Kezar Life Sciences Director’s Stock Options Cancelled or Cashed Out in $6.955‑Per‑Share Merger

TL;DR: On May 11, 2026, Kezar Life Sciences director Graham K. Cooper reported disposing of several stock option awards under the company’s merger agreement. Options with exercise prices of $6.955 or higher were cancelled without compensation, while in‑the‑money options were converted to cash plus one contingent value right per share.

Context: Kezar Life Sciences (NASDAQ: KZR) entered into an Agreement and Plan of Merger dated March 30, 2026. The merger closed on May 11, 2026, making Kezar a wholly owned subsidiary of the parent company. Stock options are contracts that give the holder the right to buy shares at a set price, known as the exercise price. A contingent value right (CVR) entitles the holder to additional payment if certain future events occur.

Key Facts: Cooper’s filing showed dispositions of multiple option awards, each with zero reported proceeds, reflecting the merger’s treatment. According to the merger terms, any option with an exercise price at or above $6.955 per share—labelled an out‑of‑the‑money option—was automatically cancelled and the holder received nothing. Options priced below $6.955 were cancelled and the holder received a cash payment equal to the difference between $6.955 and the option’s exercise price, multiplied by the number of shares, plus one CVR for each underlying share.

What It Means: The director’s disclosed dispositions align with the merger’s mechanics: he neither gained nor lost value on the high‑priced options, while the lower‑priced options yielded a modest cash amount and a CVR that could pay out later. For shareholders, the merger eliminates future option dilution and introduces CVRs that may affect future payouts contingent on post‑merger performance.

Watch for how the CVRs are settled and whether any additional payouts arise from the merger’s earn‑out conditions.