UPDATE: Court cuts Biolase board, marketing VP under fire

*Updated March 25, 2014 at 10 a.m. Eastern with comment from Biolase sales & marketing vice president Brian Jaffe.

Biolase (NSDQ:BIOL) continues to swat at challenges to its leadership, after a Delaware state judge cut the board of directors and a former employer took a few shots at the dental device maker’s sales & marketing head.

Biolase is enmeshed in a proxy war with activist investor Oracle Partners, which owns a 16.4% stake. Biolase said today that a Delaware court constrained its board of directors to 4 members on a "status quo" basis, pending the outcome of an Oracle lawsuit filed earlier this month. Biolase’s board was originally set at 6 seats; the dispute erupted when Oracle contested CEO Federico Pignatelli’s attempt to revoke the resignations of 2 long-time directors.

Dr. Alexander Arrow, who is also president & COO, and fellow director Dr. Sam Low resigned their seats early this month, making room for new members Jeffrey Nugent and Paul Clark. None of the 4 were given seats in the court’s new ruling.

The judge also excluded Oracle candidate Eric Varma, a partner at the investment firm, but let Oracle-backed existing member Frederic Moll keep his seat. The other 3 board seats were given to existing members Pignatelli, Norman Nemoy and James Talevich, whose "directorships are not disputed," the court said.

The Delaware Chancery Court also ruled that during the "status quo" period, the board may not undertake any new actions without the approval of at least 3 members, mandating that any decisions falling "outside of the ordinary course of the company’s business" must come with a 10-day advanced notice, according to an SEC filing.

A former employer took the hubbub over the proxy battle as an opportunity to take a few potshots at Biolase sales & marketing vice president Brian Jaffe, saying the broadside was prompted by Jaffe’s alleged poaching of a key employee at Millennium Dental Technologies.

In a phone interview today with MassDevice.com, Millennium Dental Technologies CEO Mark Monaghan had kind words for Jaffe on a personal level, but chastised him for falling out of touch before allegedly poaching a vital MDT employee.

Jaffe was on good terms with MDT following his departure, Monaghan said, maintaining a friendly tone at trade shows. Jaffe gave his former employer a head’s up when he was in talks with sales reps that he had previously interviewed while working for MDT, Monaghan told us. But the relationship changed when Jaffe hired then-MDT marketing director Rachel Moody, he alleged.

"We would have preferred that he contact us to let us know that he was targeting our head of marketing, or that she was looking for a position at Biolase before hiring her, but he did not and, as far as I know, he has not responded to any communications that [MDT president Dr. Robert Gregg] has sent him since," Monaghan told us. "Now that they’re starting to target our key employees, we felt it necessary, essentially, to come out and clarify truly the statement that was made by Biolase on Brian’s behalf."

MDT issued a press release this week that was notable for its personal tone, taking issue with Biolase’s claims about Jaffe’s tenure at MDT.

"Prior to joining Biolase, Jaffe served as Vice President of Global Sales at Millennium Dental Technologies during 2013, growing the periodontal laser sales reach by realigning and expanding the U.S. sales force and expanding international distribution," according to the Biolase website.

"Jaffe was a block in the process of growing our domestic sales, as indicated by the poor sales results compared to the prior year," Gregg said in the release. "Jaffe fought and resisted key marketing and pricing initiatives, which ultimately resulted in his departure. But he does have a noteworthy tennis forehand."

Monaghan told us that Jaffe’s stint at MDT was hardly long enough for him to have a significant impact.

"In the short 6 months that he was here, it wasn’t long enough for him, really, to understand our culture and to make a contribution," he said. "We didn’t increase our sales dramatically, we didn’t increase our sales force dramatically, we did not sign up a whole bunch of international distributors. We spent a lot of time just speaking and educating him on the way we do business, and that was about it."

Jaffe may have been a boon to the company had he stayed, Monaghan added, but he simply wasn’t around long enough to accomplish much of anything – although he did cause some ripples when he challenged the company’s training and pricing processes, Monaghan said.

"When we say he blocked progress, he wasn’t totally on board with our pricing policy," Monaghan said. "The guy who’s directing the sales force must be completely sold on the approach, and he was not."

*Jaffe agreed that the Moody’s departure was the catalyst in the falling out.

"That’s all it’s about, it’s just about Rachel’s leaving," Jaffe said. "I did not poach Rachel Moody; she applied to the company. It’s extremely unfortunate that they sent out this defamatory press release."

Jaffe maintained that he’d received much praise during his time at MDT, and that both Gregg and Monaghan explicitly told him that he was welcome back. He said he’d been in touch with both MDT executives over the course of the past 5 months and that they’d been "good friends.”

"Then, when I hire Rachel last week [Gregg] sends me this threatening text and then puts out this press release," Jaffe said. "I came to Biolase because Biolase has one of the best lasers in the world and a whole set of technology products, what we call a total technology solution. Millennium has 1 product, called the PerioLase. That’s why I left to go to Biolase, not because I was fired. It’s absurd. I left on very good terms with Millennium."

Gregg and Moody were not available for comment.