Carrington Cancels Stock-Purchase Pact With Its Chairman
DALLAS -- Carrington Laboratories Inc., citing the stock market's plunge, said it agreed to cancel a plan to receive a cash infusion from its newly appointed chairman and chief executive officer, Thomas J. Marquez.</br></br>Mr. Marquez, a former senior executive of Electronic Data Systems Inc., took the helm of the medical products maker in August after agreeing to purchase $5 million in unregistered common stock at half price or $15 a share, whichever is less. He agreed to increase his Carrington investment to $7.5 million by Nov. 30 under the same terms.</br></br>Mr. Marquez had so far purchased 266,667 shares for $4 million, giving him a 12.4% stake in the company.</br></br>At the time the agreement was reached, Carrington's stock was trading in the mid-$30 to high-$30 range. But Carrington has taken a beating since the stock market crash Oct. 19, plunging more than 50%. In national over-the-counter trading, Carrington closed yesterday at $17.25, down 25 cents.</br></br>Carrington said the stock market crash would force it to issue a number of shares under the agreement that would dilute other holders to an "unacceptable level." It also said Mr. Marquez was "no longer in a position" to purchase the additional shares. "We also feel that if, at some time in the future, it is necessary to raise additional capital, we should be able to do so on more favorable terms than those provided in the terminated agreement," said Clinton Howard, president and chief operating officer, in a statement.