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

Q: 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.

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

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

Q: 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).

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.

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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).

Argus Jan 5 session

-2.29% close to close Open Argus

Details

News Market Reaction – TERN

On Jan 5, the first trading day after this news, TERN closed 2.29% below the previous close.

Data tracked by StockTitan Argus for the Jan 5 session.

Key Figures

Option grant size: 312,000 shares Option term: 10 years Exercise price: $40.40 per share +3 more

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

Historical Context

5 past events · Latest: Dec 11

5 events

Dec 11
Equity offering close

24h Move

+5.6%

Closed underwritten offering including full exercise of underwriters’ option.
Dec 09
Offering pricing

24h Move

+5.8%

Priced upsized public offering of common stock with underwriter option.
Dec 09
Proposed offering

24h Move

+5.8%

Announced proposed public offering under effective S-3 registration.
Dec 08
Clinical data update

24h Move

+37.0%

Reported additional positive Phase 1 CARDINAL data for TERN-701 in CML.
Nov 14
Conference participation

24h Move

+13.3%

Announced presentation at Jefferies Global Healthcare Conference in London.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

nasdaq listing rule 5635(c)(4), equity inducement awards, exercise price, vesting

4 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.

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01/02/2026 - 04:05 PM EST

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

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

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).

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