Company: CCNE
Filing Date: 2025-03-03
Form Type: S-4/A
Source: 0001193125-25-044149
Chunk: 95

Company: CNB FINANCIAL CORP/PA
Filing Date: 2025-03-03
Form: S-4/A
Chunk 95
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2025 Plan for grantees and CNB will depend on the type of award granted. The following summary description of U.S. federal income tax consequences is intended only for the general information of CNB’s shareholders. A grantee in the 2025 Plan should not rely on this description and instead should consult his or her own tax advisor. Incentive Stock Options.The grant of an incentive stock option will not be a taxable event for the grantee or CNB. A grantee will not recognize taxable income upon exercise of an incentive stock option (except that the alternative minimum tax may apply), and any gain or loss realized upon a disposition of CNB common stock received pursuant to the exercise of an incentive stock option will be taxed as long-term capital gain or loss if the grantee holds the shares of CNB common stock for at least two years after the date of grant and for one year after the date of exercise (the “holding period requirement”). CNB will not be entitled to a business expense deduction with respect to an incentive stock option, except as discussed below. 61

For the exercise of an incentive stock option to qualify for the foregoing tax treatment, the grantee generally must be CNB’s employee or an employee of one of CNB’s direct corporate subsidiaries from the date the incentive stock option is granted through a date within three months before the date of exercise of the option.

If all of the foregoing requirements are met except the 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