Document:

February 11, 2003

Dr. Michael Perry

c/o Pharsight Corporation

800 West El Camino Real

Suite 200

Mountain View, CA 94040

 

Dear Michael:

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.  Effective
February 10, 2003, you resigned, and the Company accepted your resignation, as
President, Chief Executive Officer and Director of the Company, and effective
February 26, 2003 (the “Separation Date”), you hereby resign, and the Company
hereby accepts your resignation, from any other offices or positions that you
may hold with the Company.  For purposes
of your offer letter with the Company dated February 5, 2002 (the “Offer
Letter”)(attached hereto as Exhibit A), the Company shall deem your termination
a termination without Cause (as that term is defined in the Offer Letter).

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, subject to
standard payroll deductions and withholdings and the withholdings authorized by
section 5 of this Agreement.  You are
entitled to these payments by law.  Your
final paycheck will also include payment of the $113,000 cash retention bonus
(less standard payroll deductions and withholdings) due on the first
anniversary of your hire date as provided in the Offer Letter, and payment of a
2003 fiscal year incentive bonus in the amount of $31,200, less standard
payroll deductions and withholdings. 
You acknowledge and agree that you are not entitled to receive any
additional amounts as 2002 or 2003 fiscal year incentive bonuses.

3.             Consulting
Agreement.  The Company agrees to retain you, and you
agree to make yourself available and to perform, as a consultant under the
terms specified below.

(a)           Consulting Period.  The Company will engage you as a consultant commencing
on the Separation Date and continuing for six (6) months thereafter (the
“Consulting Period”).

(b)           Consulting Services. 
During the Consulting Period, you will perform such duties as are
assigned to you by the Company’s Board of Directors and Chief Executive Officer
(the “Consulting Services”).  You agree
to perform up to one hundred and twenty (120) hours of Consulting Services
during the Consulting Period, at times to be mutually agreed

 

 

 

between you and
the Company, however the Company’s obligation to provide the consulting fees
set forth below in section (c) remains in effect even if the Company requests
you to provide fewer than the 120 maximum hours.  Your obligation to provide the Consulting Services shall not
preclude you from accepting full-time employment during the Consulting Period
with another company.  You agree to
exercise the highest degree of professionalism and to utilize your reasonable
best efforts, expertise and creative talents in performing the Consulting
Services.  You agree not to represent or
purport to represent the Company in any manner whatsoever to any third party
during the Consulting Period unless authorized by the Company in writing to do
so.  The Company will reimburse you for
documented business expenses incurred in connection with performing the
Consulting Services, provided that these expenses have been pre-approved by the
Company in writing.

(c)           Consulting Fees.  During the Consulting Period, the Company will
compensate you for the Consulting Services at the rate of $26,667 per month,
payable semi-monthly on the Company’s regular payroll dates.  Additionally, after you complete the first
three (3) months of the Consulting Period, the Company will pay you a lump-sum
consulting fee in the amount of $80,000, payable on the first regularly-scheduled
payroll date following your completion of the first three (3) months of the
Consulting Period.  (This lump-sum
consulting fee, together with the monthly consulting fees, shall be referred to
in total as the “Consulting Fees.”)  Because you will be providing the
Consulting Services as an independent contractor, the Company will not withhold
any amount for taxes, social security or other payroll deductions from the
Consulting Fees.  The Company will
report the Consulting Fees on an IRS Form 1099.  You acknowledge that you will be entirely responsible for payment
of any taxes that may be due on the Consulting Fees, and you hereby indemnify
and save harmless the Company from any liability for any taxes, penalties or
interest that may be assessed by any taxing authority with respect to the Consulting
Fees, with the exception of the employer’s share of social security, if any.

(d)           Severance Payment. 
If
you sign the release attached hereto as Exhibit B on August 26, 2003, and allow
that release to become effective, then at the end of the Consulting Period, the
Company will make a lump-sum severance payment to you in the amount of
$80,000.  This amount shall be paid on
or before September 5, 2003, and will be subject to standard payroll deductions
and withholdings.  This amount will not
be paid unless you sign the release attached hereto as Exhibit B, and allow
that release to become effective.

(e)           Protection of Confidential Information.  You agree that during the Consulting Period and
thereafter, you will not use or disclose any confidential or proprietary
information or materials of the Company that you obtain or develop in the
course of performing the Consulting Services, except with the written
permission of the Company’s Chief Executive Officer.  Any and all work product you create in connection with the
Consulting Services will be the sole and exclusive property of the Company. You
hereby assign to the Company all right, title, and interest in all inventions,
techniques, processes, materials, and other intellectual property developed in
the course of performing the Consulting Services.

4.             Health
Insurance.  To the extent provided by federal COBRA law
and the Company’s current group health insurance policies, you are eligible to
continue your current health insurance benefits at your own expense.  Later, you may be able to convert to an

 

 

 

individual policy through
the provider of the Company’s health insurance.  If you timely elect continued coverage under COBRA, then the
Company will pay the premiums necessary to continue your health care coverage
for both you and your dependents through the Consulting Period.  The Company’s obligation to continue these
payments will cease if you become eligible for coverage under another
employer’s insurance plan.

5.             Stock Grant and Stock Options.  Pursuant to your Offer Letter, on July 29, 2002, the
Company granted you 162,857 shares of the Company’s common stock.  Although pursuant to your Offer Letter,
those shares are to be held in escrow until August 26, 2003 (eighteen months
following your date of hire), if you sign this Agreement, the Company will
release those shares to you within ten (10) days after the Effective Date of
this Agreement (as defined in section 14 of this Agreement).  You acknowledge and agree that those shares
are subject to taxation, and hereby authorize the Company to make the required
withholdings out of the final paycheck you are receiving from the Company
pursuant to section 2 of this Agreement. 
The certificates representing such shares shall bear no restrictive
legend and shall be freely tradable. 
Any stock options that you received during your employment with the
Company will continue to be governed by the terms of the applicable stock
option plan documents and stock option agreement between you and the Company.

6.             Other
Compensation Or Benefits.  You acknowledge and agree
that, except as expressly provided in this Agreement, you will not receive any
additional compensation, severance or benefits after the Separation Date, with
the sole exception of any benefit the right to which has vested under the
express terms of a Company benefit plan document.  You acknowledge and agree that the compensation and benefits that
you are receiving under this Agreement (including, without limitation, the consulting
agreement, severance payment, paid COBRA premiums, and release of your stock
grant) are being provided to you in lieu of the severance benefits set forth in
your Offer Letter.

7.             Expense
Reimbursements.  You agree that within forty-five (45) days
of the Separation Date, you will submit a 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 practice.

8.             Return
Of Company Property. 
By the Separation Date, you must return to the Company all Company
documents (and all copies thereof) and other Company property in your
possession or control, including, but not limited to:  Company files, notes, memoranda, correspondence, agreements,
draft documents, notebooks, logs, drawings, records, plans, proposals, reports,
forecasts, financial information, sales and marketing information, research and
development information, personnel information, specifications, computer-recorded
information, tangible property and equipment, 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 in whole or in part). 
You agree to make a diligent search for any Company documents and
property (as described above) in your possession or control prior to the
Effective Date.  Notwithstanding the
foregoing, the Company agrees that you may keep an electronic copy and a paper
copy of your Outlook contacts database.

 

 

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 C.

10.          Nondisparagement.  Both you and the Company (through its directors and
officers) agree not to disparage the other party, and the other party’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 may respond accurately and
fully to any question, inquiry or request for information when required by
legal process.

11.          Release
by You. 
In exchange for the consulting agreement and severance payment set forth
in section 3, the paid COBRA premiums set forth in section 4, the release of
your stock grant as set forth in paragraph 5, and other benefits you are
receiving under the terms of this Agreement to which you would not otherwise be
entitled, you hereby generally and completely release the Company and
Execustaff, Inc., and their directors, officers, employees, shareholders,
partners, agents, attorneys, predecessors, successors, parent or subsidiary entities,
insurers, affiliates and assigns, from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions prior to or on the date you sign
this Agreement.  This general release
includes, but is not limited to: (1) all claims arising out of or in any way
related to your employment with the Company or the termination of that
employment; (2) all claims related to your compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options or any
other ownership interests in the Company; (3) all claims for breach of
contract, wrongful termination or breach of the implied covenant of good faith
and fair dealing; (4) all tort claims, including claims for fraud, defamation,
emotional distress and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) (“ADEA”), or the California Fair Employment and Housing Act
(as amended).

12.          Release by the Company.  The Company hereby releases, acquits and forever
discharges you and your agents, successors, assigns, attorneys and affiliates,
from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys’ fees, damages, indemnities and obligations of any 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 within the authorized course
and scope of your employment with the Company.

13.          Waiver
Of Unknown Claims. 
In giving the releases herein, which include claims that may be unknown
at present, the parties acknowledge that they have read and understand Section
1542 of the California Civil Code which reads as follows:  “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.”  The
parties expressly waive and relinquish all rights

 

 

 

and benefits under that
section and any law of any jurisdiction of similar effect with respect to the
releases herein.

14.          ADEA
Waiver. 
You hereby acknowledge that you are knowingly and voluntarily waiving
and releasing any rights you may have under the ADEA, and that the
consideration given for the foregoing waiver is in addition to anything of
value to which you were already entitled. 
You have been advised by this writing, as required by the ADEA that: (a)
your waiver and release do not apply to any claims that may arise after your
signing of this Agreement; (b) you should consult with an attorney prior to
executing this release; (c) you have twenty-one (21) days within which to
consider this release (although you may choose to voluntarily execute this
release earlier); (d) you have seven (7) days following the execution of this
release to revoke the Agreement; and (e) this Agreement will not be effective
until the eighth day after this Agreement has been signed both by you and by
the Company (“Effective Date”).

15.          Reference Letter.  The Company will provide you with the reference letter attached hereto
as Exhibit D.

16.          Miscellaneous.  This
Agreement, together with its exhibits, constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the Company with
regard to this subject matter.  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 or representations.  In
particular, and without limitation, this Agreement supersedes the severance provisions
contained in your Offer Letter, and extinguishes the Company’s obligation to
make any severance payments to you pursuant to the Offer Letter.  (This Agreement does not, however, supersede
any other terms of your Offer Letter, nor does it supersede the Arbitration
Agreement between you, the Company and Execustaff dated December 3, 2002.)  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.  In the event of
your death, any benefits due and payable to you under this Agreement
(including, without limitation, the Consulting Fees) shall be paid to your
surviving spouse.  The failure to
enforce any breach of this Agreement shall not be deemed to be a waiver of any
other or subsequent breach.  For
purposes of construing this Agreement, any ambiguities shall not be construed
against either party as the drafter.  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 in a manner consistent with the intent of the
parties insofar as possible.  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.  This Agreement may be executed in
counterparts which shall be deemed to be part of one original, and facsimile signatures
shall be equivalent to original signatures.

 

 

If this Agreement is
acceptable to you, please sign below and return the original to me.

I wish you the best in your future endeavors.

	
  Sincerely,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PHARSIGHT
  CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  Shawn O’Connor

  	
   

  	
   

  
	
   

  	
      Shawn O’Connor

  	
   

  	
   

  
	
   

  	
      Senior Vice President and Chief
  Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACCEPTED
  AND AGREED:

  	
   

  	
  ACCEPTED
  AND AGREED:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/  Michael Perry

  	
   

  	
  /s/  Susan Jochheim

  
	
  Michael Perry

  	
   

  	
  Susan Jochheim,
  Execustaff, Inc.

  

 

Exhibit A:  Offer Letter dated
February 5, 2002

Exhibit B:  Termination of
Consulting Period Release

Exhibit C:  Proprietary Information and Inventions Agreement

Exhibit D:  Reference Letter

 

 

 

 

EXHIBIT A

OFFER LETTER
DATED FEBRUARY 5, 2002

 

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,

 

/s/ Arthur Reidel

 

Arthur Reidel

Chairman of the Board

 

	
  AGREED
  AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  /s/ Dr. Michael Perry

  	
   

  
	
  Dr. Michael Perry

  	
   

  
	
   

  	
   

  
	
  February 6, 2002

  	
   

  
	
  Date

  	
   

  

 

Enclosure: 
Proprietary Information and Inventions Agreement

 

 

EXHIBIT B

TERMINATION OF CONSULTING PERIOD RELEASE

I
understand that, pursuant to the separation letter agreement between me and the
Company, which I signed on ________________________, 2003 (the “Agreement”), I
am required to sign this Termination of
Consulting Period Release as a condition to receiving the severance
payment set forth in paragraph 3(d) of the Agreement.

In
consideration for the severance payment set forth in paragraph 3(d) of the
Agreement, I hereby generally and completely release the Company, Execustaff,
Inc., and their directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns, from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement.  This general release includes, but is not
limited to: (1) all claims arising out of or in any way related to my
employment with the Company, the termination of that employment, my consulting
relationship with the Company and the termination of that relationship; (2) all
claims related to my compensation or benefits from the Company, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and
the California Fair Employment and Housing Act (as amended).

I
acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA, as amended. 
I also acknowledge that the consideration given for the waiver and
release in the preceding paragraph hereof is in addition to anything of value
to which I was already entitled.  I
further acknowledge that I have been advised by this writing, as required by
the ADEA, that:  (a) my waiver and
release do not apply to any rights or claims that may arise after the execution
date of this Agreement; (b) I have been advised hereby that I have the right to
consult with an attorney prior to executing this Agreement; (c) I have
twenty-one (21) days to consider this Agreement (although I may choose to
voluntarily execute this Agreement earlier); (d) I have seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement will not be effective until the date upon
which the revocation period has expired, which will be the eighth day after
this Agreement is executed by me, provided that the Company has also executed
this Agreement by that date.

I
UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.  In giving this release, which
includes claims that may be unknown to me at present, I acknowledge that I have
read and understand Section 1542 of the California Civil Code which reads as
follows:  “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.”  I expressly waive and relinquish all rights and benefits under
that section and any law of any jurisdiction of similar effect with respect to
my release of any unknown or unsuspected claims I may have against the Company.

HAVING READ AND UNDERSTOOD THE FOREGOING, I HEREBY AGREE TO
THE TERMS AND CONDITIONS STATED ABOVE.

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Michael Perry

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
					

 

 

 

 

 

 

EXHIBIT C

PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT

 

 

 

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 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

 

 

 

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provision in an employee agreement purports to require an employee
to assign an 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

 

 

3

 

 

 

law rules or
principles.  In the event that any
provision of this Agreement is found by a court, 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  

  	
   

  	
  /s/ Dr. Michael Perry

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Stacy Murphy

  	
   

  	
  February 6, 2002

  
	
  Stacy Murphy

  Vice President, Human
  Resources

  	
   

  	
  Date:

  

 

 

 

 

4

 

EXHIBIT D

REFERENCE LETTER

 

	
  Letter
  of Reference re: Dr. Michael S. Perry

  	
   

  	
  February
  12, 2003

  

 

 

As Chairman of the Board and a Founder of Pharsight Corporation
(OTCBB:PHST) I am pleased to write this letter of recommendation on behalf of
Dr. Mike Perry.

 

After personally having spent seven years as President and CEO of
Pharsight, our Board recruited Dr. Perry to join the company as my successor
i.e. as President, CEO and member of the Board of Directors.  We appointed Mike to this position with explicit
appreciation of his extensive technical expertise in Pharmaceutical R&D,
his successful track record of management and leadership in this sector as well
as his extensive network of contacts in the industry i.e. our customer base.

 

Mike’s departure from Pharsight was exclusively due to a disagreement
with the Board over the strategic direction of the company.

 

During his tenure at Pharsight, the company benefited from Mike’s
industry insights, experience, operational aptitude, integrity and leadership
and it is in this spirit that I recommend him without reservation for future
employment in the Pharma/Biotech sector.

 

	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Art Reidel

  	
   

  
	
  Art Reidel

  	
   

  
	
  Chairman of the Board

  	
   

  
	
  Pharsight  CorporationExhibit
10.44

 

 

 

 

 

March 6, 2003

 

VIA HAND DELIVERY

 

Charles K. Faas

Pharsight Corporation

 

Dear Charlie:

 

As we have discussed with
you, Pharsight Corporation (the “Company”) in conjunction with Execustaff,
Inc., is pleased to offer you a promotion to the position of Chief Financial
Officer under the terms set forth in this letter.  Your promotion and the terms set forth in this letter agreement
(“Agreement”) shall be effective as of February 12, 2003.

 

Promotion and New Position

 

You will be promoted from
your current position of Vice President of Finance to the position of Chief
Financial Officer.  In your new
position, you will report to the Company’s Chief Executive Officer (“CEO”).  Your areas of responsibility will include
management of the following departments: legal, human resources, accounting,
IT, QA management and public relations and any other tasks requested of you by
the CEO or the Company’s Board of Directors (the “Board”).  Your office will continue to be located at
the Company’s headquarters in Mountain View, California.  The Company continues to retain the
discretion to change your position, duties, reporting relationship and work
location, as it deems necessary.

 

Base Salary and Bonus Potential

 

As a result of your
promotion, your annual base salary will be increased to two hundred fifteen
thousand dollars ($215,000), subject to standard payroll deductions and
required withholdings, and paid on the Company’s normal payroll schedule.

 

Pursuant to the terms and
conditions of the Company’s Management Incentive Bonus Program for its
Executive Officers, you will be eligible to receive an annual performance bonus
of up to thirty-five percent (35%) of your previous and increased base
salaries, each on a pro rata basis, subject to standard payroll deductions and
required withholdings.  The Company’s
Compensation Committee will determine in its sole discretion whether you have
earned an annual bonus, and the amount of any earned annual bonus.

 

The Company may modify
your compensation from time to time as it deems necessary.

 

 

1

 

Stock Options

 

Your current stock
options are not affected by your promotion or this Agreement, and your stock
option agreements will remain in full force and effect in accordance with their
terms.  Subject to Board approval, the
Company may grant you additional stock options at the next regularly scheduled
meeting in April 2003.

 

Employee Benefits

 

Your eligibility for
Company-sponsored employee benefits is not affected by your promotion or this
Agreement.

 

Proprietary Information and
Inventions Agreement; Company Policies and Procedures

 

Your Proprietary Information and Inventions Agreement with the Company
dated July 31, 2000 (the “Proprietary Information Agreement”) is not affected by your promotion or this
Agreement, and the Proprietary Information Agreement will remain in full force
and effect in accordance with its terms. 
You will continue to be required to abide by the Proprietary Information
Agreement as a condition of your employment.

 

In addition, you will
continue to be required to abide by Pharsight’s policies and procedures, as may
be in effect from time to time.

 

At-Will Employment Relationship

 

Your employment continues
to be terminable at-will, and either you or the Company may terminate your
employment relationship at any time, with or without Cause (defined below) or
advance notice.

 

Severance Benefits

In the event that your employment is involuntarily terminated by the
Company without Cause, as your sole severance benefits, for six (6) months
following the termination date, the Company will continue to pay your base
salary in effect on the termination date (the “Severance Payments”) and will
pay the costs to continue your health care coverage under COBRA at the same
level of coverage as in effect as of the termination date if you timely elect
continued health care coverage (collectively, the “Severance Benefits”).  As a condition of your receipt of the
Severance Benefits, you must first enter into a separation agreement with the
Company that includes your general release of all known and unknown claims, in
a form provided by 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 Agreement or your Proprietary Information
Agreement); or (f) conduct, that in the good faith and reasonable determination
of the Board demonstrates gross unfitness to serve.

In addition, if,
after a Change in Control (defined below), you resign from your employment with
the Company and such resignation qualifies as a Resignation for Good Reason
(defined below), you shall be entitled to receive the Severance Benefits, provided that you must first enter into a
separation agreement

 

2

 

with the Company
that includes your general release of all known and unknown claims, in a form
provided by the Company.

For the purposes
of this letter, the occurrence of
either of the following events shall constitute a “Change in Control”:  (a) the sale or lease of all or
substantially all of the assets of the Company; or (b) an acquisition of the
Company by another corporation or entity by consolidation, merger or other reorganization
in each case in which the holders of the Company’s outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of
the corporation or other entity purchasing such assets or surviving such
transaction.

For purposes of
this letter, a “Resignation for Good Reason” shall mean a resignation by you
due to any of the following events which occur after and as a direct result of
a Change in Control: (1) a material reduction in compensation, unless such
a reduction is applied, by resolution of the Board of Directors, to all members
of the Company’s officers; (2) a material adverse change in your title due to a
demotion; or (3) a material adverse reduction in your role and responsibilities.

You will not be
eligible for any severance benefits in the event of a termination with Cause or
any resignation that does not qualify as a Resignation for Good Reason.

If the
relationship between Execustaff and the Company is terminated for any reason,
you will agree that the Company will become solely responsible as your
employer for all payroll, workers’ compensation and benefits, including
severance and vacation pay, and you will agree to seek the same only
from the Company.

Miscellaneous

 

This Agreement sets forth
and forms the complete and exclusive statement of your employment agreement
with the Company concerning your promotion and employment terms, and this
Agreement supersedes any other agreements or promises made to you by anyone,
whether oral or written, concerning the subject matters set forth in this
letter including, but not limited to, your original offer letter with the
Company dated July 31, 2000 and your letter agreement with the Company dated
August 16, 2002.  This letter agreement cannot
be changed except in a writing signed by you and a duly authorized officer of
the Company.

 

We are very pleased to
offer you this promotion.  Please sign
and date this letter, and return it to me by March 7, 2003, if you wish to
accept this promotion under the terms described above.

 

	
  Sincerely,

  	
   

  	
   

  	
   

  
	
  Pharsight
  Corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
       /s/  Shawn M. O’Connor

  	
   

  	
   

  	
   

  
	
  Shawn M. O’Connor

  	
   

  	
   

  	
   

  
	
  President & Chief Executive Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACCEPTED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
       /s/ 
  Charles K. Faas

  	
   

  	
       March 7, 2003

  	
   

  
	
  Charles K. Faas

  	
   

  	
  Date

  	
   

  

 

 

 

 

 

3

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