Exhibit
10.28


 


February 5, 2002


 


Dr. Michael Perry


10010 Sundial Lane


Beverly Hills, California
90210


 


Dear Mike,


 


On behalf of Pharsight Corporation (“Pharsight” or the “Company”), I am
pleased to offer you the position of President and Chief Executive Officer on
the terms described below.  We are
convinced that by combining your outstanding experience in drug development,
leadership stature in the pharmaceutical industry, and demonstrated management
capability, with our current organizational strengths, proven technology, and
established customer base, you will catalyze tremendous value for yourself and
all Pharsight shareholders.  Further, we
believe that the support of our world-class board of directors will significantly
enhance your success in this significant career step—your first assignment as
CEO of a publicly traded company.


 


Reporting
Relationship, Salary, Annual Bonus and Benefits:


 


In this position you will report to the Company’s Board of Directors
(the “Board”).  Your annual base salary
will be $320,000, and will be paid semi-monthly on the Company’s normal payroll
schedule.   In FY2002 (begins April 1,
2002) you are eligible to participate in an incentive annual bonus program
targeted at 65 percent of your annual base salary, with a total compensation
potential (if you earn the target bonus of 65 percent) of $528,000.  Your annual bonus will be governed by the
terms and conditions of the Company’s management incentive plan, as
administered by the Company’s Compensation Committee, including a cap on bonus
payments at 160 percent of target in the event of overachievement of plan.  In addition, you will be eligible for
Pharsight’s regular employee benefits programs, including health, dental, life
and disability insurance, 401(k) plan and an annual accrual of 20 paid personal
time-off days.


 


Sign-On and Retention Bonus


 


In order to ensure your
ability to join us at the earliest possible date, and provided you commence
full time employment no later than February 25, 2002, you will be eligible for
a one time sign-on and retention bonus of cash and stock valued at a total of
approximately $340,000 which will be paid as follows:  1/3 of the bonus will be paid as a cash bonus of $113,000
(subject to taxes and withholdings) during the first pay period following your
first day of employment; another 1/3 of the bonus will be paid as a cash bonus
of $113,000 (subject to taxes and withholdings) on the first anniversary of
your hire date; and the remaining 1/3 of the sign-on bonus will be provided in
the form of a stock grant of Pharsight Common Stock valued at approximately
$114,000 (valuation is based on the fair market value of the stock on the date
of grant).  The stock grant will be
issued promptly by the Compensation Committee after your hire date, and the grant
will placed into and 


 

















 


 


held in escrow for a
period of 18 months.  In addition, if
you voluntarily terminate your employment prior to 12 months following your
hire date, you will forfeit the pro-rated shares of the stock grant which will
be released to the Company (pro-rated based on your termination date), and the
cash portion of the bonus previously paid to you will be immediately due and
payable to Pharsight Corporation according to the following schedule (which the
Company can deduct from any amounts owed to you):


 


 


	
   

  	
  Termination date:

  	
   

  	
  Portion of Cash Bonus and Stock Grant Owed to
  Company:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1-90
  days after hire

  	
   

  	
  100%

  	
   

  
	
   

  	
  91-180
  days after hire

  	
   

  	
  70%

  	
   

  
	
   

  	
  181-365
  days after hire

  	
   

  	
  40%

  	
   

  
	
   

  	
  After
  1 year

  	
   

  	
  0%

  	
   

  
						



 


Stock
Option Grant


 


In addition, I will recommend to the Board that you be granted an
option to purchase 700,000 shares of Pharsight Common Stock (the
“Option”).  The Option will vest over
four years during your continued employment (25 percent of the shares vesting
after one year of employment, with the remaining 75 percent of shares vesting
in equal installments on a monthly basis thereafter over the following three
years), and will be subject to the terms and conditions of the Company’s 2000
Equity Incentive Plan (the “Plan”) and your grant agreement.  The exercise price of the Option will be the
fair market value of the stock as determined by the closing price on the
business day immediately preceding the day you start work as an employee of
Pharsight.  In the event of a change of
control (as defined in the Plan), 50 percent of your remaining unvested Option
shares will vest immediately.  In the
event that your employment is terminated without Cause (as defined below) as a
direct result of and within twelve (12) months following such a change of
control, the remainder of your unvested Option shares will vest.  Your performance and compensation will be
reviewed annually, after the completion of each fiscal year.  Based on your performance and other factors
considered by the Compensation Committee, you will be eligible to receive
further stock option grants at the sole discretion of the Compensation
Committee.


 


Relocation
To Bay Area and Living Expenses


 


As we discussed, we expect that you will relocate to the San Francisco
Bay Area within six (6) months after your hire.  To assist in your relocation, upon your submission of appropriate
documentation (including receipts) and in accordance with the Company’s expense
reimbursement policies and practices, Pharsight will reimburse you for your
reasonable relocation expenses, up to a maximum reimbursement aggregate amount
of $200,000.


 


Prior to your relocation to the Bay Area, Pharsight will reimburse you
for your reasonable and necessary living expenses while in the Bay Area, upon
your submission of appropriate documentation (including receipts) and in
accordance with the Company’s expense reimbursement policies and
practices.  For example, at its
election, the Company will either provide you with 


 

















 


 


corporate rental housing for your use in the Bay Area, or will
reimburse you for your reasonable local rental housing costs.  In addition, prior to your relocation to the
Bay Area, the Company will reimburse you for your out-of-pocket costs to fly
(coach or business class) between the Bay Area and Southern California as required, upon your submission of
appropriate documentation (including receipts).  You agree to book such flights as far in advance as possible in
order to obtain the lowest available fares.


 


Severance Payments


 


In the event that your employment is involuntarily terminated without
Cause (as defined below), the Company will continue to pay your base salary in
effect on the termination date for one (1) year following the termination date
as your sole severance benefits (the “Severance Payments”).  As a condition of your receipt of the
Severance Payments, you must first enter into a separation agreement with the
Company that includes your general release of claims, in a form acceptable to
the Company.  The Severance Payments
will be paid on the Company’s normal payroll schedule and will be subject to
standard deductions and withholdings.


 


For the purposes of this letter, “Cause” for your termination shall
mean:  (a) your conviction of any
felony or of any crime involving dishonesty; (b) your participation in any
fraud or act of dishonesty against the Company; (c) the material breach of
your duties to the Company, including persistent unsatisfactory performance of
job duties; (d) your intentional damage to, or willful misappropriation
of, any property of the Company; (e) your material breach of any written
agreement with the Company (including this letter agreement); or (f) conduct
that in the good faith and reasonable determination of the Company’s Board
demonstrates gross unfitness to serve.


 


Company Policies and Procedures;
Proprietary Information and Inventions Agreement


 


As a Pharsight employee, you will be expected to abide by Pharsight’s
policies and procedures, as may be in effect from time to time, and to
acknowledge in writing that you have read Pharsight’s Employee Handbook.  As a condition of your employment with
Pharsight, you will be required to sign and abide by 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.


 


At-Will Employment Relationship


 


Your employment
relationship with Pharsight will be at-will. 
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 or advance notice.


 


Miscellaneous


 


This letter, together with your Proprietary Information and Inventions
Agreement, forms the complete and exclusive statement of your employment
agreement with Pharsight.  It supersedes
any other agreements or promises made to you by anyone, whether oral or
written, and it cannot be 


 

















 


 


modified except in a written agreement signed by you and a duly
authorized officer of Pharsight.  As
required by law, this offer is subject to satisfactory proof of your right to
work in the United States.


 


I am personally excited by the opportunity to work with you to build a
great business while implementing our shared vision for the pharmaceutical
industry. We look forward to having you join us and expect your employment with
Pharsight to begin on or before February 25, 2002.  Please sign the enclosed copy of this offer letter to indicate
your acceptance of the Company’s offer under the above terms and return it to
me by Friday, February 8, 2002.


 


Sincerely,


 


 


 


Arthur Reidel


Chairman of the Board


 


	
  AGREED AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dr. Michael Perry

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date

  	
   

  



 


Enclosure:  Proprietary
Information and Inventions Agreement