Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On December 31, 2021, CNB Financial Corporation (the “Corporation”), the parent company of CNB Bank, adopted a Defined Contribution Plan for Tito Lima, the Corporation’s Chief Financial Officer and Treasurer (the “Plan”), pursuant to which the Corporation will make certain annual contributions to the Plan on Mr. Lima’s behalf, which will be paid to Mr. Lima following his termination of employment from the Corporation or, if earlier, upon him becoming disabled. The Plan is effective as of January 2, 2022 (the “Effective Date”).
Pursuant to the Plan, the Corporation will contribute an amount to the Plan each January 1, commencing on the Effective Date, until Mr. Lima’s service with the Corporation terminates, equal to 20% of Mr. Lima’s annual base salary. Mr. Lima will be 0% vested in the contributions made by the Corporation to the Plan until the earliest to occur of one of the following events, at which time he will be 100% vested in such contributions: (i) his attainment of five years of service with the Corporation; (ii) his death or “disability” (as defined in the Plan); or (iii) a “change in control” (as defined in the Plan) of the Corporation. Mr. Lima may elect to receive payment of his vested amounts under the Plan in either a lump sum or in annual installments for a period of ten years, provided that if Mr. Lima’s service with the Corporation terminates prior to his attainment of age 65, other than by retirement, then his vested amounts under the Plan will be paid in a lump sum. Payments of vested amounts under the Plan will be made or commence within 90 days following the later of Mr. Lima’s termination of service from the Corporation or his attainment of age 65, provided that if Mr. Lima becomes disabled, then payments will be made or commence within 90 days following his disability. Notwithstanding the previous sentence, if Mr. Lima dies prior to payments commencing under the Plan, then he will receive payment of his vested amounts in a lump sum within 90 days following his death, and if Mr. Lima’s service with the Corporation terminates within one year following a change in control of the Corporation, then he will receive payment of his vested amounts in a lump sum within 90 days following his termination of service. Amounts contributed to the Plan by the Corporation will be credited with earnings each December 31 at a fixed rate of 4%.
The Board of Directors of the Corporation may, in its sole discretion and at any time, amend or terminate the Plan, provided that no such amendment or termination may adversely affect the rights or benefits of Mr. Lima under the Plan without his prior written consent.
The Plan is considered an unfunded plan for tax purposes and a “top hat” plan for purposes of ERISA. All obligations arising under the Plan are payable from the general assets of the Corporation.
The Plan is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The description of the Plan herein is a summary of the material terms, does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.1.
| Item 9.01. | Financial Statements and Exhibits |
| * | CNB Financial Corporation has omitted certain schedules pursuant to Item 601(a) of Regulation S-K and shall furnish supplementally to the SEC copies of any of the omitted schedules upon request by the SEC. |
