Terns (TERN) Director Robert Azelby Converts 91,697 Options to Cash

What Happened
Robert Azelby, a director of Terns Pharmaceuticals (TERN), had a total of 91,697 option-based share equivalents (90,000 + 1,697) disposed to the issuer on May 5, 2026 as part of the company’s merger with Merck. The options were cancelled and converted into a cash payment based on the merger consideration of $53.00 per share, with the actual cash received equal to the excess of $53.00 over each option’s per-share exercise price (amounts not reported in the Form 4).

Key Details

• Transaction date: 2026-05-05 (reported on Form 4 filed 2026-05-05).
• Transaction type: Disposition to issuer (derivative cancellation/conversion under merger agreement).
• Shares affected: 90,000 + 1,697 = 91,697 option shares converted to cash.
• Price / value shown on filing: N/A; cash consideration equals $53.00 per share minus each option’s exercise price (exercise prices and total proceeds not disclosed in the filing).
• Withholding: Payment subject to applicable withholding taxes per merger terms.
• Regulatory context: Conversion occurred under the Merger Agreement with Merck (Merger Consideration = $53.00 per share via tender offer).
• Shares owned after transaction: Not specified in the provided details.
• Filing timeliness: No late-filing indicator provided in the supplied information.

Context
Under the Merger Agreement, outstanding unexercised options with exercise prices below the $53.00 merger consideration were cancelled and converted into the right to receive cash equal to the difference between $53.00 and the option exercise price (a cash settlement of in-the-money options). This is a routine contractual outcome in an acquisition and does not by itself indicate insider sentiment about the company’s future.