CNIGP Corning Natural Gas Holding Corporation (QX)

Merger-Related Compensation of Our Senior Executive Officers

This section provides information required by Item 402(t) of Regulation S-K of the Exchange Act regarding the compensation for each of our senior executive officers that relates to the merger. The following table summarizes amounts that may be payable to the listed officers if the merger is completed. The amounts included in the following table have been calculated assuming that the merger is completed on January 12, 2022 (the initial expiration date of the merger agreement), the merger consideration is $24.75 per share of our common stock, and each listed officer experiences a qualifying termination of employment on January 12, 2022. The amounts indicated below are estimates of amounts that would be payable to the listed officers, and the estimates are based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement. The merger-related

compensation payable to these individuals is subject to a non-binding advisory vote of our shareholders, which is described in Proposal 3: Advisory Proposal to Approve Merger-Related Compensation beginning on page 87 of this proxy statement.

New Employment Arrangements

As of the date of this proxy statement, none of our executive officers has entered into any agreement or understanding with Parent regarding employment with, or the right to participate in the equity of, Parent or the Company. Although there are no agreements or understandings currently, certain of our executive officers may, prior to the closing of the merger, enter into new arrangements with Parent regarding these or similar matters. Argo has informed us that it currently intends to retain our senior management team following completion of the merger.

Indemnification; Directors’ and Officers’ Insurance

Pursuant to the terms of the merger agreement, directors and executive officers of the Company will be entitled to ongoing indemnification and coverage under directors’ and officers’ liability insurance policies following the merger. For more information, please turn to Directors’ and Officers’ Indemnification and Insurance beginning on page 60.

Voting Agreements

Our board members, who collectively own approximately one-third of the shares of our preferred and common stock as of the record date, have entered into a voting agreement with Parent, pursuant to which they agreed to vote in favor of the merger and the transactions contemplated by the merger agreement, subject to limitations included in the voting agreement relating to circumstances under which the board no longer supports the merger as permitted by the merger agreement.

Consequences If the Merger Is Not Completed

If the proposal to approve the merger and the other transactions contemplated by the merger agreement is not approved by our shareholders, or if the merger is not completed for any other reason, you will not receive any consideration for your shares of our stock. Instead, we will remain a public company, and our stock will continue to be listed and traded on the OTCQX and registered under the Exchange Act.

We expect that our management team will operate our business in a manner similar to that in which it is being operated today and that holders of shares of our stock will continue to be subject to the same risks and opportunities as they currently are subject to with respect to their ownership of our stock. If the merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of our stock, including the risk that the market price of our stock may decline to the extent that the current market price of our stock reflects a market assumption that the merger will be completed. If the proposal to approve the merger and the other transactions contemplated by the merger agreement is not approved or if the merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to us will be offered or that our business, prospects or results of operations will not be adversely impacted.

In addition, upon termination of the merger agreement under specified circumstances, we would be obligated to pay Parent a termination fee equal to equal to $2,486,648. There is no reverse termination fee in the event that Parent elects not to consummate the merger, although the merger agreement specifies that we retain all of our legal and equitable rights if Parent fails to complete the merger. For more information, please to Termination Fee beginning on page 66 of this proxy statement.

Financing of the Merger

The consummation of the merger is not conditioned upon Parent’s receipt of third-party financing. We anticipate that the total amount of funds necessary to pay all of the merger consideration to our common

and preferred shareholders in connection with the merger will be approximately $94.7 million. The payment of the merger consideration by Parent will be funded in its entirety by an affiliate of Argo that has delivered an equity commitment letter to Parent in support of the merger and that affiliate’s investors.

Accounting Treatment

The merger will be accounted for as a “purchase transaction” for financial accounting purposes.

Material U.S. Federal Income Tax Consequences of the Merger

The following are the material U.S. federal income tax consequences of the merger to “U.S. holders” and “non-U.S. holders” (in each case, as defined below) of our shareholders whose shares of our stock are converted into the right to receive cash in the merger. This discussion is based on the current provisions of the tax code, applicable U.S. Treasury regulations promulgated under the tax code, judicial authority and administrative rulings in effect as of the date of this proxy statement, all of which are subject to change, possibly with retroactive effect. Any change could alter the tax consequences to the holders as described below. No ruling from the Internal Revenue Service (IRS) has been or will be sought with respect to any aspect of the merger.

This discussion does not purport to be a complete analysis of all potential tax effects of the merger. For example, it does not consider the effect of any applicable state, local or foreign income tax laws, or of any non-income tax laws. In addition, this discussion does not address the tax consequences of transactions effectuated prior to or after the completion of the merger (whether or not these transactions occur in connection with the merger), including, without limitation, the acquisition or disposition of our stock other than pursuant to the merger. This discussion does not address the U.S. federal income tax consequences to holders of shares who demand appraisal rights under New York law. Furthermore, this discussion applies only to our shareholders that hold their stock as “capital assets” within the meaning of Section 1221 of the tax code (generally, property held for investment). In addition, this discussion does not address all aspects of U.S. federal income tax consequences that may be relevant to a holder in light of the holder’s particular circumstances or to holders subject to special rules, such as:

If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) holds our stock, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding our stock and partners in such partnerships should consult their tax advisors as to the particular U.S. federal income tax consequences of the merger to them.

U.S. Holders

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of our common stock that is:

The conversion of our common stock into the right to receive cash in the merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose shares of our common stock are converted into the right to receive cash in the merger will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares. A U.S. holder’s adjusted tax basis generally will equal the price the U.S. holder paid for the shares. Gain or loss will be determined separately for each block of our common stock (i.e., shares of our common stock acquired at the same cost in a single transaction). This gain or loss generally will be treated as long-term capital gain or loss if the U.S. holder’s holding period in our common stock exceeds one year at the time of the completion of the merger. Long-term capital gains of non-corporate U.S. holders generally are subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. Certain U.S. holders that are individuals, trusts or estates are subject to a 3.8% U.S. federal tax on certain investment income, including gain from the conversion of our common stock into the right to receive cash in the merger.

Non-U.S. Holders

A “non-U.S. holder” is a beneficial owner of our common stock that is not a U.S. holder or a partnership (or any other entity classified as a partnership for U.S. federal income tax purposes). Payments made to a non-U.S. holder upon the conversion of the shares of our common stock into the right to receive cash in the merger may also be subject to U.S. federal income tax unless the non-U.S. holder qualifies for an exemption. There are a number of exemptions for non-U.S. holders, and you should consult with your tax advisor to determine if one exists for your particular situation.

Preferred Shareholders

Payments made to our preferred shareholders, both in the form of cash in exchange for their preferred shares and unpaid dividends will also generally be a taxable event to our preferred shareholders, and subject to the same rules and regulations as our common shareholders, including the rules and regulations as they relate to U.S. holders and non-U.S. holders. We suggest that you consult with your tax advisors to determine your particular tax consequences.

Information Reporting and Backup Withholding

Payments made in exchange for our common stock generally will be subject to information reporting unless the holder is an “exempt recipient” and may also be subject to backup withholding at a rate of 24%. To avoid backup withholding, U.S. holders that do not otherwise establish an exemption should complete and return Internal Revenue Service Form W-9, certifying that such U.S. holder is a U.S. person, the taxpayer identification number provided is correct and such U.S. holder is not subject to backup withholding. A non-U.S. holder that provides the applicable withholding agent with an Internal Revenue Service Form W-8BEN or W-8BEN-E (or other applicable IRS Form W-8) will generally establish an exemption from backup withholding. Amounts withheld under the backup withholding rules are not additional taxes and may be refunded or credited against a holder’s U.S. federal income tax liability, provided the relevant information is timely furnished to the IRS.

This discussion of material U.S. federal income tax consequences is for general information only and is not tax advice. We urge you to consult with your own tax advisor with respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences of the merger arising under the federal estate or gift tax rules or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.

Regulatory Approvals Required for the Merger

We currently anticipate completing the merger in the first quarter 2022. In order to complete the merger, the Company and Argo are required to obtain certain federal and state regulatory approvals. The required regulatory approvals include the expiration or termination of the waiting period under the HSR Act (if applicable), and approvals of the New York Public Service Commission (NYPSC) and the Pennsylvania Public Utility Commission (PAPUC).

We cannot definitively determine the time frame necessary to obtain the requisite authorizations, approvals and consents, as described in additional detail below, although we anticipate the timely receipt of the required approvals in the fourth quarter 2021 or first quarter 2022. However, there can be no assurance as to the precise timing of or our ability to obtain the approvals.

This section briefly summarizes the federal and state regulatory approvals required in order to consummate the merger.

Hart-Scott-Rodino Act

Completion of the merger may be subject to the expiration or termination of the waiting period under the HSR Act. At this time, we believe that the merger does not meet the reporting requirements of the HSR Act and the related rules and regulation that are presently in effect. However, nearer to the closing date of the merger, we will reevaluate whether the merger meets the reporting requirements of the HSR Act and the related rules and regulations that are in effect at that time, which may differ from those presently effective.

If the merger meets the relevant criteria under the HSR Act and the related rules and regulations, the merger may not be completed until notification and report forms have been filed with the Antitrust Division of the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) by each of the Company and Parent and the applicable waiting period has expired or been terminated.

The waiting period with respect to the notification and report forms filed under the HSR Act expires thirty calendar days after the date both parties have submitted their filings, unless otherwise terminated or extended. The waiting period can be earlier terminated by the DOJ and FTC upon request of either the Company or Parent. The waiting period can be extended if the DOJ or the FTC issues a Request for Additional Information and Documentary Material (known as a second request) to the Company and Parent. A second request is a request that the parties to a merger or acquisition provide the DOJ or FTC with information, documents and data that allows the agency to further consider whether the proposed transaction violates the federal antitrust laws. The issuance of a second request extends the required waiting period to consummate the transaction for an additional thirty days, measured from the time both the Company and Parent certify that they have substantially complied with the second request, unless that waiting period is earlier terminated by the DOJ and FTC, or unless the parties extend that thirty-day period by agreement with the DOJ or FTC, as applicable. Responding to a second request is burdensome and time-consuming, often requiring more than six to eight months for the parties to comply.

At any time before or after consummation of the merger, regardless of the termination of the waiting period under the HSR Act, the DOJ, FTC or any U.S. state could take any action under the antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of the Company or Argo. Private parties also may seek to take legal action under the antitrust laws under certain circumstances. There can be no assurance that the DOJ, the FTC or any other governmental entity or any private party will not attempt to challenge the merger on antitrust or competition grounds, and, if a challenge is made, there can be no assurance as to its result.

Under the merger agreement, the Company and Argo generally must use reasonable best efforts to take necessary actions to obtain all regulatory approvals required to complete the merger, subject to certain exceptions.

State Regulatory Approvals

New York Regulatory Approvals

In New York, the acquisition of a public utility is governed by Section 70 of the New York Public Service Law (Public Service Law). Under the Public Service Law, the NYPSC may not approve a merger unless the merger is shown to be in the public interest, which generally requires showing that the merger will result in net positive benefits to customers of the utility. The determination of net positive benefits generally involves totaling up benefits and risks and determining whether the benefits outweigh the risks. The net positive benefits must be demonstrated.

Under the Public Service Law, the Company and Argo will submit a joint request for approval of the merger by filing a petition with the NYPSC. The petition must provide basic information about the parties, the transaction and their financial condition, and it typically includes a copy of the acquisition agreement, financial information regarding the parties, and prepared written testimony from one or both parties supporting the petition. Since the emphasis of the NYPSC’s inquiry is likely to be on the suitability of the acquiring entity (in this case, Parent/Argo) to own and operate the utility being acquired,

much of the petition and supporting documentation, including the prepared testimony, tends to focus on the attributes, experience and financial strength of the acquiring entity.

Once the petition is filed, the NYPSC will generally assign an administrative law judge to oversee the case. The petition is a public document and interested parties may participate in its consideration. The administrative law judge will typically hold one or more procedural conferences to establish a schedule for the filing of testimony and for evidentiary hearings and public statement hearings and to deal with any other matters raised by the parties. Cases are generally either litigated or resolved via settlement.

In either the litigation or settlement procedural path, the parties and interested third parties will exchange information (for example, discovery, testimony and exhibits) and will address procedural and discovery questions with the administrative law judge.

If the case goes to litigation, following the exchange of information, the case will proceed to evidentiary hearings before the administrative law judge. In some cases, the administrative law judge may issue what is referred to as a “recommended decision,” with an opportunity for the parties to file briefs in favor of or against the recommended decision. In other cases, the administrative law judge simply issues a report or draft order to the NYPSC. The case will then be presented to the NYPSC for decision.

If the parties decide that some or all issues may be settled without resort to litigation, they may notify the NYPSC, the administrative law judge and all parties of their intent to enter into settlement negotiations. Those negotiations are confidential, open to all parties to the proceeding and are conducted off the record. If negotiations are successful, the parties to the settlement will prepare and file a joint proposal to document the terms of the agreement. At that point, the administrative law judge will typically hold evidentiary hearings on the joint proposal to permit the signatory parties to enter into the record the joint proposal and to permit opponents of the joint proposal to cross-examine the signatory parties and introduce into the record the opponents’ testimony in opposition to the joint proposal. The administrative law judge will prepare a draft order for the NYPSC that outlines the judge’s recommendation on the joint proposal. The NYPSC will then make its decision to approve, reject or modify the joint proposal. These draft orders are generally not public record.

There is no statutory timeline for the NYPSC to make its decision, and it is not unusual for the NYPSC to take several months to do so. If the NYPSC approves a petition or the joint proposal, the approval order typically includes a requirement that the acquiring entity (Parent) agree to abide by the provisions of the order and to submit a written statement of acceptance. Parties may seek a rehearing if their petition or joint proposal is denied.

Pennsylvania Regulatory Approvals

Under Pennsylvania law, the PAPUC reviews mergers and acquisitions (sometimes called change of control) under its specific authority granted in the Public Utility Code to issue certificates of public convenience. A certificate of public convenience will only be issued if the proposed transaction is “necessary or proper for the service, accommodation, convenience, or safety of the public.” This has been interpreted by courts as requiring the PAPUC to determine whether granting an application will potentially provide “affirmative benefits” to the public in some substantial way.

The PAPUC requires applicants (in this case, Argo and the public utilities who will be acquired by Argo) seeking a certificate of public convenience in a connection with a proposed merger, acquisition or change of control of a public utility to demonstrate it will have the necessary (1) financial, (2) technical and (3)

legal fitness to provide the proposed utility service. Additionally, it must be shown that the proposed transaction will provide “affirmative benefits” to the public.

After an application is filed, the PAPUC will publish notice of the application in the Pennsylvania Bulletin to allow interested parties an opportunity to protest the relief requested in the application or to intervene in the proceeding. The applicant(s) must also publish the notice in a newspaper of general circulation covering the territory sought, usually once a week for two consecutive weeks. The application process follows one of two tracks depending upon whether the application is contested— litigation or an on-paper/staff review.

In litigation, the matter will proceed with testimony and hearings on the standards stated above. At the conclusion of the hearings, briefs are filed and an administrative law judge issues an initial decision, which is a recommendation to the PAPUC. Parties may file exceptions to the initial decision, and the PAPUC will then review the initial decision and exceptions. The initial decision does not bind the PAPUC. The PAPUC will then issue a decision/final order on whether to approve the application.

Under the second option (on-paper/staff review), if no parties contest the application, it will proceed under PAPUC staff review. PAPUC staff will recommend specific action with respect to the application, which the PAPUC will ultimately approve or disapprove.

Regardless of the track on which the application proceeds, the PAPUC has the right to impose conditions on any approval that the applicant(s) must fulfill.

There is no statutory deadline for the PAPUC to decide this type of application which seeks the issuance of a certificate of public convenience.

The Merger Agreement

The following summarizes the material provisions of the merger agreement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. The summary of the material terms of the merger agreement below and elsewhere in this proxy statement is qualified in its entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as Exhibit A and which we incorporate by reference into this proxy statement. We urge you to read the copy of the merger agreement attached to this proxy statement as Exhibit A carefully and in its entirety, as the rights and obligations of the parties are governed by the express terms of the merger agreement and not by this summary or any other information contained or incorporated by reference into this proxy statement.

The merger agreement contains representations and warranties made by the Company, Parent and Merger Sub. These representations and warranties, which are included in the merger agreement attached to this proxy statement as Exhibit A, were made for the purposes of negotiating and entering into the merger agreement between the parties. In addition, these representations and warranties were made as of specified dates, may be subject to standards of materiality different from what may be viewed as material to our shareholders, or may have been used for the purpose of allocating risk between the parties instead of establishing such matters as facts. In addition, the representations and warranties are qualified in a number of important respects, including through the use of exceptions for certain matters disclosed by the party that made the representations and warranties, and information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the merger agreement and subsequent developments or new

information qualifying a representation or warranty may have been included in this proxy statement. None of the representations and warranties will survive the closing of the merger and, therefore, they will have no legal effect under the merger agreement after the closing of the merger.

Structure of the Merger

When the merger is completed, Merger Sub will be merged with and into the Company with the Company surviving as a wholly owned subsidiary of Parent. At the merger effective time, the separate corporate existence of Merger Sub will cease, and the Company will continue as the surviving entity.

Closing; Effective Time

The closing of the merger under the merger agreement is set to occur no later than twelve business days after the satisfaction or waiver of the conditions precedent set forth in the merger agreement, unless another date is agreed to by Parent and the Company (please turn to the Conditions Precedent section of this proxy statement on page 62 for more information). Throughout this summary, we sometimes refer to the date on which the closing of the merger occurs as the closing date and the time at which the merger occurs as the merger effective time.

On the closing date, the Company and Merger Sub will file a certificate of merger with the Secretary of State of the State of New York to effect the merger. The certificate will comply with the relevant provisions of the New York Business Corporation Law. The merger will be effective at the time the certificate of merger has been accepted for record by the Secretary of State of the State of New York or such later time as agreed to by the parties and specified in the certificate of merger.

Organizational Documents

At the merger effective time, the certificate of incorporation of the Company will be amended and restated in its entirety and will be substantially in the form of the articles of incorporation that are attached to the merger agreement as Exhibit A. The by-laws of Merger Sub effective immediately before the merger effective time will become the by-laws of the Company following the merger effective time, except that the name will be replaced with the Company’s name as the surviving entity.

Directors and Officers

The directors and officers of Merger Sub immediately prior to the merger effective time will become the directors and officers of and will manage the Company following the merger effective time.

Treatment of Common Stock

At the merger effective time, each issued and outstanding share of the Company’s common stock owned by the Company or Parent or any direct or indirect wholly owned subsidiary of the Company or Parent (but not including the Rabbi Trust established by Corning Gas to fund a deferred compensation plan for certain officers) will automatically be cancelled and retired and cease to exist and the holders of these shares will have no right to receive any cash or other consideration. All other shares of the Company’s common stock issued and outstanding prior to the merger effective time will be converted into the right to receive merger consideration of $24.75 in cash, without interest. At the merger effective time all shares of our common stock will be automatically cancelled and retired and will cease to exist.

Treatment of Preferred Stock

At the merger effective time, each holder of shares of Series A Preferred Stock will be paid by the Company an amount equal to $25.00 per share of Series A Preferred Stock plus an amount equal to any accumulated unpaid dividends then outstanding.

At the merger effective time, each holder of shares of Series B Preferred Stock will be paid by the Company an amount equal to $29.70 per share of Series B Preferred Stock consisting of $24.90 in respect of the Series B Preferred Stock liquidation preference and $4.80 in respect of the conversion right of the holders of the Series B Preferred Stock, plus an amount equal to any accumulated unpaid dividends then outstanding.

At the merger effective time, each holder of shares of Series C Preferred Stock will be paid by the Company an amount equal to $25.00 per share of Series C Preferred Stock plus an amount equal to any accumulated unpaid dividends then outstanding.

Stock Options

At the merger effective time, each outstanding Company stock option representing the right to acquire shares of common stock of the Company will be cancelled and converted into the right to receive from Parent and the surviving entity an amount in cash, without interest, equal to the product of the number of shares of Company common stock subject to the stock option; multiplied by the excess, if any, of the merger consideration over the per share exercise price of the stock option. The cash being exchanged for options will be paid net of any withholding taxes as may be required to be withheld under the merger agreement.

Restricted Shares

At the merger effective time, each restricted share of Company common stock will vest in full and become free of restrictions and will be cancelled and converted automatically into the right to receive from Parent and the surviving entity an amount in cash, without interest, equal to the merger consideration. The cash provided for the restricted shares will be paid net of any withholding taxes as may be required to be withheld under the merger agreement.

Merger Sub Stock

Each share of Merger Sub common stock issued and outstanding immediately prior to the merger effective time will be converted into one validly issued, fully paid and non-assessable share of common stock of the Company.

Exchange and Payment Procedure

Prior to the merger effective time, Parent will designate a bank or trust company to act as the paying agent for the merger consideration, and will deposit with the paying agent cash sufficient to cover the payment of the merger consideration. Prior to the disbursement of the cash in the payment fund to the shareholders, Parent may decide to invest those funds, provided that no losses with respect to any invested fund will affect the amounts payable to the shareholders.

As soon as practicable after the merger effective time (but in no event more than three business days after the merger effective time), the Company will cause the paying agent to mail to each holder of our common stock a letter of transmittal and instructions for use in effecting the surrender of the certificates or book-entry shares. Upon surrender of a certificate or book-entry share that previously represented

shares of our common stock to the paying agent, together with a letter of transmittal, duly completed and validly executed, the holder of such certificate or book-entry share will be entitled to receive the applicable merger consideration. Until surrendered, each certificate or book-entry share (other than shares of common stock that are cancelled pursuant to the merger agreement) will be deemed, at any time after the merger effective time, to represent only the right to receive upon such surrender the merger consideration, without interest.

Payment to Non-Registered Holders

If any portion of the merger consideration is to be paid to a person other than the registered holder of a surrendered certificate or the transferred book-entry share, it will be a condition to the payment that: the certificate will be properly endorsed or will otherwise be in proper form for transfer or the book-entry share will be properly transferred; and the person requesting payment will pay the paying agent any transfer or other tax required as a result of the payment to a person other than the registered holder.

Full Satisfaction

All merger consideration paid upon the surrender of a certificate or book-entry shares will be deemed to have been paid in full satisfaction of all rights pertaining to shares of our common stock previously represented by such certificate or book-entry share. From and after the merger effective time, there will be no further registration or transfers of shares of our common stock. If, after the merger effective time, certificates or book-entry shares are presented to the Company, they will be cancelled and exchanged for the merger consideration.

Termination of Payment Fund

Any portion of the funds made available to the paying agent that remain unclaimed by our shareholders twelve months after the merger effective time will be delivered to Parent. Any shareholder who has not exchanged his or her shares will look only to Parent (subject to abandoned property, escheat, or other similar laws), as general creditors, for payment of the merger consideration without any interest. Any amounts remaining unclaimed immediately prior to such time when the amounts would otherwise escheat to or become property of any governmental entity will become the property of Parent free and clear of any claims or interest.

Parent will not be liable to any shareholder for any amounts paid to a public official pursuant to applicable abandoned property, escheat, or similar laws.

Dissenting Shares

Prior to the merger effective time, any shares of our common stock issued and outstanding immediately prior to the merger effective time that are held by shareholders of the Company who did not vote in favor of the adoption of the merger agreement and who complied with the requirements to dissent described under Dissenters’ Rights beginning at page 67 of this proxy statement will not be converted into or represent the right to receive a portion of the merger consideration, but instead will be entitled to only those rights that are granted by Section 623 of the New York Business Corporation Law.

If, after the merger effective time, a dissenting shareholder fails to perfect, waives, withdraws, or loses his or her right to appraisal under Section 623 of the New York Business Corporation Law, the shares held by the shareholder will be treated as if they had been converted into the right to receive the merger consideration, without interest.

We agreed to provide Parent notice of any demands we receive for appraisal of our shares, any waiver or withdrawal of any appraisal demand, and any other demand, notice, or instrument delivered to the Company prior to the merger effective time. Parent will also have the opportunity and right to direct all negotiations with respect to appraisal demands.

Any portion of the funds made available to the paying agent in respect of any dissenting shares will be returned to Parent upon demand.

Adjustments

If, prior to the merger effective time, there is a change in the outstanding shares of capital stock of the Company, for example, by reason of any reclassification, recapitalization, stock split (including a reverse stock split), or combination, exchange, readjustment of shares, or similar transaction, the merger consideration and any other amounts payable under the merger agreement would be appropriately and equitably adjusted to reflect the change.

Withholding Rights

The paying agent, the surviving entity and Parent are entitled to deduct from the merger consideration any amounts that Parent, the surviving entity or the paying agent are required to deduct and withhold with respect to payments under the merger consideration, or any provision of any other tax law. To the extent that amounts are so deducted and withheld by the paying agent, Parent, or the surviving entity, as the case may be, such amounts will be treated for all purposes of the merger agreement as having been paid to the person in respect of which the paying agent, Parent, or the surviving entity, as the case may be, made the deduction and withholding.

Lost Certificates

If any certificate has been lost, stolen or destroyed, then, upon providing an affidavit of that fact by the person claiming the certificate to be lost, stolen or destroyed, and, if required by Parent, the posting of a bond in a reasonable amount as Parent may direct, as an indemnity against any claim that may be made against it with respect to such certificate, the paying agent will deliver in exchange for the lost, stolen or destroyed certificate, the merger consideration.

Representations and Warranties

Company Representations and Warranties

The Company made customary representations and warranties in the merger agreement that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement or in the disclosure schedules delivered in connection with the merger agreement. These representations and warranties relate to, among other things:

Many of our representations and warranties are qualified by the concept of a “material adverse effect.” Under the terms of the merger agreement, a material adverse effect means any event, occurrence, fact, condition, or change that would reasonably be expected to be materially adverse to our business or operations or materially adverse to our ability to timely close the merger. However, no event, occurrence, fact condition or change resulting from any of the following items will be taken into account in determining whether a material adverse effect has occurred:

With respect to bullets one, three, four, five, or six above, such conditions or events may be taken into account in determining whether a material adverse effect has occurred to the extent such event or condition has a materially disproportionate adverse effect on the Company and its subsidiaries, taken as a whole, as compared to other entities (if any) engaged in the natural gas distribution business and related

businesses in the same state or states in which the event or condition has taken place. Additionally, bullets one through twelve above will not be applicable solely for purposes of determining whether any undertakings, terms, conditions liabilities, obligations, commitments or sanctions imposed or required by any government entity or order issued in respect thereof have or would reasonably be expected to have a material adverse effect.

Parent and Merger Sub Representations and Warranties

The merger agreement also contains customary representations and warranties made, jointly and severally, by Parent and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement. These representations and warranties relate to, among other things:

Conduct of Business Pending the Merger

Under the merger agreement, we agreed that, subject to certain exceptions listed in the merger agreement, between the date of the merger agreement and the earlier of the closing date or the termination of the merger agreement in accordance with its terms (referred to as the interim period), we will, and to the extent that we have the ability to do so by contract or otherwise, will cause each of our subsidiaries to:

We have also agreed that during the interim period, subject to certain exceptions described in the merger agreement or unless Parent gives its prior written consent, we will not, and will not permit any of the of our subsidiaries to, among other things:

Additionally, neither the Company nor Parent will take, or permit their subsidiaries to take, any action that would reasonably be expected to prevent, materially delay, or materially impede the consummation of the merger.

Access to Information

During the interim period, we will provide Parent and its representatives with reasonable access, during normal business hours, and in a manner so as not to unreasonably interfere with the business or operations of the Company, to the officers, employees, accountants, agents, properties, offices, and other facilities and to all books, records, contracts, and other assets of the Company and its subsidiaries, and will promptly furnish additional information that Parent reasonably requests. We are not required to provide access to or disclose information that is protected by attorney-client privilege or would violate applicable law.

Confidentiality Agreement

The Company and Parent acknowledge that their obligations under the non-disclosure agreement, dated March 6, 2020, remain in effect.

Solicitation of Takeover Proposals

Go-Shop Period

During the forty-five day period after the signing of the merger agreement (referred to as the “go-shop period”), we had the right to solicit takeover proposals from third parties and otherwise work with third parties to facilitate any proposal that could lead to a takeover proposal.

We agreed to notify Parent of each takeover proposal (or any inquiry that could reasonably be expected to lead to a takeover proposal) received prior to the expiration of the go-shop period, and the notice would include (i) a copy of each takeover proposal and a summary of materials terms, and (ii) and the identity of the parties that have made each takeover proposal. There were no takeover proposals to report upon expiration of the go-shop period.

A takeover proposal, as defined in the merger agreement, means an inquiry, proposal, or offer from, or indication of interest by any third party relating to any transaction involving any:

Conduct of the Company after the Expiration of the Go-Shop Period

After the expiration of the go-shop period, other than with respect to any parties that had been identified by us as having made a takeover proposal, we agreed to (i) cease and cause to be terminated any discussions or negotiations with any other party with respect to a takeover proposal, (ii) provide notice of termination to each party, and (iii) promptly request that each party return or destroy all confidential information furnished to them by or on behalf of the Company and withdraw or revoke access of each party to any data room (virtual or actual) containing any non-public information with respect to the Company and its subsidiaries.

Upon the expiration of the go-shop period, we agreed not to, and will cause our subsidiaries and their directors and officers not to:

Notwithstanding these prohibitions, if, at any time following the expiration of the go-shop period and prior to obtaining the approval of the merger by our shareholders:

then the Company may participate or engage in discussions or negotiations with, or disclose any non-public information relating to the Company or any of our subsidiaries or afford access to the business, properties, assets, employees, books or records of Company or any of our subsidiaries to the person that made the unsolicited takeover proposal or to any person in connection with that takeover proposal.

A superior proposal is defined in the merger agreement as a bona fide written takeover proposal (as defined above, except that, for purposes of this definition, each reference in the definition of “takeover proposal” to “20%” will be “51%”) that our board determines in good faith is more favorable to the our shareholders than the transactions contemplated by the merger agreement, taking into account the anticipated timing, conditions (including any financing condition or the reliability of any debt or equity funding commitments) and prospects for completion of such takeover proposal; and the other terms and conditions of such takeover proposal and the implications to the Company, including relevant legal, regulatory, and other aspects of such takeover proposal deemed relevant by our board.

As part of its obligations under the merger agreement with respect to a takeover proposal that is, or could lead to a superior proposal, we:

Company Shareholder Approval

The Company shareholder approval refers to the requisite number of votes by our shareholders to approve the merger agreement. Specifically, this requires the adoption of the merger agreement by the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of our common stock and a majority of the outstanding shares of our preferred stock voting as a single class.

Company Board Recommendation

The merger agreement provides that, except as described below, our board of directors will not:

The merger agreement refers to an action described in any of the bullet points above as an “adverse recommendation change.”

At any time prior to the Company shareholder vote, the merger agreement permits our board to make an adverse recommendation change, provided that the following conditions are met:

Intervening Event

Under the merger agreement an “intervening event” means, with respect to the Company:

In response to an intervening event that has occurred prior to the Company shareholder vote, the merger agreement permits our board to make an adverse recommendation change if:

Voting Agreement

We agreed to deliver the executed voting agreement attached as Exhibit B to the merger agreement, within five business days following the date of the merger agreement.

Preparation of Proxy Materials

Within 90 days of the date of the merger agreement we agreed to prepare and file this proxy statement with the SEC. We agreed to use commercially reasonable efforts and to cooperate and consult with other parties, including Parent and Merger Sub, to resolve any SEC comments with respect to the proxy statement, as promptly as practicable after receipt and further agreed to cause the proxy statement, once in its definitive form, to be cleared by the SEC. The Company and Parent will also take any other action

required to be taken under the Securities Act, the Exchange Act, any applicable foreign or state securities or “blue sky” laws and the rules and regulations applicable to the merger. The Company will then file the proxy statement in definitive form with the SEC and cause the proxy statement to be mailed to the shareholders of the Company as promptly as reasonably practicable after the SEC advises the Company that the SEC has no further comments on the proxy statement. Unless our board has made an adverse recommendation change, the Company will include the Company’s recommendation that the shareholders adopt the merger agreement, in both the preliminary and definitive proxy statements. Parent, Merger Sub, and the Company agreed to correct any information provided by it for use in the proxy statement which subsequently becomes false or misleading and the Company will promptly prepare and mail to its shareholders an amendment or supplement setting forth such correction, after notice to and cooperation with Parent.

Shareholder Meeting

We agreed to hold a shareholder meeting within 30 days after the proxy statement has been cleared by the SEC. The Company will mail the proxy statement to the shareholders in advance of the meeting. Unless our board has made an adverse recommendation change, the proxy statement will include the Company’s recommendation to adopt the merger agreement.

The Company agreed to use commercially reasonable efforts to: solicit from shareholders proxies in favor of the adoption of the merger agreement and approval of the merger; and take all other actions necessary or advisable to secure the vote or consent of shareholders required by applicable law to obtain such approval.

No other proposals for approval will be included at the shareholder meeting without consent of Parent. We agreed to keep Parent and Merger Sub updated with respect to proxy solicitation results. Once the Company shareholder meeting has been called and noticed, the Company agreed not to postpone or adjourn the shareholder meeting without the consent of Parent (other than: in order to obtain a quorum of its shareholders; or to allow reasonable additional time after the filing and mailing of any supplemental or amended disclosures to the proxy statement for compliance with applicable legal requirements). Unless our board makes as adverse recommendation change, it will not alter the obligation of the Company to submit the adoption of the merger agreement for approval by the shareholders.

Parent, as sole shareholder of Merger Sub, agreed to adopt the merger agreement and approve the merger.

Notice of Events

We agreed to provide notice to Parent of any of the following:

We also agreed to provide notice to Parent of any legal action commenced against the Company or any of its directors by any shareholder of the Company relating to the merger or merger agreement. We agreed to allow Parent to have the opportunity to participate in, but not control, the defense or settlement

negotiations of such legal action. We agreed not to settle any shareholder litigation without the prior written consent of Parent.

Employees and Benefits Plans

Under the merger agreement, for a period of one year after the merger effective time, Parent agreed to cause the Company and its subsidiaries to provide our employees who remain employed after the merger effective time with annual base salary or wage level, annual target bonus opportunities (excluding equity-based compensation), and employee benefits (excluding any retiree health or defined benefit retirement benefits) that are no less favorable, in the aggregate, than what the employee is currently receiving.

Additionally, for any “employee benefit plan,” as that term is defined in Section 3(3) of ERISA, any defined benefit retirement plans or programs, and any equity compensation arrangements (excluding any retiree health plans or programs), each maintained by Parent or its subsidiaries, and in which continuing employees participate, and subject to the terms of the governing plans documents, Parent agreed to cause the Company to credit all service of the continuing employees with the Company or its subsidiaries as if such service were with Parent, for purposes of eligibility to participate and vesting (but not for purposes of benefit accrual, except for vacation, if applicable) for full or partial years of service in any employee benefit plan in which a continuing employee may be eligible to participate after the merger effective time; provided, that such service will not be credited to the extent that: crediting would result in a duplication of benefits; or service was not credited under the corresponding employee benefit plan of the Company.

Notwithstanding the foregoing, we agreed that the above provisions do not make employees third party beneficiaries of the merger agreement, nor do these provisions:

Additionally, we agreed not to send any written notices or other communication materials to any employees without the consent of Parent.

Directors’ and Officers’ Indemnification and Insurance

Parent and Merger Sub agreed that all rights to indemnification, advancement of expenses, and exculpation by the Company now existing in favor of the current and former officers and directors of the Company or its subsidiaries as provided in their respective organizational documents and any indemnification or other similar contracts of the Company or any of our subsidiaries that were listed in a confidential disclosure schedule to the merger agreement, in each case, as in effect on the date of the merger agreement, will continue in full force and effect in accordance with their terms to the extent provided in the following paragraph.

Additionally, Parent agreed that for a period of six years after the merger effective time it will (or cause the surviving entity to) maintain in effect exculpation, indemnification, and advancement of expenses provisions that were equivalent to those included in the Company’s organizational documents, immediately prior to the merger effective time, with respect to acts by the current and former officers and directors of the Company or its subsidiaries. Parent further agreed not to amend, repeal, or otherwise

modify any such provisions in any manner adverse to the current and former officers and directors of the Company or its subsidiaries.

Parent agreed to cause the surviving entity to obtain a six-year “tail” insurance policy with at least the same coverage and amounts and containing terms and conditions that are not less advantageous to the current and former officers and directors of the Company or its subsidiaries; provided, however, that the surviving entity in no event will be required to expend an annual premium for such coverage in excess of 300% of the last annual premium paid by the Company. If such insurance coverage cannot be obtained without exceeding that annual premium, then the surviving entity agreed to obtain the greatest coverage available within that budget.

Parent agreed that the provisions outlined in this section will survive after the merger effective time and remain in effect, and if Parent is sold, either by sale, merger or otherwise, then Parent shall make proper provision that these obligations will be assumed by the successor to Parent.

Reasonable Best Efforts

Each of the parties agreed to, and agreed to cause their subsidiaries to, use commercially reasonably efforts to consummate and make effective, and to satisfy all conditions to, the transactions contemplated by the merger agreement, including:

Parent and the Company further agreed that neither will commit to or agree with any governmental entity to stay, toll, or extend any applicable waiting period under the HSR Act (if applicable) or other applicable antitrust laws. Nor will either party participate in or attend any formal meeting with any governmental entity with respect to the merger without providing reasonable prior notice of such formal meeting to the other party and providing a representative of the other party an opportunity to participate or attend.

The parties also agreed to the extent that any legal or administrative action or proceeding is instituted by a governmental entity or private party challenging the merger, then the parties will cooperate and use their commercially reasonable efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed, or overturned any ruling prohibiting or restricting the merger.

Parent and Merger Sub are not required to, and the Company agreed not to, without the prior written consent of Parent, become subject to, consent to, or offer or agree to, accept or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement, or order:

Other Covenants and Agreements

The Company, on the one hand, and Parent and Merger Sub, on the other hand, have each agreed with each other regarding various other matters, including:

Conditions Precedent

Conditions to Each Party’s Obligations

Each party’s obligations to complete the merger are subject to the satisfaction or waiver (where permitted) of the following conditions:

Conditions to Parent’s and Merger Sub’s Obligations

The obligations of Parent and Merger Sub to complete the merger are subject to the satisfaction or waiver (where permitted) of the following conditions:

Condition to the Company’s Obligations

Our obligations to complete the merger are subject to the satisfaction or waiver (where permitted) of the following conditions:

Termination of Merger Agreement

Mutual Termination Right

The parties agreed that the merger agreement could be terminated by the written consent of both parties, or by either party in the following instances, by making written notice to the other party:

Parent Termination Right

We also agreed that Parent can terminate the merger agreement:

Company Termination Right

We can terminate the merger agreement:

If either party wishes to terminate the merger agreement other than by mutual consent, it must provide written notice of the termination to the other party and specify the reason the merger agreement is being terminated. After an effective termination, the merger agreement will be of no further force or effect, except with respect to the certain provisions, including confidentiality and the termination fees described in the next section.

Termination Fee

We agreed to pay a termination fee to Parent if either Parent terminates the merger agreement in accordance with the first bullet point under the section titled Parent Termination Right or the Company terminates the merger agreement in accordance with the first bullet point under the section titled Company Termination Right.

In either instance, if the merger agreement had terminated prior to the expiration of the go-shop period, then the termination fee would have been equal to $1,721,526, or if the merger agreement is terminated after the expiration of the go-shop period, then the termination fee will be equal to $2,486,648. We further agreed that the termination fee is an integral part of the merger agreement, and acknowledged that without the termination fee, Parent would not have entered into the merger agreement; however, in no event will we be required to pay the termination fee more than once, and if paid, the termination fee will be Parent’s exclusive remedy for monetary damages under the merger agreement, other than monetary damages resulting from expenses incurred by Parent in connection with the Company’s failure to timely pay the termination fee, if such expenses are awarded by a court.

Additionally, we agreed to pay a termination fee equal to $2,486,648, if:

Other Miscellaneous Items

Expenses

Each party agreed that any expenses incurred by such party in connection with the merger will be paid by that party; provided that Parent agreed to be responsible for all filing fees related to any HSR Act filing, if applicable.

Amendment

The merger agreement may be amended by written agreement of the parties, provided, that the merger agreement cannot be amended after the Company shareholder approval if the amendment would require further approval of the shareholders without such approval.

Extension; Waiver

Prior to the merger effective time, Parent or Merger Sub, on the one hand, or the Company, on the other hand, may: (i) extend the time for the performance of any of the obligations of the other party(ies); (ii) waive any inaccuracies in the representations and warranties of the other party(ies) contained in the merger agreement or in any document delivered under the merger agreement; or (iii) unless prohibited by applicable law, waive compliance with any of the covenants, agreements, or conditions contained in the merger agreement. A party does not waive its rights under the merger agreement for failure to assert any of its rights.

Specific Performance

If either party fails to perform its obligations under the merger agreement, the parties agreed that the non-breaching party would be entitled to specific performance, that is, requiring the breaching party to perform its obligations under the merger agreement. The parties further agreed that they would not object to the granting of specific performance by any court.

Governing Law

The merger agreement and any legal actions arising out of the merger agreement will be governed by New York law.

Dissenters’ Rights

Under Sections 623 and 910 of the New York Business Corporation Law, if you do not wish to accept the cash payment provided for in the merger agreement, you have the right to file a written objection including a notice of election to dissent to the merger and demand payment of the “fair value” of your shares of the Company. If you intend to dissent and demand payment of the “fair value” of your shares, you must comply with the provisions of Section 623 of the NYBCL in order to receive payment for your shares. We will require strict compliance with the statutory procedures by any shareholder wishing to exercise their dissenters’ rights.

The following brief summarizes the material provisions of the New York statutory procedures you must follow if you wish to dissent from the merger and receive payment of the “fair value” of your shares. Because such “fair value” could potentially be determined in a judicial proceeding, the outcome of which cannot be predicted, there is no guarantee that shareholders exercising dissenters’ right would receive an amount per share equal to or greater than the amount that shareholders may receive through a public or private sale of shares of the Company.

This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to Sections 623 and 910 of the NYBCL, the full text of which appears in Exhibit C of this proxy statement.

This proxy statement constitutes the Company’s notice to its shareholders of the availability of dissenters’ rights in connection with the merger in compliance with the requirement of Section 623 of the NYBCL. Dissenters’ rights are available to holders of shares of common stock and preferred stock of the Company. If you wish to consider exercising your dissenters’ rights, you should carefully review the text of Section 623 of the NYBCL contained in Exhibit C because failure to timely and properly comply with the requirements of Section 623 will result in the loss of your rights under the NYBCL. In view of the complexity of Section 623 of the NYBCL, shareholders who may wish to dissent from the merger

and pursue dissenters’ rights should consult their own legal advisors to ensure that they fully and properly comply with the requirements of Section 623 of the NYBCL.

If you elect to dissent, you must satisfy the conditions stated below.

Notice of Election to Dissent

Section 623 of the NYBCL requires that if you intend to enforce your right to dissent in connection with the merger, you must file with the Company, before the meeting of shareholders, or at the meeting, but before the vote, written objection to the merger. The written objection must include:

(1)   a notice of your election to dissent;

(2)   your name and residence address;

(3)   the number and class of shares as to which you dissent; and

(4)   a demand for payment of the fair value of your shares if the merger is consummated.

The objection is not required from any shareholder to whom the Company did not give notice of the annual meeting.

If you intend to exercise your dissenters’ rights, you must not vote in favor of the approval of the merger. Voting against or failing to vote for the merger by itself does not constitute an election to dissent within the meaning of Section 623 of the NYBCL and will not satisfy the requirement of filing a written objection. An abstention or failure to vote will not waive your right to receive payment so long as you have properly and timely filed the appropriate written objection to the merger in accordance with Section 623 and have not voted in favor of approval of the merger. A vote in favor of the merger, by proxy or online, will constitute a waiver of your election to dissent in respect of the shares voted and will nullify any previously filed written notices of election to dissent. Since a proxy left blank will be voted for adoption of the merger, if you wish to exercise your dissenters’ rights you must either vote against approval of the merger or abstain. You may not dissent as to less than all of your shares as to which you have a right to dissent. A nominee or fiduciary may not dissent on behalf of any beneficial owner as to less than all of the shares of the owner, as to which the nominee or fiduciary has a right to dissent, held of record by the nominee or fiduciary. The written notice of election to dissent must be in addition to and separate from any proxy or vote abstaining from or against the merger. Finally, you must continuously be the beneficial owner of your shares through the effective date of the merger. If you fail to comply with any of these conditions and the merger is completed, you will be entitled to receive payment for your shares as provided for in the merger agreement, but you will have no dissenters’ rights with respect to your shares.

All written objections to the merger and notices of election to dissent pursuant to NYBCL Section 623(a) should be addressed to Charles A. Lenns, Vice President and Chief Financial Officer, Corning Natural Gas Holding Corporation, 330 West William Street, Corning, New York 14830 and should be executed by, or on behalf of, the record holder of the shares.

To be effective, a notice of election to dissent by a holder of our common or preferred stock must be made by or in the name of the registered shareholder, fully and correctly, as the shareholder’s name appears on his, her or its stock certificate(s) and cannot be made by the beneficial owner if he, she or it does not also hold the shares of record. The beneficial holder must, in that case, have the registered owner submit the required notice of election to dissent.

If shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a notice of election to dissent should be made in that capacity; and if the shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. A record owner, such as a broker, who holds shares as a nominee for others, may exercise the record owner’s dissenters’ rights with respect to the shares held for one or more beneficial owners, while not exercising this right for other beneficial owners.

If you hold your shares in a brokerage account or in other nominee form and you wish to exercise dissenters’ rights, you should consult with your broker or other nominee to determine the appropriate procedures.

Notice of Authorization by the Company

If the holders of at least two-thirds of the outstanding shares of our common stock and a majority of the outstanding shares of our preferred stock voting as a single class approve the merger, then within ten days of the date of approval, we will give written notice of approval by registered mail to each shareholder who filed a timely notice of election to dissent, and who did not withdraw the notice of election to dissent prior to the vote or did not vote in favor of the merger, or from whom a dissent was not required.

Notice of Dissent by Shareholder Not Previously Required to Submit Notice of Election to Dissent

Within twenty days after the giving of notice to any shareholder from whom written objection was not required, and who elects to dissent, the dissenting shareholder must file with the Company a written notice of the election, stating the shareholder’s name and residence address, the number and classes of shares as to which the shareholder dissents and a demand for payment of the fair value of the shares.

Rights of Dissenting Shareholders Upon Consummation of the Merger

Upon consummation of the merger, each shareholder will cease to have any of the rights of a shareholder except the right to be paid the fair value of the shareholder’s shares and any other rights under Section 623 of the NYBCL. A notice of election may be withdrawn by a shareholder at any time prior to the shareholder’s acceptance in writing of an offer made by the Company, as provided below, but in no case later than sixty days from the date of consummation of the merger except that if the Company fails to make a timely offer, the time for withdrawing a notice of election will be extended until sixty days from the date an offer is made. Upon expiration of that time, withdrawal of a notice of election requires the written consent of the Company. To be effective, withdrawal of a notice of election must be accompanied by the return to the Company of any advance payment made to the shareholder. If a notice of election is withdrawn, or the merger is rescinded, or a court determines that the shareholder is not entitled to receive payment for the shareholder’s shares, or the shareholder otherwise loses dissenters’ rights, the shareholders will not have the right to receive payment for the shareholder’s shares and will be reinstated to all rights as a shareholder as of the consummation of the merger, including any intervening preemptive rights and the right to payment of any intervening dividend or other distribution or, if any of these rights have expired or any dividend or distribution other than in cash has been completed, in lieu thereof, at the election of the Company, the fair value thereof in cash as determined by the board of directors of the Company as of the time of expiration or completion, but without prejudice otherwise to any corporate proceedings that may have been taken in the interim.

Submission of Stock Certificates for Notation

At the time of filing the notice of election to dissent or within one month after filing, the dissenting shareholder must submit the shareholder’s stock certificate(s) representing the shareholder’s dissenting

shares to the Company, or to its transfer agent, which, upon receipt, will note conspicuously on the certificate(s) that a notice of election has been filed and return the certificate(s) to the shareholder who submitted them. Any shareholder with stock certificates who fails to submit them for notation will at the option of the Company, by written notice to the shareholder within forty-five days of the date of filing the notice of election to dissent, lose the shareholder’s rights, unless a court, for good cause shown, otherwise directs. Upon transfer of a certificate bearing the notation, each new certificate issued will bear a similar notation together with the name of the original dissenting holder of the shares and a transferee will acquire no rights in the Company except those rights the original dissenting shareholder had at the time of transfer.

Written Offer by the Company

Within fifteen days after the expiration of the period within which shareholders may file their notices of election to dissent, or within fifteen days after the proposed merger is consummated, whichever is later (but in no case later than ninety days from the date of the shareholders’ meeting at which the merger agreement was adopted and approved), the Company will make a written offer by registered mail to each shareholder who has filed a notice of election to dissent to pay for the shareholder’s shares at a specified price that the Company considers to be their fair value.

This offer will be accompanied by a statement setting forth the aggregate number of shares with respect to which notices of election to dissent have been received and the aggregate number of holders of these shares. If the merger has become effective, the offer must also be accompanied by (1) advance payment to each shareholder who submitted stock certificates to the Company for notation in an amount equal to 80% of the amount of the offer, or (2) as to a shareholder who has not yet submitted stock certificates, if the time period has not expired, or if the Company elects to grant the shareholder additional time, a statement that advance payment of 80% of the offer will be promptly made by the Company once certificates have been submitted and notated. If the merger has not become effective at the time of the offer, then the Company may wait until the merger becomes effective to send the advance payment or statement of advance payment to the dissenting shareholders and any offer extended without the payment or statement of payment may be conditioned on the effectiveness of the merger. Each advance payment or statement as to advance payment must advise the recipient shareholder that acceptance of payment does not constitute a waiver of any dissenters’ rights. If the merger has not been consummated upon the expiration of the ninety-day period after the shareholders’ authorization date, the offer may be conditioned upon the consummation of the merger. The offer made to each dissenting shareholder must be made at the same price per share to all dissenting shareholders of the same class and series of stock and will be accompanied by a balance sheet of the Company as of the latest available date, which must not be earlier than twelve months before the offer was made, and a profit and loss statement or statements for not less than a twelve-month period ended on the date of the balance sheet.

If within thirty days of the Company making the offer to the dissenting shareholders, the Company and any shareholder agree on the price to be paid for the shareholder’s dissenting shares, payment for the shares must made within sixty days after the later of the offer or the effective date of the merger, upon surrender of stock certificates for the shares.

Judicial Enforcement

If the Company fails to make an offer for the dissenting shares within the fifteen-day period described above, or if the Company makes the offer and any dissenting shareholder fails to agree with the Company upon the price to be paid for their shares within thirty days, the Company must within twenty days of the

expiration of the applicable period, institute a special proceeding in the Steuben County Supreme & County Court (the supreme court in the judicial district where the office of the Company is located) to determine the rights of dissenting shareholders and to fix the fair value of their shares. If the Company fails to timely institute the special proceeding within the twenty-day period, any dissenting shareholder may institute the proceeding within thirty days of the expiration of the twenty-day period. If a special proceeding is not then timely instituted, all dissenters’ rights will be lost unless the court, for good cause shown, otherwise directs.

All dissenting shareholders, excepting those who have agreed with the Company upon the price to be paid for their shares, will be made parties to the special proceeding. The Company must serve a copy of the petition in the special proceeding upon each dissenting shareholder who is a resident of New York in the manner provided by law for the service of a summons, and upon each nonresident dissenting shareholder either by registered mail and publication, or in any other manner that is permitted by law.

If a special proceeding is instituted, the court will determine whether a dissenting shareholder is entitled to receive payment for the shareholder’s shares, and the court will fix the fair value of the shares as of the close of business on the day prior to the shareholders’ meeting at which the merger was authorized. In fixing the fair value of the shares, the court will consider the nature of the merger giving rise to the shareholder’s right to receive payment for shares and its effects on the Company and its shareholders, the concepts and methods then customary in the relevant securities and financial markets for determining fair value of shares of a corporation engaging in a similar transaction under comparable circumstances and all other relevant factors. The court will determine the fair value of the shares without a jury and without referral to an appraiser or referee. Upon application by the Company or by any shareholder who is a party to the proceeding, the court may, in its discretion, permit pretrial disclosure, including disclosure of any expert’s reports relating to the fair value of the shares whether or not intended for use at the trial in the proceeding.

A final order will be entered by the court against the Company for payment to the dissenting shareholders including interest from the date the merger was consummated to the date of payment. In determining the rate of interest, the court will consider all relevant factors, including the rate of interest which the Company would have had to pay to borrow money during the pendency of the proceeding. If the court finds that the refusal of any shareholder to accept the corporate offer of payment for the shareholder’s shares was arbitrary, vexatious or otherwise not in good faith, no interest will be allowed to that shareholder. Each party to the special proceeding will bear its own costs and expenses, including the fees and expenses of its counsel and of any experts employed by it, provided that the court may apportion or assess all or any part of the costs, expenses and fees incurred by the Company against any or all of the dissenting shareholders who are parties to the proceeding, including any who have withdrawn their notices of election, if the court finds that their refusal to accept the Company offer was arbitrary, vexatious or otherwise not in good faith. Similarly, the court may apportion and assess all or any part of the costs, fees and expenses incurred by any or all of the dissenting shareholders who are parties to the proceeding against the Company if the court finds any of the following: (1) the fair value of the shares as determined by the court materially exceeds the amount which the Company offered to pay; (2) no offer or required advance payment was made by the Company; (3) the Company failed to institute the special proceeding within the specified period; or (4) the action of the Company in complying with its obligations as provided in Section 623 of the NYBCL was arbitrary, vexatious or otherwise not in good faith. In making any determination as provided in clause the first clause, the court may consider the dollar amount or the percentage, or both, by which the fair value of the shares as determined exceeds the Company’s

offer. The Company must make payment to each dissenting shareholder that is a party to the proceeding pursuant to the court order within sixty days after final determination of the special proceeding, upon surrender of the certificates for any shares represented by certificates.

Shares acquired by the Company upon the payment of the agreed value or of the amount due under the final order, may be held and disposed of as the merger agreement provides.

Other Considerations

No payment may be made to a dissenting shareholder at a time when the Company is insolvent or when the payment would make it insolvent. In that event, the dissenting shareholder must, at the shareholder’s option: withdraw the shareholder’s notice of election, which will then be deemed withdrawn with the written consent of the Company; or retain the shareholder’s status as a claimant against the Company and, if the Company is liquidated, be subordinated to the rights of creditors of the Company, but have rights superior to the non-dissenting shareholders, and if the Company is not liquidated, retain the shareholder’s right to be paid for the shareholder’s shares, which right the Company must satisfy when the restrictions of this paragraph do not apply. The dissenting shareholder must exercise an option by written notice given to the Company within thirty days after the Company has given the shareholder written notice that payment for the shareholder’s shares cannot be made because of the restrictions of this paragraph. If the dissenting shareholder fails to exercise an option, then the Company will exercise the option by written notice given to shareholder within twenty days after the expiration of the thirty-day period.

The enforcement by a shareholder of the shareholder’s right to receive payment for shares excludes the enforcement by that shareholder of any other right to which the shareholder might otherwise be entitled by virtue of share ownership, except as provided in paragraph (e) of Section 623 of the NYBCL, and except that Section 623 of the NYBCL does not exclude the right of a shareholder to bring or maintain an appropriate action to obtain relief on the ground that the merger is unlawful or fraudulent as to the shareholder.

Except as otherwise expressly provided in Section 623 of the NYBCL, any notice to be given by the Company to a shareholder under Section 623 of the NYBCL shall be given in the manner provided in Section 605 of the NYBCL (Notice of meetings of shareholders).

Proposal 2: Election of Directors

At the annual meeting, eight directors are to be elected to hold office until the next annual meeting of shareholders or until their respective successors are elected and qualified. Nominees for election this year are Henry B. Cook, Jr., Michael I. German, Ted W. Gibson, Robert B. Johnston, Joseph P. Mirabito, William Mirabito, George J. Welch, and John B. Williamson III. Each nominee has consented to be named in this proxy statement and to serve if elected. Information about the director nominees is included under Board of Directors following this section. If any director nominee is unable to stand for re-election, the board may provide for a fewer number of directors or designate a substitute director nominee. If the board designates a substitute, shares represented by proxies may be voted for the substitute director.

Our board of directors unanimously recommends that you vote FOR Mr. Cook, Mr. German, Mr. Gibson, Mr. Johnston, Mr. Joseph Mirabito, Mr. William Mirabito, Mr. Welch and Mr. Williamson. The affirmative vote of the holders of a plurality of the shares of common stock present in person or represented by proxy at the annual meeting is required to elect directors.

Henry B. Cook, Jr. is our chairman of the board of directors and has served as a director since May 2007. He has served as the president of Triple Cities Acquisition, LLC, a heavy truck parts and vehicle dealer, and Roadwolf Transportation Products, LLC, an importer of heavy-duty truck parts, since 2001. Mr. Cook has exhibited his expertise in the development and management of the business of those two companies. This business experience, together with the expertise about our business and operations derived from his years of service on the board of the Company and leadership as chairman of the board, led the board of directors to conclude that Mr. Cook has the judgment and skills desired for continued service on the board. He is not related to Matthew J. Cook, our vice president — operations.

Michael I. German has served as our chief executive officer, president, and director since December 2006. Mr. German serves as president of Corning Gas, Corning Appliance, Pike County Light & Power Company, Leatherstocking Gas and Leatherstocking Pipeline. He also serves on the boards of Leatherstocking Gas, Leatherstocking Pipeline, and Pike. Prior to joining the Company, he was senior vice president, utility operations for Southern Union Company where he was responsible for gas utility operations in Missouri, Pennsylvania, Rhode Island, and Massachusetts. From 1994 to 2005, Mr. German held several senior positions at Energy East Corporation, a publicly held energy services and delivery company, including president of several utilities. From 1978 to 1994, Mr. German worked at the American Gas Association, finishing as senior vice president. From 1976 to 1978, Mr. German worked for the US Energy Research and Development Administration. Mr. German is a board member of the Northeast Gas Association, Ampco Pittsburgh Corporation, and several non-profit organizations. Mr. German’s role as president and chief executive officer, responsibility for the day-to-day operations and significant strategic initiatives, as well as his extensive experience in utility and public company operations led the board to conclude that Mr. German should continue to serve as a director.

Ted W. Gibson has been a director since November 2006. He has served as the chief executive officer of Classic City Mechanical, an underground utility business, since 1979. Mr. Gibson is also a corrosion specialist in the National Association of Corrosion Engineers and a graduate of the Georgia Institute of Technology — Mechanical Engineer. Mr. Gibson previously served as a United States Marine Corps Captain and is a Vietnam veteran. He is also an inspector for the Nevada State Boxing Commission. Mr. Gibson’s professional background and extensive experience with pipelines and other underground utilities, his business and management expertise in his service as chief executive officer of Classic City

Mechanical, his knowledge of our business, and contributions during his years of service on the board of directors led the board of the Company to conclude that Mr. Gibson has the skills desired for continued service on the board.

Robert B. Johnston has been a director since July 2014. He has served as the executive vice president and chief strategy officer for The InterTech Group, Inc. since 2008. In this capacity, he is responsible for merger and acquisition activities, investments and communications, as well as oversight of a number of InterTech operating companies. He currently serves as chairman of the board of directors of Colabor Inc. Additionally, he serves on the board of directors of the South Carolina Community Loan Fund, Supremex Inc., FIH Group PLC, Circa Enterprises, and Swiss Water Decaffeinated, Inc. Mr. Johnston previously served as the president, chief executive officer, and deputy governor of the Hudson’s Bay Company, and on the boards of the Hudson’s Bay Company, Gas Natural Inc., Pacific Northern Gas, Central Vermont Public Service Corporation, Produce Investments PLC, Fyffes PLC, Galvanic Applied Sciences, Span America Medical Products, Experiences Canada, Carolina Youth Development Center, and Canada’s National History Society. He was also a member of the advisory board of the McGill University Executive Institute. Mr. Johnston completed the University of Oxford Advanced Management and Leadership Program and received an MBA from the John Molson School of Business, an MA in Public Policy & Public Administration, and a BA in Political Science from Concordia University. Additionally, he holds the ICD.D Designation from the Institute of Corporate Directors (Canada). Mr. Johnston’s extensive financial and operational experience coupled with his corporate governance and regulated utility experience led the board to conclude that he should continue to serve as a director.

Joseph P. Mirabito has been a director since November 2010. He was president of Mirabito Fuel Group from 1986 to 1998. He has also served as president of Granite Capital Holdings, Inc. from 1998 to 2009. He is currently chairman and chief executive officer of Mirabito Holdings, Inc. and Mirabito Regulated Industries, LLC. He serves as a director on several professional and civic boards in the central New York region. He and William Mirabito are cousins. Mr. Mirabito’s business and corporate management experience in the energy delivery businesses where he serves as the president and chief executive officer, his knowledge of the local communities in Central New York served by those businesses, and commitment to the growth of our business as a significant shareholder, as well as his prior experience in advising and serving on the board and committees of Wilber Bank led the board of directors to conclude that Mr. Mirabito has the skills, connections, and experience desired for continued service on the board.

William Mirabito has served as a director since November 2010. He was president of Mang Insurance Agency from 2008 to 2015 and has served as vice chairman and treasurer of Mirabito Holdings, Inc. and Mirabito Regulated Industries, LLC since 2014. He is also the chairperson of the audit committee for Mirabito Holdings. He previously served on the board and finance committee of Fox Hospital in Oneonta, New York. He is also a board member of Springbrook, New York, and serves on its executive committee. He and Joseph Mirabito are cousins. Mr. Mirabito’s business and management experience as president of Mang Insurance Agency and vice chairman and treasurer of Mirabito Holdings and Mirabito Regulated Industries, his commitment to the growth of our business as a significant shareholder, as well as his experience in advising and serving on the board and committees of Fox Hospital and Springbrook led the board of directors to conclude that Mr. Mirabito has the skills and experience desired for continued service on the board.

George J. Welch has served as a director since May 2007. He is the senior partner in Welch Law LLP in Corning, New York, concentrating on real estate and business transactions. He has served as a director of many regional organizations, including a regional economic development organization, and PaneLogic,

Inc., a provider of control system integration services. Mr. Welch serves on the Alfred State College Council, an advisory group to the president of the college. Mr. Welch’s extensive experience in legal matters and economic development, and as a community leader led the board to conclude that he should continue to serve as a director.

John B. Williamson III has served as a director since November 2010. Since 2004, Mr. Williamson has served as chairman of RGC Resources, Inc., a $230 million energy distribution and services holding company, and as director, president, and chief executive officer from 1999 to 2013. He currently serves as a director of Bank of Botetourt, Optical Cable Corporation, and Lawrence Transportation Company, an ESOP. He previously served as a director on the board of Luna Innovations Corporation. Mr. Williamson received an MBA from the College of William and Mary, and a BS from Virginia Commonwealth University. Mr. Williamson’s experience as the chairman, president, and chief executive officer of an energy distribution and services company, as well as his experience in advising and serving on the board and committees of other corporations has resulted in his broad understanding of the operational, financial, and strategic issues that businesses and utilities face. This led the board to conclude that he should continue to serve as a director.

Director Independence

The board of directors has determined and confirmed that each of Mr. Cook, Mr. Gibson, Mr. Johnston, Mr. Joseph Mirabito, Mr. William Mirabito, Mr. Welch, and Mr. Williamson do not have a material relationship with the Company or any of its subsidiaries that would interfere with the exercise of independent judgment and are, therefore, independent as defined by applicable laws and regulations and the listing standards of the New York Stock Exchange. In making the determination that each of the members of our board and our board’s committees is independent, the board considered that Mr. Joseph Mirabito and Mr. William Mirabito are officers of Mirabito Regulated Industries, LLC. The Company and Mirabito Regulated Industries are each 50% owners of Leatherstocking Gas Company of New York, Inc.

Director Compensation

For fiscal year 2020, we paid our directors with restricted stock grants of 450 shares per quarter. The shares awarded become unrestricted upon a director leaving the board. Directors who also serve as officers are not compensated for their service as directors. On February 24, 2020, shares were issued for the quarter ended December 31, 2019, on June 15, 2020, shares were issued for the quarter ended March 31, 2020, on August 14, 2020, shares were issued for the quarter ended June 30, 2020, and on November 17, 2020, shares were issued for the quarter ended September 30, 2020. Information regarding shares of restricted stock awarded to directors in the fiscal year ended September 30, 2020, is summarized below, at the amount recognized for financial statement reporting purposes in accordance with FASB ASC 718.

*As of September 30, 2020, each director had 450 shares of stock award outstanding, which were issued on November 13, 2020. On January 12, 2021, we discontinued the issuance of stock compensation for our directors in connection with our entry into the merger agreement with Argo. In 2021, we intend to compensate our directors with deferred cash payments equal in value to 450 shares a quarter.

Board Meeting Attendance

Our board of directors met twelve times during fiscal 2020. All members of the board of directors participated in at least 75% of all board and applicable committee meetings in the last fiscal year. We strongly encourage our directors to attend our annual meetings of shareholders. All members of our board attended last year’s annual meeting.

Risk Oversight

Our board is actively involved in oversight of risks that could affect the Company and particularly focuses on operational risks such as those identified in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020. The full board has overall responsibility for the general oversight of risks that could affect the Company, but some of this oversight is conducted by committees of the board. Our board satisfies this responsibility through regular reports directly from officers responsible for oversight of particular risks within the Company, as well as through reports by each committee chair regarding the committee’s considerations and actions.

Board Leadership Structure

The roles of our chief executive officer and chairman of the board are separated in recognition of the differences between the two roles. The chief executive officer is responsible for the Company’s strategic initiatives and day-to-day operations and performance, while the chairman of the board provides guidance to the chief executive officer and presides over meetings of the full board.

Audit Committee

Our audit committee is currently comprised of Mr. Welch, the committee’s chairman, Mr. Cook, Mr. William Mirabito, and Mr. Williamson, each of whom was determined by our board of directors to be “independent directors” as defined in the New York Stock Exchange listing standards. For additional information regarding the audit committee, please turn to Audit Committee Report beginning on page 78 of this proxy statement.

Nominating and Compensation Committee

Our nominating and compensation committee is comprised of Mr. Joseph Mirabito, the committee’s chairman, Mr. Gibson, Mr. Cook, Mr. Johnston and Mr. Williamson. The nominating and compensation committee oversees our executive compensation program. In this role, the committee reviews and approves, or recommends for approval by the full board, the compensation that is paid or awarded to our executive officers. The goal of our nominating and compensation committee is to ensure that the total compensation paid to our executive officers and significant employees is fair, reasonable, and competitive.

No officers or employees of the Company or its subsidiaries served on the nominating and compensation committee. Mr. German meets with the committee at their request and makes recommendations with respect to the compensation of other officers. Mr. Joseph Mirabito is an officer, director, and shareholder of a company that has entered into a joint venture with the Company (Leatherstocking New York). There

are no interlocks between our nominating and compensation committee, our officers, and those of any other company.

The nominating and compensation committee also administers our stock compensation plan. On January 12, 2021, we discontinued the issuance of stock compensation for our directors in connection with the proposed merger with companies affiliated with Argo. The nominating and compensation committee met twice in the last fiscal year to recommend salaries and report those recommendations to the full board of directors for approval and to nominate directors. Our board has approved the charter of the nominating and compensation committee, which is available on our website at www.CorningGas.com.

If there are any vacancies on the board, or if the nominating and compensation committee determines not to re-nominate an incumbent director for election to the board, our president and chief executive officer and our chairman of the board generally would identify a qualified candidate for the committee’s consideration. Director nominees are approved by the nominating and compensation committee and recommended to the full board for their approval. Nominees are not required to possess specific skills or qualifications; however, nominees are recommended and approved based on various criteria including relevant skills and experience, personal integrity, and ability and willingness to devote their time and efforts to the Company. Qualified nominees are considered without regard to age, race, color, sex, religion, disability, or national origin. We do not use a third party to locate or evaluate potential candidates for director. Neither the board of directors nor the nominating and compensation committee have adopted any policy on whether to consider candidates recommended by shareholders for nomination to fill board seats, or the terms on which any such consideration would be made. The board of directors has not adopted any policy regarding shareholder recommendations of candidates since vacancies on the board occur infrequently, and the board has not received any recommendations.

Corporate Governance and Community Relations Committee

Our corporate governance and community relations committee is currently comprised of Mr. Gibson, the committee’s chairman, Mr. Johnston, Mr. William Mirabito and Mr. Welch. The committee did not meet during fiscal 2020. The committee is responsible for developing corporate governance principles and practices, considering corporate governance issues, administering our related person transaction policy, and assisting the board in compliance with our code of business conduct and ethics. Our board has approved the charter of the corporate governance and community relations committee, which is available on our website at www.CorningGas.com.

Shareholder Communications with Directors

A shareholder who wishes to communicate directly with our board of directors, a committee of the board, or with an individual director, should send the communication to:

Corning Natural Gas Holding Corporation

Board of Directors [or committee name, or director’s name, as appropriate]

330 West William Street

Corning, New York 14830

We will forward shareholder correspondence about the Company to the board, committee, or individual director, as appropriate.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all employees, including our chief executive officer and our chief financial officer, who also serves as our principal accounting officer. This code is available on our website at www.CorningGas.com. Any amendments or waivers to the code that apply to our chief executive officer or chief financial officer will be promptly disclosed to our shareholders by posting that information on our website.

Policy Concerning Hedging Transactions

We have adopted an insider trading policy that governs the ability of our directors, officers and employees to trade in stock of the Company. Under the policy our board members and executive officers are only permitted to trade in our stock during prescribed “open window” periods and generally only after obtaining pre-clearance for the transaction. Although the policy does not specifically address transactions that hedge or offset a decrease in the market value of our shares (an equity swap or collar, for example), the policy applies broadly to all Company “securities.” We have not been requested to approve any hedging transaction and would deny a request to hedge our stock. We do not believe that any of our directors or executive officers have engaged in any hedging transactions relating to our shares.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our directors and executive officers and persons who own more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Our officers, directors, and greater than 10% shareholders are required by the SEC to furnish us with copies of all Section 16(a) forms they file. Based solely on review of copies of reports furnished to us or written representations that no reports were required, we believe that all Section 16(a) filing requirements were met in the last fiscal year.

Insurance and Indemnification

We have renewed our directors and officers’ indemnification insurance coverage with The Travelers Indemnity Company. This insurance covers directors and officers individually where we would be required to provide indemnification. This coverage runs from June 1, 2020 through June 1, 2021, at a total cost of approximately $83,417.