Exhibit
10.38


 


 


September 4, 2002


 


Shawn O’Connor


1010 Dunhill Ct.


Danville, CA 94506


 


Dear Shawn:


 


On behalf of Pharsight Corporation, I am pleased to offer you the
position of Senior Vice President and Chief Financial Officer, reporting
directly to me.  In your role, you would
provide leadership for our Finance, Information Technology, Human Resources and
Legal groups.


 


We are confident that you will make an outstanding addition to our
team.  There are many professional and
technical challenges and the company is still small enough and growing rapidly
enough to provide ample opportunity for professional development and an
increasing role in the leadership of the firm. 
As a young and recently public company, Pharsight also offers you the
opportunity to participate in the company’s growth, on both a financial and
intellectual basis.


 


Your base salary will be $240,000 annually, and will be paid
semi-monthly.  In FY2003 (which began
April 1, 2002) you are eligible for an incentive bonus program
targeted at 40 percent of your base salary, with total compensation targeted at
$336,000. This bonus is tied to the company corporate performance goals and
will be pro-rated for FY2003.  To the
extent that the percentage you earn is less than 62.5%, and provided you are actively
employed at Pharsight on date the bonus is paid out, you will be paid an
additional guaranteed bonus equal to the difference between your actual FY2003
bonus payout and $30,000. For example, if your FY2003 bonus payout is $20,000,
and you are employed by Pharsight on the payout date, you will receive an
additional bonus of $10,000 at that time. In addition, your performance and
potential merit increase will be reviewed during our normal annual cycle in May
2003.


 


You will be eligible for Pharsight’s employee benefits programs,
including health, dental, life and disability insurance, 401(k) plan and an
annual accrual of 20 paid personal-time-off days.


 


In addition, the Company’s management will recommend to the Board of
Directors that you be granted an option to purchase 250,000 shares of
stock.  This option will vest over four
years and is subject to the terms and conditions of the Company’s 2000 Stock
Option Plan.  The exercise price of the
option will be the fair market value of the stock as determined by the closing
price on the Thursday of the week in which you start work as an employee of
Pharsight.  In addition, the Board of
Directors will review additional stock option grants for you based on your
performance and execution of deliverables.


 


This offer does not constitute a guarantee of employment for any
specific period of time, and either you or Pharsight may terminate the
employment relationship at any time, with or without cause.


 


As a condition of your employment with Pharsight, you will be required
to sign the Company’s Proprietary Information and Inventions Agreement, two
originals of which are enclosed.  Please
sign both originals and return one to me with your acceptance of this offer.


 


In order to comply with Federal labor law requirements (IRCA), you will
be required to provide the Company documentary evidence of your identity and
eligibility for employment in the United States.  Such 


 

















 


 


documentation must be provided to us within three (3) business days of
your date of hire, or our employment relationship with you may be terminated.


 


 


 


I am providing two originals of this letter.  Please sign and return one to indicate your acceptance.  This offer is valid through September 10,
2002.  We are excited about the prospect
of having you on the Pharsight team.


 


Sincerely,


 


/s/ Mike Perry


 


Mike Perry PhD


President and Chief Executive Officer


Pharsight Corporation


 


 


 


Enclosures


 


I accept employment with Pharsight Corporation subject to the terms and
conditions hereof.  I understand that
the terms set forth in this letter supersede all oral discussions I may have
had with anyone in the Company.


 


I anticipate a start date of September 16, 2002.


 


 


	
  /s/ Shawn O’Connor

  	
   

  
	
  Shawn O’Connor

  	
   

  
	
   

  	
   

  
	
  September 9, 2002

  	
   

  
	
  Date

  	
   

  



 


 


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PHARSIGHT
CORPORATION


 


Proprietary Information and
Inventions Agreement


 


In consideration
of, and as a condition of, my employment with Pharsight
Corporation, a Delaware corporation (the “Company”), I hereby represent
to and agree with the Company as follows:


 


1.             Purpose of Agreement; Effective
Date.  I understand that the
Company is engaged in a continuous program of research, development,
production, and marketing in connection with its business and that it is
critical for the Company to preserve and protect its Proprietary Information
(as defined below) and its rights in Inventions (as defined below) and all
related intellectual property rights. 
Accordingly, whether or not I am expected to create inventions of value
for the Company, I am entering into this Proprietary Information and Inventions
Agreement (this “Agreement”) as a condition of my employment with the
Company.  This Agreement shall be
effective as of the first day of my employment with the Company.


 


2.             Definition of Proprietary
Information.  Proprietary
Information is any information of a confidential nature (i.e., not generally
known or publicly available) that may be disclosed to me that relates to the
business of the Company or to the business of any parent, subsidiary,
affiliate, customer, or supplier of the Company or to the business of any other
party with whom the Company agrees to hold the information disclosed by such
party in confidence.   Proprietary
Information includes but is not limited to Inventions, marketing plans, product
plans, business strategies, financial information, forecasts, personnel
information, customer lists, and product sales and pricing information.


 


3.             Confidentiality.  I understand that my
employment by the Company creates a relationship of confidence and trust with
respect to Proprietary Information.  At
all times, both during my employment with the Company and after the termination
of such employment, I will keep and hold all Proprietary Information in
confidence and trust, and I will not use or disclose any Proprietary
Information without the prior written consent of the Company, except as may be
necessary to perform my duties as an employee of the Company for the benefit of
the Company.  Upon termination of my
employment with the Company, I will promptly deliver to the Company all
documents and materials of any nature pertaining to my work with the Company,
and I will not take with me any documents or materials or copies thereof
containing any Proprietary Information.


 


4.             Work for Hire.  I acknowledge and agree that any copyrightable works
prepared by me within the scope of my employment are “works for hire” under the
Copyright Act and that the Company will be considered the author and owner of
such copyrightable works.


 


5.             Additional Activities.  I agree that during the period of my employment by the Company I
will not, without the Company’s express written consent, engage in any
employment or business activity which is competitive with, or would otherwise
conflict with, my employment by the Company. 
I agree further that for the period of my employment by the Company and
for 


 


 


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one (l) year after
the date of termination of my employment by the Company I will not, either
directly or through others, solicit or attempt to solicit any employee,
independent contractor or consultant of the company to terminate his or her
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or entity.


 


6.             Definition of Invention.  The term Invention includes all inventions,
improvements, designs, original works of authorship, formulas, processes,
compositions of matter, algorithms, computer software programs, databases, mask
works, and trade secrets that either (a) are developed using equipment,
supplies, facilities or trade secrets of the Company, (b) result from work
performed by me for the Company, or (c) relate to the Company’s business or to
its current or anticipated research or development.


 


7.             Disclosure and Assignment of
Inventions.   I will promptly disclose in confidence to the
Company all Inventions that I make or conceive or create or first reduce to
practice, either alone or jointly with others, during the period of my employment,
whether or not in the course of my employment and whether or not such
Inventions are patentable, copyrightable, or protectable as trade secrets.  I agree that all Inventions that (a) are
developed using equipment, supplies, facilities or trade secrets of the
Company, (b) result from work performed by me for the Company, or (c) relate to
the Company’s business or to its current or anticipated research or development
will be the sole and exclusive property of the Company and are hereby
irrevocably assigned by me to the Company.


 


8.             Assignment of Other Rights.  In addition to the foregoing
assignment of Inventions to the Company, I hereby irrevocably transfer and
assign to the Company: (a) all worldwide patents, patent applications,
copyrights, mask works, trade secrets, and any other intellectual property
rights in any and all Inventions, and (b) any and all Other Rights (as defined
below) that I may have in or with respect to any Invention.  I also hereby forever waive and agree never
to assert any Other Rights I may have in or with respect to any Invention, even
after termination of my employment with the Company.  “Other Rights” means any right to claim author’s rights with
respect to an Invention, to object to or prevent the modification of any Invention,
and any similar right, existing under judicial or statutory law of any country
in the world, or under any treaty, regardless of whether such right is
denominated or generally referred to as a “moral right” or otherwise.


 


9.             Labor Code Notice.  I have been notified and
understand that the provisions of paragraphs 6 and 7 of this Agreement do not
apply to any Invention that qualifies fully under the provisions of Section
2870 of the California Labor Code, which states as follows:


 


ANY PROVISION IN
AN EMPLOYMENT AGREEMENT WHICH PROVIDES THAT AN EMPLOYEE SHALL ASSIGN OR OFFER
TO ASSIGN ANY OF HIS OR HER RIGHTS IN AN INVENTION TO HIS OR HER EMPLOYER SHALL
NOT APPLY TO AN INVENTION THAT THE EMPLOYEE DEVELOPED ENTIRELY ON HIS OR HER
OWN TIME WITHOUT USING THE EMPLOYER’S EQUIPMENT, SUPPLIES, FACILITIES, OR TRADE
SECRET INFORMATION EXCEPT FOR THOSE INVENTIONS THAT EITHER: (1) RELATE AT THE
TIME OF CONCEPTION OR REDUCTION TO PRACTICE OF THE INVENTION TO THE EMPLOYER’S
BUSINESS, OR ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT OF THE
EMPLOYER, OR (2) RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE
EMPLOYER.  TO THE EXTENT A PROVISION IN
AN EMPLOYEE AGREEMENT PURPORTS TO REQUIRE AN EMPLOYEE TO ASSIGN AN 


 


 


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INVENTION
OTHERWISE EXCLUDED FROM BEING REQUIRED TO BE ASSIGNED UNDER CALIFORNIA LABOR
CODE SECTION 2870 (A), THE PROVISION IS AGAINST THE PUBLIC POLICY OF THIS STATE
AND IS UNENFORCEABLE.


 


10.           Assistance.  I agree
to assist the Company in every proper way to obtain for the Company and to
enforce patents, copyrights, mask work rights, trade secret rights, and other
legal protections for the Company’s Inventions in any and all countries.  I will execute any documents that the
Company may reasonably request for use in obtaining or enforcing such patents,
copyrights, mask work rights, trade secret rights and other legal
protections.  My obligations under this
paragraph will continue beyond the termination of my employment with the
Company, provided that the Company will compensate me at a reasonable rate
after such termination for time and expenses actually spent by me at the
Company’s request on such assistance.


 


11.           No Breach of Prior Agreement.  I represent that my
performance of all the terms of this Agreement and my duties as an employee of
the Company will not breach any invention assignment, proprietary information,
or similar agreement with any former employer or other party. During my
employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or
any other person to whom I have an obligation of confidentiality, and I will
not bring onto the premises of the Company any unpublished documents or any
property belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person, or unless the items have been legally transferred to the
Company or are generally available to the public.  I will use in the performance of my duties only information which
is generally known and used by persons with training and experience comparable
to my own, which is common knowledge in the industry or otherwise legally in
the public domain, or which is otherwise provided, developed or owned by the
Company.


 


12.         Prior Inventions.  If, in the course of my employment with the Company, I
incorporate a prior invention made by me into a Company product, process or
machine, the Company is hereby granted and shall have a nonexclusive,
royalty-free, irrevocable, perpetual, worldwide license (with rights to
sublicense through multiple tiers of sublicensees) to make, have made, modify,
use and sell such prior invention. 
Notwithstanding the foregoing, I agree that I will not incorporate, or
permit to be incorporated, prior inventions in any Company Inventions without
the Company’s prior written consent.


 


13.           Notification. I hereby authorize the Company
to notify my future employers of the terms of this Agreement and my
responsibilities hereunder.


 


14.           Injunctive Relief. 
I understand that in the event of a breach
or threatened breach of this Agreement by me, the Company may suffer
irreparable harm and will therefore be entitled to injunctive relief to enforce
this Agreement.


 


15.           Governing Law; Severability.  This Agreement will be governed and interpreted in
accordance with the laws of the State of California, without regard to
application of choice of law rules or principles.  In the event that any provision of this Agreement is found by a
court, 


 


 


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arbitrator, or
other tribunal to be illegal, invalid, or unenforceable, then such provision
shall not be voided but shall be enforced to the maximum extent permissible
under applicable law, and the remainder of this Agreement shall remain in full
force and effect.


 


16.           No Duty to Employ. 
I understand that this Agreement does not
constitute a contract of employment or obligate the Company to employ me for
any stated period of time.


 


17.           FDA Debarrment.  I represent that I have never been debarred under Section 306(a)
or (b) of the Federal Food Drug or Cosmetic Act and that I will immediately
notify the Company in the event that any debarrment proceedings are commenced
against me.


 


 


	
  PHARSIGHT CORPORATION

  	
   

  	
  Shawn O’Connor

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/  Stacy
  Murphy

  	
   

  	
  /s/  Shawn
  O’Connor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Stacy Murphy

  	
   

  	
  Date: 
  September 9, 2002

  
	
   

  	
  Vice President, Human
  Resources

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


 


 


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