Company: LNAI
Filing Date: 2025-10-15
Form Type: DEF 14A
Source: 0001731122-25-001378
Chunk: 60

Company: Lunai Bioworks Inc.
Filing Date: 2025-10-15
Form: DEF 14A
Chunk 60
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 as short-term or long-term capital gain, depending upon
how long the participant has held the shares. If the amount received is less than the participant’s tax basis for such shares, the
loss will be treated as a short-term or long-term capital loss, depending upon how long the participant has held the shares.

Restricted Stock. A participant
who receives restricted stock generally will recognize as ordinary income the excess, if any, of the fair market value of the shares granted
as restricted stock at such time as the shares are no longer subject to forfeiture or restrictions, over the amount paid, if any, by the
participant for such shares. However, a participant who receives restricted stock may make an election under Section 83(b) of the Code
within 30 days of the date of grant of the shares to recognize ordinary income on the date of grant of the shares equal to the excess
of the fair market value of such shares (determined without regard to the restrictions on such shares) over the purchase price, if any,
for such shares. If a participant does not make an election under Section 83(b) of the Code, then the participant will recognize as ordinary
income any dividends received with respect to such shares. At the time of sale of such shares, any gain or loss realized by the participant
will be treated as either short-term or long-term capital gain (or loss) depending upon how long the participant has held the shares.
For purposes of determining any gain or loss realized, the participant’s tax basis will be the amount previously taxable as ordinary
income, plus the purchase price paid by the participant, if any, for such shares.

Stock Appreciation Rights.
Generally, a participant who receives a stand-alone SAR will not recognize taxable income at the time the stand-alone SAR is granted,
provided that the SAR is exempt from or complies with Section 409A of the Code. If an employee receives the appreciation inherent in the
SARs in cash, the cash will be taxed as ordinary income to the recipient at the time it is received. If a recipient receives the appreciation
inherent in the SARs in stock, the spread between the then current market value and the grant price, if any, will be taxed as ordinary
income to the employee at the time it is received.

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Other Awards. In the case
of an award of restricted stock units, or other stock or cash awards, the recipient will generally recognize ordinary income in an amount
equal to