Statement re award of options

22 May 2017  
Tern Plc 
(AIM: TERN) 

New Employee Share Option Plan and Grant of Options 

Tern PLC (LSE:TERN), ("Tern" or the "Company"), the investing company focused on the Internet of Things (IoT), announces that upon the recommendation of the Company's Remuneration Committee, a new employee share option plan was adopted on 19 May 2017 (the "Share Option Plan").  This option plan replaces all previous share option schemes and all existing executive directors share options are replaced by the new scheme.

The implementation of this Share Option Plan is intended to align the interests of the Company's executive directors and eligible employees with shareholders, and to help attract talent in the future. 

The key terms of the Share Option Plan are summarised below:

• The Share Option Plan will be used to grant options over the Company's ordinary shares of 0.02p each ("Ordinary Shares") to Tern's employees and directors;
• Under the Share Option Plan, up to 10% of the Company's issued share capital at any time may be issued to satisfy rights, measured over a rolling ten year period. This limit takes account of Ordinary Shares or treasury shares already issued or used to satisfy option exercises in the preceding ten years and Ordinary Shares or treasury shares that could be issued or used to satisfy existing options;
• The Company's Remuneration Committee may impose performance conditions over the grant of options and these conditions may be varied, substituted or waived as deemed appropriate by the Remuneration Committee;
• Options will be granted with an exercise price equal to the market value of the Company's shares at the date of grant, i.e. the closing mid-market price from the preceding business day;
• The options will be capable of exercise in normal circumstances, provided the option holder remains employed at that time, on the third anniversary of the grant date (the "Normal Vesting Date"), according to the increase in the Share price on the Normal Vesting Date as set out below:

Normal Vesting Date	Percentage increase in Share price relative to the Exercise Price	Percentage of Shares to Vest
36 months after the Date of Grant	0%	0%
36 months after the Date of Grant	100%	100%

• Between the two points illustrated in the table above, the EMI Option shall vest on a straight-line basis.
• In the event that the share price increases by 50% at any time prior to the Normal Vesting Date, 50% of the option becomes exercisable, and where the increase is 100%, 100% of the option becomes capable of exercise;
• In the event of a change of control prior to the Normal Vesting Date, the options will vest over such number of shares as determined by the Committee who will apply the share price increase target set out in the table above; and
• The Share Option Plan allows for the grant of tax efficient Enterprise Management Incentive Options for those who are eligible.

Following the implementation of the Share Option Plan, the Remuneration Committee has approved the grant of options over 10,000,000 Ordinary Shares to its executive directors representing 6.6% of Tern's Ordinary Shares and total voting rights on a fully diluted basis. The exercise price for these options is 8.5 pence being the closing middle market share price on 18 May 2017. The options will remain capable of exercise within the remaining period of up to ten years from the date of grant.   

The amount of options granted to Directors are summarised in the following table:

Director	Options Granted
Angus Forrest	2,500,000
Bruce Leith	2,500,000
Sarah Payne	2,500,000
Al Sisto	2,500,000

Following this grant of options, the total number of share options outstanding will be 11,600,000 representing 7.7% of Tern's Ordinary Shares and total voting rights on a fully diluted basis.

Messrs Forrest, Leith and Sisto currently have the following interests in Ordinary Shares: 

Director	Number of  Ordinary Shares	% of issued share capital  at 19 May 2017
Angus Forrest	7,899,602	6.6
Bruce Leith	5,957,233	5.0
Al Sisto	6,263,333	5.2

 Mrs Payne owns no shares in the Company.

Following the grant of options, Mr Forrest, Mr Leith, Mrs Payne and Mr Sisto will have the following share options in the Company: 

Director	Number of options	Exercise Price	Expiry Date
Angus Forrest	2,500,000	8.5 p	18.05.2027
Bruce Leith	2,500,000	8.5p	18.05.2027
Sarah Payne	2,500,000	8.5p	18.05.2027
Al Sisto	2,500,000	8.5p	18.05.2027

The implementation of the Share Option Plan constitutes a related party transaction pursuant to AIM Rule 13.  The Company's non-executive director, who is not party to the Share Option Plan and is therefore independent for this purpose, having consulted with the Company's Nominated Adviser, considers the terms of the Share Option Plan to be fair and reasonable insofar as Tern's shareholders are concerned. 
  
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

Enquiries

Tern Plc Al Sisto/Sarah Payne	via Redleaf
WH Ireland (NOMAD and joint broker) Mike Coe/Ed Allsopp	Tel: [phone]
Whitman Howard (Joint broker) Nick Lovering/Francis North	Tel: [phone]
Redleaf Communications Rebecca Sanders-Hewett/David Ison	Tel: [phone]

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This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Tern Plc via Globenewswire