EXHIBIT 10.9K

 

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April 14, 2004

 

Thomas H. Silberg

18776 Bernardo Trails Drive

Rancho Bernardo, CA 92128

 

Dear Tom:

 

We are pleased to offer you a position with Tercica, Inc., as its Chief
Operating Officer, reporting to the Chief Executive Officer. If you decide to
join us, you will receive an annual salary of $310,000, less standard payroll
deductions and all required withholdings. Your salary will be paid semi-monthly
in accordance with our normal payroll procedures, and, as an employee, you will
also be eligible to receive standard employee benefits, including the benefits
detailed in Exhibit A.

 

We currently anticipate that your target bonus will be up to 33% of your annual
salary, less standard payroll deductions and all required withholdings, at the
Company’s discretion, dependent upon both Company and individual performance.

 

In addition, if you decide to join us, we will recommend to our Board of
Directors that you be granted an option to purchase 300,000 shares of common
stock of Tercica. During the term of your employment with us, 25% of the shares
subject to the option will vest on the one-year anniversary of your start date,
and the remaining shares will vest ratably over the next thirty-six (36) months.
All option grants will be subject to the terms and conditions of our stock
option plan and form of stock option agreement.

 

We are pleased to offer you a sign-on bonus of $50,000, less standard payroll
deductions and all required withholdings. You agree to return this bonus on a
pro rata basis if you voluntarily resign or are terminated for Cause within
eighteen (18) months after your start date. If you leave the Company for any
reason more than eighteen months after the start date, you will not need to
return any portion of this bonus.

 

The Company will pay you $7,000 per month, less standard payroll deductions and
all required withholdings, for the cost of temporary housing expenses and travel
to and from the San Francisco Bay Area. You will be eligible for this monthly
payment until the sooner of: (a) the relocation of your household to the San
Francisco Bay Area; or (b) nine (9) months from your start date.

 

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The Company will reimburse you up to $25,000 for usual and customary moving
expenses incurred in relocating your household from Rancho Bernardo, California
to the San Francisco Bay Area. You agree to return this reimbursement on a pro
rata basis if you voluntarily resign or are terminated for Cause within two (2)
years after your relocation to the San Francisco Bay Area. If you leave the
Company for any reason more than two years after your relocation, you will not
need to return any portion of the reimbursement.

 

The Company will reimburse you up to $75,000 for expenses relating to usual and
customary costs associated with the sale of your Rancho Bernardo, California
home and/or the purchase of a home in the San Francisco Bay Area, upon your
relocation to the San Francisco Bay Area. All of the payments described in this
paragraph will be subject to full gross-up of required taxes and such will be
paid by the Company. You agree to return this reimbursement on a pro rata basis
if you voluntarily resign or are terminated for Cause within two (2) years after
your start date. If you leave the Company for any reason more than two years
after the start date, you will not need to return any portion of the
reimbursement.

 

In addition, if the Company terminates your employment without Cause (as defined
in Exhibit B) and not within 12 months after a Change of Control (as defined in
Exhibit B), then, subject to your entering into and not revoking the Company’s
standard form of release of claims in favor of the Company, you will receive a
severance payment equal to six (6) months of your base salary in effect at the
time of termination, the shares subject to your stock options will not continue
to vest after the date of termination, and you will have ninety (90) days to
exercise all those stock option shares that have vested as of the date of
termination.

 

If the Company terminates your employment without Cause or you terminate your
employment for Good Reason (as defined in Exhibit B) in either case within 12
months after a Change of Control, then, subject to your entering into and not
revoking the Company’s standard form of release of claims in favor of the
Company, you will receive a severance payment equal to six (6) months of your
base salary in effect at the time of termination, the vesting for 50% of the
unvested stock option shares will be accelerated so as to vest as of the date of
termination, and you will have ninety (90) days to exercise all those stock
option shares that have vested as of the date of termination.

 

We are excited about your joining Tercica and we look forward to a beneficial
and productive relationship. Please note, however, that your employment with the
Company constitutes at-will employment and is subject to all the Terms and
Conditions of Employment set forth in Exhibit C, including the provisions of the
Company’s At-Will Employment, Confidential Information, Invention Assignment,
and Arbitration Agreement (the “Agreement”), a copy of which is attached to this
letter as Annex 1. Please read both those documents carefully. A duplicate
original of this letter, including

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Exhibit A, Exhibit B, Exhibit C and the Agreement attached as Annex 1, is
enclosed for your records.

 

This offer of employment is contingent upon the granting of employment
authorization through the INS’s approval of the Company’s H1-B visa petition on
your behalf (if applicable), the costs of which will be paid by Tercica. Your
first day of employment will be within three (3) business days of receiving such
INS approval.

 

To accept the Company’s offer, please sign and date both this letter and the
Agreement in the spaces provided and return both to the Company. This offer of
employment will terminate if we do not receive your signatures to both this
letter and the Agreement by April 17, 2004. You understand that, by signing this
letter, you are also agreeing to the Terms and Conditions of Employment set
forth in Exhibit C.

 

This letter, including Exhibit A, Exhibit B, Exhibit C and the Agreement
attached as Annex 1, sets forth the entire terms of your employment with the
Company and supersedes any prior representations or agreements, whether written
or oral, and may not be modified or amended except by a written agreement signed
by you and approved by the Company’s Board of Directors.

 

We look forward to your favorable reply and to working with you at Tercica, Inc.

 

Sincerely,

TERCICA, INC.

/s/    John A. Scarlett, M.D.

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John A. Scarlett, M.D.

President and Chief Executive Officer

 

Agreed to and accepted:

Signature:  

/s/    Thomas H. Silberg

   

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Printed Name:  

T.H. Silberg

   

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Date:  

4-16-04

   

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Enclosures

Duplicate letter, with Exhibit A, Exhibit B, Exhibit C and Annex 1