{"url_path":"/sec/tern/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 Certain Relationships and Related Transactions, and Director Independence.","topic":"sec","document":{"doc_type":"10-K/A","doc_date":"2026-04-27","source_url":"https://www.sec.gov/Archives/edgar/data/1831363/0001193125-26-182140-index.html","accession_number":"0001193125-26-182140","cik":"0001831363","ticker":"TERN","issuer_name":"Terns Pharmaceuticals, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1831363/0001193125-26-182140-index.html","primary_entity_key":"0001831363","primary_entity_name":"Terns Pharmaceuticals, Inc."},"word_count":908,"has_tables":true,"body_markdown":"Item 13. Certain Relationships and Related Transactions, and Director Independence.\n\n \n\nCertain Relationships and Related Party Transactions\n\n \n\nOther than compensation arrangements, including employment arrangements with our directors and executive officers, the following is a description of each transaction since January 1, 2024 in which:\n\n•\nwe were a party or will be a party;\n\n•\nthe amounts involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years; and\n\n•\nany of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest.\n\n \n\nDirector and Executive Officer Compensation\n\n \n\nSee “Executive Compensation” and “Director Compensation” for information regarding compensation of directors and executive officers.\n\n \n\nEmployment Agreements\n\n \n\nWe have entered into employment agreements with our executive officers. For more information regarding these agreements, see “Executive Compensation—Narrative to Summary Compensation Table and Outstanding Equity Awards at 2025 Fiscal Year End.”\n\n \n\nInvestors’ Rights Agreement\n\n \n\nWe entered into an amended and restated investors’ rights agreement with the purchasers of our convertible preferred stock, which was subsequently converted into common stock in connection with our initial public offering, and certain of our other stockholders, including entities with which one of our former directors, Dr. Carl L. Gordon, who is a member of the management committee of OrbiMed Advisors LLC, is affiliated. All remaining registration rights with respect to shares of our common stock covered by this agreement expired in May 2025.\n\n \n\nIndemnification Agreements\n\n \n\nWe have entered into indemnification agreements with certain of our current directors, executive officers and certain other employees. Our amended and restated certificate of incorporation and our amended and restated bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by applicable law.\n\n \n\nIndependence of the Board of Directors\n\n \n\nAs required under the Nasdaq Global Select Market (“Nasdaq”) rules and regulations, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by such board. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees must be an “independent director.” Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Additionally, compensation committee members must not have a relationship with the listed company that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended. The board of directors consults with our counsel to ensure that the board of directors’ determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent Nasdaq listing standards, as in effect from time to time.\n\n \n\n20\n\n \n\nConsistent with these considerations, our board of directors has determined that all of our directors, other than Ms. Burroughs, qualify as “independent” directors in accordance with The Nasdaq Stock Market LLC Marketplace Rules, or the Nasdaq Listing Rules. Ms. Burroughs is not considered independent because she is an executive officer of our company. From November 2023 to February 2024, when Ms. Quigley served as our Senior Advisor and Strategy Officer on an interim basis, she was not independent under Nasdaq Listing Rules and she did not serve on any committees of our board of directors. Ms. Quigley regained her status as an independent director under Nasdaq Listing Rules following the end of her term as our Interim Senior Advisor and Strategy Officer. While serving as our Interim Senior Advisor and Strategy Officer, Ms. Quigley did not participate in the preparation of our financial statements, including any role in compiling or reviewing financial statements. Under the Nasdaq Listing Rules, the definition of independence includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. In addition, as required by the Nasdaq Listing Rules, our board of directors has made a subjective determination as to each independent director that no relationships exist that, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each director’s relationships as they may relate to us and our management. There are no family relationships among any of our directors or executive officers.\n\n \n\nAs required under Nasdaq rules and regulations, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. All of the committees of our board of directors are comprised entirely of directors determined by the board of directors to be independent within the meaning of Nasdaq and SEC rules and regulations applicable to the members of such committees."}