TERCICA INC
EMPLOYMENT LETTER TO THOMAS H. SILBERG DATED APRIL 14, 2004
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<TYPE>EX-10.9K
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<DESCRIPTION>EMPLOYMENT LETTER TO THOMAS H. SILBERG DATED APRIL 14, 2004
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<TITLE>Employment letter to Thomas H. Silberg dated April 14, 2004</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 10.9K </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px">

<IMG SRC="g27971imgx1x1.jpg" ALT="LOGO"> </P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">April 14, 2004 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Thomas H. Silberg </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">18776 Bernardo Trails Drive </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2">Rancho Bernardo, CA 92128 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2">Dear Tom: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">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<I>,</I> 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 <U>Exhibit A</U>.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">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&#146;s discretion, dependent upon both Company and individual performance. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">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. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">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. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">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. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">

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<IMG SRC="g27971imgx1x1.jpg" ALT="LOGO"> </P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">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.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">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. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In addition, if the Company terminates your employment without Cause (as defined in <U>Exhibit B</U>) and not within 12 months after a Change of Control
(as defined in <U>Exhibit B</U>), then, subject to your entering into and not revoking the Company&#146;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. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">If the Company terminates your employment without
Cause or you terminate your employment for Good Reason (as defined in <U>Exhibit B</U>) in either case within 12 months after a Change of Control, then, subject to your entering into and not revoking the Company&#146;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. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">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 <U>Exhibit C</U>, including the provisions of the Company&#146;s At-Will Employment, Confidential Information, Invention Assignment,
and Arbitration<B></B> Agreement (the &#147;Agreement&#148;), a copy of which is attached to this letter as <U>Annex 1</U>. Please read both those documents carefully. A duplicate original of this letter, including </FONT></P>

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<IMG SRC="g27971imgx1x1.jpg" ALT="LOGO"> </P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><U>Exhibit A</U>, <U>Exhibit B</U>, <U>Exhibit
C</U> and the Agreement attached as <U>Annex 1</U>, is enclosed for your records. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">This offer of employment is contingent upon the granting of employment authorization through the INS&#146;s approval of the Company&#146;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<I>.</I> </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">To accept the Company&#146;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 <U>Exhibit C</U>. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This letter, including <U>Exhibit A</U>,
<U>Exhibit B</U>, <U>Exhibit C</U> and the Agreement attached as <U>Annex 1</U>, 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&#146;s Board of Directors. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We look forward to your favorable reply and to working with you at Tercica, Inc. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><DIV ALIGN="right">
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Sincerely,</FONT></P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">TERCICA, INC.</FONT></P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;John A. Scarlett, M.D.</FONT></P></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="1">John A. Scarlett, M.D.</FONT></P></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="1">President and Chief Executive Officer</FONT></P></TD></TR>
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<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Agreed to and accepted:</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Signature:</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;Thomas H. Silberg</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Printed&nbsp;Name:</FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">T.H. Silberg<U></U></FONT></P></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">4-16-04</FONT></P></TD></TR>
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</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Enclosures </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Duplicate letter, with <U>Exhibit A</U>, <U>Exhibit B</U>, <U>Exhibit C</U> and <U>Annex 1</U> </FONT></P>
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