Company: CCNE
Filing Date: 2025-03-05
Form Type: 424B3
Source: 0001193125-25-047258
Chunk: 95

Company: CNB FINANCIAL CORP/PA
Filing Date: 2025-03-05
Form: 424B3
Chunk 95
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 holding period requirement mentioned above, the grantee will recognize ordinary income upon the
disposition of the shares of CNB common stock in an amount generally equal to the excess of the fair market value of the common stock at the time the option was exercised over the option’s exercise price (but not in excess of the gain realized
on the sale). The balance of the realized gain, if any, will be capital gain. If CNB complies with applicable reporting requirements but subject to the restrictions of Section 162(m) of the Code, it will be entitled to a business expense
deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.

Nonqualified Options. The grant of a
nonqualified option will not be a taxable event for the grantee or CNB. Upon exercising a nonqualified option, a grantee will recognize ordinary income in an amount equal to the difference between the option’s exercise price and the fair market
value of the common stock on the date of exercise. Upon a subsequent sale or exchange of shares acquired pursuant to the exercise of a nonqualified option, the grantee will have taxable capital gain or loss, measured by the difference between the
amount realized on the disposition and the tax basis of the shares of CNB common stock (generally, the amount paid for the shares plus the amount treated as ordinary income at the time the option was exercised). Capital gain or loss will be
long-term if the grantee has held the shares for more than one year. Otherwise, the capital gain or loss will be short-term.

If CNB complies with
applicable reporting requirements but subject to the restrictions of Section 162(m) of the Code, it will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.

A grantee who has transferred a nonqualified option to a family member by gift will realize taxable income at the time the nonqualified option is
exercised by the family member. The grantee will be subject to withholding of income and employment taxes at that time. The family member’s tax basis in the shares of CNB common stock will be the fair market value of the shares of common stock
on the date the nonqualified option is exercised. The transfer of vested nonqualified options will be treated as a completed gift for gift and estate tax purposes. Once the gift is completed, neither the transferred options nor the shares acquired
on exercise of the transferred options will be includable in