CAMBRIDGE, Mass. -- The recently dismissed president ofPerSeptive Biosystems Inc. says in a lawsuit that he was keptin the dark about planned management changes until thecompany's five other directors set those changes in motion at aJune 9 board meeting.
James E. Coutre filed a wrongful termination suit three dayslater in Superior Court of Middlesex County in Cambridge,Mass., contending that the changes in management reportingfunctions effectively ended his role and his contract as thecompany's president and chief executive officer.
The company, whose board formally terminated Coutre'semployment contract on Monday after Coutre sued thecompany, maintains that the actions of June 9 were not adismissal. Citing the pending litigation and a quiet period onpublic statements imposed by PerSeptive's initial publicoffering in late May, company officials and directors declinedfurther comment on Wednesday.
Although many legal observers said that board-orderedmanagement changes at the helm of high-technologycompanies are common as companies grow and go public, anexecutive's rapid filing of a lawsuit sets this case apart.
The lawsuit names PerSeptive and the five other companydirectors who "disseminated a memorandum and voted aresolution" at the June 9 board meeting. Under the new system,all department heads would report to Noubar B. Afeyan,PerSeptive's founder and newly appointed replacement forCoutre. Afeyan, in turn, would report to Coutre on major issues.In addition, the board established an operations committee,comprised of Afeyan, Coutre and another board member, toresolve "any major issues on which Jim and Noubar have notreached consensus," according to the board's memorandum toemployees.
Coutre asks in his lawsuit for reinstatement as president andchief executive officer and for unspecified damages, noting onan attached sheet that he has "stock options worth at leasthundreds of thousands of dollars which are imperiled by theboard's action." According to the IPO prospectus, Coutre hadvested stock options to purchase 197,064 shares and was in theprocess of earning options to 263,336 additional shares, all at aweighted average exercise price of 43 cents each. Thecompany's stock (NASDAQ:PBIO) closed Wednesday at $7.50 ashare, up 25 cents.
To buttress his claims, Coutre's lawsuit describes his view ofthe events surrounding the board's meeting. Attached to thefiling were copies of an agenda for the June 9 meeting and theboard's memorandum to employees.
In a line perhaps prophetic of the events that would followwithin a week, the memorandum to employees noted thatbuilding a company is tough. "It is an exciting process, but to besure many stresses and strains appear along the way."
DIARY OF A DEPARTURE
In his lawsuit, James E. Coutre gives this account of the eventsleading up to his departure from PerSeptive Biosystems.
May 27, 1992: PerSeptive's IPO raises about $16 million..
Thursday, June 4: Coutre hears rumors of a "managementshake-up."
Friday, June 5: Discussing a scheduled June 9 board meeting, adirector describes "only a highly generalized agenda," sayingnothing of the plans by which Coutre maintains he "was aboutto be effectively removed."
Sunday, June 7: Coutre is faxed an agenda for the June 9meeting with one of four agenda items calling for a "discussionof organizational issues."
Tuesday, June 9: A memorandum distributed at the 6 p.m.board meeting outlines the new reporting plan for managers.The board votes a resolution that Coutre contends took awayhis functions as CEO and president.
-- Ray Potter Senior Editor
(c) 1997 American Health Consultants. All rights reserved.