Terns Pharmaceuticals Reports Inducement Grants to New Employees Under Nasdaq Listing Rule 5635(C)(4)

Rhea-AI Summary

Terns Pharmaceuticals (Nasdaq: TERN) announced on January 2, 2026 that it granted inducement equity awards to two new employees under its 2022 Employment Inducement Award Plan.

The company granted options to purchase a total of 312,000 shares of common stock, with a 10-year term and an exercise price of $40.40 per share (the closing price on December 31, 2025). The options vest over four years, subject to continued service, and were approved by the Compensation Committee in accordance with Nasdaq Listing Rule 5635(c)(4).

Key Figures

Option grant size 312,000 shares Options to purchase Terns common stock granted to two new employees

Option term 10 years Stated term of the employee stock options

Exercise price $40.40 per share Equal to Terns’ closing price on December 31, 2025

Vesting period 4 years Options vest over four years subject to continued service

New employees 2 employees Equity inducement awards granted under 2022 plan

Listing rule Nasdaq Rule 5635(c)(4) Cited basis for inducement grants approval

Market Reality Check

$40.11 Last Close

Volume Volume 1,532,221 vs 20-day average 4,715,950 (relative volume 0.32) ahead of this HR-related filing. low

Technical Price $40.40 is trading above the 200-day moving average of $10.56, indicating a pre-existing uptrend.

Peers on Argus

While TERN was at -$0.47% prior to this news, peers were mixed: RIGL -0.09%, BCAX +4.21%, IMTX +4.06%, SEPN +0.94%, NRIX +0.42%, suggesting this HR grant news is stock-specific rather than part of a sector move.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 11	Equity offering close	Neutral	+5.6%	Closed underwritten offering including full exercise of underwriters’ option.
Dec 09	Offering pricing	Neutral	+5.8%	Priced upsized public offering of common stock with underwriter option.
Dec 09	Proposed offering	Neutral	+5.8%	Announced proposed public offering under effective S-3 registration.
Dec 08	Clinical data update	Positive	+37.0%	Reported additional positive Phase 1 CARDINAL data for TERN-701 in CML.
Nov 14	Conference participation	Neutral	+13.3%	Announced presentation at Jefferies Global Healthcare Conference in London.

Pattern Detected

Recent news catalysts, especially clinical data and capital raises, have generally coincided with positive price reactions.

Recent Company History

Over the last several months, Terns has combined clinical progress with significant capital raises. Positive Phase 1 CARDINAL data for TERN-701 on Dec 8, 2025 was followed by large equity offerings between Dec 9–11, 2025, each linked to strong positive price moves. Earlier, a conference appearance on Nov 14, 2025 also aligned with a double‑digit gain. Today’s inducement grants are routine HR-related awards and much smaller in scale than these prior financing and clinical catalysts.

Market Pulse Summary

This announcement details equity inducement grants of 312,000 stock options to two new employees under Nasdaq Listing Rule 5635(c)(4), with a 10‑year term, a $40.40 exercise price, and 4‑year vesting. It follows a period marked by major financings and positive clinical data for TERN‑701. Investors may track how ongoing hiring and equity incentives support pipeline execution, alongside future clinical readouts and capital deployment decisions, when assessing the longer‑term impact of such grants.

Key Terms

nasdaq listing rule 5635(c)(4) regulatory

"approved by the Compensation Committee ... in accordance with Nasdaq Listing Rule 5635(c)(4)"

NASDAQ Listing Rule 5635(c)(4) is a rule that requires a company to get approval from its shareholders before selling a large amount of its shares, usually over 20%. This helps protect investors by making sure the company doesn't flood the market with new shares without their say, which could lower the stock's value.

equity inducement awards financial

"granted as of January 1, 2026 equity inducement awards to two new employees"

Equity inducement awards are special stock-based rewards given to new employees to encourage them to join a company or stay long-term. They are like signing bonuses paid with company shares instead of cash, helping motivate employees to contribute to the company's success.

exercise price financial

"an exercise price per share equal to $40.40, which was the closing price"

The exercise price is the fixed amount at which you can buy or sell an asset, like a stock, when using an options contract. It matters because it helps determine whether exercising the option will be profitable or not, depending on the current market price. Think of it as the set price you agree on today to buy or sell later.

vesting financial

"The options vest over four years, subject to the employees’ continued service"

Vesting is the process by which you earn full ownership of something, like company stock or a retirement benefit, over time. It’s like earning the right to keep a gift piece by piece the longer you stay with a company, making sure employees stay committed before they receive all the benefits.

AI-generated analysis. Not financial advice.

FOSTER CITY, Calif., Jan. 02, 2026 (GLOBE NEWSWIRE) -- Terns Pharmaceuticals, Inc. (“Terns” or the “Company”) (Nasdaq: TERN), a clinical-stage oncology company, today announced that it has granted as of January 1, 2026 equity inducement awards to two new employees under the terms of the 2022 Employment Inducement Award Plan, as amended. The equity awards were approved by the Compensation Committee of the Company’s Board of Directors in accordance with Nasdaq Listing Rule 5635(c)(4) and were made as a material inducement to the employees’ acceptance of employment with Terns.

The Company granted options to purchase 312,000 shares, in the aggregate, of Terns common stock to the new employees. The options have a 10-year term and an exercise price per share equal to $40.40, which was the closing price of Terns’ common stock on December 31, 2025. The options vest over four years, subject to the employees’ continued service through the applicable vesting dates.

About Terns Pharmaceuticals

Terns Pharmaceuticals is a clinical-stage oncology company reimagining known biology to deliver high impact medicines. Our lead program, TERN-701, is a highly selective, oral, allosteric BCR-ABL inhibitor with a potentially best-in-disease profile that could meaningfully improve upon the efficacy, safety and convenience of existing treatments for chronic myeloid leukemia. For more information, please visit: www.ternspharma.com.

Contacts for Terns

Investors
Justin Ng
investors@ternspharma.com

Media
Jenna Urban
CG Life
media@ternspharma.com

FAQ

What did Terns Pharmaceuticals (TERN) announce on January 2, 2026 regarding employee equity grants?

Terns announced inducement option awards to two new employees totaling 312,000 shares, approved under Nasdaq Rule 5635(c)(4).

What is the exercise price and term of the TERN options granted January 1, 2026?

The options carry an exercise price of $40.40 per share and a 10-year term.

How do the newly granted TERN options vest for the new employees?

The options vest over four years, subject to the employees' continued service through each vesting date.

Under which plan were Terns' January 2026 inducement awards made?

Awards were made under the company's 2022 Employment Inducement Award Plan, as amended.

Why did Terns use Nasdaq Listing Rule 5635(c)(4) for these grants?

The Compensation Committee approved the awards as material inducements to accept employment, which is permitted under Nasdaq Rule 5635(c)(4).