November 16, 2001

 

VIA HAND DELIVERY

 

Mike Emley

 

Dear Mike:

 

This letter sets forth the substance of the separation agreement (the
“Agreement”) that Pharsight Corporation (the “Company”) is offering to you to
aid in your employment transition.

 

1.     Resignation.  You have tendered your resignation to the Company, which it
hereby accepts.  Your employment resignation date will be November 30, 2001(the
“Separation Date”).

 

2.     Accrued Salary and Paid Time Off.  On the Separation Date, the Company
will pay you all accrued salary, and all accrued and unused vacation, earned
through the Separation Date, less standard payroll deductions and withholdings. 
You are entitled to these payments regardless of whether you sign this
Agreement.

 

3.     Severance Benefits.  Although the Company has no policy or procedure for
providing severance benefits, if you accept this Agreement, the Company will
make severance payments to you in the amount of your base salary in effect as of
the Separation Date for four (4) months following the Separation Date (the
“Initial Severance Period”).  You will also be eligible for sales commissions
according to the Pharsight Sales plan for the months of November and December
2001.   In addition, the Company will make severance payments to you in the
amount of your base salary in effect as of the Separation Date for up to an
additional two (2) months (the “Additional Severance Period”) following the end
of the Initial Severance Period, if you have not obtained other employment by
that time.  The Company’s obligation to make severance payments during the
Additional Severance Period ceases immediately and in full upon your
commencement of new employment.  Therefore, you hereby agree to notify the
Company as soon as you obtain new employment, if such employment will commence
during the Initial Severance Period or the Additional Severance Period.  The
severance payments will be made on the Company’s ordinary payroll dates, and
will be subject to standard payroll deductions and withholdings. 
Notwithstanding the above, the Company’s obligation to make any severance
payments, during both the Initial Severance Period and the Additional Severance
Period, will cease immediately if you refuse to fulfill your obligations under
this Agreement or materially breach this Agreement in any other respect

 

4.     Health Insurance.  Your group health insurance coverage will continue
until your separation date, November 30, 2001.  To the extent provided by the
federal COBRA law or, if applicable, state insurance laws, and by the Company’s
current group health insurance policies, you will be eligible to continue your
group health insurance benefits at your own expense after

 

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November 30, 2001.  Later, you may be able to convert to an individual policy
through the provider of the Company’s health insurance, if you wish.  If you
timely elect continued coverage under COBRA, the Company, as part of this
Agreement and as an additional severance benefit, will reimburse you for your
COBRA premiums during the Initial Severance Period and the Additional Severance
Period.  The Company’s obligation to reimburse you will cease immediately if
either of the following occurs:  (a) you refuse to fulfill your obligations
under this Agreement or materially breach this Agreement in any other respect;
or (b) you become eligible for other health insurance benefits at the expense of
a new employer.  You agree to notify the Company immediately, in writing, of the
availability of health insurance upon your acceptance of new employment.

 

5.     Stock Options. Accelerated Vesting of Stock Option Grant.  The shares in
your stock option grant #OP-105, dated June 18, 1999, which were granted under
the 1997 stock option plan, and that are unvested as of the Separation Date,
will be subject to accelerated vesting, so that your stock option grant will be
fully exercisable effective as of the Separation Date.  You will be able to
exercise your vested shares within ninety (90) days after the Separation Date in
accordance with the terms of your stock option grant.

 

6.     Other Compensation or Benefits.  You acknowledge that, except as
expressly provided in this Agreement, you will not receive any additional
compensation, vesting, severance or benefits after the Separation Date.

 

7.     Expense Reimbursements.  You agree that, by the Separation Date, you will
submit your final documented expense reimbursement statement reflecting all
business expenses you incurred through the Separation Date, if any, for which
you seek reimbursement.  The Company will reimburse you for these expenses
pursuant to its regular business practices.

 

8.     Return of Company Property.  You agree to return to the Company, no later
than the Separation Date, all Company documents (and all copies thereof) and
other Company property that you have had in your possession at any time,
including, but not limited to, Company files, notes, drawings, records, business
plans and forecasts, financial information, specifications, computer-recorded
information, tangible property (including, but not limited to, computers,
cellular phones, etc.), credit cards, entry cards, identification badges and
keys; and, any materials of any kind that contain or embody any proprietary or
confidential information of the Company (and all reproductions thereof).  Your
timely return of all Company property is a condition precedent to the Company’s
payment of any severance payments.

 

9.     Proprietary Information Obligations.  You acknowledge your continuing
obligations under your Proprietary Information and Inventions Agreement, a copy
of which is attached hereto as Exhibit A.

 

10.  Confidentiality.  The provisions of this Agreement will be held in
strictest confidence by you and the Company and will not be publicized or
disclosed in any manner whatsoever; provided, however, that:  (a) you may
disclose this Agreement in confidence to your immediate family; (b) the parties
may disclose this Agreement in confidence to their respective attorneys,
accountants, auditors, tax preparers, and financial advisors; (c) the Company
may disclose this Agreement as necessary to fulfill standard or legally required
corporate reporting or disclosure requirements; and (d) the parties may disclose
this Agreement insofar as such disclosure may be necessary to enforce its terms
or as otherwise required by law.  In particular, and without limitation, you
agree not to disclose the terms of this Agreement to any current or former
employee, consultant or independent contractor of the Company.

 

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11.  Duty Of Cooperation.  During the Initial and Additional Severance Periods,
you agree to reasonably cooperate with the Company’s requests for information or
assistance in transitioning activities, if any.  You and the Company agree that
if you fail to comply with this Section, or if you materially breach this
Agreement in some other respect, the Company’s obligation to provide you with
the severance payments and other benefits provided in this Agreement will
immediately cease.

 

12.  Nondisparagement.  Both you and the Company agree not to disparage the
other party, and you further agree not to disparage the Company’s officers,
directors, employees, shareholders and agents, in any manner likely to be
harmful to them or their business, business reputation or personal reputation;
provided that both you and the Company will respond accurately and fully to any
question, inquiry or request for information when required by legal process.

 

13.  Release of Claims.  In exchange for the payments and other consideration
under this Agreement to which you would not otherwise be entitled, you hereby
release, acquit and forever discharge the Company, its parents and subsidiaries,
and its and their respective officers, directors, agents, servants, employees,
attorneys, shareholders, successors, assigns and affiliates, of and from any and
all claims, liabilities, demands, causes of action, costs, expenses, attorneys’
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to and including the execution date hereof,
including but not limited to: any and all such claims and demands directly or
indirectly arising out of or in any way connected with your employment with the
Company or the termination of that employment; claims or demands related to
salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
sabbatical benefits, severance benefits, or any other form of compensation;
claims pursuant to any federal, state, local law, statute or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as amended;
the federal Age Discrimination in Employment Act of 1967, as amended; the
federal Americans with Disabilities Act of 1990; the California Fair Employment
and Housing Act, as amended; California Labor Code section 132a, as amended;
tort law; contract law; wrongful discharge; discrimination; fraud; defamation;
harassment; emotional distress; and breach of the implied covenant of good faith
and fair dealing.  You represent that you have no lawsuits, claims or actions
pending in your name or on behalf of any other person or entity, against the
Company or any other person or entity subject to the release granted in this
paragraph.  You agree that in the event you bring a claim covered by this
release in which you seek damages against the Company or in the event you seek
to recover against the Company in any claim brought by a governmental agency on
your behalf, this Agreement shall serve as a complete defense to such claims.

 

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14.  Section 1542 Waiver.  In granting the release herein, you acknowledge that
you understand that you are waiving the benefit of any provision of law in any
jurisdiction to the following effect:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the

time of executing the release, which if known by him must have materially
affected his settlement with the debtor.

(California Civil Code Section 1542.)

 

You hereby expressly waive and relinquish all rights and benefits under that
section and any law or legal principle of similar effect in any jurisdiction
with respect to the release of unknown and unsuspected claims granted in this
Agreement.

 

15.  Miscellaneous.  This Agreement, including Exhibits A, constitutes the
complete, final and exclusive embodiment of the entire agreement between you and
the Company with regard to its subject matters.  It is entered into without
reliance on any promise or representation, written or oral, other than those
expressly contained herein, and it supersedes any other such promises,
warranties or representations.  This Agreement may not be modified or amended
except in a writing signed by both you and a duly authorized officer of the
Company.  This Agreement will bind the heirs, personal representatives,
successors and assigns of both you and the Company, and inure to the benefit of
both you and the Company, their heirs, successors and assigns.  If any provision
of this Agreement is determined to be invalid or unenforceable, in whole or in
part, this determination will not affect any other provision of this Agreement
and the provision in question will be modified by the court so as to be rendered
enforceable.  This Agreement will be deemed to have been entered into and will
be construed and enforced in accordance with the laws of the State of California
as applied to contracts made and to be performed entirely within California.

 

The Company’s offer to enter into this Agreement will expire if you do not
accept it on or by November 21, 2001.

 

If this Agreement is acceptable to you, please sign below and return the
original to me.  I wish you good luck in your future endeavors.

 

Sincerely,

 

Pharsight Corporation

 

By:__________________________________

 

 

Art Reidel

 

President and Chief Executive Officer

 

I have read, understand and agree fully to the foregoing Agreement.

 

 

 

 

 

Mike Emley

 

Date

 

 

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Exhibit A

 

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

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