></P>

<PAGE>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" size=2>
<B><I>Compliance with Reporting Requirements of Section 16(a) of the Securities
Exchange Act of 1934</I></B></font></P>

<P align=justify><FONT FACE="Times New Roman, Times, Serif" size=2>
Section 16(a) of the Securities Exchange Act of 1934 requires the BASi directors
and executive officers and persons who own more than ten percent of a registered
class of the BASi equity securities to file with the SEC initial reports of
ownership and reports of changes in ownership of common shares and other equity
securities of BASi. Officers, directors and greater-than-ten-percent
shareholders are required by SEC regulation to furnish BASi with copies of all
Section 16(a) reports they file. Except as set forth below and based solely upon
the review of Section 16(a) reports furnished to BASi during or with respect to
fiscal 2003 and written representations by the BASi officers, directors and
greater-than-ten-percent beneficial owners that no other reports were required,
BASi is not aware of any instance of noncompliance or late compliance with
Section 16(a) during or with respect to fiscal 2003.</font></P>

<!-- MARKER FORMAT-SHEET="Exhibit Header" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Mr. Daniels was late in filing a Form 3. Messrs. Baitinger, Thompson and
Kraeutler each was late filing a Form 4 relating to certain option grants in
June, 2003. Each of them attempted to file the Form 4 to report this grant in a
timely fashion, but the original paper filings were rejected by the SEC pursuant
to SEC Release No. 33-8235. Messrs. Baitinger, Thompson and Kraeutler are in the
process of filing these Form 4s.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Communications with the Board of Directors</B></I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Currently,
BASi shareholders may send communications directly to Peter T. Kissinger,
Chairman of the Board of Directors, under the &#147;Ask Pete&#148; portion of
the BASi website found at <U>http://www.bioanalytical.com/</U>. The Board of
Directors is also in the process of implementing a shareholder communication
policy in order to better facilitate communications between shareholders and all
members of the Board of Directors.</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold w/spaces" FSL="Workstation" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject to
ratification by the shareholders, the Audit Committee of the Board of Directors
has selected Ernst &amp; Young LLP as independent auditors for BASi for the
fiscal year ending September 30, 2004. BASi has been advised by such firm that
neither it nor any of its associates has any direct or material indirect
financial interest in BASi.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of
Directors recommends that shareholders vote FOR ratification of the appointment
of Ernst &amp; Young LLP as independent auditors for fiscal year ending
September 30, 2004. Unless authority to vote for the ratification of the
appointment of Ernst &amp; Young LLP as independent auditors for fiscal year
ending September 30, 2004 is withheld, the accompanying proxy will be voted FOR
such ratification.</FONT></P>

<BR>
<BR>
<BR>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" size=1>
15</font></P>

<PAGE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ernst &amp;
Young LLP have acted as independent auditors for BASi since 1994. Representatives
of Ernst &amp; 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
BASi&#146;s financial statements.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Audit Fees</B></I></FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=center WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003<hr width=93%></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2002<hr width=93%></FONT></TH></TR>
<TR VALIGN=Bottom>
<TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Aggregate fees for annual audit, quarterly reviews,</FONT></TD>
<TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD>
<TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 316,015</FONT></TD>
<TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD>
<TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 180,081</FONT></TD>
<TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SEC registration, and acquisitions</FONT></TD></tr>
</TABLE>


<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I><B>Tax Fees</B></I></FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=center WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003<hr width=93%></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2002<hr width=93%></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Income tax services related to compliance with tax laws</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD>
<TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 64,920</FONT></TD>
        <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD>
<TD WIDTH=9% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 50,425</FONT></TD>
        <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BASi&#146;s
policies require that the scope and cost of all work to be performed for BASi by
its independent auditors must be approved by the Audit Committee. Prior to the
commencement of any work by the independent auditor on behalf of BASi, the
independent auditor provides 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. Where fees charged by the
independent auditor exceed the estimate, the Audit Committee must review and
approve the excess fees prior to their payment.</FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OTHER MATTERS</FONT></H1>

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<P ALIGN=JUSTIFY><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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.</FONT></P>

<!-- MARKER FORMAT-SHEET="Italics Bold Heading" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
By Order of the Board of Directors,<BR>
<BR>
<BR>
<BR>

Candice B. Kissinger<BR>
Secretary<BR>
January 23, 2004</FONT></P>

<BR>
<BR>
<BR>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" size=1>
16</font></P>


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