Merck deal cancels Terns Pharmaceuticals (TERN) director stock options

Rhea-AI Filing Summary

Terns Pharmaceuticals director Robert Azelby reported the cancellation of stock options in connection with the company’s merger with Merck. On May 5, 2026, he disposed of options covering 1,697 shares of common stock with a per share exercise price of $34.60 and options covering 90,000 shares with a per share exercise price of $4.13, each as a disposition to the issuer.

Under the Merger Agreement, each unexercised option with an exercise price below the cash merger consideration of $53.00 per share is cancelled and converts into the right to receive the excess of the merger consideration over the exercise price, in cash and subject to applicable withholding taxes.

Insider Trade Summary

2 transactions reported

Mixed 2 txns

Insider Azelby Robert

Role null

Type	Security	Shares	Price	Value
Disposition	Stock Option (Right to Buy)	90,000	$0.00	--
Disposition	Stock Option (Right to Buy)	1,697	$0.00	--

Holdings After Transaction: Stock Option (Right to Buy) — 0 shares (Direct, null)

Footnotes (1)

1. Pursuant to the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), each option to purchase the Issuer's Shares that was outstanding and unexercised immediately prior to the Effective Time, whether or not vested, with a per share exercise price that was less than the Merger Consideration was cancelled and converted into the right to receive, without interest thereon and subject to the applicable withholding taxes, the excess of the Merger Consideration over the per share exercise price. On March 24, 2026, Terns Pharmaceuticals, Inc. (the "Issuer") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Merck Sharp & Dohme LLC ("Merck") and Thailand Merger Sub, Inc. (the "Purchaser"), a wholly owned subsidiary of Merck. Pursuant to the Merger Agreement, the Purchaser completed a tender offer for the shares of the Issuer's common stock (the "Shares"). In exchange for each Share, tendering shareholders will receive $53.00 per Share (the "Merger Consideration"), payable in cash, net to the seller, and without interest, subject to any applicable withholding taxes, as described more fully in the Schedule 14D-9 filed by the Issuer on April 7, 2026.

Key Figures

Options cancelled at $34.60: 1,697 options at $34.60/share Options cancelled at $4.13: 90,000 options at $4.13/share Underlying shares affected: 91,697 underlying common shares +2 more

5 metrics

Options cancelled at $34.60 1,697 options at $34.60/share Issuer disposition on May 5, 2026

Options cancelled at $4.13 90,000 options at $4.13/share Issuer disposition on May 5, 2026

Underlying shares affected 91,697 underlying common shares Total across both option grants

Merger consideration $53.00 per share Cash paid per Terns common share in tender offer

Merger agreement date March 24, 2026 Agreement and Plan of Merger execution date

Key Terms

Agreement and Plan of Merger, tender offer, Merger Consideration, Stock Option (Right to Buy), +1 more

5 terms

Agreement and Plan of Merger regulatory

"On March 24, 2026, Terns Pharmaceuticals, Inc. entered into an Agreement and Plan of Merger"

An Agreement and Plan of Merger is a formal document where two companies agree to combine into one, outlining how the process will happen. It’s like a step-by-step plan for merging, and it matters because it shows both sides have agreed on the details before the official transition takes place.

tender offer financial

"the Purchaser completed a tender offer for the shares of the Issuer's common stock"

A tender offer is a proposal made by a person or company to buy shares from existing shareholders at a set price, usually higher than the current market value, within a specific time frame. It matters to investors because it can lead to a change in ownership or control of a company, and shareholders must decide whether to sell their shares at the offered price.

Merger Consideration financial

"per share exercise price that was less than the Merger Consideration was cancelled"

Merger consideration is the total payment a company or buyer offers to shareholders of a target company in exchange for combining the two businesses, and can include cash, shares in the surviving company, debt assumption, or a mix of these. Investors care because the form and amount affect the deal’s value, tax consequences, immediate cash received versus future ownership, and the risk and upside of holding new shares — similar to choosing between cash now or stock that could grow later.

Stock Option (Right to Buy) financial

"security_title": "Stock Option (Right to Buy)""

disposition to issuer financial

"transaction_action": "issuer disposition""

Form 4 Insider Transactions: What Each Field Means →

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL

OMB Number:			3235-0287
Estimated average burden
hours per response:			0.5

X

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

Check this box to indicate that a transaction was made pursuant to a contract, instruction or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). See Instruction 10.

1. Name and Address of Reporting Person^*

Azelby Robert

(Last) (First) (Middle)

C/O TERNS PHARMACEUTICALS, INC.

1065 EAST HILLSDALE BLVD., SUITE 100

(Street)

FOSTER CITY CALIFORNIA 94404

(City) (State) (Zip)

UNITED STATES

(Country)

2. Issuer Name and Ticker or Trading Symbol
Terns Pharmaceuticals, Inc. [ TERN ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director		10% Owner
	Officer (give title below)		Other (specify below)

2a. Foreign Trading Symbol

3. Date of Earliest Transaction (Month/Day/Year)
05/05/2026

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

4. If Amendment, Date of Original Filed (Month/Day/Year)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Stock Option (Right to Buy)	$4.13	05/05/2026		D			90,000(1)	(1)	(1)	Common Stock	90,000	(2)	0.00	D
Stock Option (Right to Buy)	$34.6	05/05/2026		D			1,697(1)	(1)	(1)	Common Stock	1,697	(2)	0.00	D

Explanation of Responses:

1. Pursuant to the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), each option to purchase the Issuer's Shares that was outstanding and unexercised immediately prior to the Effective Time, whether or not vested, with a per share exercise price that was less than the Merger Consideration was cancelled and converted into the right to receive, without interest thereon and subject to the applicable withholding taxes, the excess of the Merger Consideration over the per share exercise price.

2. On March 24, 2026, Terns Pharmaceuticals, Inc. (the "Issuer") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Merck Sharp & Dohme LLC ("Merck") and Thailand Merger Sub, Inc. (the "Purchaser"), a wholly owned subsidiary of Merck. Pursuant to the Merger Agreement, the Purchaser completed a tender offer for the shares of the Issuer's common stock (the "Shares"). In exchange for each Share, tendering shareholders will receive $53.00 per Share (the "Merger Consideration"), payable in cash, net to the seller, and without interest, subject to any applicable withholding taxes, as described more fully in the Schedule 14D-9 filed by the Issuer on April 7, 2026.

Remarks:

	/s/ David Strauss, as Attorney-in-Fact for Robert Azelby	05/05/2026
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.
* Form 4: SEC 1474 (03-26)

FAQ

What insider transaction did Terns Pharmaceuticals (TERN) report for Robert Azelby?

Terns Pharmaceuticals reported that director Robert Azelby disposed of stock options in issuer transactions. These included options on 1,697 shares at $34.60 and 90,000 shares at $4.13 per share, canceled and settled in cash under the Merger Agreement with Merck.

How many Terns Pharmaceuticals options were affected for Robert Azelby in this Form 4?

The filing shows two option positions affected, covering a total of 91,697 underlying common shares. One grant covered 1,697 shares at $34.60 per share and the other 90,000 shares at $4.13 per share, both disposed of to the issuer under merger terms.

How are Terns Pharmaceuticals (TERN) options treated under the Merck merger?

Under the Merger Agreement, each unexercised option with an exercise price below the $53.00 per share merger consideration is cancelled. It converts into a right to receive cash equal to the excess of $53.00 over the option’s exercise price, subject to withholding taxes.

What merger transaction is referenced in this Terns Pharmaceuticals Form 4?

The Form 4 references an Agreement and Plan of Merger between Terns Pharmaceuticals, Merck Sharp & Dohme LLC, and Thailand Merger Sub, Inc. Merck’s subsidiary completed a tender offer, and each common share will receive $53.00 in cash, net to the seller, subject to applicable taxes.

Did Robert Azelby’s Form 4 show open-market buying or selling of Terns Pharmaceuticals stock?

The Form 4 does not show open-market purchases or sales. Instead, it reports issuer dispositions of stock options tied to the merger. These option awards were cancelled and converted into cash-settled rights based on the $53.00 per share merger consideration and their respective exercise prices.