care-20240426

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Filed by a Party other than the Registrant ☐

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☐ Preliminary Proxy Statement

☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material Pursuant to § 240.14a-12


CARTER BANKSHARES, INC.
(Name of Registrant as Specified in its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☒ No fee required.

☐ Fee paid previously by preliminary materials.

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

NOTICE TO HOLDERS OF SHARES OF COMMON STOCK OF

Carter Bankshares, Inc.

1300 KINGS MOUNTAIN ROAD
MARTINSVILLE, VIRGINIA 24112

NOTICE IS HEREBY GIVEN that pursuant to its Bylaws and call of its Directors, the 2024 Annual Meeting of Shareholders of CARTER BANKSHARES, INC., Martinsville, Virginia, will be held at New College Institute, 191 Fayette St., Martinsville, Virginia 24112, Wednesday, May 22, 2024 at 10:00 a.m. Eastern Time, for the purposes of considering and voting upon the following matters:

1.To elect the 12 persons listed in the proxy statement dated April 26, 2024 to serve as Directors of the Company until the 2025 Annual Meeting of Shareholders.

2.To approve, in an advisory and non-binding vote, the compensation of the Company's named executive officers as disclosed in the proxy statement.

3.To ratify the appointment of the independent registered public accounting firm of Crowe LLP as the independent auditors of the Company for the fiscal year ending December 31, 2024.

4.To transact such other business as may be properly brought before the meeting or any adjournment thereof. The Board of Directors at the present knows of no other business to be presented at the Annual Meeting.

Only those shareholders of record at the close of business on April 5, 2024 shall be entitled to notice of the meeting and to vote at the meeting or any adjournment thereof.

Important Notice Regarding the Availability of Proxy Materials for the Shareholders’ Meeting to be held May 22, 2024. The 2024 Proxy Statement, Proxy Card, and Annual Report to Shareholders for the year ended December 31, 2023, are also available at www.CBTCares.com under “Investor” beginning April 26, 2024.

By Order of the Board of Directors

James W. Haskins
Chairman of the Board

April 26, 2024

CARTER BANKSHARES, INC.
1300 Kings Mountain Road
Martinsville, Virginia 24112
PROXY STATEMENT

FIRST MAILED ON OR ABOUT APRIL 26, 2024
FOR THE 2024 ANNUAL MEETING OF SHAREHOLDERS

This proxy statement is furnished in connection with the solicitation of the proxies to be used at the 2024 Annual Meeting of Shareholders (the “Annual Meeting”) of Carter Bankshares, Inc. (the “Company”), Martinsville, Virginia to be held May 22, 2024. The Company was incorporated on October 7, 2020, by and at the direction of the board of directors of Carter Bank & Trust (the “Bank”), for the sole purpose of acquiring the Bank and serving as the Bank’s parent bank holding company pursuant to a corporate reorganization transaction, which was completed on November 20, 2020. The Company owns all the outstanding common stock of the Bank. The reorganization is referred to herein as the “holding company reorganization”. In connection with the holding company reorganization, all directors of the Bank became directors of the Company. Certain references in this proxy statement to the Company refer to the Company and/or the Bank, and actions discussed in this proxy statement that occurred prior to November 20, 2020 were taken by the board of directors, committees and/or associates of the Bank.

Voting in Person at the Annual Meeting or by Proxy

Shareholders of record can vote in person at the Annual Meeting or by proxy. There are three ways for shareholders of record to vote by proxy:

•By Internet - You can vote over the Internet by following the instructions on the proxy card (you will need the control number on the proxy card);

•By Telephone - You can vote by telephone (toll-free) by following the instructions on the proxy card (you will need the control number on the proxy card); or

•By Mail - You can vote by mail by signing, dating and mailing the enclosed proxy card in the accompanying postage paid envelope.

If the enclosed proxy card is properly signed and returned, the shares represented thereby will be voted at the Annual Meeting in accordance with the specifications made on the proxy. When no choice is indicated, the proxy will be voted “FOR” all Director nominees in Proposal 1, “FOR” Proposal 2, "FOR" Proposal 3 and according to the recommendations of the Board of Directors (the "Board") of the Company on any other matter that may properly come before the meeting or any adjournment thereof. Proxies will extend to, and will be voted at, any properly adjourned session of the Annual Meeting. Voting by proxy over the Internet, by telephone or by mailing a proxy card will not affect your right to attend or to vote in person at the Annual Meeting.

If you hold your shares through a bank, broker or other holder of record, you will receive voting instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. If you hold your shares through a bank, broker or other holder of record, and you plan to vote in person at the Annual Meeting, you should contact the holder of record (that is, your bank, broker or other nominee) to obtain a legal proxy or broker's proxy card and bring it to the Annual Meeting as proof of your authority to vote the shares.

Revocation of Proxies

If you are a shareholder of record, you may change or revoke your proxy at any time before your shares are voted at the Annual Meeting, by any of the following methods:

•By submitting a written notice of revocation to the Secretary of the Company by the close of business on May 21, 2024;

•By submitting a completed proxy card bearing a later date than any other proxy submitted by you by the close of business on May 21, 2024;

•By Internet by following the Internet voting instructions on the proxy card (you will need the control number on the proxy card) by 1:00 a.m. Eastern Time on May 22, 2024;

•By telephone by following the telephone voting instructions on the proxy card (you will need the control number on the proxy card) by 1:00 a.m. Eastern Time on May 22, 2024;

•By attending the Annual Meeting and voting in person.

The last Internet vote, telephone vote, proxy card vote or in person vote that you submit in accordance with all instructions, including the timing deadlines set forth above, with respect to the same shares is the one that will be counted.

Solicitation of Proxies

Proxies in the form enclosed herewith are solicited by the Board. In addition to the solicitation of proxies by this proxy statement, officers and regular associates of the Company may solicit proxies from shareholders in person, by telephone, or by mail, acting without any compensation other than their regular compensation. The cost of soliciting proxies will be borne by the Company.

Questions During the Annual Meeting

During the Annual Meeting, we intend to answer questions that are pertinent to shareholders generally and the matters to be considered at the Annual Meeting, subject to time constraints. Substantially similar questions may be answered once to avoid repetition and allow for more time for other questions.

Directions to the Annual Meeting

To obtain directions to attend the Annual Meeting and vote in person, please contact the Secretary of the Company, at 276-656-1776.

Voting Rights of Shareholders

The number of shares of common stock outstanding and entitled to vote at the Annual Meeting is 23,018,897 as of the record date. Only those shareholders of record at the close of business April 5, 2024 shall be entitled to vote at the meeting.

A majority of the shares entitled to be voted, represented in person or by proxy, will constitute a quorum for the transaction of business at the meeting. Each share is entitled to one vote upon each matter to be presented at the meeting.

With regard to the election of Directors, votes may be cast “FOR” any given nominee or withheld. If a quorum is present, the nominees receiving the greatest number of the votes cast (even if less than a majority) will be elected Directors; therefore, votes withheld will have no effect.

For the advisory vote to approve the compensation of the Company's named executive officers ("NEOs") and the ratification of the selection of the independent registered public accounting firm Crowe LLP as the independent auditors of the Company for the 2024 fiscal year, votes may be cast “FOR” or “AGAINST” or you may abstain from voting. For each of these proposals, if a quorum is present, the proposal will be approved if the votes cast "FOR" the proposal exceed the votes cast "AGAINST" the proposal.

An abstention does not constitute a vote “FOR” or “AGAINST” any proposal. “Broker non-votes” (i.e., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owner or the persons entitled to vote the shares, and (ii) the broker does not have discretionary voting power on a particular matter) will be treated in the same manner as abstentions. The election of directors and the advisory vote to approve the compensation of the Company's NEOs are not considered routine matters; therefore, brokers do not have discretionary voting power with respect to these proposals. The ratification of the selection of Crowe LLP as the Company’s independent registered public accounting firm for the 2024 fiscal year is considered a routine matter; therefore, brokers do have discretionary

voting power with respect to this proposal. Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting, but will have no effect on the outcome of any of the proposals.

PROPOSAL 1

ELECTION OF DIRECTORS

The exact size of the Board shall be fixed by the Board prior to each annual meeting. As established in the Company's Articles of Incorporation and Bylaws, the number of Directors shall at no time be less than 5 nor more than 30. The Nominating and Compensation Committee has recommended and the Board has nominated the 12 persons named below to the Board to serve until the 2025 Annual Meeting of Shareholders or until their successors have been elected and qualified. Each of the nominees is a current member of the Board. The Board believes that the nominees will be available and able to serve as Directors if elected, but if any of these nominees becomes unavailable or unable to serve, the persons named in the proxy may exercise discretionary authority to vote for a substitute proposed by the Board. In no event will a proxy be voted for more than 12 Directors.

The Board is not aware of any family relationship between any Director, executive officer or person nominated by the Company to become a Director; nor is the Board aware of any involvement in legal proceedings that would be material to an evaluation of the ability or integrity of any Director, executive officer or person nominated to become a Director.

The following paragraphs provide information regarding each nominee’s specific experience, qualifications, attributes and skills that led to the conclusion that he or she should serve as a Director. We also believe that all of our Director nominees have a reputation for honesty and adherence to high ethical standards. References below to joining the Board refer to the board of directors of the Bank for years 2006 to 2020, and these persons became Directors of the Company as of the holding company reorganization. It is the intent of the persons named in the proxy, unless otherwise directed therein, to vote “FOR” the election of the following nominees:

Michael R. Bird has more than 30 years of experience in the long-term care industry. He retired from Virginia Lutheran Homes, Inc., which owns and operates a continuing care retirement community and nursing and rehabilitation center in Roanoke, Virginia and subsidized apartments with supportive services in New Market, Virginia, in April 2020 where he had held the position of Chief Financial Officer ("CFO") since May 2013. Prior to this, he served as CFO of Waveny LifeCare Network, a provider of long-term care, assisted living, independent living and home healthcare in New Canaan, Connecticut. He earned his Bachelor’s Degree in Accounting from Central Connecticut State University in New Britain, Connecticut and MBA from Sacred Heart University in Fairfield, Connecticut. Mr. Bird was appointed to the Board in 2018. Mr. Bird is qualified to serve as a Director due to his broad experience in finance and accounting.

Kevin S. Bloomfield is the managing partner at Bloomfield Partners, LLC which makes equity investments in software, technology and life science innovation companies, since 2014. Previously he was Chief Executive Officer ("CEO") of NetVentures where he helped to build a fast-growing, disruptive cloud-based Operations & Fund Accounting software platform for progressive non-profit organizations. He led the company’s growth from an early-stage startup with just a handful of customers to the market leader with over 500 customers that processed over two billion dollars of customer transactions. In 2014, NetVentures was acquired by the private equity firm Pamlico Capital. He earned his Bachelor’s Degree from Radford University. Mr. Bloomfield was appointed to the Board in 2020. Mr. Bloomfield is qualified to serve as a Director due to his business background and leadership roles within the community.

Robert M. Bolton is the founder of Iron Bay Capital and is currently the President, CEO and Chief Investment Officer to the Iron Bay Fund LP, which invests exclusively in financial services companies, specifically community banks. He has over 25 years of experience in banking, asset management and equity trading. Before forming Iron Bay Capital in 2011, Mr. Bolton worked at Mendon Capital, where he was managing director and head trader. He was responsible for overseeing four different domestic equity financial services portfolios. He was also a senior member of the investment committee and was in charge of strategy implementation and trading. Earlier in his career, Bolton was both a proprietary trader for Pershing Trading Company in New York, and an award-winning banker with The Bank of New York. He has an extensive background in both fundamental and technical research. Mr. Bolton is a retired board member of HopFed Bancorp, Inc. in Kentucky (Nasdaq: HFBC), which merged with First Financial Corporation in 2019, and Naugatuck Valley Financial Corp. in Connecticut (Nasdaq: NVSL), which merged with Liberty Bank in 2016. He earned his Bachelor’s Degree in Philosophy from St. Bonaventure University and attended the University of Rochester-Simon School of Business. Mr. Bolton was appointed to the Board in 2020. Mr. Bolton is qualified to serve as a Director due to his broad knowledge in banking and finance.

Gregory W. Feldmann is President and Founder of Skyline Capital Strategies, LLC, a management consultancy firm providing advisory services in the areas of corporate finance, private equity, business and financial strategy, mergers and acquisitions ("M&A"), and performance related studies, since 2011. He is former President, CEO and Director of StellarOne Bank. Mr. Feldmann was appointed to the Board in 2017 and currently serves as the Lead Independent Director of the Board. Mr. Feldmann is qualified to serve as a Director due to his business and banking background in commercial banking, investment banking and brokerage and private equity and experience in other executive and leadership roles, both in private and public companies.

James W. Haskins is an attorney and principal in the law firm of Young, Haskins, Mann, Gregory and Wall, P.C., Martinsville, Virginia. He also served as a director of Mountain National Bank from 1996 until its merger into Carter Bank & Trust and of Patrick Henry National Bank from 1982 until its merger into Carter Bank & Trust. Mr. Haskins was appointed as Chairman of the Board in 2017; prior to that appointment, he served as Vice Chairman of the Board. Mr. Haskins is qualified to serve on the Board due to his legal expertise and his prominence in the Company’s market area.

Phyllis Q. Karavatakis is Senior Executive Vice President, Special Projects Executive of Carter Bank & Trust since 2020. Prior to serving in this role, she served as President and Chief Banking Officer. Before she was President and Chief Banking Officer, she served as Executive Vice President and Chief Lending Officer and held other various roles in her over 45 years employed with the Bank and now with the Company. Ms. Karavatakis was appointed to the Board in 2017 and was also appointed Vice Chairman in 2017. Ms. Karavatakis is qualified to serve as a Director due to her business experience along with in-depth knowledge of the banking industry.

Jacob A. Lutz, III is a retired former partner of the law firm Troutman Pepper Hamilton Sanders LLP's ("Troutman Pepper") Richmond, Virginia office, having served with the firm and its predecessors from 1990 until his retirement in December 2021. He was Chair of Troutman Pepper's Financial Institution Practice firm-wide for 20 years, with a focus on advising banks and other financial service companies on a variety of matters including securities and capital markets, mergers and acquisitions, regulation and compliance, and community banking. Prior to this, Mr. Lutz was an attorney with the Federal Deposit Insurance Corporation ("FDIC") in its Washington, D.C. headquarters and Atlanta, Georgia regional office with responsibility for supervisory and regulatory matters as well as failed bank M&A and asset disposition. Mr. Lutz has a Bachelor's Degree in Finance from Virginia Polytechnic Institute and State University and a J.D. from William and Mary Law School. He also has a Certificate of Completion from the Harvard Law School Program of Instruction for Lawyers. Mr. Lutz was appointed to the Board in 2022. Mr. Lutz is qualified to serve as a Director due to more than 40 years of legal and regulatory expertise in the banking industry involving management of legal, credit, regulatory, strategic, operational and compliance risk, among others in the Company's market area.

E. Warren Matthews is an attorney in the firm of Harris, Matthews & Crowder, P.C and has been for over 57 years. He also served as a director of Community National Bank from 1998 until its merger into Carter Bank & Trust. Mr. Matthews is qualified to serve on the Board due to his legal expertise and his prominence in the Company’s market area.

Catharine L. Midkiff worked for more than 20 years as an Executive with General Electric Capital Corporation in risk management, operations, and finance in its Asia, Europe, and United States markets, retiring in 2017. Prior to this, she served as Vice President and Director in other General Electric entities located in the United States, Japan, Korea, Thailand and Hong Kong. A Certified Public Accountant, Ms. Midkiff has a Bachelor’s Degree in Commerce with a specialization in Finance and Accounting from the University of Virginia. She is certified in Six Sigma as a master black belt, the highest level credential in management techniques to improve business processes, primarily by reducing risks, and has completed numerous specialty programs, such as an asset-based finance program from the University of Pennsylvania’s Wharton School and the Commercial Finance Association. Ms. Midkiff was appointed to the Board in 2018. Ms. Midkiff is qualified to serve as a Director due to her broad based experience in accounting, risk management and finance with executive roles in public companies.

Curtis E. Stephens is an experienced Board Member, Executive, Entrepreneur and Advisor in the consumer services, transportation, real estate, manufacturing, technology and sports and entertainment industries. He is a Co-Founder of Name, Image, and Likeness ("NIL") Metaverse Studios, Inc. since 2021, an early stage business developing and bringing together a Web3 technology platform in the collegiate NIL space. He has served as Chief Operating Officer

(on a fractional basis) of United Network for Collegiate Pantry Sharing, Inc., a collaborative initiative that seeks to address short-term food relief for those experiencing food insecurities while enrolled as students at universities and colleges within the United States since 2020. In 2019, Mr. Stephens was Area Vice President-Administration-Mid Atlantic Region for StoneMor Partners, L.P., the second largest network of cemeteries and funeral homes in the United States and was responsible for managing and mitigating legal and regulatory compliance risks. Prior to this, he was Certified as a Contract Advisor by National Football League Players Association and served as Managing Director of Marketing Xchange Worldwide, LLC from September 1997 until October 2017, a full-service sports agency that specialized in both contract negotiation and venture management for professional athletes in the National Football League. He was Vice President, Administration and Operations of Stephens Transportation Corporation from January 2010 until December 2018. Mr. Stephens holds an MBA from Virginia Commonwealth University-School of Business and a Bachelors' Degree in Economics from Rutgers University. Mr. Stephens also holds various certificates from Harvard Business School, Directors Chief Risk Officer Institute and Private Directors Association. Mr. Stephens was appointed to the Board in 2022. Mr. Stephens is qualified to serve as a Director due to his business background, leadership roles, and broad experience in finance, risk management and technology transformation in private and public companies.

Litz H. Van Dyke is CEO of Carter Bankshares, Inc. and Carter Bank & Trust and previously served as Executive Vice President. Prior to joining Carter Bank & Trust in 2016, Mr. Van Dyke was a Practice Manager for CCG Catalyst Consulting Group based in Phoenix, Arizona, assisting banks with strategic advisory services. He served as Chief Operating Officer for StellarOne Corporation from 2008 to 2012. Mr. Van Dyke was appointed to the Board in 2017. Mr. Van Dyke is qualified to serve as a Director due to his prior experience in senior executive roles with a number of Virginia-based banking institutions with responsibilities including credit administration, regulatory risk management, information technology ("IT"), operations, marketing, and facilities as well as extensive work with commercial, retail, and mortgage lines of business.

Elizabeth L. Walsh is the managing member of Eliz, LLC, a consulting practice specializing in accounting, IT, data analytics and real estate projects since 2023. Ms. Walsh worked in Curriculum Development from 2018 to 2023 for Becker Professional Education ("Becker") where she primarily created an emerging technology curriculum. Ms. Walsh also previously wrote Continuing Professional Education courses for the American Institute of Certified Public Accountants where she served as Director of Knowledge Management, Becker and Agate Publishing. Ms. Walsh earned her Bachelor’s Degree in Accounting Information Systems from Virginia Polytechnic Institute and State University. Ms. Walsh was appointed to the Board in 2020. Ms. Walsh is qualified to serve as a Director due to her broad experience in accounting, technology and finance.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE DIRECTOR NOMINEES LISTED ABOVE.

INDEPENDENCE AND COMMITTEE MEMBERSHIPS

The following individuals are Directors of the Company. Ages are given as of April 19, 2024:

Name
Current Position

Age

Director Since

Independent

Committee Memberships

Audit

Investment/Interest Rate Risk

Credit Risk

Nominating & Compensation

Executive & Governance

Enterprise Risk Management

Michael R. Bird

Retired CFO of Virginia Lutheran Homes, Inc.

2018**

YES

Chair

Kevin S. Bloomfield

Managing Partner at Bloomfield Partners, LLC

2020**

YES

Robert M. Bolton

Founder and President, CEO and Chief Investment Officer of Iron Bay Capital

2020**

YES

Gregory W. Feldmann

President and Founder of Skyline Capital Strategies, LLC

2017**

YES

Chair

James W. Haskins

Chairman of the Board of Directors; Attorney and Principal of Young, Haskins, Mann, Gregory and Wall, P.C.

1982*

Chair

Phyllis Q. Karavatakis

Vice Chairman of the Board of Directors; Senior Executive Vice President, Special Projects Executive of Carter Bank & Trust

2017**

Jacob A. Lutz, III

Retired Partner of the law firm Troutman Pepper Hamilton Sanders LLP

2022

YES

Chair

E. Warren Matthews

Attorney at Harris, Matthews & Crowder, P.C.

1998*

YES

Catharine L. Midkiff

Retired Executive from General Electric Capital Corporation

2018**

YES

Chair

Curtis E. Stephens

Co-Founder of Name, Image, and Likeness Metaverse Studios, Inc. and Chief Operating Officer of United Network for Collegiate Pantry Sharing, Inc.

2022

YES

Litz H. Van Dyke

CEO of Carter Bank & Trust and Carter Bankshares, Inc.

2017**

Elizabeth L. Walsh

Managing Member of Eliz, LLC

2020**

YES

* Indicates year first served as a director of one of the 10 banking institutions that were merged into and created Carter Bank & Trust in 2006 (each a “Merged Bank” and collectively, the “Merged Banks”). The Merged Banks were Blue Ridge Bank, N.A., Central National Bank, Community National Bank, First National Bank, First National Exchange Bank, Mountain National Bank, Patrick Henry National Bank, Patriot Bank, N.A., Peoples National Bank and Shenandoah National Bank.

** Indicates the year the director joined the board of directors of the Bank prior to the holding company reorganization.

BOARD SKILLS & DEMOGRAPHICS

Bird

Bloomfield

Bolton

Feldmann

Haskins

Karavatakis

Lutz

Matthews

Midkiff

Stephens

Van Dyke

Walsh

Skills and Experience

Financial Reporting/Audit/Capital Planning

•

Leadership

•

Technology

•

Risk Management

•

Business Operations

•

Corporate Governance

•

Cybersecurity and Information Security

•

Board Demographics

Age

Gender

Tenure (years)

EXECUTIVE OFFICERS OF THE REGISTRANT

The following individuals are executive officers of the Company. Ages are given as of April 19, 2024:


Name	Age	Position	Business Experience During Past Five Years
A. Loran Adams	63	Executive Vice President and Director of Regulatory Risk Management of the Bank since 2018	Prior to 2018, Senior Vice President and Director of Regulatory Risk Management of the Bank since 2017; prior to joining the Bank, Director of Internal Audit, Georgia Bank & Trust from 2009 to 2016.
Wendy S. Bell	60	CFO of the Company since November 2020; Senior Executive Vice President and CFO of the Bank since 2020	Executive Vice President and CFO of the Bank from 2017 to 2019; prior to joining the Bank, Senior Vice President and Senior Finance Officer, First Commonwealth Financial Corporation from 2010 to 2017.
Jane Ann Davis	61	Executive Vice President and Chief Administrative Officer of the Bank since 2017	Prior to 2017, Executive Vice President, CFO and Chief Operating Officer of the Bank.
Tony E. Kallsen	56	Senior Executive Vice President and Chief Credit Officer of the Bank since 2023	Prior to 2023, Executive Vice President and Chief Credit Officer of the Bank since 2018; prior to joining the Bank, Senior Vice President and Senior Credit Officer, First Commonwealth Financial Corporation from 2010 to 2017.
Phyllis Q. Karavatakis	68	Senior Executive Vice President, Special Projects Executive of the Bank since 2020	Prior to 2020, President and Chief Banking Officer of the Bank since 2017, President and Chief Administrative Officer of the Bank since 2016, Executive Vice President and Chief Lending Officer of the Bank since 2014.
Bradford N. Langs	58	President and Chief Strategy Officer of the Bank since 2020	Prior to 2020, Executive Vice President and Chief Strategy Officer of the Bank from 2017 to 2019; prior to joining Carter Bank & Trust, Chief Risk Officer, Chief Credit Officer and Treasurer, Coastal States Bank from 2009 to 2017.
Matthew M. Speare	57	Senior Executive Vice President and Chief Operations Officer of the Bank since 2023	Prior to 2023, Executive Vice President and Chief Information Officer of the Bank since 2017; prior to joining the Bank, Executive Vice President and Chief Information Officer, Regions Bank from 2013 to 2017.
Litz H. Van Dyke	60	CEO of the Company since November 2020; CEO of the Bank since 2017	Prior to 2017, Executive Vice President of the Bank since July 2016; prior to joining the Bank, Practice Manager, CCG Catalyst Group from 2012 to 2016.

PRINCIPAL BENEFICIAL OWNERS OF CARTER BANKSHARES, INC. COMMON STOCK

The following table sets forth certain information concerning the persons known by us to be the beneficial owners of more than 5% of the outstanding shares of the Company’s common stock as of April 5, 2024.


Name and Address	Number of Shares Beneficially Owned	Percentage of Class (1)
AllianceBernstein L.P. 501 Commerce Street Nashville, TN 37203	1,366,496 (2)	5.94%
BlackRock, Inc. 50 Hudson Yards New York, NY 10001	1,730,464 (3)	7.52%
The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355	1,227,878 (4)	5.33%

(1) Percentages are based on 23,018,897 shares of common stock issued and outstanding at April 5, 2024.

(2) Based solely on information as of December 31, 2023 contained in Amendment No. 3 to Schedule 13G filed with the Securities and Exchange Commission ("SEC") on February 14, 2024 by AllianceBernstein L.P., including notice that it has sole investment power as to 1,366,496 shares and sole voting power as to 1,229,252 shares.

(3) Based solely on information as of December 31, 2023 contained in Amendment No. 2 to Schedule 13G filed with the SEC on January 26, 2024 by BlackRock, Inc., including notice that it, through various subsidiaries, has sole investment power as to 1,730,464 shares and sole voting power as to 1,696,306 shares.

(4) Based solely on information as of December 29, 2023 contained in Amendment No. 1 to Schedule 13G filed with the SEC on February 13, 2024 by The Vanguard Group, including notice that it has sole investment power as to 1,208,809 shares, shared investment power as to 19,069 shares and shared voting power as to 10,365 shares. These shares may be owned by The Vanguard Group, Inc.'s clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts.

BENEFICIAL OWNERSHIP OF CARTER BANKSHARES, INC. COMMON STOCK BY DIRECTORS AND OFFICERS

The following table sets forth, as of April 5, 2024, the beneficial ownership of the Company’s common stock of each Director, the executive officers identified in the Summary Compensation Table (referred to as our NEOs) and the Company’s current Directors and executive officers as a group. For purposes of the table below, beneficial ownership has been determined in accordance with the provisions of Rule 13d-3 of the Securities Exchange Act of 1934 (the “Exchange Act”) under which, in general, a person is deemed to be the beneficial owner of a security if he/she has or shares the power to vote or direct the voting of the security or the power to dispose of or direct the disposition of the security, or if he/she has the right to acquire beneficial ownership of the security within sixty days. The shares listed in the table below include restricted stock that has not yet vested and is restricted as to the sale or other transfer. The shares listed in the table below do not include an aggregate of 27,848 and 46,331 shares underlying the target percentage of performance units ("PUs") that were granted to Mr. Van Dyke, Mr. Langs, Ms. Bell, Mr. Kallsen, Mr. Speare and two other executive officers who are not NEOs on March 7, 2022 and January 5, 2024, respectively, but remain subject to vesting conditions more than sixty days after April 5, 2024.


Name	Amount and Nature of Beneficial Ownership	Ownership as a Percentage of Common Stock Outstanding (1)
Bell, Wendy S.	29,486	*
Bird, Michael R.	12,947	*
Bloomfield, Kevin S.	21,729	*
Bolton, Robert M. (2)	67,401	*
Feldmann, Gregory W.	13,572	*
Haskins, James W. (3)	63,824	*
Kallsen, Tony E.	11,580	*
Karavatakis, Phyllis Q.	18,066	*
Langs, Bradford N.	18,168	*
Lutz III, Jacob A.	16,061	*
Matthews, E. Warren	16,784	*
Midkiff, Catharine L.	17,227	*
Speare, Matthew M.	29,102	*
Stephens, Curtis E.	5,403	*
Van Dyke, Litz H.	45,458	*
Walsh, Elizabeth L. (4)	25,840	*

All Directors and Executive Officers as a Group (18 Persons)(5)	428,707	1.86%

(1) Percentages are based on 23,018,897 shares of common stock issued and outstanding at April 5, 2024.

(2) Mr. Bolton holds 56,500 shares for Iron Bay Fund, LP, of which he is a limited partner.

(3) Shares reported include 20,000 shares of common stock pledged as security.

(4) Includes (i) 11,300 shares held by Ms. Walsh as custodian for an adult family member over which shares Ms. Walsh shares voting and investment power; and (ii) 4,769 shares held by Carriage Square, Ltd. over which shares Ms. Walsh shares voting and investment power by virtue of her ownership interest in Carriage Square, Ltd. and her officer and director roles held at such entity.

(5) Includes shares held by A. Loran Adams and Jane Ann Davis.

*Less than 1% of the outstanding common stock.

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Exchange Act requires that Directors and executive officers, and persons who beneficially own more than 10% of the Company’s equity securities, file reports of ownership and reports of changes in ownership of the Company’s outstanding equity securities. Based on a review of these reports filed by the Company’s officers and Directors, the Company believes that its officers and Directors complied with all filing requirements under Section 16(a) of the Exchange Act during 2023, except that executive officer Ms. Jane Ann Davis reported one transaction late on a Form 4 and executive officer Mr. A. Loran Adams reported two transactions late on a Form 4.

PROPOSAL 2

ADVISORY AND NON-BINDING VOTE TO APPROVE EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, and related SEC regulations enable our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our NEOs as disclosed in this proxy statement in accordance with the SEC rules relating to compensation disclosure. The advisory vote on executive compensation is not a vote on the Company’s general compensation policies. Section 14A of the Exchange Act, requires the Company to hold the advisory vote on executive compensation at least once every three years. At the Company's 2023 Annual Meeting of Shareholders, shareholders voted on our say-on-pay frequency proposal indicating a preference for holding such advisory vote on executive compensation every year. Accordingly, the Board decided that the advisory vote on executive compensation would be held every year, at least until the next advisory say-on-pay frequency vote.

With assistance from its independent compensation consultant, Pearl Meyer & Partners, LLC ("Pearl Meyer"), the Nominating and Compensation Committee regularly reviews the compensation programs for our NEOs to ensure they achieve the desired goal of striking a balance between recognition of recent achievements and aligning the interests of management on a longer-term basis with that of the Company’s shareholders. The Company’s compensation program is designed to offer competitive compensation to associates based on each individual’s contribution to the Company’s success. As such, the program provides a competitive compensation package to attract and retain capable associates. Pearl Meyer assists the Nominating and Compensation Committee in this effort by annually recommending a peer group of financial institutions with reasonably similar market capitalization and business strategy to the Company and conducting an external market study for the Nominating and Compensation Committee using the peer group to assess the competitiveness of current pay opportunities for our NEOs. Please read the “Compensation Discussion & Analysis” beginning on page 14 for additional details about our executive compensation programs, including information about the fiscal year 2023 compensation of our NEOs.

We are asking our shareholders to indicate their approval of our NEO compensation as described in this proxy statement. The proposal, commonly known as “say-on-pay” proposal, is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the policies and practices described in this proxy statement.

Accordingly, the Board recommends that the shareholders approve the following advisory resolution:

“RESOLVED, that the shareholders approve, on an advisory basis, the compensation paid to the Company’s NEOs as disclosed in the Company’s proxy statement for the 2024 Annual Meeting of Shareholders pursuant to compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, and the related narrative disclosure.”

This vote is advisory and not binding on the Company, the Board or the Nominating and Compensation Committee. However, the Board and the Nominating and Compensation Committee value the opinions of our shareholders and will consider the outcome of this advisory vote when considering future executive compensation decisions. We anticipate that the next vote on a say-on-pay proposal will occur at the 2025 Annual Meeting of Shareholders.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.

EXECUTIVE COMPENSATION

Compensation Discussion & Analysis

The Company’s compensation program is designed to offer competitive compensation to associates based on each individual’s contribution to the Company’s overall success. As such, the program provides a competitive compensation package to attract and retain capable associates.

The compensation and benefits program consists of salary, annual and long-term incentive opportunity, equity compensation, nonqualified deferred compensation plan, life, health and disability insurance and limited perquisites, such as a monthly automobile allowance, reimbursement of relocation and temporary housing expenses and legal expenses relating to employment agreement review, as appropriate, and modest tax gross-ups on the same, which the Company believes are important to attract the most qualified candidates. The Company has a single health insurance plan for all officers and full-time associates who meet the eligibility requirements. The Company also provides a 401(k) and Profit Sharing Plan, group life insurance plan and short-term disability plan for officers and full-time associates. The Company has entered into employment or change of control severance agreements with its NEOs, which are further described under “Employment/Change of Control Severance Agreements”.

The Nominating and Compensation Committee (for purposes of this "Executive Compensation"section, the “Committee”) has the responsibility for administering the Company’s overall compensation program and for setting the salaries and annual and long-term incentive opportunities for the Company’s senior officers. In setting the compensation of the Company’s senior officers, the Committee generally relies on the recommendations of the Chairman, CEO and the Board members’ own significant personal knowledge of the compensation provided to other, similarly situated, executives in banking and other industries in the local area, as well as recommendations from the Committee’s independent compensation consultant, Pearl Meyer, who maintains a significant focus on banking industry compensation. Pearl Meyer annually recommends a peer group of financial institutions with reasonably similar market capitalization and business strategy to the Company and conducts an external market study for the Committee using the peer group to assess the competitiveness of current pay opportunities for our executive officers. For 2023 compensation determinations, the peer companies consisted of twenty-one regional U.S. commercial banks ranging in asset size from approximately $3.1 to $7.5 billion. As of December 31, 2022, the Company had $4.2 billion in total assets versus the peer group median of $4.6 billion. The following financial institutions were included in the 2023 peer group:


American National Bankshares, Inc.			Danville, VA
Bar Harbor Bankshares			Bar Harbor, ME
Capital City Bank Group, Inc.			Tallahassee, FL
Capstar Financial Holdings, Inc.			Nashville, TN
City Holding Company			Charleston, WV
CNB Financial Corporation			Clearfield, PA
Community Trust Bancorp, Inc.			Pikeville, KY
First Community Bankshares, Inc.			Bluefield, VA
Great Southern Bancorp, Inc.			Springfield, MO
HomeTrust Bancshares, Inc.			Asheville, NC
Mid Penn Bancorp, Inc.			Millersburg, PA
Peoples Bancorp, Inc.			Marietta, OH
Peoples Financial Services Corp.			Hallstead, PA
Primis Financial Corp.			McLean, VA
Republic Bancorp, Inc.			Louisville, KY
Shore Bancshares, Inc.			Easton, MD
SmartFinancial, Inc.			Knoxville, TN
Stock Yards Bancorp, Inc.			Louisville, KY
Summit Financial Group, Inc.			Moorefield, WV
The First Bancshares, Inc.			Hattiesburg, MS
Univest Financial Corporation			Souderton, PA

In 2023, the Committee engaged Pearl Meyer to assist in an evaluation of the competitiveness of the executive compensation program and to provide information on executive compensation at these peer banks, including market trends and developments in executive compensation. The Committee reviews each executive’s performance and contribution to the overall Company goals, as well as recommendations of Pearl Meyer, in determining the level of salary and other compensation for the coming year. The Committee considers the peer data to ensure that the Company’s compensation programs are competitive and close to the median of market practices of the peer companies, although for certain positions the Company’s cash and short-term incentive compensation remains slightly below the median of the peer group but within an overall competitive range.

When setting compensation for fiscal 2023 and in determining compensation policies, the Committee also took into account the results of the shareholder advisory vote on executive compensation that took place in May 2023. In that vote, which is advisory and non-binding, shareholders approved the compensation of our NEOs as disclosed in the proxy statement for the 2023 Annual Meeting of Shareholders. A substantial majority (85.6%) of votes cast approved the executive compensation program described in the Company’s proxy statement for the 2023 Annual Meeting of Shareholders. The vote results were taken into consideration when setting the compensation for 2023 and are being taken into consideration by the Committee when setting the compensation for 2024. Additionally, since market practice and the Company's business needs continue to evolve, the Committee continually evaluates our compensation program, with input from Pearl Meyer, and makes changes when warranted.

Analysis of Risk Associated with Compensation Policies and Practices

The Committee oversees an annual review of our compensation programs to determine whether such programs encourage excessive risk-taking by our associates. The most recent review was conducted in April 2024. Management and the Committee participated in the review, which included identification of the relevant compensation policies and practices, review of potential related risks, and analysis of risk-mitigating factors, including the Company’s system of internal controls and oversight. All executive compensation incentive program payouts and awards are subject to periodic reviews by the Company's internal audit department. The Committee shared the information with the Enterprise Risk Management ("ERM") Committee, whose Chair, Mr. Jacob A. Lutz, III, is also a member of the Nomination and Compensation Committee. Beginning in June 2024, all executive compensation incentive program payouts and awards are subject to periodic reviews by the Company's internal audit department.

The Committee determined that the potential risks arising from our compensation programs are not reasonably likely to have a material adverse effect on the Company. In making this determination, the Committee took into account the structure of our compensation programs, the amount of cash compensation available to associates in the form of base salary, the involvement of the Committee in setting compensation for executive officers and in particular for those individuals who can commit the Company’s capital or who manage the Company’s risk, and the oversight of the Board in monitoring certain risk tolerances and internal controls.

Employment / Change of Control Severance Agreements

The Company has entered into employment agreements with Mr. Van Dyke, Ms. Bell, Mr. Speare and Mr. Langs and a change of control severance agreement with Mr. Kallsen. Each of these agreements was originally entered into with the Bank and was amended and restated effective as of November 20, 2020 in connection with the holding company reorganization to add the Company as a party and make corresponding and other administrative changes. The terms of the agreements are substantially similar to each other as described below.

Van Dyke Employment Agreement

Mr. Van Dyke and the Company are parties to an amended and restated employment agreement, dated as of November 20, 2020 (the “Van Dyke Agreement”), which had an initial term of two years, beginning on October 1, 2017. The employment term automatically renewed most recently on October 1, 2023 and will automatically renew on each subsequent two-year anniversary for an additional two-year term unless either party provides at least 60 days’ advance notice of non-renewal.

Pursuant to the Van Dyke Agreement, Mr. Van Dyke’s current annual base salary is $645,750, subject to increase by the Company’s Board at its discretion. He also receives $700 per month as an automobile allowance. Mr. Van Dyke is eligible to participate in the Company’s annual bonus plan, associate benefit plans and programs on terms offered to similarly situated associates and is eligible to receive equity awards in the discretion of the Company’s Board.

The Company may terminate Mr. Van Dyke’s employment with or without cause (as defined in the Van Dyke Agreement), with or without notice. Mr. Van Dyke also may voluntarily terminate his employment with the Company at any time for Good Reason (as defined in the Van Dyke Agreement). In the event the Company terminates Mr. Van Dyke’s employment without cause or Mr. Van Dyke terminates his employment for Good Reason, Mr. Van Dyke will receive any unpaid base salary, any annual bonus compensation earned and awarded but not yet paid, and any vested benefits (collectively, the “Accrued Obligations”). He will also receive a monthly severance payment equal to one-twelfth of his annual base salary for 18 months and continued associate health insurance coverage for 18 months. Payment of these severance benefits is subject to receipt by the Company of a signed release and waiver of claims and satisfaction of other requirements, conditions, and limitations set forth in the Van Dyke Agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.

In the event the Company terminates Mr. Van Dyke’s employment without cause or Mr. Van Dyke terminates his employment for Good Reason within two years after a Change of Control (as defined in the Van Dyke Agreement), Mr. Van Dyke will receive the Accrued Obligations, plus a lump sum severance payment equal to 2.99 times his annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Mr. Van Dyke’s highest annual bonus earned from the Company for the three years prior to termination. The Van Dyke Agreement provides for these Change of Control severance benefits on a “best net” approach, under which Mr. Van Dyke’s Change of Control benefits will be reduced to avoid the golden parachute excise tax under Section 280G of the Internal Revenue Code unless without such a reduction he would receive more after-tax compensation than with a reduction. Payment of these severance benefits is subject to receipt by the Company of a signed release and waiver of claims and satisfaction of other requirements, conditions, and limitations set forth in the Van Dyke Agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.

In the event of a termination for Cause or due to Incapacity, Mr. Van Dyke will be entitled to receive his Accrued Obligations. If he dies while employed by the Company, the Company will pay Mr. Van Dyke’s spouse, if his spouse survives him, or, if not, his estate, his Accrued Obligations and an amount equal to his base salary from the date of his death through the end of the month in which his death occurs.

Bell Employment Agreement

Ms. Bell and the Company are parties to an amended and restated employment agreement, dated as of November 20, 2020 (the “Bell Agreement”). The terms of the Bell Agreement are substantially the same as the Van Dyke Agreement, except as follows. The initial term of the Bell Agreement was two years, beginning on July 24, 2017. The employment term automatically renewed most recently on July 24, 2023 and will automatically renew on each subsequent anniversary for an additional one-year term unless either party provides at least 60 days’ advance notice of non-renewal.

Pursuant to the Bell Agreement, Ms. Bell’s current annual base salary is $390,000, subject to increase by the Company’s Board in its discretion. She also receives $500 per month as an automobile allowance.

In the event the Company terminates Ms. Bell’s employment without cause or Ms. Bell terminates her employment for Good Reason, in addition to the Accrued Obligations, she will also receive a monthly severance payment equal to one-twelfth of her annual base salary for 12 months and continued associate health insurance coverage for 12 months. In the event the Company terminates Ms. Bell’s employment without cause or Ms. Bell terminates her employment for Good Reason within two years after a Change of Control (as defined in the Bell Agreement), Ms. Bell will receive the Accrued Obligations, plus a lump sum severance payment equal to 24 months of her annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Ms. Bell’s highest annual bonus earned from the Company for the three years prior to termination.

Speare Employment Agreement

Mr. Speare and the Company are parties to an amended and restated employment agreement, dated as of November 20, 2020 (the “Speare Agreement”). The terms of the Speare Agreement are substantially the same as the Van Dyke Agreement, except as follows. The initial term of the Speare Agreement was one year, beginning on July 3, 2017. The employment term automatically renewed most recently on July 3, 2023 and will automatically renew on each subsequent anniversary for an additional one-year term unless either party provides at least 60 days’ advance notice of non-renewal.

Pursuant to the Speare Agreement, Mr. Speare’s current annual base salary is $375,000, subject to increase by the Company’s Board in its discretion. He also receives $500 per month as an automobile allowance.

In the event the Company terminates Mr. Speare’s employment without cause or Mr. Speare terminates his employment for Good Reason, in addition to the Accrued Obligations, he will also receive a monthly severance payment equal to one-twelfth of his annual base salary for 12 months and continued associate health insurance coverage for 12 months. In the event the Company terminates Mr. Speare’s employment without cause or Mr. Speare terminates his employment for Good Reason within two years after a Change of Control (as defined in the Speare Agreement), Mr. Speare will receive the Accrued Obligations, plus a lump sum severance payment equal to 24 months of his annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Mr. Speare’s highest annual bonus earned from the Company for the three years prior to termination.

Langs Employment Agreement

Mr. Langs and the Company are parties to an amended and restated employment agreement, dated as of November 20, 2020 (the “Langs Agreement”). The terms of the Langs Agreement are substantially the same as the Van Dyke Agreement, except as follows. The initial term of the Langs Agreement was one year, beginning on June 19, 2017. The employment term automatically renewed most recently on June 19, 2023 and will automatically renew on each subsequent anniversary for an additional one-year term unless either party provides at least 60 days’ advance notice of non-renewal.

Pursuant to the Langs Agreement, Mr. Langs’ current annual base salary is $515,000, subject to increase by the Company’s Board in its discretion. He also receives $500 per month as an automobile allowance.

In the event the Company terminates Mr. Langs’ employment without cause or Mr. Langs terminates his employment for Good Reason, in addition to the Accrued Obligations, he will also receive a monthly severance payment equal to one-twelfth of his annual base salary for 12 months and continued associate health insurance coverage for 12 months. In the event the Company terminates Mr. Langs’ employment without cause or Mr. Langs terminates his employment for Good Reason within two years after a Change of Control (as defined in the Langs Agreement), Mr. Langs will receive the Accrued Obligations, plus a lump sum severance payment equal to 24 months of his annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Mr. Langs’ highest annual bonus earned from the Company for the three years prior to termination.

Kallsen Change of Control Severance Agreement

Mr. Kallsen and the Company are parties to an amended and restated change of control severance agreement, dated as of November 20, 2020 (the “Kallsen Agreement”).

In the event the Company terminates Mr. Kallsen's employment without cause or Mr. Kallsen resigns for Good Reason, in each case within two years after a Change of Control (as defined in the Kallsen Agreement), Mr. Kallsen will receive the Accrued Obligations. If Mr. Kallsen executes and delivers to the Company a signed release and waiver of claims, Mr. Kallsen will also receive an amount equal to his annual base salary plus his average annual bonus payable from the Company for the three years prior to termination, payable over 12 months, and a lump sum payment equal to continued associate health insurance coverage for 12 months. The Kallsen Agreement provides for these Change of Control severance benefits on a “best net” approach, under which Mr. Kallsen’s Change of Control benefits will be reduced to avoid the golden parachute excise tax under Section 280G of the Internal Revenue Code unless without such a reduction he would receive more after-tax compensation than with a

reduction. Payment of these severance benefits is subject to satisfaction of other requirements, conditions, and limitations set forth in the Kallsen Agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.

In the event of a termination for cause or due to death or Incapacity within two years after a Change of Control, Mr. Kallsen will be entitled to receive any unpaid base salary and any vested benefits.

Base Salaries

Base salaries provide appropriate fixed cash compensation necessary to attract and retain executive talent. Base salaries are intended to be competitive. The Committee reviews the base salaries of our NEOs on an annual basis as well as at the time of any promotion or other material change in responsibilities. In addition to engaging independent compensation consultant, Pearl Meyer on base salaries, the Committee also considers the following when setting base salaries: (a) the individual executive’s overall performance and contribution to the Company’s performance, (b) overall Company performance and (c) the individual’s base salary relative to other executive officers. The Committee approved base salary increases for each NEO in January 2023, effective January 2, 2023 to maintain comparability to peers at the median level.


Executive	2023 Base Salary ($)	2022 Base Salary ($)	% Increase
Litz H. Van Dyke	$645,750	$615,000	5.0%
Bradford N. Langs	$515,000	$495,000	4.0%
Wendy S. Bell	$390,000	$375,000	4.0%
Tony E. Kallsen	$340,000	$322,000	5.6%
Matthew M. Speare	$375,000	$352,000	6.5%

Annual Incentive Plan

In November 2018, with assistance from its independent compensation consultant, the Governance & Compensation Committee (which became the “Nominating and Compensation Committee” in August 2019) adopted an annual incentive plan for the purpose of awarding annual bonuses to certain associates based upon the achievement of annual performance objectives established each year under the plan. This was implemented in order to position the Company to be competitive with its peers with respect to overall executive compensation. The annual incentive plan covers the Company’s executive officers and certain executive vice presidents (each, a “Participant”), which includes all of the Company’s NEOs. The goal of the annual incentive plan is to motivate Participants to maximize shareholder value by achieving performance while limiting risk appropriately and maintaining the safety and soundness of the Company.

The plan is an annual incentive plan that is approved each year with a performance year running from January 1 through December 31. The Committee oversees the administration of the plan, as well as plan design, determination of performance measures, goals and weightings and award payouts, partly based on input from the Company’s CEO.

At the beginning of each year, the Committee develops a bonus template for each Participant. The primary elements of each template are:

•Percentage of base salary opportunity,

•Performance measures and goals selected from the Company’s approved budget numbers for the year or other objective measures such as asset quality ratios, and

•Weightings assigned to the selected performance measures.

Under the annual incentive plan, a Participant can earn a bonus of up to a specific percentage of the Participant’s base salary. For 2023, these percentages for the NEOs were as follows:


			Participant			% of Base Salary
			CEO			60%
			President & Chief Strategy Officer, CFO			55%
			Chief Operations Officer, Chief Credit Officer			50%

Performance measures under the plan are determined each year, in the categories of profitability, capital effectiveness and safety and soundness. The performance measures, goals and weightings assigned to them may change from year to year, and are typically the same for all Participants in any given year, although that is subject to change.

The amount of bonus earned by a Participant each year will depend on the Company’s achievement with respect to the performance measure goals selected for that year, multiplied by the applicable weightings, multiplied by the Participant’s base salary and percentage of base salary opportunity.

Bonus amounts earned based on the Company’s performance for a year are reviewed and certified by the Committee and paid to the Participant between January 1 and March 15 of the following year, generally shortly after the year’s results have been finalized and the Company’s earnings for the year have been announced. The plan has both short-term and long-term components, as the bonus amounts currently are paid approximately 2/3 in cash and 1/3 in shares of restricted common stock of the Company, with time-based vesting in three annual installments.

For 2023, the Committee selected the same performance measure goals and weightings for each of the Participants, including the Company's NEOs. The following table shows the performance measure goals for the annual incentive plan for 2023, as well as the weightings of these goals and the achievement with respect to each goal:


Performance Measure	Weighting	Maximum Performance Goal	Weighted Average Performance Achieved	Performance Achieved	Percentage of Performance Achieved
Core Earnings per Share (1)	25%	$2.75	—%	$1.11	—%
Core ROAA (1)	25%	1.58%	—%	0.59%	—%
Core ROATCE (1)	25%	16.82%	—%	7.51%	—%
Core Efficiency (1)	25%	50.47%	—%	72.54%	—%
Weighted Average Bonus Amount Earned			—%

(1) Non-GAAP core earnings per share, core return on average assets ("ROAA"), core return on average tangible common equity ("ROATCE") and core efficiency are calculated utilizing financial data on a GAAP basis and excluding all extraordinary items, whether positive or negative.

Following the end of the year, the Committee reviewed the Company’s performance with respect to these goals for 2023. Due to the impacts of a single large nonperforming loan ("NPL") relationship, none of the Company's performance goals were met. As a result, the participants were awarded 0% of their annual incentive award under the annual incentive plan. The Committee discussed the performance situation with Pearl Meyer and recommended to the full Board of Directors that each Participant be granted a discretionary bonus of 15% of annual salary to reflect the outstanding work the Participants had completed in 2023, which included strong loan growth, successful expansion in high-growth markets and successful management of liquidity and deposit stability in a challenging market environment, although many of the positive effects of this outstanding work were muted in the Company's financial performance for 2023 by the impacts of the single large NPL relationship on the Company. The Committee's recommendation also reflected the Company's compensation philosophy, which, in part, seeks to offer competitive compensation to attract and retain capable associates and to improve the performance of the Company. The Board of Directors agreed with this recommendation and the Participants were issued a cash only bonus in February 2024. These cash bonus amounts earned by the NEOs for 2023 performance are reported as "Bonus" for 2023 in the Summary Compensation Table.

Long-Term Incentive Plan

The Committee approved the long-term incentive program (the "LTIP") for certain associates, under which shares of restricted stock and performance units are to be awarded periodically under the Carter Bankshares, Inc. Amended and Restated 2018 Omnibus Equity Incentive Plan (the "Equity Plan"). The LTIP covers the Company’s executive officers and certain executive vice presidents (each, a “Participant”), which includes all of the Company’s NEOs. The goal of the LTIP is to promote leadership retention and management continuity, to reward management for strong sustained value creation and financial performance and to align the executives' interests with those of our shareholders through appropriately-sized grants of equity compensation. It is the Company's intent to maximize shareholder value by achieving performance while limiting risk appropriately and maintaining the safety and soundness of the Company by awarding shares of restricted stock and performance units.

The Committee granted the first awards under the LTIP in March 2022. Due to uncertainty with respect to the Company's financial performance in 2023, no awards under the LTIP were granted in 2023. In late 2023, the Committee approved the grant of LTIP awards for 2024, which were granted on January 5, 2024. Based on the prior recommendation of Pearl Meyer, the grants were divided as 70% performance-based as performance units and 30% retention-based as restricted shares.

The time-based restricted stock awards cliff-vest on the fifth anniversary of the grant date, subject to accelerated vesting in certain circumstances.

The performance units granted under the LTIP can be earned from 0% to 110% of target based on achieving the applicable performance goals and will be paid to the extent earned after the end of the three-year performance period, subject to accelerated vesting in certain circumstances. The 2024 performance units are subject to four equally weighted performance-based goals established by the Committee: return on average assets ("ROAA"), core efficiency ratio, total shareholder return ("TSR") and the non-performing assets ratio. The Committee added the TSR metric as a performance goal to align driving shareholder value with management's long-term incentive. This is also a recommendation and best practice highlighted in executive compensation research by proxy advisory services, such as Glass Lewis and Institutional Shareholder Services ("ISS"). Achievement with respect to these goals will be measured by comparing the Company's performance during the three-year performance period of January 1, 2024 to December 31, 2026 to a peer group consisting of the companies listed on the ABAQ index of publicly traded community banking companies on the first business day of the performance period. The level of achievement percentage that corresponds to the Company's percentile ranking for each performance goal will be applied to the one-fourth of the target number of performance units. Failure to meet threshold performance during the performance period means no performance units for that performance goal will be earned. The level of achievement will be calculated separately for each performance goal and the level of achievement for one performance goal will not impact the other performance goals.

The performance goals under the performance units granted in January 2024 are summarized in the following table:


Performance Goal	Percentage of Target Performance Units Subject to Performance Vesting	Percentile Ranking of Company vs Peer Group for Performance Period Percentage Earned Threshold % - Target % - Stretch%
Performance Goa1 1: ROAA	25%	54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 2: Core Efficiency Ratio	25%	54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 3: TSR	25%	54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%
Performance Goal 4: Non-Performing Assets Ratio	25%	54th Percentile - 67th Percentile - 74th Percentile 80% - 100% - 110%

If the performance criteria and service requirements are met, these performance units will vest on the payment date which is within 70 days following the end of the performance period. The Company will pay the performance units that have vested in shares of the Company's common stock.

Equity Compensation

The Company grants equity compensation pursuant to the Equity Plan. The Equity Plan authorizes the issuance of up to 2,000,000 shares of common stock for awards to key associates and non-employee Directors of the Company and its subsidiaries as determined by the Committee, which has been appointed by the Board to administer the Equity Plan. The Equity Plan authorizes the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, stock awards, performance units and performance cash awards. Subject to accelerated vesting under certain circumstances, the Equity Plan requires a minimum vesting period of one year for awards subject to time-based conditions and a minimum performance period of one year for awards subject to achievement or satisfaction of performance goals. These minimums are applicable to awards other than those granted as part of a retainer for the service of non-employee Directors. With respect to executive compensation, the purpose of the Equity Plan is to provide incentives to certain key associates to align their personal interests with the long-term financial success of the Company and with growth in shareholder value, consistent with the Company’s risk management practices.

In addition to the LTIP awards granted in January 2024 and March 2022, in February 2023, 2022 and 2021, the Company and the Bank, respectively, granted restricted stock awards to several associates, including all of the NEOs, in connection with the annual incentive plan bonus payouts for 2022, 2021, and 2020 performance. The restricted stock vests in equal installments on each of the first, second and third anniversaries of the grant date, subject to accelerated vesting in certain circumstances.

As discussed above, the Committee anticipates granting future awards of restricted stock to associates, including the NEOs, in connection with the annual incentive plan and future awards of restricted stock and performance units to associates, including the NEOs, pursuant to the LTIP, and may also grant other equity awards under the Equity Plan as part of the Company’s compensation program.

Limitations on Hedging and Speculative Transactions

The Board has approved the Carter Bankshares, Inc. Insider Trading Policy that applies to all directors, officers and associates of the Company and, among other goals, helps ensure that the Company’s personnel bear the full risks and benefits of stock ownership. Under this policy, Company personnel may not sell Company stock “short,” trade in Company stock in or through a margin account (except certain grandfathered arrangements in place when the prohibitions were adopted), or otherwise engage in hedging transactions or speculative or short-term trading of Company stock.

Clawback Policies

The Committee has adopted two clawback policies. The Dodd-Frank Clawback Policy, which became effective on October 2, 2023 and implements the requirements of Exchange Act Rule 10D-1 and Nasdaq’s Listing Rule 5608, provides for the recoupment, under certain conditions, of certain incentive-based compensation from executive officers of the Company if the Company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements under the securities laws (an “accounting restatement”). The Supplemental Clawback Policy, which became effective on March 21, 2024, expands the coverage of the Dodd-Frank Clawback Policy to provide for the recoupment, under certain conditions, of cash-based and equity-based incentive compensation from the executive management team (which is a broader group than the Company’s executive officers) in the event of an accounting restatement. The Supplemental Clawback Policy also provides for the recoupment, under certain conditions, of certain cash-based and equity-based incentive compensation from the executive management team and employees who have an employment or change of control severance agreement, cash incentive or equity award agreement or incentive or commission agreement if the executive or employee engages in detrimental conduct. Detrimental conduct means: (1) the commission of a criminal act by the executive or employee that constitutes a felony, (2) a violation by the executive or employee of federal or state securities laws, rules or regulations, and/or the rules of any exchange or association of which the Company is a member, (3) a violation by the executive or employee of the Company’s Code of Conduct, as determined by the Company in its reasonable discretion, or (4) any misconduct or illegal activity by the employee or executive in performing the work for which incentive compensation covered by the policy is paid, as determined by the Company in its reasonable discretion.

Nominating and Compensation Committee Report

The Nominating and Compensation Committee of the Board has reviewed and discussed with management the Compensation Discussion & Analysis included above. Based upon such review, the related discussions and such other matters deemed relevant and appropriate by the Committee, the Committee has recommended to the Board the inclusion of the Compensation Discussion & Analysis in this proxy statement.

Members of the Nominating and Compensation Committee

Kevin S. Bloomfield

Gregory W. Feldmann, Chair

Jacob A. Lutz, III

E. Warren Matthews

CEO Pay Ratio

The Company determined that the 2023 annual total compensation of the median compensated associate of all its associates, other than the CEO, as of December 31, 2023 was $55,282; the CEO’s 2023 annual total compensation was $784,630; and the ratio of these amounts was 14:1.

The Company identified a new median associate for 2023 due to changes in the Company’s compensation program since 2022. To do this, we utilized the following methodology. As of December 31, 2023, the Company’s total population consisted of 679 associates, all of whom work in the United States. This population consisted of all of the Company’s full-time and part-time associates. To identify the median compensated associate, we used a consistently applied compensation measure defined as gross wages as reported on each associate’s 2023 Internal Revenue Service (“IRS”) Form W-2. We further annualized pay for those individuals not employed for a full year in 2023, but who were employed as of December 31, 2023.

Once we identified our median compensated associate, we calculated the median compensated associate’s and our CEO’s 2023 annual total compensation in accordance with the requirements of the Summary Compensation Table.

This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated associate and calculating the pay ratio based on that associate’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

Summary Compensation Table

Fiscal 2021 - 2023

The table below reflects compensation received by each NEO.


Name and Principal Position	Year	Salary ($)	Bonus ($)(1)	Stock Awards ($)(2)	Option Awards ($)	Non-equity Incentive Plan Compensation($)(3)	Change in Pension Value and Non-Qualified Deferred Compen-sation Earnings ($)	All Other Compen-sation ($)(4)	Total ($)
Litz H. Van Dyke	2023	$644,618	$96,863	—	—	—	—	$43,149	$784,630


CEO of the Company and the Bank	2022	$612,513	—	$232,042	—	$369,000	—	$46,274	$1,259,829
	2021	$593,000	—	—	—	$296,500(5)	—	$44,834	$934,334

Bradford N. Langs	2023	$514,282	$77,250	—	—	—	—	$45,001	$636,533
President and Chief Strategy Officer of the Bank	2022	$480,628	—	$102,378	—	$247,500	—	$42,713	$873,219
	2021	$370,000	—	—	—	$185,000(5)	—	$41,378	$596,378

Wendy S. Bell	2023	$389,724	$58,500	—	—	—	—	$46,359	$494,583
CFO of the Company; Senior Executive Vice President and CFO of the Bank	2022	$373,320	—	$88,726	—	$187,500	—	$42,794	$692,340
	2021	$360,000	—	—	—	$180,000(5)	—	$41,464	$581,464

Tony E. Kallsen	2023	$339,861	$51,000	—	—	—	—	$34,943	$425,804
Senior Executive Vice President and Chief Credit Officer of the Bank	2022	$321,243	—	$88,726	—	$112,700	—	$36,049	$558,718
	2021	$315,000	—	—	—	$110,250(5)	—	$40,334	$465,584

Matthew M. Speare	2023	$374,667	$56,250	—	—	—	—	$38,310	$469,227
Senior Executive Vice President and Chief Operations Officer of the Bank	2022	$351,244	—	$88,726	—	$123,200	—	$36,486	$599,656
	2021	$345,000	—	—	—	$120,750(5)	—	$35,479	$501,229

(1) The Committee recommended to the full Board of Directors, and the full Board of Directors approved, granting each participant in the annual incentive plan a discretionary flat bonus equal to 15% of annual salary to reflect the outstanding work they had completed in 2023, which included strong loan growth, successful expansion in high-growth markets and successful management of liquidity and deposit stability in a challenging market environment, although many of positive effects of this outstanding work were muted in the Company's financial performance for 2023 by the impacts of the single large NPL relationship discussed above.

(2) Stock awards for 2022 consist of time-based restricted stock and performance-based unit awards granted under the Company's LTIP. The performance-based unit awards vest only if, and to the extent earned based on performance achievement over a three-year performance period ending December 31, 2024 and satisfaction of additional service requirements.

All stock and unit awards are reflected at their grant date fair value, as determined pursuant to Accounting Standards Codification -Topic 718, Stock Compensation ("ASC 718"), based on the closing price of stock on the grant date. The amounts reflected for performance-based unit awards reflect the grant date assumption that we will achieve the required performance goals at target levels. Beginning September 1, 2023 the Company utilizes a 90-day look back period to estimate the average stock price to resolve issues of rapid stock price fluctuations.

The following table provides the grant date fair value of performance-based unit awards granted during 2022 assuming stretch (or maximum) achievement:


			Name			Stretch Payout ($)
			Litz H. Van Dyke			$144,414
			Bradford N. Langs			$63,712
			Wendy S. Bell			$55,217
			Tony E. Kallsen			$55,217
			Matthew M. Speare			$55,217

(3) The amounts in this column for 2021 and 2022 reflect the bonus amounts earned for 2021 and 2022 performance under the annual incentive plan and include both the portion of the bonus paid in cash and the portion paid in shares of restricted stock that were granted in February 2022 and 2023. In each case, the cash portion and the portion paid in restricted shares of these bonus amounts were paid in the year following the year in which the performance criteria was achieved.

(4) The amount of compensation properly categorized in this column, including perquisites and other personal benefits that total more than $10,000, is listed in the table below for 2023 for each NEO.


Name	Medical	401(k) and Profit Sharing Plan Matching Contributions	Disability Insurance	Life Insurance Premiums	Car Allowance	Gross Ups Car Allowance	Total
Litz H. Van Dyke	$12,951	$13,200	$592	$4,224	$8,400	$3,782	$43,149
Bradford N. Langs	$19,642	$13,200	$592	$2,982	$6,000	$2,585	$45,001
Wendy S. Bell	$19,642	$13,200	$592	$4,224	$6,000	$2,701	$46,359
Tony E. Kallsen	$9,957	$12,777	$592	$2,982	$6,000	$2,635	$34,943
Matthew M. Speare	$12,951	$13,200	$592	$2,982	$6,000	$2,585	$38,310

(5) The amounts for 2021 have been updated from prior proxy statement disclosures that inadvertently excluded amounts surrendered to satisfy tax withholding obligations.

The table below reflects information regarding the annual incentive plan opportunities granted to the NEOs during or for the year ended December 31, 2023.

Grants of Plan-Based Awards

Fiscal 2023


		Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)			Estimated Possible Payouts Under Equity Incentive Plan Awards			All Other Stock Awards: Number of Shares of Stock or Units	Grant Date Fair Value of Stock and Option Awards(4)
		Threshold	Target	Maximum	Threshold	Target	Maximum
Name	Grant Date	($)	($)	($)	(#)	(#)	(#)	(#)	($)
Litz H. Van Dyke
Annual Incentive Plan	N/A	—	—	$387,450	—	—	—	—	—

Bradford N. Langs
Annual Incentive Plan	N/A	—	—	$283,250	—	—	—	—	—

Wendy S. Bell
Annual Incentive Plan	N/A	—	—	$214,500	—	—	—	—	—

Tony E. Kallsen
Annual Incentive Plan	N/A	—	—	$170,000	—	—	—	—	—



Matthew M. Speare
Annual Incentive Plan	N/A	—	—	$187,500	—	—	—	—	—

(1) Reflects the maximum bonus that each NEO could earn for 2023 performance under the annual incentive plan. The annual incentive plan does not have threshold or target performance levels. Due to the impacts of a single large NPL relationship discussed above, none of the Company's performance goals were met for 2023. Consequently, the NEOs did not earn any amounts under the annual incentive plan for 2023.

Outstanding Equity Awards at Fiscal 2023 Year-End

The table below reflects certain information regarding restricted stock awards held by each NEO as of December 31, 2023. None of the NEOs held any other equity awards as of December 31, 2023.


		Stock Awards
Name	Grant Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($) (4)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Litz H. Van Dyke	2/19/21(1)	806	$12,066	—	—
	2/17/22(1)	2,836	$42,455	—	—
	3/7/22(2)	6,373	$95,404	—	—
	3/7/22(3)	—	—	2,213	$33,129
	2/14/23(1)	7,023	$105,134	—	—

Bradford N. Langs	2/19/21(1)	448	$6,707	—	—
	2/17/22(1)	1,787	$26,751	—	—
	3/7/22(2)	2,812	$42,096	—	—
	3/7/22(3)	—	—	976	$14,611
	2/14/23(1)	4,853	$72,649	—	—

Wendy S. Bell	2/19/21(1)	436	$6,527	—	—
	2/17/22(1)	1,728	$25,868	—	—
	3/7/22(2)	2,437	$36,482	—	—
	3/7/22(3)	—	—	846	$12,665
	2/14/23(1)	3,677	$55,045	—	—

Tony E. Kallsen	2/19/21(1)	381	$5,704	—	—
	2/17/22(1)	1,047	$15,674	—	—
	3/7/22(2)	2,437	$36,482	—	—
	3/7/22(3)	—	—	846	$12,665
	2/14/23(1)	2,229	$33,368	—	—

Matthew M. Speare	2/19/21(1)	418	$6,257	—	—
	2/17/22(1)	1,184	$17,724	—	—
	3/7/22(2)	2,437	$36,482	—	—
	3/7/22(3)	—	—	846	$12,665
	2/14/23(1)	2,436	$36,467	—	—

(1) These awards of restricted stock were granted pursuant to the Equity Plan. The restricted stock vests in equal 1/3 installments on the first, second and third anniversaries of the grant date, subject to accelerated vesting under certain circumstances.

(2) These awards of restricted stock were granted pursuant to the LTIP and the Equity Plan. The restricted stock has a five-year cliff vesting, with all shares vesting on March 7, 2027.

(3) These PU awards vest on the payment date, which is within 70 days following December 31, 2024 to the extent earned based on performance achievement over a three-year performance period ending December 31, 2024 and satisfaction of additional service requirements. The amounts reported are based on achieving the threshold level of performance.

(4) The amounts in this column represent the aggregate fair market value of the restricted stock and PU awards, as applicable, as of December 31, 2023, based on the closing price of the Company's stock on December 29, 2023, which was the last business day of the year. The closing price of the Company’s common stock was $14.97 on that date.

Option Exercises and Stock Vested

Fiscal 2023

The table below reflects information regarding restricted stock awards held by each NEO that vested during 2023. None of the NEOs held any stock options during 2023.


	Stock Awards
Name	Number of shares acquired on vesting (#)(1)	Value realized on vesting ($)(2)
Litz H. Van Dyke	3,239	$56,395

Bradford N. Langs	1,938	$33,757

Wendy S. Bell	1,922	$33,471

Tony E. Kallsen	1,285	$22,362

Matthew M. Speare	1,427	$24,836

(1) The number of shares acquired on vesting represents the gross number of shares of the Company's common stock that vested, without taking into account any shares withheld to satisfy applicable tax obligations.

(2) The value realized on vesting for restricted stock is the market value based on the closing price of the Company’s common stock on the vesting date multiplied by the gross number of shares that vested.

401(k) and Profit-Sharing Plan

The 401(k) and Profit-Sharing Plan covers all associates that have been employed for one month (six months for profit-sharing), have reached the age of 20-1/2 and have reached an entry date provided under the plan. Persons who have reached the age of 62 are fully vested regardless of length of service. Elective deferrals and safe harbor matching contributions are 100% vested. Profit-sharing contributions and non-safe harbor matching contributions are subject to the below vesting schedule and certain other requirements set forth in the plan. For eligibility and vesting purposes, associates receive credit for previous employment with any of the Merged Banks, the Mortgage Company of Virginia, Bank Services of Virginia, Inc. and Bank Services Insurance, Inc. Vesting is based on the number of years of service, with a year being any year an associate works a minimum of 1,000 hours.

The vesting schedule is as follows:


Years of Service	Vested Percentage	Forfeitable Percentage
1	20%	80%
2	40%	60%
3	60%	40%
4	80%	20%
5	100%	0%

Each year the Board determines what amount, if any, is to be allocated as a profit-sharing contribution to the plan. A profit-sharing contribution is made in the year following the year to which it relates. These profit-sharing contributions to the plan were $0.4 million in 2023, $1.0 million in 2022, and $0.9 million in 2021.

The 401(k) and Profit-Sharing Plan also includes a company match based upon an associate’s elective deferral. This elective deferral is subject to dollar limits announced annually by the IRS. Elective deferrals are currently matched with a safe-harbor match equal to 100% of the first 3% deferred and 50% of the next 2%, producing a maximum 4% match. Expense for this deferral match was $1.4 million, $1.3 million and $1.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. Each of the NEOs participates in the 401(k) and Profit-Sharing Plan except that, beginning in 2020, the NEOs are excluded from participation in the profit-sharing contribution.

Nonqualified Deferred Compensation Plan

In December 2020, the Bank adopted an unfunded, nonqualified deferred compensation plan, called the Nonqualified Deferred Compensation Plan, to provide key associates of the Bank, including all of the Company’s NEOs (beginning after the date of adoption) the opportunity to defer to a later year on a pre-tax basis certain compensation without being subject to the dollar limits that apply to these associates under the Bank’s 401(k) and Profit-Sharing Plan. This plan allows participants whose maximum retirement contribution is limited by IRS rules to defer additional compensation. Participants in the plan are eligible to defer (on a pre-tax basis) up to 100% of their eligible plan compensation. The compensation and fees (and related earnings) deferred under this plan are held in a grantor trust until paid to the participants and are 100% vested, but remain subject to the claims of the creditors of the Bank and Company until paid to the participants. Benefits under the Nonqualified Deferred Compensation Plan are paid upon the later of reaching age 62 or separation from service in either a lump sum or annual installments of 5, 10 or 15 years, in each case as elected by the participant and subject to a mandatory six-month delay for certain participants. Two NEOs participated in the Nonqualified Deferred Compensation Plan in 2023.

Nonqualified Deferred Compensation for 2023


Name	Executive Contributions in Last FY($)(1)	Registrant Contributions in Last FY ($)	Aggregate Earnings in Last FY($)(2)	Aggregate Withdrawals/Distributions ($)	Aggregate Balance at Last FYE ($)(3)
Litz H. Van Dyke	—	—	—	—	—
Bradford N. Langs	—	—	—	—	—
Wendy S. Bell	$139,759	—	$4,597	—	$357,429
Tony E. Kallsen	$18,200	—	$4,796	—	$45,028
Matthew M. Speare	—	—	—	—	—

(1) Reflects salary deferred under the Nonqualified Deferred Compensation Plan. These amounts are included as 2023 "salary" in the Summary Compensation Table. Ms. Bell and Mr. Kallsen were the only NEOs who participated in this plan in 2023.

(2) Aggregate gains attributed to participants under the Nonqualified Deferred Compensation Plan are actual returns based on their investment elections under the plan.

(3) Of the amounts in this column, $214,528 and $25,200 were previously reported as compensation to Ms. Bell and Mr. Kallsen, respectively, in a Summary Compensation Table for years prior to 2023.

Potential Payments upon Termination or Change of Control

The following table shows the estimated payments to or benefits that would have been received by each of the NEOs upon the following termination events or upon a change of control of the Company, in each case assuming that each termination event or the change of control occurred on December 31, 2023, and assuming a stock price of $14.97 which was the closing stock price of the Company’s common stock on December 29, 2023, the last business day of the year. The amounts reflected in the following table are estimates, as the actual amounts that would have been paid to or received by a NEO can only be determined at the time of termination or change of control.

The following table reports only amounts that are increased, accelerated or otherwise paid or payable as a result of the applicable termination or change of control event and, as a result, excludes amounts accrued through December 31, 2023, such as accrued but unpaid salary and annual bonus compensation amounts for completed performance periods and vested account balances under the 401(k) and Profit Sharing Plan, Nonqualified Deferred Compensation Plan and other plans. The Nonqualified Deferred Compensation Plan provides that all amounts will be paid upon the later of reaching age 62 or separation from service, subject to a mandatory six-month delay for certain participants. The terms of the Nonqualified Deferred Compensation Plan are discussed in further detail under "Nonqualified Deferred Compensation Plan," and the "Nonqualified Deferred Compensation Plan for 2023" table sets forth the vested account balances of the NEO participants. The table also excludes any amounts that are available generally to all salaried associates and in a manner that does not discriminate in favor of the Company’s executive officers.


Payments and Benefits	Death	Termination Due to Incapacity	Termination Without Cause or for Good Reason Not in Connection with Change of Control (1)(2)	Termination Without Cause or for Good Reason within 2 Years Following a Change of Control (3)(4)(5)(6)	Termination For Cause or Without Good Reason	Change of Control with no Related Termination of Employment
Litz H. Van Dyke
Cash Severance	$ —	$ —	$968,625	$2,299,793	$ —	$ —
Equity Vesting (7)	216,722	216,722	—	34,981	—	181,741
Health Care Coverage	—	—	19,427	19,427	—	—
Total	$216,722	$216,722	$988,052	$2,354,201	$ —	$181,741

Bradford N. Langs
Cash Severance	$ —	$ —	$515,000	$1,277,500	$ —	$ —
Equity Vesting (7)	131,283	131,283	—	15,435	—	115,848
Health Care Coverage	—	—	19,642	29,463	—	—
Total	$131,283	$131,283	$534,642	$1,322,398	$ —	$115,848

Wendy S. Bell
Cash Severance	$ —	$ —	$390,000	$967,500	$ —	$ —
Equity Vesting (7)	109,260	109,260	—	13,377	—	95,883
Health Care Coverage	—	—	19,642	29,463	—	—
Total	$109,260	$109,260	$409,642	$1,010,340	$ —	$95,883

Tony E. Kallsen
Cash Severance	$ —	$ —	$ —	$431,317	$ —	$ —
Equity Vesting (7)	76,566	76,566	—	13,377	—	63,189
Health Care Coverage	—	—	—	9,957	—	—
Total	$76,566	$76,566	$ —	$454,651	$ —	$63,189

Matthew M. Speare
Cash Severance	$ —	$ —	$375,000	$873,200	$ —	$ —
Equity Vesting (7)	82,268	82,268	—	13,377	—	68,891
Health Care Coverage	—	—	12,951	19,427	—	—
Total	$82,268	$82,268	$387,951	$906,004	$ —	$68,891

(1) Under his employment agreement, if Mr. Van Dyke resigns for Good Reason or his employment is terminated without cause not in connection with a change of control, Mr. Van Dyke will be entitled to receive monthly severance payments equal to one-twelfth of his annual base salary for 18 months and continued associate health insurance coverage for 18 months. Payment of these severance benefits is subject to receipt by the Company of a signed release and waiver of claims and satisfaction of other requirements, conditions, and limitations set forth in Mr. Van Dyke’s employment agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.

(2) For each NEO other than Messrs. Van Dyke and Kallsen, under his or her employment agreement, if the NEO resigns for Good Reason or his or her employment is terminated without cause not in connection with a change of control, the NEO will be entitled to receive monthly severance payments equal to one-twelfth of his or her annual base salary for 12 months and continued associate health insurance coverage for 12 months. Payment of these severance benefits is subject to receipt by the Company of a signed release and waiver of claims and satisfaction of other requirements, conditions, and limitations set forth in the employment agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.

(3) Under his employment agreement, if Mr. Van Dyke resigns for Good Reason or his employment is terminated without cause within two years after a change of control Mr. Van Dyke will be entitled to receive a lump sum severance payment equal to 2.99 times his annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to Mr. Van Dyke’s highest annual bonus earned from the Company for the three years prior to termination. Payment of these severance benefits is subject to receipt by the Company of a signed release and waiver of claims and satisfaction of other requirements, conditions, and limitations set forth in Mr. Van Dyke’s employment agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.

(4) Under his change of control severance agreement, if Mr. Kallsen resigns for Good Reason or his employment is terminated without cause within two years after a change of control and Mr. Kallsen executes and delivers to the Company a signed release and waiver of claims, he will be entitled to receive monthly severance payments for 12 months in an aggregate amount equal to his annual base salary plus his average annual bonus payable from the Company for the three years prior to termination, and a lump sum payment equal to continued associate health insurance coverage for 12 months. Payment

of these severance benefits is subject to satisfaction of other requirements, conditions, and limitations set forth in Mr. Kallsen's change of control severance agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.

(5) For each NEO other than Messrs. Van Dyke and Kallsen, under his or her employment agreement, if the NEO resigns for Good Reason or his or her employment is terminated without cause within two years after a change of control, the NEO will be entitled to receive to receive a lump sum severance payment equal to two times his or her annual base salary, continued associate health insurance coverage for 18 months and a lump sum payment equal to the NEO’s highest annual bonus earned from the Company for the three years prior to termination. Payment of these severance benefits is subject to receipt by the Company of a signed release and waiver of claims and satisfaction of other requirements, conditions, and limitations set forth in the employment agreement, including covenants regarding confidentiality, non-competition, non-piracy and non-solicitation.

(6) Each NEO’s employment agreement or change of control severance agreement provides for change of control benefits on a “best net” approach, under which the NEO’s change of control benefits will be reduced to avoid the golden parachute excise tax under Section 280G of the Internal Revenue Code unless without such a reduction the NEO would receive more after-tax compensation than with a reduction. The amounts shown in this column do not reflect any reductions that might be made pursuant to these provisions.

(7) All then unvested restricted stock other than restricted stock granted under the LTIP (“non-LTIP restricted stock”) becomes fully vested upon a change of control of the Company or the Bank, as applicable, or upon termination of the NEO’s employment due to (a) death or (b) disability. In the event of termination of the NEO’s employment for good reason or without cause, all then unvested non-LTIP restricted stock would be forfeited in the absence of the Committee’s exercise of discretion to waive such forfeiture. In the event of termination of the NEO’s employment for any other reason, including retirement, all then unvested non-LTIP restricted stock would be forfeited.

A pro-rata portion (based on the number of months employed during the period of restriction) of the restricted stock granted under the LTIP (“LTIP restricted stock”) becomes vested upon termination of the NEO’s employment due to (a) death, (b) disability, or (c) for good reason or without cause within 2 years following a change of control of the Company or the Bank, as applicable. In the event of termination of the NEO’s employment for any other reason, all then unvested LTIP restricted stock would be forfeited in the absence of the Committee’s exercise of discretion to waive such forfeiture.

A pro-rata portion (based on the number of months employed during the performance period) of the performance units becomes vested (to the extent the applicable performance goals are met) upon a change of control of the Company or the Bank, as applicable, or upon termination of the NEO’s employment due to (a) death or (b) disability. Performance is measured as of the end of the quarter immediately preceding the date of the change of control or termination, as applicable. In the event of termination of the NEO’s employment for any other reason, all then unvested LTIP restricted shares would be forfeited in the absence of the Committee’s exercise of discretion to waive such forfeiture.

PAY VERSUS PERFORMANCE

The following table presents certain information regarding compensation paid to the Company's CEO and other NEOs, and certain measures of financial performance, for the four years ended December 31, 2023. The amounts shown below are calculated in accordance with Item 402(v) of Regulation S-K:


Year	Summary Compensation Table Total for CEO(1)	Compensation Actually Paid ("CAP") to CEO(2)	Average Summary Compensation Table Total for Non-CEO Named Executive Officers(3)	Average Compensation Actually Paid to Non-CEO Named Executive Officers (4)	Value of Initial Fixed $100 Investment Based on:		Net Income (Loss) (in thousands)	Earnings (Loss) per Share ("EPS")
					Total Share holder Return ("TSR")	Peer Group Total Share holder Return(5)
2023	$784,630	$872,615	$506,537	$548,735	$63.56	$107.32	$23,384	$1.00
2022	$1,259,829	$1,255,996	$680,983	$681,963	$70.44	$98.38	$50,118	$2.03
2021	$934,334	$890,964	$536,164	$515,917	$65.35	$118.61	$31,590	$1.19
2020	$785,742	$755,842	$405,951	$387,559	$45.52	$87.24	$(45,858)	$(1.74)

(1) The dollar amounts reported in this column are the amounts of total compensation reported for Mr. Van Dyke for each corresponding year in the "Total" column of the Summary Compensation Table ("SCT").

(2) The dollar amounts reported in this column represent the amount of CAP to our CEO, Litz Van Dyke, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Van Dyke during the applicable year. To calculate CAP to Mr. Van Dyke, for each of the years shown, the following amounts were deducted from and added to SCT total compensation.

CEO SCT Total to CAP Reconciliation:


Year	SCT Total	Deductions from SCT Total(a)	Additions to SCT Total(b)	CAP
2023	$784,630	$—	$87,985	$872,615
2022	$1,259,829	$353,812	$349,979	$1,255,996
2021	$934,334	$97,847	$54,477	$890,964
2020	$785,742	$26,405	$(3,495)	$755,842

(a) The dollar amounts reported in this column include $232,042 in the "Stock Awards" column of the SCT, as well as, $121,770 in the "Non-equity Incentive Plan Compensation" column of the SCT for 2022, $97,847 and $26,405 in the "Non-equity Incentive Plan Compensation" column of the SCT for 2021 and 2020, respectively, reflecting the portion of the bonus amounts earned for 2022, 2021 and 2020 performance under the annual incentive plan that was paid in shares of restricted stock granted in February 2023, 2022 and 2021.

(b) The equity component of CAP for each fiscal year is further detailed in the supplemental table below.

CEO Equity Component of CAP:


Year	Fair Value of Equity Awards Granted in the Year and Outstanding and Unvested as of Year End	Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Outstanding and Unvested as of Year End	Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year	Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year	Fair Value at the End of the Prior Year of Equity Awards that were Forfeited in the Year	Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation	Total Equity Award Adjustments
2023	$105,134	$(19,809)	$—	$2,660	$—	$—	$87,985
2022	$314,049	$3,154	$29,672	$3,104	$—	$—	$349,979
2021	$37,213	$15,056	$—	$2,208	$—	$—	$54,477
2020	$32,653	$(31,018)	$—	$(5,130)	$—	$—	$(3,495)

(3) The dollar amounts reported in this column represent the average of the amounts reported for the Company's non-CEO NEOs ("Non-CEO NEOs") as a group in the "Total" column of the SCT in each applicable year. The names of the Non-CEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: for 2023, 2022 and 2021: Bradford N. Langs, Wendy S. Bell, Tony E. Kallsen and Matthew M. Speare; and for 2020, Bradford N. Langs, Wendy S. Bell, Phyllis Q. Karavatakis and Matthew M. Speare.

(4) The dollar amounts reported in this column represent the average amount of CAP to the Non-CEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the Non-CEO NEOs during the applicable year. To calculate CAP to our Non-CEO NEOs for each of the years shown, the following amounts were deducted from and added to SCT total compensation.

Average Non-CEO NEOs SCT Total to CAP Reconciliation:


Year	SCT Total	Deductions from SCT Total(a)	Additions to SCT Total(b)	CAP
2023	$506,537	$—	$42,198	$548,735
2022	$680,983	$149,334	$150,314	$681,963
2021	$536,164	$49,176	$28,929	$515,917
2020	$405,951	$10,647	$(7,745)	$387,559

(a) The dollar amounts reported in this column include the average of $92,139 in the "Stock Awards" column of the SCT, as well as, $57,195 in the "Non-equity Incentive Plan Compensation" column of the SCT for 2022, and includes an average of $49,176 and $10,647 in the "Non-equity Incentive Plan Compensation" column of the SCT for 2021 and 2020, respectively, reflecting the portion of the bonus amounts earned for 2022, 2021 and 2020 performance under the annual incentive plan that was paid in shares of restricted stock granted in February 2023, 2022 and 2021.

(b) The equity component of CAP for each fiscal year is further detailed in the supplemental table below.

Average Non-CEO NEOs Equity Component of CAP:


Year	Fair Value of Equity Awards Granted in the Year and Outstanding and Unvested as of Year End	Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Outstanding and Unvested as of Year End	Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year	Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year	Fair Value at the End of the Prior Year of Equity Awards that were Forfeited in the Year	Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation	Total Equity Award Adjustments
2023	$49,382	$(8,533)	$—	$1,349	$—	$—	$42,198
2022	$132,434	$1,616	$14,647	$1,617	$—	$—	$150,314
2021	$19,403	$7,731	$—	$1,795	$—	$—	$28,929
2020	$17,964	$(20,511)	$—	$(5,198)	$—	$—	$(7,745)

(5) Represents the weighted peer group TSR, weighted according to the respective companies' stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the S&P BMI U.S. Banks Index.

Tabular List of Financial Performance Measures

The Company considers the following to be the most important financial performance measures it uses to link CAP to its NEOs, for 2023, to Company performance. These financial measures are used by the Nominating and Compensation Committee to link executive compensation to Company performance for the 2023 performance year.

Most Important Financial Performance Measures

•Earnings per Share

•Return on Average Assets

•Return on Average Equity

•Efficiency Ratio

•Nonperforming Assets to Average Assets Ratio

Relationship between Financial Performance Measures and Executive Compensation

Compensation Actually Paid and Cumulative TSR: The graph below illustrates the relationship between the CAP of our CEO and the average CAP of our non-CEO NEOs over the last four years and the Company's TSR performance, as well as TSR relative to the S&P BMI U.S. Banks Index. This illustrates that, from 2020 to 2021, 2021 to 2022 and 2022 to 2023, the CAP of our CEO and the average CAP of our non-CEO NEOs is generally aligned with the Company's cumulative TSR.

Compensation Actually Paid and Net Income (Loss): The graph below illustrates the relationship between the CAP of our CEO and the average CAP of our non-CEO NEOs over the last four years and the Company's net income (loss). This illustrates that, from 2020 to 2021, 2021 to 2022 and 2022 to 2023, the CAP of our CEO and the average CAP of our non-CEO NEOs is generally aligned with the Company's net income (loss).

Compensation Actually Paid and Earnings (Loss) per Share: The graph below illustrates the relationship between the CAP of our CEO and the average CAP of our non-CEO NEOs over the last four years and the Company's earnings (loss) per share. This illustrates that, from 2020 to 2021, 2021 to 2022 and 2022 to 2023, the CAP of our CEO and the average CAP of our non-CEO NEOs is generally aligned with the Company's earnings (loss) per share.

SEC Form DEF 14A filed by Carter Bankshares Inc.