UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 2, 2016
Bioanalytical Systems, Inc.
(Exact name of registrant as specified in charter)
| Indiana | 0-23357 | 35-1345024 | ||
|
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
|
2701 KENT AVENUE WEST LAFAYETTE, INDIANA |
47906-1382 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (765) 463-4527
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c)) |
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 2, 2016, Jacqueline Lemke informed the board of directors of Bioanalytical Systems, Inc. (the “Company”) of her intent to resign from her positions of President and Chief Executive Officer. On November 8, 2016, Ms. Lemke’s attorney provided a letter to Company’s counsel, which indicates that Ms. Lemke believes her resignation to be for "good reason" under the terms of her employment agreement and her expectation of severance compensation commensurate therewith. The board of directors disagrees with the characterization of the events set forth in the letter, including the statements to the effect that Ms. Lemke was deprived of her authority as President and Chief Executive Officer, and disagrees that she has met the requirements under her employment agreement to resign for "good reason". The board of directors has confirmed that Ms. Lemke has also stepped down from her position on the Company’s board of directors and has accepted Ms. Lemke’s respective resignations effective immediately. The board of directors is in the process of identifying Ms. Lemke’s successor.
The Company has provided Ms. Lemke with a copy of the disclosures contained in this Form 8-K no later than the date on which this report is being filed with the Securities and Exchange Commission. The Company has also provided Ms. Lemke with the opportunity to furnish the Company with a letter stating whether she agrees or disagrees with the statements made in this report and, if she disagrees, the respects in which she disagrees.
Item 9.01. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits
17.1 Letter from Jacqueline Lemke’s counsel to Bioanalytical Systems, Inc. counsel, dated November 8, 2016.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BIOANALYTICAL SYSTEMS, INC. | ||||||
| Dated: November 8, 2016 | By: |
/s/ Jill C. Blumhoff | ||||
| Jill C. Blumhoff Chief Financial Officer, Vice President of Finance | ||||||
Exhibit Index
| Exhibit No. | Description | |
| 17.1 | Letter from Jacqueline Lemke’s counsel to Bioanalytical Systems, Inc. counsel, dated November 8, 2016. |
Exhibit 17.1
MACEY SWANSON AND ALLMAN
ATTORNEYS AT LAW _______________________________________________________________________________
BARRY A. MACEY RICHARD J. SWANSON JOSEPH E. ALLMAN ROBERT A. HICKS QUINCY E. SAUER JEFFREY A. MACEY ________ |
445 NORTH PENNSYLVANIA STREET INDIANAPOLIS, INDIANA 46204-1800
TELEPHONE (317) 637-2345 FAX (317) 637-2369 www.maceylaw.com | ||
November 8, 2016
By Email and First Class Mail
Mr. Stephen J. Hackman
ICE MILLER
One American Square
Suite 2900
Indianapolis, IN 46282
Email: Stephen.Hackman@icemiller.com
| RE: | Jacqueline M. Lemke, President/CEO of Bioanalytical Systems, Inc. |
Dear Mr. Hackman:
Jackie Lemke has engaged my law office to advise her in connection with her separation from employment at Bioanalytical Systems, Inc. ("BASi"). It is our understanding that you represent BASi. After speaking with Ms. Lemke and reviewing the relevant facts and agreements, we believe BASi and Ms. Lemke have a mutually beneficial interest in effectuating an amicable separation. In order to facilitate Ms. Lemke's amicable separation from BASi, we provide the following review to further both parties' interests in maintaining a strong professional relationship.
Ms. Lemke first entered into an employment agreement with BASi on April 9, 2012. This agreement was amended on October 15, 2012 and February 7, 2013. Ms. Lemke and BASi then entered into a Second Amended and Restated Employment Agreement ("Second Employment Agreement") effective July I, 2014. The Second Employment Agreement contains an Initial Term from July 1, 2014 until June 30, 2017, unless either party terminates the agreement under the provisions of Article 4.
Under the Second Employment Agreement, Ms. Lemke is to serve as the President and Chief Executive Officer of the Company. Ms. Lemke's specific duties are described under Article 2 of the Second Employment Agreement. For example, Ms. Lemke "shall have full responsibility and decision-making authority for the day-to-day operatioris of the Company's business, subject to the general control of the Board." See Section 2.1. The Board of Directors currently consists of three members: Larry Boulet, Richard Johnson, and Wendy Perrow. The Second Employment Agreement further states, "Notwithstanding any other provision of this Agreement, the Company shall not impose employment duties or constraints of any kind upon Employee which would require Employee to violate any ordinances, regulation, statute or other law." See Section 2.2.
Mr. Stephen J. Hackman
Re: Jacqueline M. Lemke, BASi President and CEO
November 8, 2016
Page 2 of 3
Since late August 2016, the Company has imposed constraints upon Ms. Lemke that have inhibited Ms. Lemke's ability to ensure compliance with regulations, such as the Sarbanes-Oxley Act. On August 29, 2016, Ms. Lemke was stripped of her decision-making authority for the day-to-day operations of the Company. Examples of this loss of authority, include without limitation, the Board preventing Ms. Lemke from having oversight over the Company's CFO, preventing Ms. Lemke from direct involvement in new client meetings and discussions, preventing Ms. Lemke from enforcing an employee's confidentiality agreement, and preventing Ms. Lemke from hiring a Vice President of Business Development to fill a critical need. Ms. Lemke notified the Board of these breaches of the Second Employment Agreement through an email on September 22, 2016.
On October 7, 2016, Mr. Boulet dismissed Ms. Lemke from a meeting of the Senior Leadership Team. This incident perpetuated the situation established by the Board in late August when the CFO, Ms. Jill Blumhoff, was given leadership and particularly inhibited Ms. Lemke's ability to comply with Section 2.2 of the Second Employment Agreement because the Board gave Ms. Lemke's direct reports authority to exclude her from knowledge of Company operations and meetings.
On October 12, 2016, Ms. Lemke again notified the Board of these breaches of the Second Employment Agreement. Through an email to the Board, Ms. Lemke provided significant detail regarding her inability to perform her duties because of her loss of decision-making authority for the day-to-day operations of the Company, and stated, "I am giving you [Mr. Bouleti and the Board notice that there is a disconnect between the expectations attached to my duties and my ability to continue to execute these duties."
Nevertheless, the situation remained unchanged, and on October 14, 2016, Ms. Lemke was informed that her authority to manage the Senior Leadership Team, which was taken away in late August, would not return, and she would continue to be excluded from exercising decision-making authority for the day-to-day operations of the Company's business. Ms. Lemke was also informed that her CEO position had been offered to Richard Johnson, but Mr. Johnson had declined the position. This same day Ms. Lemke was additionally informed that she was entitled to full severance given the situation. Shortly thereafter, on October 18, 2016, Ms. Lemke was expressly excluded from another Senior Leadership Team meeting and is unaware of how many other executive meetings have occurred without her knowledge. Ms. Lemke gave the Company ample opportunities to cure the breach; however, the Company has continued to prevent her from executing her duties as President and CEO.
Therefore, on November 2, 2016, Ms. Lemke informed the Board that she was resigning her employment with good reason. Ms. Lemke has provided at least ten days advance notice as per the Second Employment Agreement, and effective November 18, 2016, she is resigning her employment with good reason pursuant to Section 4.1(a) of her Second Employment Agreement. Ms. Lemke has extensive facts to support good reason for her resignation, and believes it is in both parties' interests to avoid litigation over this issue. Ms. Lemke expects that BASi will honor its
Mr. Stephen J. Hackman
Re: Jacqueline M. Lemke, BASi President and CEO
November 8, 2016
Page 3 of 3
obligations under Section 4.1 of the Second Employment Agreement. Under Section 4.1, because Ms. Lemke is resigning her employment with good reason, she is entitled to the same compensation and benefits as if she had been terminated from BASi without cause. Specifically, the Second Employment Agreement provides that BASi shall pay Ms. Lemke the following:
| (a) | 18 months base salary at Ms. Lemke's current salary in equal bi-weekly installments over the 18-month period following the Termination Date; | |
| (b) | a pro-rated Bonus for the completed portion of the current fiscal year, if any; | |
| (c) | all vacation pay accrued as of the Termination Date; and | |
| (d) | participation in the Company's group health plan as an active employee, at the active employee rate, throughout the entire 18-month severance period. Consistent with Section 4.6, upon the conclusion of the 18-month severance period, Ms. Lemke will then be eligible to participate in the Company's group health plan and elect continuation of health coverage pursuant to COBRA. Ms. Lemke's participation in the Company's group medical plan during the 18-month severance period will NOT run concurrently with the allotted 18-month period under COBRA. |
Under the Second Employment Agreement, Ms. Lemke also agrees to use her best efforts to assist the Company in good faith to effect a smooth transition. We are most hopeful that we can achieve an amicable separation, and look forward to working together to effectuate Ms. Lemke's departure. Please direct any questions and response to my office.
Best regards,
MACEY SWANSON AND ALLMAN
/s/ Quincy E. Sauer
Quincy E. Sauer
| CC: | Jacqueline M. Lemke |