CAMBRIDGE, Mass. H On the heels of its initial stock offering,PerSeptive Biosystems Inc., based here, said Monday that itspresident was fired after filing suit last week against thecompany and its directors over his claim that he was strippedof power.
PerSeptive, whose stock went public on May 29, said its boardon Monday named company founder Noubar B. Afeyan toreplace John E. Coutre as president and chief executive officer.
The change at the helm shouldn't disrupt the company's effortsto expand its proprietary lines of biochemical separation andpurification instruments, according to officials and someoutside observers tracking PerSeptive's stock. But coming just17 days after the IPO, Coutre's departure was "an unfortunatecase of timing," Afeyan said. Still, "nothing substantial haschanged in the company. ... The company has a challenge infront of it, and the board enacted certain moves to make thathappen."
Coutre, who did not return a call to his home on Monday, filedsuit last Friday in Superior Court of Middlesex County inCambridge following a flare-up over the board's June 9 decisionto change the company's management reporting structure,according to the company. Coutre contends in his lawsuit thatthe change had "constructively terminated" his employmentcontract, according to PerSeptive.
"The only surprise I can point to is the set of actions that tookplace following that board meeting," Afeyan said. Theyincluded Coutre's lawsuit on Friday and culminated with theboard's move on Monday morning to terminate Coutre'scontract.
The impact on the company is hard to fathom. PerSeptive'sstock (NASDAQ:PBIO), which went public at $7 a share in May,traded at $7.75 a share Monday before the company haltedtrading for about an hour pending news. It closed for the dayat $7.50 a share, down 38 cents for the day.
Company officials and representatives of the IPO'sunderwriters said they were restricted from speaking freelybecause of a legally mandated post-IPO quiet period. Coutre'sattorney at the Boston firm of Hale and Doerr did not return aphone call on Monday.
According to sources familiar with the changes ordered byPerSeptive's board, the new arrangement called for alldepartment heads to report to Afeyan, who in turn reported toCoutre. Previously, some departments, such as finance,reported directly to Coutre. Another possible source ofunhappiness for Coutre was Afeyan's more active role inPerSeptive's recent road show in support of the company's IPO,one observer said. The IPO raised about $16 million in the faceof a cooling IPO market. (The company cut the per-share priceto $7 from the $8-to-$9 indicated range initially planned.)
Ironically, Coutre, who joined the company as CEO in December1990, stands to become a significant shareholder, thanks tovested stock options to purchase 197,064 shares. The shareswould represent slightly more than a 2 percent stake in thecompany. Coutre was earning options for another 263,336shares that were not yet issued.
Afeyan acknowledged that Coutre also had an employmentagreement, but refused to give details or to say if a terminationclause would be triggered by Coutre's departure. Theprospectus does state that the former CEO earned $118,750,exclusive of stock options, during the year ended Sept. 30,1991.
Still open to question is whether Coutre's filing of a lawsuit lastFriday would be considered sufficient cause for the board'sfiring of Coutre on Monday, limiting his rights to collect under atermination agreement with the company.
Coutre's immediate predecessor as president and CEO, Terry L.Loucks, left the company in December 1990 with a one-yearconsulting agreement that paid Loucks $20,000 during fiscal1991, the prospectus stated.
"There have been a number of attempts to settle this matter,"Afeyan said Monday of the lawsuit. "It's in the company'sinterest to find a way to do what's fair." It will continue to seekan out-of-court settlement. "The board is very responsible, hesaid. That does not preclude (any) options."
Coutre joined PerSeptive from Omni-Flow, where until October1990 he was president, chief executive officer and chairman.Omni-Flow was acquired by Abbott Laboratories in early 1989.He previously worked for Pall Biomedical Inc., U.S. SurgicalCorp., Baxter Laboratories and Johnson & Johnson.
-- Ray Potter Senior Editor
(c) 1997 American Health Consultants. All rights reserved.