Exhibit 10.9L

 

LOGO [g63448tercica.jpg]

 

June 23, 2004

 

Stephen Rosenfield

284 Wawona Street

San Francisco, CA 94127

 

Dear Stephen:

 

We are pleased to offer you a position with Tercica, Inc., as its Senior Vice
President and General Counsel, reporting to the Chief Executive Officer. If you
decide to join us, you will receive an annual salary of $260,000, less standard
payroll deductions and all required withholdings.

 

Your start date is July 19, 2004. From July 19, 2004 until September 7, 2004,
you will perform the duties, tasks and functions of this position on a 40
percent time basis. Accordingly, your annualized salary during this period will
be $104,000, less standard payroll deductions and all required withholdings.
Effective September 7, 2004, you will perform the duties, tasks and functions of
this position on a 100 percent time, full-time basis. 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.

 

You will be entitled to participate in a company bonus program, if any
(including bonus programs paid in the form of stock options), applicable to the
Company’s executive-level employees that may be established in the future,
including a pro rata bonus for 2004, dependent upon 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 180,000 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.

 

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

 

65_ Gateway Boulevard : Suite 950 : South San Francisco, California : 94080

Phone - 650.624.4900 : Fax - 650.624.4940 : www.tercica.com

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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 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, the costs of which will be paid by Tercica or the demonstration of
citizenship or resident alien status. If visa is required, 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 Monday, June 28, 2004. If you accept our offer, your
first day of employment will be Monday, July 19, 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.

 

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

 

Sincerely,

TERCICA, INC.

/s/ John A. Scarlett, M.D.

John A. Scarlett, M.D.

President and Chief Executive Officer

 

Agreed to and accepted:

Signature:

 

/s/ Stephen N. Rosenfield

Printed Name:

 

Stephen N. Rosenfield

Date:

 

6/25/04

 

Enclosures

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

 

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Exhibit A

Benefits

 

Employee Benefits: As a regular full-time employee, you shall be entitled to all
benefits, including medical, dental, vision, life & disability and the Employee
Stock Purchase Plan benefits, for which you are or may become eligible under the
terms and conditions of the standard Company benefits plans that may be in
effect from time to time and provided by the Company to its employees generally.
You shall be entitled to participate in the Company’s 401(k) plan, with no
matching contribution, which will be established in the future.

 

Vacation Accrual: As a regular full-time employee, you will be entitled to
vacation at a rate of four (4) weeks per year. Vacation accrual shall be limited
to five (5) weeks in the aggregate. However, on a 40 percent time basis from
July 19, 2004 until September 7, 2004, you will be entitled to vacation at a
reduced rate of one and one-half (1½) weeks per year, with a maximum accrual of
10 days in the aggregate.

 

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Exhibit B

Definitions

 

1. Definition of Cause for Termination. “Cause” for termination means: (i) your
conviction of any felony, (ii) your participation in any fraud or act of
dishonesty against the Company resulting in material damage to the Company,
(iii) your material breach of this offer letter or the At-Will Employment,
Confidential Information, Invention Assignment, and Arbitration Agreement
between you and the Company, or (iv) other wrongful conduct by you that in the
good faith and reasonable determination of the Company’s Board of Directors
demonstrates your gross unfitness to serve; provided, that in the case of any
termination pursuant to the preceding clause (iii) or clause (iv), unless the
Company’s Board of Directors determines that such conduct cannot be cured within
thirty (30) days, you will be given written notice of the occurrence of such
ground for termination and a period of thirty (30) days in which to cure.

 

2. Definition of Resignation for Good Reason. “Good Reason” for resignation
means the occurrence of any of the following events, without your express
written consent: (i) a significant reduction of your duties, position or
responsibilities relative to your duties, position or responsibilities in effect
immediately prior to such reduction, provided, however, that a reduction in
duties, position or responsibilities solely by virtue of the Company being
acquired by and made part of a larger entity (as, for example, when, following a
Change of Control, the Chief Financial Officer of the Company remains the Chief
Financial Officer of a division or subsidiary of the acquirer that contains the
Company’s business) shall not constitute a “Good Reason,” (ii) a reduction by
the Company of your base salary as in effect immediately prior to such reduction
(except as part of a base salary reduction generally applicable to executives),
or (iii) a material reduction by the Company in the kind or level of employee
benefits to which your are entitled immediately prior to such reduction with the
result that your overall benefits package is significantly reduced (except as
part of a reduction generally applicable to executives); provided, that with
respect to the preceding clauses (i) through (iii), the Company shall have a
period of thirty (30) days following receipt of written notice from you
specifying the grounds for a purported voluntary termination for Good Reason to
cure any event or failure that would otherwise constitute Good Reason.

 

3. Change of Control. “Change of Control” means the consummation of any of the
following transactions:

 

(i) a business combination (such as a merger or consolidation) of the Company
with any other corporation or other type of business entity (such as a limited
liability company), other than a business combination that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the surviving
entity or its parent outstanding immediately after such business combination, or

 

(ii) the sale, lease, exchange or other transfer or disposition by the Company
to a non-affiliate of all or substantially all of the Company’s assets by value.

 

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Exhibit C

Terms and Conditions of Employment

 

You should be aware that your employment with the Company is for no specified
period and constitutes at-will employment. As a result, you are free to resign
at any time, for any reason or for no reason. Similarly, the Company is free to
conclude its employment relationship with you at any time, with or without
cause, and with or without notice. We request that, in the event of resignation,
you give the Company at least two weeks notice. In addition, the Company
reserves the right to modify job titles, salaries and benefits from time to time
as it deems necessary.

 

As we’re sure you can understand, we need to reserve the right to conduct
background investigations and/or reference checks on all of our potential
employees, and we must condition our offers of employment on clearance of such
inquiries, if any. In this regard, for purposes of federal immigration law, you
will be required to provide us with documentary evidence of your identity and
eligibility for employment in the United States. This documentation must be
provided to us within three (3) business days of your date of hire, or we may
have to terminate our employment relationship with you.

 

We also ask that, if you have not already done so, you disclose to us any and
all agreements relating to your prior employment that may affect your
eligibility to be employed by Tercica. By signing this letter you represent to
Tercica that no agreements prevent you from performing the duties of your
position.

 

As a condition of your employment, you are required to sign and comply with the
Company’s At-Will Employment, Confidential Information, Invention Assignment,
and Arbitration Agreement (the “Agreement”), a copy of which attached to this
letter as Annex 1. The Agreement requires, among other provisions, the
assignment to Tercica of patent rights to any inventions made during your
employment with us, the non-disclosure of Tercica proprietary information, and
the arbitration of all disputes relating to our employment relationship under
this letter or otherwise. Please read the Agreement carefully. Please note that
we must receive your signed Agreement before your first day of employment.

 

As a Company employee, you will be expected to abide by the Company’s rules and
standards. Specifically, you will be required to sign an acknowledgment that you
have read and that you understand the Company’s rules of conduct that are
included in the Company Handbook, which the Company will soon complete and
distribute to you.

 

In the event of any dispute or claim relating to or arising out of our
employment relationship, whether under this letter, the Agreement or otherwise,
you and the Company agree that (i) any and all disputes between you and the
Company shall be fully and finally resolved by binding arbitration, (ii) you are
waiving any and all rights to a jury trial but all court remedies will be
available in arbitration, (iii) all disputes shall be resolved by a neutral
arbitrator who shall issue a written opinion, (iv) the arbitration shall provide
for adequate discovery, and (v) the Company shall pay all arbitration fees
except that you shall pay the first $200.00 of any filing fees associated with
any arbitration you initiate.

 

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Annex 1

At-Will Employment, Confidential Information, Invention Assignment, and

Arbitration Agreement

 

Attached.